The concept of a zombie foreclosure might sound like part of a science fiction movie, but such homes could wreak havoc on Minnesota neighborhoods. A zombie foreclosure is a home with which the foreclosure process has begun but is bogged down. As the homeowners leave their properties, the failure of creditors to move forward efficiently with the foreclosure process can leave these locations vacant. Properties may become rundown due to a lack of activity or maintenance. They could also attract squatters, drug dealers, gang members or other undesirable individuals, creating an unsafe environment for the rest of the neighborhood.
During the second quarter of 2015, approximately 25 percent of foreclosures fell into this category, nearly 130,000 properties across the country. Two of the leading cities dealing with the problem are located in New Jersey, and the state has attacked the problem through legislation that places responsibility for zombie properties on the creditors. With fines of $1,500 per day implemented for creditors violating ordinances in the communities in which their properties are located, there is good reason for quick handling of foreclosure properties. In some cases, short sales are used to liquidate such a home. In other cases, land banks are used to take over such locations.
By working quickly to get foreclosed properties sold to responsible owners, neighborhood conditions can be stabilized. However, some zombie foreclosures occur due to legal challenges faced by debtors. These can include issues such as the creditor's skipped steps during the original sale of the property or a lack of proper documentation of their interest in a property.
An individual who is facing foreclosure proceedings might want to meet with a lawyer to ensure that the action is legal. Further, a lawyer may be helpful in overseeing a client's side of the process to ensure that they don't vacate the property prematurely and expose themselves to liability issues over the condition of the property.