That’s a VERY good question and detailed. The short answer is that it’s a title to a home that has not been foreclosed on.
The longer answer is that it’s a result of a bank not foreclosing on a property that a homeowner lost to foreclosure (and likely believes they are clear of).
If a person “walks away” from a home, the bank typically moves to foreclose. The homeowner vacates the property and believes the foreclosure has often occurred. This isn’t always the case; sometimes, banks don’t take back the home.
This results in “zombie title,” where a homeowner thinks they are clear but they aren’t. These titles are starting to pop up with increased frequency as this wave of the housing crisis settles down.
This is NOT legal advice. Always consult a CPA or attorney when making these decisions (foreclosure, etc.).
If you’re in trouble, foreclosure isn’t the best answer. There are other options.
Call me at 719-440-6626 and we can talk about those options!