Zombie Mortgage & Dormant Lien Resolution
Is a Forgotten Mortgage Preventing You From Selling or Refinancing Your Home?
A Forgotten Mortgage Just Reappeared on Title. Now What?
A dormant lien can delay closing, derail a transaction, or consume a substantial portion of your equity if not addressed properly.
Many homeowners are shocked to learn that an old second mortgage, HELOC, or junior lien they have not heard from in years is still attached to their property.
Often, these loans disappeared after the 2008 financial crisis. The lender stopped sending statements, the loan was charged off, or ownership of the debt changed hands multiple times. Then, years later, the lien suddenly resurfaces when the homeowner attempts to sell, refinance, obtain a reverse mortgage, or transfer the property.
These are commonly known as “zombie mortgages.”
The good news is that these liens are often negotiable and may be resolved for substantially less than the amount claimed.
These are commonly known as “zombie mortgages.”
The good news is that these liens are often negotiable and may be resolved for substantially less than the amount claimed.
How California's New Zombie Mortgage Law Can Help
Leverage protections under California's zombie mortgage laws
California recently enacted AB 130, which added Civil Code Section 2924.13 to provide additional protections for homeowners facing collection or foreclosure efforts on long-dormant junior liens and second mortgages.
In plain English, the law recognizes that lenders should not be able to disappear for years, allow interest and penalties to accumulate, and then suddenly reappear demanding payment when a homeowner tries to access their equity.
Depending on the circumstances, homeowners may have significant leverage to challenge enforcement of these liens, negotiate substantial reductions, or obtain a release of the lien altogether.
HOW CALIFORNIA'S NEW ZOMBIE MORTGAGE LAW CAN HELP
We help homeowners:
Negotiate discounted settlements with dormant lienholders
Obtain releases of old second mortgages and HELOCs
Analyze whether a lender’s claim is legally enforceable
Investigate ownership and servicing history of the loan
Leverage protections under California’s zombie mortgage laws
Clear title issues preventing a sale or refinance
Resolve last-minute escrow problems involving old liens
In many cases, these liens can be settled for pennies on the dollar. In some situations, the lien may be released with little or no payment depending on the lender’s legal position and the facts of the case.
We Help Homeowners
Eliminate Zombie Mortgages and Clear Title.
A dormant lien can delay closing, derail a transaction, or consume a substantial portion of your equity if not addressed properly.