DETROIT (WWJ) – It’s a problem now affecting thousands of people who’ve lost their homes. WWJ’s Sandra McNeill reports on the phenomenon known as the ‘zombie foreclosure.’
Mark Gilman from Decus Consulting says a zombie foreclosure is when a homeowner walks away from their home but the tax debt isn’t dead.READ MORE: MSU Police: Tip From Private Investigator Led To Discovery Of Body Believed To Be Brendan Santo
“The banks are not starting the process immediately and what happens is a year later they get a tax bill and they can’t understand why? The reason is because the house was never actually put into the foreclosure process,” notes Gilman.
Gilman says because the markets are so bad the banks are holding on to a lot of these foreclosed homes.
“The banks are making the calculated financial decision ‘I’m going to have a really hard time selling this home,’ even a foreclosure, because it’s in a bad area,” he said.READ MORE: Consumer Alert: How To Avoid Fake N95, KN95 Masks
“The banks hold these properties as long as they possibly can before they release them, so there is an entire inventory we’re not even hearing about.”
Having that extra tax bill is putting an extra hard hit on the homeowners credit.
“The homeowners think that just because they walked away from a property they are done – it affects people in the neighborhood and to not even make a phone call is irresponsible,” said Gilman.
Gilman recommends that homeowners call their bank to make sure the foreclosure process has begun because technically they still own the home and owe the property taxes.MORE NEWS: Flint Public Schools Staying Virtual Indefinitely Due To Large Amount Of Positive COVID-19 Cases
“They’ve got a huge inventory, not enough people to manage it and it’s up to the homeowners to make sure that this is processed.”