The letter arrives out of nowhere: a repayment demand on a home loan you thought long forgiven. An unfamiliar company claims you owe tens or hundreds of thousands of dollars in back interest and fees — or face foreclosure.
It’s a real nightmare. Many of these “zombie” second mortgages date to the early 2000s subprime lending boom. After the 2008 crash, lenders often stopped sending statements on small, seemingly uncollectible loans or even canceled the debt with a 1099-C notice, leaving those borrowers convinced they were in the clear.
Zombie Mortgages Explained: Protect Your Home From Old Loans
