Some refer to “zombie titles” as a little-known horror in the fallout of the foreclosure crisis. Thousands of home owners are discovering they may be legally liable for a home they thought they no longer owned.

In some of these cases, home owners receive a notice of a foreclosure sale and move out to give the home to the bank. But then the bank never completes the foreclosure.

“The banks are just deciding not to foreclose, even though the home owners never caught up with their payments,” Daren Blomquist, vice president at RealtyTrac, told Reuters.

According to housing experts, the problem of “zombie titles” is worsening, although no national databases track such titles.

“There are thousands of foreclosures in limbo, just hanging out there, just sitting, with nothing being done,” says Raymond Pianka, a Cleveland Housing Court. He says the problem is due to home owners who leave the home before an imminent foreclosure sale. Later, the home owners discover they’re legally responsible for the home. By that time, the house may have greatly deteriorated. And some home owners don’t even discover it until years later, such as when a municipality finally fines them for failing to keep the property.

Source: “‘Zombie Titles’ Haunt Victims of Foreclosure,” Reuters (January 2013)

The moral of this story is despite how difficult it is emotionally to face a foreclosure don’t just walk away!  In the history of problem solving, ignoring a problem has never been a successful solution.  There are options for dealing with the foreclosure that include short sale (many banks are offering incentives to do this and there are new short sale programs in place from Fannie Mae that include reduced paperwork, faster turn times and relocation funds for the seller) or deed-in-lieu.  Foreclosure is not a fun time but make sure it stays where it belongs – in the past – so that you can move forward to brighter days.