Zombie Foreclosures Attacking American Homeowners; Learn What You Can Do

American homeowners are facing an epidemic, "zombie foreclosures."

According to CNN Money, "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." 

CNN reported approximately 2 million people faced home foreclosures since 2005, and from that number, RealtyTrac found that tens of thousands of those homes were actual zombie foreclosures.

CNN Money found low-income families were hit the hardest. For instance, there's a long wait to find a taker for the property, so former residents won't have the opportunity to save on the taxes.

"The most frustrating part is that I can't move on," said Rose Nathan, a 37-year-old office manager who lost her home in January 2009.

She filed a "deed in lieu of foreclosure," after CitiMortgage came to an agreement to have her walk away.

"On Christmas Eve, the bank called and told me a sheriff's sale was coming and I had to move out right away," she told CNN. "So that's what I did -- seven days after New Year's."

According to CNN, Nathan had moved to Hawaii and after two years she received a $5,000 bill on her property tax because the bank never repossessed.

Forbes reported several ways homeowners can arm themselves from these zombie foreclosures. Homeowners tend to get to early stages of the zombie foreclosure if they leave their homes without taking extra steps to reaffirm the foreclosure status.

Homeowners can work out a modification of their loan or agree to a short sale, these can be accommodated by respectable real estate professionals who can talk with the lenders.  But ultimately, lenders have the final say.

"Many homeowners leave their homes during the foreclosure process assuming they are doing the honorable and morally right thing," Allan S Glass, president of ASG Real Estate told 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."