what is a zombie title 
a zombie title is a real estate title that remains with a homeowner who is mistakenly under the impression that the property has been lost to foreclosure and that as a result the title has passed to the lender zombie titles are the result of lenders initiating foreclosure proceedings by issuing a notice of foreclosure and then unexpectedly dismissing it if the homeowner is unaware of a foreclosure dismissal they will be left holding a zombie title a lender may decide to dismiss the foreclosure for a variety of reasons including a surplus of inventory or unjustifiable costs a zombie title can pose a significant financial risk to the homeowner who continues to be shown on the property title since they remain liable for property taxes and code violations understanding zombie titleszombie titles are often the result of confusion on the part of homeowners regarding foreclosure rules a homeowner who has defaulted on a mortgage may abandon the property and move out upon receiving a foreclosure notice from the lender the lender will assess the property prior to the foreclosure sale if the property is in disrepair and needs a substantial outlay for repairs and unpaid taxes before it can be sold the lender may choose to not take the title based on the premise that there is no point in throwing good money after bad if the lender cancels or dismisses the foreclosure process the homeowner is left with a zombie title zombie titles arise for two reasons first a lender or financial institution is under no obligation to take the legal title of a property in foreclosure even if the homeowner has defaulted on the loan if the costs of selling the property or potential liability associated with the property are too high the lender may walk away rather than take the title of the property second the lender is also not required to let the homeowner know if it has decided to dismiss the foreclosure even if the lender does decide to inform the homeowner it may not have an address or contact information for the homeowner who is now living elsewhere a homeowner in this situation will unknowingly still hold title to the property along with all of the associated costs and responsibilities of owning a home without any of the intended benefits ownership does not change until someone else s name is on the title recent trendsthe 2007 2008 mortgage lending crisis resulted in millions of homeowners facing foreclosure 1 while the majority of those foreclosures were carried through many were left dangling in the middle of the process or unexpectedly dismissed resulting in tens of thousands of homeowners unknowingly holding zombie titles in the years after the financial crisis as the u s economy and housing market gradually strengthened the number of zombie foreclosures began declining however with inflation and interest rates ticking up in 2022 vacancies have again seen a tick up according to industry data in the third quarter of 2022 around 1 3 million residential properties in the united states sat vacant or 1 3 of all u s homes 2according to property data provider attom data solutions of approximately 270 500 homes that were in the process of foreclosure during the third quarter of 2022 just over 7 700 or 2 85 were sitting empty as zombie foreclosures 2financial impact on lenders and homeowners