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by Bruce Strom

Zombie foreclosures impact individuals and communities.  If you know someone going through foreclosure or are aware of any vacant property in your community, then this information may be helpful to you.  Here are three things to know and two things you can do to help.

  1. What are zombie foreclosures? If the mortgage foreclosure crisis was the war, then zombie foreclosures are the apocalyptic aftermath.  Consider Tom and Mary.  Tom lost his job and his savings.  His home was in foreclosure.  Under pressure, Tom and Mary split up, eventually divorcing.  Assuming the foreclosure would finalize, and with no assets to divide, they left the home. Only the home didn’t foreclose.  Tom and Mary lived in a lower income neighborhood with several foreclosed properties.  The bank didn’t want the liabilities associated with owning the home, so they just left the case in limbo.  That is zombie foreclosure.
  2. So what? Tom discovered two great challenges before finding help through us.  First, a credit check revealed he owed money for back property taxes.  Second the credit check showed money was owed the city for yard maintenance.  Hundreds of thousands of people left their homes in the foreclosure crisis believing they had to get out before the sheriff threw them out.  They did not bother going to court because they assumed the property would foreclose.  Now the pain of losing their home is magnified when they learn that the tax collector is pursing them for back taxes, a homeowners association is pursuing them for unpaid assessments, money is owed for housing code violations, or a municipality is collecting for yard maintenance, repairs or trash removal.  Now their credit, already damaged by the foreclosure, is made worse by these unpaid debts.  Like Tom, these families often leave no forwarding address to receive notice of the debts.
  3. Now what? The challenge of zombie foreclosures isn’t just for the individual homeowner.  The blight of abandoned properties impacts whole neighborhoods.  Property values plummet.  Property taxes aren’t paid and in many areas that impacts local schools and services.  The problem of zombie foreclosures hurts us all.

[bctt tweet=”The problem of zombie foreclosures hurts us all.” username=”@gospel_justice”]

Here are two things you can do to help:

  1. Share this post with anyone you know going through a foreclosure or who went through a foreclosure in the last few years.  Some of these zombie foreclosures began several years ago. Have your friend check county records to confirm the property deed was transferred.  Often this can be done online but, if not, it is worth a trip to the county recorder’s office.  If the deed was not transferred contact us for help.  If your friend is still in foreclosure tell them to stay in the house as long as possible.  This keeps the home maintained and allows them to save money while communicating with the bank or private equity firm so they can move somewhere else before being homeless.  Unaware of that option, Tom and Mary were homeless for a brief period of time.
  2. Help your neighborhood. Last week New York’s Governor Cuomo signed into law a comprehensive Foreclosure Relief Act.  The legislation combats the blight of vacant and abandoned properties by creating a community restoration fund, mandatory mediation process, consumer bill of rights, and works with not for profits, churches and other community development groups in reclaiming vacant properties.  This is critical as HUD sells tens of thousands of mortgages each quarter to largely private equity firms causing significant problems.  Two months ago HUD changed its rules to allow municipalities to purchase these foreclosures.  Municipalities can now partner with the community in true community development.  New Jersey introduced similar legislation last week – Preventing Abandoned Foreclosures and Preserving Communities Act of 2016.

If you are in New York, thank your legislator and learn how you can be part of reclaiming your community.  If you are in New Jersey, encourage passage of the pending legislation.  If you are in another state, advocate for adoption of legislation that takes advantage of the new HUD rules to allow your community to work together to remove the blight of vacant properties.

This is an area where the people of God and the church of God should be engaged.  As I mentioned in a previous post, church legal partnerships can be powerful agents for community change.  Our neighbors need our help to battle zombie foreclosures.  They need Good Samaritans who stop to make a difference.  We are happy to help you in this effort.  Share your stories in our comments, share this article with others, and lets build justice communities together.

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