8/3/19 Zombie Debt / Zombie title / Zombie bank


Zombie Debt

Zombie debt is debt that has been long forgotten about and has probably been written off as uncollectible. But zombie debt can rise from the grave, if a debt collector attempts to collect on it all over again, even when the debt is too old to legally pursue.

Zombie title

A zombie title is a real estate title that has stayed with the owner of a residential property after the mortgage lender has begun a foreclosure process (making the owner move out to enable sale of the property) but then cancelled the foreclosure process. The lender is not required to notify the owner of the cancellation, who is therefore often unaware of the obligations associated with continued ownership, such as payment of local taxes and upkeep of the property in accordance with local bylaws. The prevalence of zombie titles greatly increased in the United States following the financial crisis of 2007–08. Sometimes also known as ‘zombie foreclosure’ or ‘zombie mortgage’

Zombie bank

A zombie bank is a financial institution that has an economic net worth less than zero but continues to operate because its ability to repay its debts is shored up by implicit or explicit government credit support. A zombie can continue to operate and even to grow as long as creditors remain confident in the relevant government’s ability to extract the funds needed to back up its promises from current or future taxpayers