Zombie mortgages are second mortgages that consumers believed were resolved or forgiven long ago but actually still exist. In many cases, debt collectors can show up and claim that they can legally claim the debt and have the right to take drastic measures such as taking property if the debt is not paid. Fortunately, there are a number of defenses for these types of mortgages that have been successful. Here are ways to protect yourself from a zombie mortgage.
Quiet title action
One of the most common defenses people use when dealing with zombie mortgages is quiet title action. It is a crucial step to take when dealing with zombie mortgages because it helps eliminate uncertainties over who owns the property. This might entail the courts looking at the title insurance policy to determine the owner of the property.
Title insurance is a policy that protects homebuyers and lenders from financial loss because of an undetected title error. The policy covers the legal costs of fighting against a claim or any losses incurred as a result of a defective title. Title insurance protects a homebuyer from different types of issues including liens, claims of ownership interests, and covenants. Buying title insurance is often recommended because it protects an individual’s property rights.
Statutes of limitations
Statutes of limitations make it impossible for debt collectors to take action after a particular length of time. In many cases, an old second mortgage may not be collected if the statutory duration has passed. It is important to note that the statutes of limitation for debt vary from state to state and limits may also vary depending on the type of debt.
Conclusion
Zombie mortgages can be scary and stressful. However, there are ways to protect or defend yourself against them successfully. Purchasing title insurance from a reputable company can give you confidence and peace of mind knowing that you are protected from any issues or problems relating to the ownership of your property later on. It can also prove beneficial in case any problems arise. To learn more about zombie mortgages and title insurance, contact us today to
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