10 Dec 2013
What is a Zombie Mortgage? Part 1
One day in the future, somebody will reflect on the real estate investing opportunities of the present times and make a profound statement: “It was the best of times, it was the worst of times.” That somebody should be you.
You should be reflecting on when and how you made your fortunes while telling tales about your good deeds that led to success. One of these opportunities is presenting itself now with what is called, a Zombie Mortgage. Let us explain this situation further.
Many people who get behind on their mortgage payments think that when they receive a notice of foreclosure from their bank, it’s time to move out. Abandoning the property may be the worst mistake they can make. Many times the banks don’t follow through with the foreclosure and the legal ownership remains in the person who thought they lost the property.
What these homeowners are not aware of is that they are still responsible for the property and everything that happens on it or to it, whether they are living in the property or not.
The homeowner who moved on with life eventually finds out that the legal “title” to the property is still in their name. Unfortunately they often learn this years later when they show up on the radar of creditors. The unsuspecting homeowner’s old home has come back from the grave to haunt them – a“Zombie Mortgage.”
As more and more homeowners are recognizing that they are still responsible for their previous homes, they find that their lawyers have no solutions. The short-sale failed, the deed-in-lieu of foreclosure didn’t work, and their bankruptcy left the door of debt open. That’s where you, the real estate investor is presented with an opportunity and can come in to assist the homeowner.
While it will take some time to gain complete control of the property, you can put your real estate knowledge to good use by helping a person in need while still making money.
Alan Kosinski is the co-founder of ZombieMortgage.com where homeowners can learn & find help, and ZombieInvestors.com where investors can see how it’s done! This is the first article of a 3 part series. In part 2, we look at steps on how real estate buyers can take over a Zombie Mortgage as well as real world examples of their success in part 3.