Zombie Second Mortgages

 

As the name suggests, zombie mortgages can be terrifying. They rise from the dead, appear without warning, and seize homes. And they are appearing now more than ever. These resources explain what they are, why they are now such a problem, and ways homeowners can stop foreclosures of zombie mortgages.

 

Resources

open NCLC treatise

 

Articles & Reports

The following articles and reports are free to the public.

12 Ways to Fight Foreclosure of Zombie Second Mortgages

 

Court Decisions

The following court decisions are free to the public.

Pierre v. Midland Credit Mgmt., 2002 WL 986441 (4th Cir. April 1, 2022)  (homeowner had no standing)

Aspen Props. Grp. v. Roberts-Joachim (Conn. Super. Ct. Sept. 22, 2022) 

 

Videos

The following videos are free to the public.

SC Legal Services & NCLC's Andrea Bopp Stark, Zombie Second Mortgages Video (Oct. 31, 2023)

Video of CFPB Field Hearing on Zombie Mortgages with Director Chopra (Brooklyn, N.Y. April 26, 2023) (Note: Video begins at 46:52.  Fast forward to that point for best experience or click here.)

 

Key Weblinks

The following weblinks are free to the public.

CFPB Guidance to Protect Homeowners from Illegal Collection Tactics on Zombie Mortgages

 

NCLC Conference Archives

Image of FDC conference
 The following NCLC conference material is free to legal aid, NACA, and recent NCLC conference attendees.

 

General

Fighting Zombie Second Mortgages (Mortgage Conference 2022)

Fighting Zombie Second Mortgages (two page issue brief)

Handout: Fighting Zombie Second Mortgages (outline)

Mortgage Servicing Claims Chart

Mortgage Strategy Summit: Zombie Mortgages, Successors and Tangled Title, and Loss Mitigation/Homeowners Assistance Fund (CRLC 2022)

NCLC, Fighting Zombie Second Mortgages (two page overview with links)

Coalition Letter to CFPB

Back from the Dead: Dealing with Zombie Second Mortgages (Mortgage Conference 2021)

Back from the Dead: Dealing with Zombie Second Mortgages (PowerPoint)

Using the FDCPA to Combat Zombie Second Mortgages (Fair Debt Conference 2022)

Using the FDCPA to Combat Zombie Second Mortgages (PowerPoint)

Fighting Zombie Second Mortgages

Using the Rules of Evidence to Set Up Wins in Mortgage and Foreclosure-Related Trials and in Appeals (CRLC 2019)

Federal Rule of Evidence 201 and Related Materials

 

Letters

Using the FDCPA to Combat Zombie Second Mortgages (Fair Debt Conference 2022)

Sample Zombie Second Mortgage Letter (proposing settlement of HELOC, where loan was charged off and no statements have been sent)

Sample Zombie Second Mortgage Letter (NOE) (notice of error, requests for information, and debt verification)

Sample Zombie Second Mortgage Letter (request for information)

Sample Second Mortgage Pleading (request for information and notice of error)

 

Complaints

Fighting Zombie Second Mortgages (Mortgage Conference 2022)

Sample Complaint (state court complaint to cancel second mortgage, injunctive relief under New York law)

Sample Complaint in E.D. Cal. (breach of contract and implied covenant of good faith and fair dealing; Cal. Civ. Code § 2924.17 4; TILA; negligence; UDAP)

Sample Complaint in E.D. Va. (class complaint for failure to notify the assignment)

Sample Complaint in E.D. Pa. (injunctive relief and damages under RESPA and Pa. Loan Interest Protection Law, UDAP,  Mortgage Satisfaction Act,  and Fair Credit Extension and Uniformity Act)

Sample Complaint in E.D.N.Y. (FDCPA and UDAP claims for collection of time-barred debt)

Using the FDCPA to Combat Zombie Second Mortgages (Fair Debt Conference 2022)

Complaint (Defour v. United Asset Mgmt.) (Va. federal court class complaint for failure to notify of assignment)

Complaint (Kumi v. United Asset Mgmt.) (Ga. federal court seeking FDCPA and TILA damages and injunctive relief)

First Amended Complaint (Baptiste-Elmine v. Richland & Falkowski PLLC) (N.Y. federal court action for collection of time-barred debts of numerous homeowners)

 

Other Pleadings

Fighting Zombie Second Mortgages (Mortgage Conference 2022)

Sample Bankruptcy Pleading (Mass.) (objection to proof of claim and counterclaims)

Using the FDCPA to Combat Zombie Second Mortgages (Fair Debt Conference 2022)

Motion for TRO (Kumi v. United Asset Mgmt.)

Mortgage Strategy Summit: Zombie Mortgages, Successors and Tangled Title, and Loss Mitigation/Homeowners Assistance Fund (CRLC 2022)

Order for TRO (Kumi v. United Asset Mgmt.)

Sample Complaint Filed with HUD (alleging discrimination in second mortgage)

Back from the Dead: Dealing with Zombie Second Mortgages (Mortgage Conference 2021)

Sample Chapter 13 Lien Strip Order

 

Conference Videos

The following NCLC conference material is free to legal aid, NACA, and recent NCLC conference attendees.

 

Fighting Zombie Second Mortgages (Mortgage Conference 2022)

Zombie Second Mortgages (Video)

Using the FDCPA to Combat Zombie Second Mortgages (Fair Debt Conference 2022)

Using the FDCPA to Combat Zombie Second Mortgages (Video)

Back from the Dead: Dealing with Zombie Second Mortgages (Mortgage Conference 2021)

Back from the Dead: Dealing with Zombie Second Mortgages (Video)

 

Related Conferences

Image of 2023 CRLC promo
Registration is restricted to those representing consumers.

Consumer Rights Litigation Conference and Class Action Symposium
October 26-29 | Chicago

 

The following material requires a subscription to the individual title or to NCLC's Consumer Law Practice Series.  For more information on subscription options, visit the NCLC Bookstore. 

cover image of NCLC's Home Foreclosures

Home Foreclosures (2023 Second Edition)

5.3 Statute of Limitations Defenses

10.4 Deficiency Judgments

Chapter 12: Second Mortgages

12.1 Getting Started

12.2 Statutes of Limitations and Second Mortgage Foreclosures

12.3 Authority to Foreclose a Second Mortgage

12.4 TILA and RESPA Claims Related to Second Mortgages

12.5 Loss Mitigation Options to Junior Mortgages

12.6 Contract-Based Claims and Defenses

12.7 Defenses and Claims Based on State UDAP Statutes

12.8 Laches and Equitable Defenses to Second Mortgage Foreclosures

12.9 State Law Foreclosure Requirements

12.10 State Laws That Specifically Regulate Second Mortgages

12.11 Using Bankruptcy for Second Mortgages

12.12 Deficiency Claim Issues Special to Second Mortgages

 

Pleadings and Discovery

Federal Court Complaint Concerning Zombie Debt (Richland & Falkowski) (complaint against foreclosure law firm concerning time-barred collection and threatened foreclosure of second mortgage debt)

Virginia Federal Court Class Action Complaint Concerning Zombie Mortgage Debt Collection (United Asset Management) (collection of waived fees and interest; no notice of assignment; deceptive collections; violation of state foreclosure law)

Maryland Federal Court Complaint Concerning Post-Foreclosure Claims (failure to implement Covid-era forbearance for second mortgage; FDCPA; RESPA; NOE claims; state debt collection, UDAP)

Maryland Federal Court Complaint Against Zombie Second Mortgage Debt Buyer Acting as Debt Collector (FDCPA; state debt collection act, UDAP, mortgage fraud statute, licensing laws)

Georgia Federal Court Complaint Concerning Zombie Debt (United Asset Management) (wrongful foreclosure; breach of contract; FDCPA; and TILA) 

Federal Court Complaint Where Assignee of Second Mortgagee Improperly Charged Interest (Interstate TD Investments) (loan assigned to unlicensed entity that used improper interest rate; no statements; failure to correct errors and satisfy the mortgage; aggressive collections) 

California State Complaint Concerning HELOC (contractual interference claims asserted here can be effective in opposing foreclosure of a zombie second mortgage)

California State Complaint for Wrongful Foreclosure Regarding Zombie Debt (Wilmington Savings) (no loan statements sent; claimed amount inaccurate and unsupported) 

Answer in Connecticut State Case Concerning Zombie Second Mortgage (foreclosure after 12 years of inaction; defenses focus on state law claims of abandonment and laches; counterclaim of quiet title)

Brief Opposing Motion to Strike Answer in Connecticut State Case Concerning Zombie Second Mortgage (foreclosure after 12 years of inaction; defenses focus on state law claims of abandonment and laches; counterclaim of quiet title)

Memo Opposing Summary Judgment in Connecticut State Case Regarding Judicial Foreclosure Involving Zombie Second Mortgage (defenses of latches, abandonment, breach of contract, TILA)

Connecticut State Decision Denying Creditor's Summary Judgment Motion in Case Regarding Judicial Foreclosure Involving Zombie Second Mortgage (defenses of latches, abandonment, breach of contract, TILA)

Homeowner's Answer in Connecticut State Case Regarding Judicial Foreclosure Involving Zombie Second Mortgage (defenses of latches, abandonment, breach of contract, TILA)

Amicus Brief Arguing that Filing Stale, Baseless Claims by Debt Buyers Violates Fundamental Fairness (April 5, 2010)

Brief Arguing Defendant Coerced Plaintiffs Into Arbitration Agreement

 

cover of NCLC's Mortgage Servicing and Loan Modifications

Mortgage Servicing and Loan Modifications (2023 Second Edition)

4.2.5 Periodic Mortgage Statements

4.2.7  Mortgage Transfer of Ownership Notices

 

 

Fair Debt Collection cover

Fair Debt Collection (2022 Tenth Edition)

4.7.3.4 Enforcement of Security Interests As Debt Collection

4.7.5.2.3 FDCPA Coverage of Mortgage servicers, foreclosure trustees, foreclosure law firms