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From the Living Dead – Zombie Mortgages?

Zombies are supposed to only exist in the movies and on TV shows.


However, it seems that the zombie trend has transcended to the world of finance and the housing market.  Many news outlets have been reporting about “zombie mortgages”.

According to CNN, “[s]ince the housing bubble burst seven years ago, almost two million properties have started but never completed the foreclosure process, according to RealtyTrac…it’s estimated that tens of thousands could be zombie foreclosures.”

What is a Zombie Mortgage?

A “zombie mortgage”, according to CNN writer Les Christie, is when “borrowers move out after their bank schedules a foreclosure auction only to learn months or years later that the auction never took place or the bank never transferred the deed. That means the borrower still technically owns the house and is on the hook for property taxes, fees and homeowners’ association dues.”

From the chaos that has arisen from the housing market crash, many individuals have been left to deal with these debts that they believe have disappeared and they are no longer responsible for repaying.

Unfortunately, this is not the case.  In some instances, there are people who have multiple mortgages on their home.  In California when a first lien holder forecloses and there is a second mortgage or HELOC on the home, the second mortgage becomes a sold out junior lien and can still collect on the debt.

Is there a solution? 

Many people who are in this unfortunate situation do not have the means to escape from these mortgages and are unable to pay for them due to their financial situation.

However, one possible solution to assist these individuals is to file for bankruptcy.   Here at The Law Office of John Iaccarino, we have been assisting our clients in the San Francisco Bay Area with filing for bankruptcy (Chapter 7, 11, 13)  for over 20 years.  If you are currently dealing with a mortgage from a foreclosed home, we can assist you to determine what solution you have available to your situation.



Frequently Asked Questions About Bankruptcy

Stress. Anxiety.Depression.  




1. What are the advantages of bankruptcy?

2. What about my credit?


Chapter 7 takes between 3 to 8 months;



7. Which bankruptcy chapter is the least expensive?



10. What does reaffirm mean?

11. What exactly can I exempt?

12. Does my personal bankruptcy affect my corporation?

13. Can I file a personal Chapter 11?
Individuals may file. Chapter 11 – More info

14. Do I have to appear before a bankruptcy judge?

15. What is the trustee’s job?




19. What does it mean when a trustee abandons property?
