The New Foreclosure Problem: The Zombie House



According to an article on Reuters, since 2006 more than 10 million homes have gone into foreclosure. Of those more than 10 million, about 2 million have never come out. The backlog of paperwork means some homeowners are still living in homes on which they aren’t making payments.   Others are victims of robo-signing, where banks have stormed through foreclosures so fast they are under investigation for fraud.

But thousands of homeowners are being stalked by what’s being called “zombie foreclosures”. They’ve left their homes behind after their banks have made them leave but then those banks haven’t completed the required paperwork to take formal possession.

Your foreclosed home may be stalking you.
Your foreclosed home may be stalking you.

Regulations don’t require that a bank notify homeowners when they decline to follow through with foreclosures. They walk away essentially in the same fashion that the homeowner does but in this case the homeowner may not even know anything about it.

This can mean that the homeowner is still the legal owner of the home and therefore responsible for taxes, upkeep and all the other duties any homeowner would have, but since they couldn’t afford all of that in the first place, the people will often find themselves in legal trouble.

The banks, on the other hand, get insurance, tax and accounting benefits from documenting the home loss. A Case Western Reserve University study released in 2011 noted that the banks will also “sell the unpaid debt to debt collectors, sometimes noting to the court that the loan has been charged off.”

Municipalities are also left to deal with the mess. In depressed neighborhoods they are forced to spend public funds on securing, cleaning and stabilizing houses that generate no tax revenue and may even be uninhabitable. Houses can become a danger if utilities are not shut down, such as gas. Homes can be flooded when pipes break or damaged when they are invaded by wildlife that destroy the interior. Thieves can strip a home of everything including literally the kitchen sink.

Because homeowners are sometimes uninformed their liabilities add up. Some are forced to spend money simply to bring a home up to code many months after they’ve even lived in it. Some have moved to other cities, others may still be in the same financial straits that led to the loss of their homes in the first place.

Judgments can be taken and wages garnished,  tax refunds seized, and sometimes a probation or threat of imprisonment for the individual. They come home to see court summons or can be plagued by collection agencies.

Because of the huge backlog in processing homes in foreclosure will, homeowners need to pay close attention to make sure their names are removed from home titles and their obligations are over. It may mean enlisting legal representation to ensure that you’re protected. If you have questions about your home foreclosure call the attorneys at Fletcher, Rohrbaugh and Chahine. The call is free and we’ll advise you of your rights as a homeowner and as a client.

New Foreclosure Law In California May Be The US Model



A new law passed earlier this month in California could become a model for foreclosure relief around the country. On July 2, lawmakers approved legislation to strengthen the rights of homeowners facing foreclosure.

If Governor Jerry Brown signs the bill it will be the first in the nation to put into state law several significant provisions that are contained in the national foreclosure settlement with five large banks.

“I think we all should feel very good that we have done something that was just the right thing to do,” state Attorney General Kamala Harris said at a press conference following the vote.

The bill targets so-called “dual tracking” by stopping lenders from beginning the home foreclosure process while a loan modification is being negotiated.  It also seeks to curb the use of “robo-signed”, unverified documents that can speed up the foreclosure process.

The legislation also provides homeowners with some legal recourse, such as the ability to seek an injunction blocking the sale of their foreclosed home, and requires that large financial institutions give borrowers negotiating a loan modification a single point of contact for dealing with their home financing issue. Many homeowners have complained that numerous and ever changing contact persons makes the process more difficult.

Institutions that foreclosed on fewer than 175 homes the previous year would be exempt from some parts of the law.

The provisions in the bill that were part of the national settlement, which already apply to the five banks involved in that agreement, would take effect for other institutions Jan. 1, 2013, with some provisions sunsetting after five years.

The five mortgage servicers that are parties to the settlement are Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial.

In Missouri and Kansas, Fletcher, Rohrbaugh and Chahine can be your ally if you’re facing foreclosure. Our attorneys will work with you to explore all of your options whether it’s a loan modification, short sale or other solutions. We’ll also make sure you are protected from predatory lending, unfair mortgage terms, or overly high-rate loans. Fletcher, Rohrbaugh and Chahine will stand with your to ensure that you’re treated fairly and with dignity.