Facing foreclosure? Here’s why you should not abandon your home

Abandoning your home to escape your mortgage debt can be an ineffective strategy.

When some people are behind on their mortgage and facing foreclosure, they think that abandoning their home to the lender is their only option. By abandoning their home, they assume that it will be later sold in the foreclosure sale, relieving them of further liability on the mortgage. Although this often happens when the foreclosure process runs to completion, sometimes it does not. In cases where, for whatever reason, the foreclosure process is stalled or dismissed by the court, homeowners who have abandoned their homes can find themselves in a difficult situation.

“Zombie” foreclosures

When the foreclosure process is not completed, it can result in what is informally known as a “zombie” foreclosure (or zombie title). This occurs when the home is abandoned during foreclosure but is not later sold to a new owner.

Why is it that the foreclosure process is sometimes not completed? There are several reasons for this. In some cases, the lender lacks the paperwork necessary to complete the foreclosure. In others, the lender may determine that the home is not worth selling. Still, in other cases, the reason is unknown. Regardless of the reason, the homeowner remains the owner of the house and is still responsible for its upkeep.

Owning an abandoned home can cause several types of problems for the homeowner. For one, the homeowner is still responsible for property taxes and HOA dues (if applicable). Additionally, the abandoned home can also be vandalized or fall into disrepair, which can cause the homeowner to be liable for fines for violations of zoning codes.

Unfortunately, homeowners who have abandoned their homes are often unaware of these costs, as they assumed that the foreclosure process ran to completion. Because of this, these costs can mean financial disaster for them, as they are already in a weak financial position.

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