‘Zombie mortgage’ threatens family’s Virginia Beach home

VIRGINIA BEACH, Va. — For many families, paying a mortgage is difficult enough.

So imagine if one day you got a notice saying there was a second one in your name, and if you didn’t pay tens of thousands of dollars right away, the bank was going to take you home.

That’s what happened to a family in Virginia Beach. Now, they’re going through litigation to keep their home and warn others about so-called “zombie mortgages.”

To understand the family’s plight, I have to take you back to the early 2000s.

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During this time, people were taking out second mortgages on their homes.

Interest rates were low and they could use the second mortgage as a line of credit.

The first mortgage would cover most of the debt and the second mortgage would cover the remaining 20%. However, when the market crashed, home values ​​fell and people couldn’t pay.

right Consumer Financial Protection Bureauif you default on a second mortgage, your home can be foreclosed on even if you are current on your first mortgage.

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“Sometimes there are situations where people think the mortgage, or a loan, is being discharged for whatever reason, but later find out that’s not true. This is why they are commonly referred to as zombie mortgages. They kind of come back to life, if you will,” says Brandon Ballard, strategic litigation attorney at the Legal Aid Society of Eastern Virginia.

Ballard says that’s what happened to the Virginia Beach family she represents.

They didn’t want to go on camera, but they told me they were unexpectedly notified that their home was foreclosed on.

“One of the things we’re also dealing with is that, as is common in these cases, they don’t tend to send monthly statements over that five or 10-year period,” Ballard says.

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He says this happens because old debts are sold cheaply to debt collectors.

They often go quiet for a while, then years later the mortgage company comes to collect the money — all while racking up interest on the loan.

“It can go up a lot. Like $10,000 $15,000 $20,000 depending on how long they wait,” he says.

Ballard says his clients were never sent statements. In fact, they didn’t even know this mortgage existed.

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They have since learned that their father took out a second mortgage, but he died before telling the family about it.

Now she’s in a legal battle to keep her home and raise awareness about zombie mortgages for other families.

“If you think something is wrong, get help right away,” says Ballard.

Ballard tells me the second mortgage company claims over $36,000 is owed on the family’s account, with a principal balance of over $14,000.

For more information on how to fight zombie foreclosures, see: