Imagine sitting in your home only to find out that it’s facing foreclosure by for missing payments that you didn’t know still existed.
This is a phenomenon known as “Zombie Mortgages” haunting homeowners in the United States.
Karen McDonough, a homeowner in Quincy Massachusetts, is one of the many Americans facing the threat of losing their homes because they forgot to pay for their mortgage that they believe had already been pardoned or forgiven.
According to an NPR investigation, debt collectors are buying old second mortgages from the banks and foreclosing the properties. To make matters worse, they’re imposing huge interest and fees that apply retroactively.
As previously mentioned, the cause of the zombie mortgages is from the housing crash of 2008. At the time, millions of Americans found relief after mortgage companies told them that they no longer had to worry about paying for their second mortgages as part of their modified loans.
Over the past two years, the NPR had found at least 10,000 “new” old second mortgages in New York alone that resulted in the initiation of foreclosure activity.
What makes these mortgages that have returned to life dangerous for the homeowners is that they are real. They have existing and recorded liens that make it easy for investors to gain legal ownership of the loans that allow them to foreclose the homes.
Homeowners are currently fighting a legal battle against these companies but it appears that their chances of winning are slim to none.