That term refers to a second mortgage that seemed to have been forgiven or written off - until years later when a collector reaches out about the unknown, but supposedly unpaid, debt.
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Such confusion over mortgages has led to a surprise massive bill that Adaina Brown and her husband can't pay.
Brown said they are living in what was supposed to be her dream home. Now she's worried she might lose it.
"It kind of just broke my heart. I told my husband I can't take another thing," Brown said.
She and her husband bought the house in 2007. They needed a first and second mortgage. When the housing market crashed she said the mortgages were transferred several times to new companies.
She said her original lender eventually charged off the second loan.
But then it showed up with a new company.
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After she spoke with them, that company sent her a letter that said she was not responsible for the debt.
"They said, 'thank you for reaching out. You're absolutely right, this debt has been charged off. You are no longer liable for this debt. We will update your credit.' They sent me a new credit report," Brown said.
But just a few months later that same loan showed up again with yet another company, Specialized Loan Servicing, which said she owed $139,000. Since then,Adaina said the company filed against her property.
"I get a notice of default, and hundreds of realtors called me about my house saying, 'do I want to sell it, it's in pre-foreclosure,'" Brown said.
Back in 2020, the federal government's Consumer Financial Protection Bureau found that Specialized Loan Servicing violated regulatory guidelines by foreclosing against borrowers who were entitled to protection.
"It's illegal for an agency to sue or try to collect debt that's way past the statue of limitations," bureau official Mark McArdle said. "So, your classic zombie foreclosure."
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Now that they notified Brown of a default, the loan company could sell the house at any moment. So she's trying to be proactive. She might have to sell the home even though she doesn't want to.
"Ultimately, the goal is to keep it, but I don't have $200,000 to keep this house. I don't have money for a lawyer. And I don't want a foreclosure on my record either, you know, so it's just like we're in a lose-lose situation," Brown said.
Information about zombie mortgages and how to file a complaint with the Consumer Financial Protection Bureau is available here.
"So we do encourage everybody in that situation to make a complaint to the bureau. And especially if they're facing foreclosure, we have a a flag that they can click. That helps us prioritize it so we can intervene," McArdle said.
ABC Los Angeles affiliate KABC tried to contact Specialized Loan Servicing for a statement but no one responded to an email or could be reached by phone.