A Virginia Beach Family Faces a Foreclosure Battle Over a “Zombie Mortgage”

What is a zombie mortgage and why do families face so many risks of foreclosure on their homes and properties?

For many homeowners, keeping up with one mortgage is already a struggle; now, imagine receiving a notice stating that there is now a second mortgage in your name and that if you do not pay tens of thousands of dollars immediately, the bank will seize your home.

That is exactly what happened to a Virginia Beach family, as they are now caught in a legal battle to protect their home and raise awareness about what are called “zombie mortgages.”

To fully understand their situation, we must go back to the early 2000s, when many homeowners were obtaining second mortgages on their properties because interest rates were favorable, and people used these loans as additional credit.

However, when the housing market collapsed, property values plummeted, and borrowers began struggling to make timely payments.

Regarding this, the Consumer Financial Protection Bureau states that defaulting on a second mortgage can still lead to foreclosure, even if the first mortgage is up to date.

Brandon Ballard, a legal strategist at the Legal Aid Society of Eastern Virginia, explains, “Sometimes, homeowners assume their loan was canceled for some reason, only to later find out that it wasn’t. That’s why they are often labeled as zombie mortgages—they somehow come back to life.”

Mr. Ballard, who is currently representing the Virginia Beach family dealing with this issue, also says that one of the main concerns is that lenders do not usually send monthly statements for five to ten years. He points out that these debts are often sold at low prices to collection agencies, which remain silent for years before suddenly demanding repayment, with high interest added.

Mr. Ballard says his clients never received any statements and did not know about this mortgage, as it turns out that their father had taken out the second mortgage but passed away without informing the family.

Now, they are entangled in a legal battle to keep their home and warn others about zombie mortgages.

Ballard states that the second mortgage lender claims the family owes more than $36,000, with the original balance exceeding $14,000.

Available Foreclosures:

Virginia Beach: 67 homes available

Norfolk: 54 homes available

Chesapeake: 42 homes available

By Elías DaSilva | 14 de Febrero de 2025