What The Hell Is A Zombie Foreclosure?!

Performance Property Real Estate Question

Q: Gerald, I heard an economist recently say that the number of zombie foreclosures were going down. What The Hell Is A Zombie Foreclosure?! Jamie, Bayonne, NJ

A: A zombie title is a real estate title that has stayed with the owner of a residential property after the mortgage lender has begun a foreclosure process (making the owner believe in some cases that they no longer own the property).  If the lender does not finish the foreclosure process, the title to the property remains in zombie status, which means it remains in limbo, hence the phrase, zombie foreclosure.

Some homeowners pack up and move when they receive a foreclosure notice because they assume the lender will take the property from them. However, in some cases, the bank doesn’t finish the process. These “zombie foreclosures” can lead to negative consequences for homeowners who want to get the foreclosure behind them so they can move on with their lives.

Since title is never transferred out of the homeowner’s name, the homeowner still has the legal obligation to pay for certain debts and expenses like property taxes, HOA dues, and maintenance on the property. Debts associated with these responsibilities can go unpaid and then come back to haunt homeowners who have no idea that the foreclosure process was never completed.

Zombie foreclosures also harm neighborhoods. When properties are vacant, it can drag down the value of the entire neighborhood.

Thanks for your question, Jamie!

For more real estate tips and information visit my blog at