The term "zombie foreclosure" might conjure up scenes from the movie "Night of the Living Dead," but for the more than 7,000 homeowners who abandoned their homes before their lenders completed the foreclosure process by taking possession, the term could represent a lost opportunity.
According to recent data on foreclosures in the United States, Ohio ranks fourth on the list of states with zombie foreclosures.
Many people who experience financial challenges brought about by circumstances such as unemployment, a reduction in available overtime leading to a loss of income or overwhelming medical debt caused by a serious illness or injury fall behind on their mortgage payments. Rather than wait out the foreclosure process by remaining in the home until the courts award possession to the bank or mortgage lender, a mortgage borrower might elect to abandon the property. When this happens, it is called a zombie foreclosure.
Perhaps surprisingly, improvement in the real estate market in Ohio, with prices of homes increasing, is contributing to banks moving more rapidly toward judicial proceedings instead of attempting to work with a family to prevent foreclosure. Rising home prices could present opportunities for a mortgage borrower to avoid the threat of foreclosure, but the large number of zombie foreclosures in the state would appear to indicate that many homeowners are not taking advantage of them.
The owner of a home in Cincinnati or other communities throughout Ohio who is delinquent in mortgage payments might benefit from consulting with an attorney about options, such as bankruptcy, that could be available to prevent foreclosure.
Seeking advice early in the foreclosure process might help a mortgage borrower to avoid having his or her home become another zombie foreclosure.
Source: Dayton Daily News, "Ohio at the top of zombie foreclosures," Feb. 6, 2015