When homeowners in Illinois receive a notice of foreclosure from their bank, many move out of their home as soon as possible. However, in some situations, the bank will not follow through on the foreclosure and the title of the property will stay in the name of the owner who thought that they no longer had rights to the property. Property owners who do not know this can occur often become possessors of “zombie titles.”

Why banks don’t take over the property

There are a variety of reasons why a bank may not take over a home after a foreclosure. Some of these reasons include the following:

  • They simply do not want to take the house back
  • The costs of handling the foreclosure do not justify completing the process
  • They bank already has too many houses to deal with

According to Forbes, banks are not legally obligated to foreclose on and take ownership of a property once the homeowner has walked away from it.

Disastrous consequences for owners

 When a bank fails to take over a property after the homeowner has moved out, the property may fall into disrepair, become occupied by undesirable tenants or acquire fines from the municipality where the home is located. In some cases, the bank may not attempt to contact the homeowner and let them know that the foreclosure process is not moving forward.

Zombie titles can put homeowners in difficult positions. For example, according to Reuters, a man, who was 10 months behind on his mortgage payments, received a notice from his bank that his home was going into foreclosure. After he and his wife moved out of the house, they thought they would not have to deal with the property ever again.

However, a year later, the county sued him because the house violated housing codes due to its collapsed garage and hanging gutters. After that, he received notices for back taxes and bills for weed removal, waste removal and sewer fees. Several years later, the man applied for disability benefits from the Social Security Administration but was denied because the home in his name made him ineligible. Due to this, the man will not be able to get the liver transplant he needs to survive from advanced liver disease.

When a bank does not complete the foreclosure process, the results of this inaction can haunt the property owner for many years to come. Homeowners who are thinking about walking away from their home may benefit from speaking with an attorney who can help them avoid the adverse consequences of a zombie title.