Attack of the Zombie Foreclosures: 'Dead' Debts Haunt Ex-Homeowners

Just when you thought you were safe: Look out behind you, it's the attack of the "zombie foreclosures." Several former homeowners have discovered debts they thought were paid coming back from the grave even after their homes were foreclosed on, according to CNN Money. That's even more terrifying than your typical brand of brain-eater.

CNN explains these foreclosures of the undead: "borrowers move out after their bank schedules a foreclosure auction only to learn months or years later that the auction never took place or the bank never transferred the deed. That means the borrower still technically owns the house and is on the hook for property taxes, fees and homeowners' association dues.

While the exact figure isn't known, in the last seven years, about two million properties have begun but never finished the foreclosure process, miring in the limbo of such "zombie foreclosures," according to The Christian Post.

"The most frustrating part is that I can't move on," said Rose Nathan, a 37-year-old who lost her house in Indiana, CNN reported. "On Christmas Eve, the bank called and told me a sheriff's sale was coming and I had to move out right away," she said. "So that's what I did - seven days after New Year's."

After losing her home, Nathan reportedly sold her things and moved to Hawaii. But while Nathan was finished with her debts, her were not finished with her. Almost two years after moving out of her home, Nathan was hit with a property tax bill from the City of South Bend for $5,000 because the bank had never taken possession of the residence, according to CNN. 

Citi Bank informed Nathan's attorney, Judith Fox, that the home had never been sold because the property had a lien against it. That's not how Nathan remembers things. She claims she knew of no liens against her house at the time the transaction took place, an assertion backed up by Fox, who wasn't able to find any evidence of a lien until "well after" Citi Bank made the deed-in-lieu agreement with Nathan. 

If "zombie foreclosures" are so unpredictable, is there any way we can protect ourselves? Speaking to Forbes, Allan S. Glass, president of ASG Real Estate, explained much of the problem had to do with residents making assumptions about the status of their foreclosures. 

"Many homeowners leave their homes during the foreclosure process assuming they are doing the honorable and morally right thing," said Glass to Forbes. "The unfortunate risks they assume are that someone takes possession of their home, damages the home causing additional loss, or that the house lingers in disrepair until it becomes a nuisance to their neighbors and city. All of these things could lead to a greater loss financially for the homeowner, or worse yet potential legal liability."