Planet Money
Zombie mortgages are coming back to life
May 10, 2024
A woman experiences a shocking foreclosure on her home despite being current on her mortgage after 17 years. It turns out she's facing a 'zombie mortgage'—a debt she thought was settled but has come back to haunt her. The podcast delves into the resurgence of these unspoken financial nightmares and the legal implications for affected homeowners. It also illustrates the struggles of individuals navigating complex legal battles to reclaim their homes, shedding light on a troubling trend in the housing market.
30:55
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Quick takeaways
- Zombie mortgages resurface, causing financial distress for homeowners like Karen McDonough due to debt collectors' predatory practices.
- Consumer lawyers combat zombie mortgages by demanding proof of debt, holding collectors accountable, and leveraging regulations to protect homeowners' rights.
Deep dives
The Resurfacing of Zombie Mortgages
Many individuals, including Karen McDonough, who experienced the financial stress of the housing crisis, are now facing a new threat known as zombie mortgages. These old debts, believed to have been forgiven, have resurfaced, leading to foreclosures and financial turmoil. Debt collectors target individuals with second mortgages from decades ago, adding interest and late fees retroactively, causing financial distress to homeowners like Karen.
