'Zombie' mortgages/titles: Foreclosure horror stories

10:47 PM, Apr 24, 2013   |    comments
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CLEVELAND -- Many area residents are having a recurring nightmare about "zombies."

No, not the scary human creatures hovering between life and death.

These "zombies" are "zombie" mortgages, houses and titles, properties they thought they'd left behind through foreclosure or bankruptcy.

But they've discovered the haunting, not haunted, houses are stalking them, making them responsible for ongoing mortgage costs, taxes, repairs and, in some cases, demolition bills.

Russell Bonchu, a Cleveland computer adviser who now works out of his rental  home, got way behind in his mortgage payments.

"There was not enough check at the end of the month," he said.

His mortgage holder told him he must pay it all back at once, no partial payments allowed.

"If you send a check, we'll send it back.....we're going to start the foreclosure process," he says he was told.

Russell and his family got legal advice to move out and figured the foreclosure would cut his ties to the house.

Time passed. And a city inspector found Russell at his new home, asking "Did you know your house caught on fire?"

Russell was shocked. He thought he was free and clear of the home.

Russell's mortgage holder threatened to foreclose, but never did and did not inform him of its decision, leaving his name on the title.

"I'm responsible...I have to go back to the house and make repairs," he said.

If the city orders demolition, "that's going to be a bill of $8,000 to $10,000 for me. And it's going to hurt," he sighed.

Zanetta Seigers is in the same boat.

She lost her eyesight to diabetes and had to quit three part-time jobs she worked to pay her mortgage.

When she asked her mortgage holder to work out more flexible terms, instead she was told her mortgage would go up about $500 a month.

"I just couldn't afford it," she said.

A lawyer told her she could tell her mortgage holder to foreclose and then move out and "it would be done and over."

She did that. But she was surprised to get a violation notice in mail, telling her she must make repairs on the house.

"I'm visually impaired. I'm indigent. How am I supposed to do all those things?" she asked.

Chelena Hurst lost her job and got way behind in her mortgage.

A lawyer advised her she could file bankruptcy and would lose the house in eventual foreclosure.

She moved out thinking that's what happened.

About a year later, she was pulled over for a traffic violation. She was missing a front license plate.

The officer found out there was a warrant for her arrest for not keeping conditions up at the house she thought she was done with.

She had to spend a weekend in jail and pay $1,000.

She's still responsible for her old house.

"It's horrible. It's horrible....I thought once I moved, I'd be free and clear," she said.

Kermit Lind is a retired CSU Law Professor and attorney working on this problem.

He compares those haunted by zombie mortgages to indentured servants who have all the responsibilities and none of the rights of the homes they thought they were rid of.

"They're broke. They're poor and there's a house in their name, " he said.

He thinks there should be a law that lets homeowners "declare publicly I disown this title."

Sen. Sherrod Brown would back a law forcing banks to tell homeowners if they halt a foreclosure that they start.

"That's clearly not right...it's important that banks behave ethically and properly...We need more transparency and clarity for banks on what they're doing with homeowners," he said.

Cleveland Housing Court Judge Ray Pianka sees lots of "zombie" cases.

Cleveland Housing Court "Zombie Mortgages/Titles" page

He sends Clevelanders named in foreclosure suit start-ups a letter, explaining their rights and responsibilities.

He says many lawyers are not properly informed what to tell their clients in this situation.

His biggest piece of advice is, "Do not leave that property until the sheriff tells you to leave that property."

Pianka says the three most important steps to avoid or address a zombie/toxic title situation are:

  • If you are in foreclosure or bankruptcy and believe that you will lose your house, do not leave until the County Sheriff tells you to.
  • Consult an attorney
  • If you cannot afford an attorney, go to a Legal Aid Brief Advice Clinic (list at http://lasclev.org/category/events/ or call 216-687-1900 or 888-817-3777)
  • Legal Aid Brief Advice Clinics "A first-come, first-served free advice clinic for low-income individuals with civil legal issues. Please bring all relevant paperwork with you."

Next Legal Aid events in Cleveland:

  • April 27, 9:30 a.m. to 11:30 a.m. at Fatima Family Center on 6600 Lexington Ave
  • May 5, 9:30 a.m. to 11:30 a.m. at Cleveland Public Library, Woodland Branch, 5806 Woodland Avenue
  • May 18, 9:30 a.m. to 11:30 a.m. at Spanish American Committee, 4407 Lorain Avenue
  • May 22, 2 p.m. to 4 p.m., location TBA.

Owners of property in the City of Cleveland and the Village of Bratenahl can also contact Cleveland Housing Court for more information.

Housing Specialists are available from 8:30 a.m. to 4 p.m. Monday through Friday to assist residents with information about a wide range of housing issues, including "zombie" titles, but cannot provide legal advice.

Property owners can stop by the 13th floor of the Justice Center, 1200 Ontario Street in Cleveland or can call 216-664-4295 to speak with a Housing Specialist. Email inquiries can be directed to mooredi@cmcoh.org.

Many "zombie" mortgage victims are trying to resolve issues that get their name off the title and have the property taken over by the Cleveland Land Bank.

Case Western Reserve University's Center for Urban Poverty and Community Development estimates about five thousand people in Cuyahoga County are in this "zombie" predicament.

It's a national problem with an estimated hundreds of thousands of victims.

But with many mortgages being sold and resold, it's difficult just to find the right firm to either reinstate or rescind a foreclosure action.

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