Residents of Quincy, Massachusetts, are facing a troubling situation with the resurgence of “zombie mortgages,” which are leaving many homeowners at risk of losing their homes. These mortgages, holding second liens on properties, have resurfaced, catching homeowners off guard and leading to foreclosure proceedings without their knowledge.
An investigation uncovered that thousands of old second mortgages have been subject to foreclosure activity in recent years. Shockingly, homeowners who had taken out these second mortgages during the subprime lending housing bubble between 2004 and 2008 now find themselves in a precarious situation, as these debts they believed were written off have returned to haunt them.
The issue of zombie mortgages is not confined to just Quincy; it is a widespread concern across the nation. The increasing foreclosure filings and attempts to collect on these debts have raised alarms among experts, indicating a rising trend in this unsettling phenomenon.
One such resident, Karen McDonough, faced a distressing experience when she discovered that her home was targeted for foreclosure, despite being up-to-date on her mortgage payments. McDonough, who owned her home for 17 years, was taken aback by the revelation of a “zombie” mortgage that she had no knowledge of, dating back to her home purchase in 2005.
Initially obtaining an “80/20” loan for her home, McDonough encountered difficulties when the interest rates spiked, causing her monthly payments to increase substantially. Although she was assured that the second mortgage had been forgiven, she later found herself hounded by demands for payment from an unfamiliar company, First American National.
In a bid to protect her home, McDonough initiated legal action against First American National, claiming that the foreclosure on her property was unjust and deceptive. Despite the turmoil, she remains hopeful of retaining her home and winning her case against the company, which has been accused of engaging in questionable practices in its pursuit of foreclosure proceedings.
The intricate web of financial transactions involving the resale of these second mortgages to obscure entities for profit has added layers of complexity to the situation, leaving homeowners vulnerable to predatory actions that threaten their most significant investments. The ongoing legal battle highlights the challenges faced by individuals like McDonough in navigating the complexities of mortgage ownership and the repercussions of neglecting second lien obligations.
As the saga continues, residents grapple with the uncertainty of their homeownership status, shedding light on the shadowy world of “zombie mortgages” and the far-reaching implications of financial distress faced by unsuspecting homeowners. The resilience and determination displayed by individuals like McDonough underscore the human toll of these predatory practices and the urgent need for safeguards to protect vulnerable homeowners from falling prey to such schemes.