Florida: a national leader for zombie foreclosures

On behalf of James Monroe

Florida is a national leader in zombie foreclosures.

When some people are unable to pay their mortgage and are facing foreclosure, they opt to abandon their homes to their lenders to be sold during the foreclosure process. Although this may seem like a sound solution, in reality it can often make the homeowner's financial situation worse, especially if the lender never sells the home.

The "zombie " foreclosure problem

A particularly troublesome type of foreclosure is a "zombie" foreclosure. This occurs when the homeowner abandons the home but the home is not later sold during a foreclosure sale. There are several reasons why the home is never sold. For example, the lender may find that it is not worth selling or lacks the necessary paperwork to complete the foreclosure.

Regardless of the reason, the home sits abandoned during a zombie foreclosure and can continue creating financial headaches for the homeowner. Since the title to the home is never transferred out of the homeowner's name, he or she remains liable for the financial responsibilities of homeownership, such as property taxes or HOA dues. Additionally, the abandoned property may become vandalized, subjecting the absentee homeowner to fines for zoning violations. In most instances, this financial liability comes as a shock to the homeowner, who assumed that the house had been sold.

Unfortunately, Florida was recently named the national leader for zombie foreclosures. At the beginning of the year, data from RealtyTrac showed that there were 36,000 pending zombie foreclosures in the state, comprising about a quarter of all foreclosures. No other state had a higher rate. Experts say that the problem is likely caused by the foreclosure process in the state. Unlike some other states, the process requires a court's involvement, which can cause it to take up to two years to complete. Although the rate of zombie foreclosures has declined somewhat since the beginning of the year, they remain a significant issue, according to the latest data.

Avoiding the zombie foreclosure

Because zombie foreclosures can worsen the financial situation for homeowners, it is best to take action to avoid them completely. If you are having problems keeping up with your mortgage, but otherwise would like to stay in your home, filing Chapter 13 bankruptcy is preferable to abandonment. This type of bankruptcy allows you to stay in your home while you pay off your back mortgage payments over three to five years. If you have other debts, many of them will be eliminated during the process as well.

Even if you cannot afford or no longer wish to stay in your home, abandonment remains a unwise move. Instead, there are other legal options that will allow you to transfer the title to your home, taking you off the hook for taxes and other costs of ownership.

When faced with a foreclosure, it is helpful to learn about all of your options. An experienced bankruptcy attorney can consider your situation and recommend the option that would be best for you.