What are Zombie Titles?
Homeowners Nationwide are the victims of “Zombie Titles”
A disturbing new trend has emerged as the foreclosure crisis continues to ravage large portions of the county. This phenomenon is being referred to in the industry as having a “zombie title” and occurs when foreclosing lenders fail to follow through the with the entire process of assuming title to the property they have pressured residents to abandon.
As homeowners have fallen behind on their mortgages, they often receive threatening notices from the bank or its agents that they must leave the property immediately or face eviction by law enforcement. Feeling frightened and vulnerable, these people often flee and leave behind their homes, thinking they have no other alternative.
The problem occurs when the banks decide that it is no longer in their financial interests to finish the foreclosure process and take legal title to the property. The abandoned homes often become a haven for drug and gang activity, while scavengers ravage the home until it is uninhabitable. More disturbing is cases where banks complete the foreclosure process take title yet fail to record their sheriffs deed with the appropriate recorders office as evidence of ownership. Due to the fact that the banks froze, fail to file, or dropped the foreclosure suit, the original borrowers still have title and are therefore liable for city ordinance violations, property taxes and any other expenses associated with property ownership.
Those homeowners who find themselves in the position of defending themselves from a foreclosing lender should be aware of this situation and evaluate their circumstances carefully before vacating a property based on a notice from the bank or a real estate agent. In Illinois, the foreclosure process must be conducted through the courts and may take several months or even years. A resident should not leave their home until absolutely necessary and only if it is clear that the legal title has been properly transferred and they are no longer liable for the property.
We have encountered many cases and clients where this happened and identified several remedies to counteract he banks actions or lack of actions to protect the borrowers going forward. It is critical to consult with competent attorneys on this and other issues to ensure full awareness of the law and all the rights that are available to Illinois homeowners.