Most of us have never heard of a Zombie Lien. It is such a hidden disaster, it is not even explained in the online, very popular Wikipedia. When it strikes, we must first become aware of what it really means, how it happened to us and then figure out quickly how to save ourselves.

The name Zombie Lien is derived from a financial situation that was dead and buried only to come back to life.

A Zombie Lien can take place during a foreclosure when a title is not transferred out of the homeowner’s name and although the homeowner is not aware this happened they still have the legal obligation to pay certain debts and expenses like property taxes, HOA dues, and maintenance on the property. Debts associated with these responsibilities can go unpaid for years and then come back to haunt unsuspecting people who were unaware the foreclosure process was not completed.

One would think the bank would be legally required to inform the homeowner, but it is the responsibility of the homeowner to ensure everything was handled properly at the time of a foreclosure. These situations when a bank falls through often occur in low-income areas where the bank does not want to assume responsibility for the upkeep of the property and wants to save on taxes and other costs. Or, the bank decides not to follow through with the foreclosure because they already have too much inventory, the costs of foreclosing don’t justify completing the foreclosure, or maybe the paperwork was simply lost. In any case, people move out of their home during a foreclosure and assume the situation is in their past without realizing the nightmare can continue to haunt them.

Take steps now to make sure you, or anyone you know who could be affected, are not a victim. Confirm the title has been transferred out of your name after the bank held a foreclosure sale. To do so, go to the county recorder’s office in which the property is located and confirm a new deed has been recorded.