The term “zombie house” sounds like it was made-up. But if you say “zombie house” in a room full of real estate professionals, they will probably nod their heads knowingly. Zombie houses are a nightmare for homeowners, banks, and the neighbors.
What’s a Zombie House?
A zombie house is one that has been vacated because the owner could no longer make their scheduled mortgage payments. In most cases, the bank moves forward with foreclosure proceedings. But when the foreclosure process never ends, these houses are referred to as zombie houses. They’re in limbo between living and dead. Because the owner is still responsible for property taxes, HOA dues, and other expenses. But the house is vacant, so it is subject to decay and damage. This makes it become an eye-sore and hazard to the neighborhood.
In the case of a zombie house, the title still belongs to the homeowner. However, the owner probably doesn’t know that the foreclosure process never ended. And, that they’re still responsible for the property. Lenders are not responsible to notify the owner in this case. Therefore, property owners should keep contact with their lenders throughout the foreclosure process until it is finalized in order to protect their interests and avoid accruing additional debts.
According to an article by Marcie Geffner, “‘Zombie’ houses stalk previous owners after move-out”, published in The Houston Chronicle, there are more than 300,000 zombie houses in the U.S., with more than 30% in the state of Florida. States like Oregon and Nevada, which enforce penalties for lenders that abandon the foreclosure process, have the fewest zombie houses.