Scott and Kari Amable lost their three-bedroom house to foreclosure in 2021 because they couldn’t come up with the roughly $200,000 that a debt collector said they owed on a second mortgage. It was a shocking amount—more than double the $98,000 they had borrowed. It also shocked them for another reason: their original lender had sent them tax documents more than a decade earlier saying their debt had been canceled.
Their story is far from unique, as a growing number of debt collectors across the US specialize in buying a certain type of loan, often referred to as a “zombie” mortgage, which have lain dormant for years. Borrowers took them out before the Great Recession, and after home prices crashed, these loans became all but worthless. But as we show on this episode of Bloomberg Investigates, the market eventually came roaring back, and with it a cottage industry looking to bring these loans back to life.
Americans Are Losing Their Homes to Zombie Mortgages
