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“Zombie” Foreclosures and “Vampire” REOs Haunt Miami Homeowners

There is no doubt that the prospect of a Miami foreclosure filing is scary.

What may be even more frightening though is a “vampire REO” or, perhaps worse, a “zombie foreclosure.” As it turns out, according to RealtyTrac, Miami is high on the list for both.

Let’s first delve into vampire REOs. We touched on these briefly in on of our recent Miami foreclosure lawyer blogs. This is a situation wherein the bank has completed a foreclosure action on a certain property, and yet the previous owner continues to live there. There is no formal agreement between the bank and the former homeowner, which may leave the occupants at a disadvantage – particularly now that rising home prices are motivating more banks to sell and try to recoup their losses.

In Miami, vampire REOs account for about 65 percent of foreclosures.

On the surface, these homes may not appear to be distressed. That is, the lawn is still being mowed, the property still maintained. That’s a big part of the reason banks may have been slow to take action in these cases, particularly if there haven’t been purchase opportunities. These homeowners aren’t paying any sort of mortgage, but neither are they protected if the bank wanted to have them removed on a moment’s notice.

On the flip side of this are “zombie foreclosures.” These are far more dangerous to the homeowner, and they account for about 20 percent of the foreclosure market.

These are homes that are still languishing somewhere in the foreclosure process, but have been vacated by the homeowner. He or she may not have understood that they had a right to remain in the home until the foreclosure action was completed. In some cases, the bank may have told them they had to leave.

In a sense, the property exists in a state of limbo. It’s not bank-owned – yet – but neither is it being cared for by the homeowner, who has moved on, believing the house is no longer theirs.

The problems with this kind of situation are multi-faceted. First, it’s detrimental to the neighborhood because the home falls into a state of disrepair. The bank doesn’t claim responsibility for the upkeep, but neither does the homeowner. It can serve to drag down nearby property values. Secondly, it harms the bank because, when it comes time to sell, the property may be worth significantly less without substantial repairs.

Mostly, though, it harms the homeowner. Most of the time, the homeowner has no idea that throughout the duration of this time, he or she has been responsible for property taxes, housing association fees and code enforcement regulations and fines. By the time they find out, they may be thousands if not tens of thousands of dollars behind in debt.

RealtyTrac reports that of 86,000 Miami foreclosures in the pipeline, about 16 percent are “zombie foreclosures.”
Finding out you owe all sorts of back taxes, fees and fines can be a serious impediment to helping you move forward in your life. We’re here to help.

If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.

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