Zombie foreclosures stick former homeowners with major fines from city after bank doesn't claim deed

ByJason Knowles and Ann Pistone WLS logo
Friday, July 22, 2022
Zombie foreclosures stick former homeowners with major fines from city after bank doesn't claim deed
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Going through foreclosure is difficult but imagine losing your home and still getting stuck with thousands of dollars in city fines from the property.

CHICAGO (WLS) -- Going through a foreclosure is difficult but imagine losing your home and still getting stuck with thousands of dollars in city fines attached to the property.

Some people are turning to our I-Team saying that happened to them, and they blame the banks.

They are known as "Zombie Foreclosures." A homeowner thinks the foreclosure done deal, so they move out and move on. But instead, the homeowner ends up being on the hook for thousands in municipal fines.

"They should definitely forgive the fines because it's not my property, " said Wanda Carter.

She walked through a now vacant lot that used to be her home before the bank started the foreclosure process on her home in 2008.

Now, 14 years later, she said she's still on the hook for the property.

"I'm still on the hook for this property. That doesn't even make sense. I don't even understand how the city can keep coming after me," she said.

Carter said she's fighting roughly $44,000 in fines from the city that were issued after she thought she was no longer responsible for the home.

"It's like a chain around my neck. I can't seem to get rid of it," she said.

"She was unaware that the City of Chicago was charging her for all of the violations, she was unaware that she was even still the owner according to the legal record," said Carter's attorney, Mario Reed. "The City of Chicago demolished the building and charged the homeowner $31,000 for doing so. The City of Chicago fined the homeowner more than 30 different times for uncut weeds, rat harbridge, any number of different expenses."

How can this happen after a foreclosure?

Reed, who was formerly an attorney for the Cook County Recorder of Deeds Office, blames it on what's known as "Zombie Foreclosures." This is when the homeowner thinks the property is foreclosed on and out of their name but the banks fail to transfer the deed into the bank's name after homeowners, like Carter, hand over the deed.

Reed said, in some cases, lenders decide they do not want the burden of reselling a property in a struggling neighborhood.

"Right now, we have cases where over 10 different clients have experienced this or are on the verge of experiencing this," Reed said.

Carter's lender, DB Structured Products, is a subsidiary of Deutsche Bank. They told the I-Team, "No comment."

The City of Chicago said its records show that the deed is in Carter's name, making her responsible for the debt. However, Reed provided the I-Team with this document showing she was able to get the deed into the bank's name in February of 2022, which Reed believes will eventually clear Carter of the debt when they attend an upcoming administrative hearing.

"I was told that I was no longer responsible for the property. It was theirs," says Vanessa Jones, who is also a client of Reed's.

She is dealing with a similar battle with an investment property in suburban South Holland.

"It's I just found out about it and it's pretty scary," Jones added.

After facing foreclosure, she provided a bank with her deed in lieu of foreclosure in 2008 but the bank never recorded the deed in its name. Jones now owes more than $90,000 in village nuisance fines, which racked up after she thought the property was no longer hers.

"I mean, it's a large amount of money that is potentially extremely catastrophic for me and my family, " Jones said.

Jones's lender is no longer in business and was dissolved after another bank bought its parent company, but the I-Team was able to get answers from the Village of South Holland. A village attorney said they are willing to work with Jones to get the debt out of her name if she transfers the property ownership to the Village of South Holland. Still, the stress has taken its toll.

"For me, it's, it's unnerving. I will say this, since I found out I have not slept very well, " Jones said.

The village of South Holland and Reed are hoping that potential legislation can eventually require banks to move deeds in their names in these situations.

If you are facing foreclosure, make sure you check public records and verify that the deed has been transferred into the bank's name. Experts say you should not leave the property until that is done.