Zombie closures are up around the country, and that includes in the Sarasota-Manatee region and the rest of southern Florida. Zombie foreclosures occur when homeowners suspect the bank will foreclose on their home, or they have already received a foreclosure notice. Fearing the worst, homeowners sometimes simply pack up their stuff and vacate the property, thinking that will allow them to move on with their lives and avoid the foreclosure case altogether. Unfortunately, that is not usually the case and instead, the homeowner faces additional consequences. Additionally, zombie foreclosures also hurt the lender and the surrounding neighborhood.
Zombie Foreclosures Hurt Homeowners
It seems logical that once a homeowner has moved out of a property facing foreclosure, there are no further consequences to the property owner. The bank will simply foreclose and the process may, in fact, be even smoother because the homeowner is not fighting the action. It is then often too late when the homeowner realizes that the negative impacts of the foreclosure did not stop when they left the property.
Just as the title to the property would remain in the homeowner’s name if they left the home for a significant period of time and were not facing foreclosure, the same remains true when a lender has already taken foreclosure action. The title will remain in the homeowner’s name until the foreclosure process is over – this means that the property owner will carry all of the same responsibilities. If the lender decides not to proceed with the foreclosure action, the property owner could have all the same obligations indefinitely.
One of the ramifications a person may face in a zombie foreclosure is that they are still responsible for paying property taxes. A tax collector may find the homeowner at their new location and try to collect on the back taxes the person still owes. If the homeowner lived in a property governed by a homeowners’ association (HOA), the property owner is still also liable for any fees or assessments they owe. The HOA may file a lawsuit in an attempt to recover those unpaid fees.
Properties that have been abandoned by the homeowner will also quickly fall into disrepair. When that is the case, the local government may also locate the homeowner and send them a bill for necessary repairs, trash removal, graffiti removal, and yard maintenance.
A story in Dunedin, Florida several years ago made headlines throughout the state when the homeowner was slapped with more than $100,000 in fines for stagnant water in a swimming pool and overgrown vegetation on the property while her name was still on the title.
These stories are not uncommon and they clearly show that even if you walk away from your home because you are facing foreclosure, you are not necessarily freeing yourself from liability. If you do not pay these fines, the city may also take legal action in an attempt to garnish your wages or otherwise recover the fees owed.
Lastly, a zombie foreclosure will hurt your credit score. Many people understand that a foreclosure on their credit report will negatively impact their credit score. However, when you incur additional fines from the city and municipality for unpaid property taxes, these will further hurt your credit score.
Zombie Foreclosures Hurt Neighborhoods
Abandoned properties are never good for neighborhoods. Vacant properties are highly susceptible to become a location for criminal acts, vandalism, squatters, and more. Of course, abandoned properties also become overrun with vegetation and otherwise fall into disrepair, which is why a municipality is so likely to issue fines when this occurs. However, properties that are in disrepair or the location for crimes are also very bad for the surrounding neighborhood.
Properties that are not properly maintained and managed cause the resale value of the surrounding properties to also drop. Anyone in that neighborhood that then wants to sell their home will not receive as much in profits from the sale. Also, unmaintained properties simply become unsightly. For those living in very close vicinity to the abandoned property, it can also result in them being unable to fully enjoy their home. They may not want to spend time in their yard because they are forced to look at the unmaintained property, and wildlife such as feral cats or even mice and rats may move in, and quickly spread out to surrounding properties.
Clearly, zombie foreclosures do not only hurt the homeowners that were facing foreclosure but all homeowners around them, too.
Zombie Foreclosures Hurt Lenders
It is common for homeowners facing foreclosure to not worry too much about the lenders to which they owe money. In fact, it is very easy to see the lender as an enemy. However, zombie foreclosures also hurt banks and other financial institutions, which is not good for the economy as a whole or taxpayers.
When property owners vacate their homes, the bank then must maintain the property, particularly if they want to sell it in the future. The lender then has to ensure the property is in good condition, and that it is properly maintained to attract buyers, all of which is very expensive. While many people do not see this as a concern because banks are a big business, it impacts everyone.
During the Great Recession of 2008, the United States government bailed out the banks, spending approximately $700 billion to do it. The money the government uses for this type of bailout is taxpayer money and so, it hurts everyone. Regardless of whether people think bailouts work or not, the fact of the matter is that they do occur and when that is the case, they hurt everyone.
Our Florida Foreclosure Defense Lawyers Can Help You Avoid a Zombie Foreclosure
It is true that zombie foreclosures hurt everyone. Even more unfortunate is the fact that many people think they have taken the right steps only to learn later their property is a zombie foreclosure and they still have certain obligations tied to the property.
At Loan Lawyers, our experienced Fort Lauderdale, FL foreclosure defense lawyers will not allow this to happen. We know how to defend against foreclosures to help you stay in your home and avoid the negative ramifications of a foreclosure, zombie or otherwise. Call us today at (954) 807-1361 or contact us online to learn more about your options.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations.
Contact us for a free consultation to see how we may be able to help you.