Zombie foreclosures are problematic for Indiana homeowners.
If you do not pay your mortgage, you may assume that your lender always takes possession of your home and sells it to pay your mortgage balance. Although this happens in most instances, sometimes the lender does not, for whatever reason, get around to selling the home. When the foreclosure process is not completed in this manner, it can be problematic for the homeowner.
One particularly troublesome type of uncompleted foreclosure is the “zombie” foreclosure. This occurs when the homeowner abandons the home after receiving a notice of foreclosure. By doing so, the homeowner often believes that the lender will sell the property and he or she is under no further financial obligation.
However, in some cases, the lender does not sell the house. The reasons this occurs are varied. In some instances, the lender already has a large portfolio of foreclosed properties and does not want to be responsible for the care and maintenance of another one. Whatever the reason is, when the sale does not occur, the title to the house remains with the owner.
When the title is not transferred to the lender, this can cause serious problems for the homeowner. The property continues to incur property taxes, which the homeowner is still liable for. Additionally, the property can fall into disrepair, leaving the homeowner on the hook for fines and other penalties for violations of housing codes or ordinances. This can come to a complete surprise to an already financially strapped homeowner, since he or she often assumed that the home was sold.
Indiana zombie foreclosures
According to the most recent data from RealtyTrac, zombie foreclosures are quite prevalent in Indiana. As of the end of January 2015, there were 5,217 zombie foreclosures in the state, making it one of the top 10 states in the nation with this problem.
Since zombie foreclosures can cause homeowners already feeling the financial pinch to be hit unexpectedly with significant expenses, if you are facing foreclosure, it is important to take steps to avoid this problem. In many cases, you may be able to stay in your home if you file Chapter 13. In this type of bankruptcy, you stay in your home as you pay your mortgage arrearages in monthly installments over a three to five-year period. Since the installment amount is based on your disposable income, it is kept affordable.
In cases where you think you cannot afford your home and would be better off giving it up, it is wise not to abandon it. Various legal tactics can be used to ensure that the title to the house is transferred out of your name, eliminating the possibility of future financial obligations.
In either case, it is important to speak with an experienced bankruptcy attorney. The attorneys at Golden Law, PC can listen to your situation, give you your legal options and recommend a solution based on your long-term goals.