Oakland County Zombie Foreclosures Following You

Look around your Oakland County neighborhood. There may be zombies out there.

We’re not talking Night of the Living Dead zombies. We’re talking zombie foreclosures that are in Oakland County. And they can be scarier than anything George Romero ever dreamt up: Zombies aren’t real; zombie foreclosures are. And, they can cause big problems for homeowners.

Zombie foreclosures are homes that have been abandoned by their owners but not yet taken over by banks. The owners have stopped making their monthly mortgage payments. They may be long gone. But the banks, because they are so far behind on their foreclosure work, may not take ownership of the abandoned home for months in Oakland County.

Scary numbers: According to early summer 2014 numbers from RealtyTrac, as many as 141,406 zombie foreclosures lurked in neighborhoods across the country. The good news? That’s down 16% from one year earlier. The bad news? There are still too many of these homes out there.

And while these zombie properties are nuisances to other homeowners—often no one is taking care of these homes—they can be especially dangerous to their former owners. Why? Walking away from a home doesn’t absolve owners of certain responsibilities. Too many homeowners don’t understand this.

Haunted by zombies: What if your home is one of these zombie foreclosures? Was it smart to move out of the home immediately after you received a foreclosure notice? Can you just wash your hands of the Oakland County property once you vacate the premises?

The short answer to these questions? No.

A zombie foreclosure can haunt you for years. A traditional foreclosure does this anyway, remaining on your credit report for up to seven years. Your three-digit FICO credit score can immediately drop by 100 points or more after a foreclosure. This makes applying for future credit—an auto loan, personal loan, credit card or, of course, another home loan—difficult. Most lenders won’t risk lending to you until you’ve rebuilt your credit score.

It gets worse.

Zombies don’t die: In the typical foreclosure process, you’ll receive a foreclosure letter (“notice of default”) from your lender. The bank is then supposed to take ownership of your home if you can’t pay back the mortgage dollars that you owe. When banks are backlogged, though, this process doesn’t always run smoothly. You might move out quickly after receiving a foreclosure notice. But the bank might not get around to taking over your home for months or, in extreme cases, years.

But after you’ve moved out, you’re still responsible for paying your homeowners insurance and property taxes. If you don’t pay these bills because you think the bank has already taken over ownership of your home, you might be in for a surprise when your county sends you a hefty bill for back taxes.

Protecting yourself: The best move after receiving a foreclosure notice in Oakland County? Stay in your home until the bank takes ownership of the property. Continue to mow your lawn and maintain your property. Pay as many bills as you can afford to, including, if possible, your tax and insurance payments. Don’t move until you are absolutely certain that your bank has taken ownership.

Once this finally happens, you can move on to the next stage of your financial life, and repair your credit following foreclosure.

The good news is you can steadily rebuild your credit score after losing a home to foreclosure. You’ll need to start a new financial history of paying your bills on time and eliminating as much of your credit-card debt as possible. After doing this for several years, your credit score will begin to improve. And then your dream of a second chance at owning in Oakland County a home can become a reality.