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Zombie Titles: A Fresh New Horror Courtesy Of The Broken American Banking System

By Yashwanth Manjunath

It’s almost hackneyed at this point covering a story involving the big banks committing a terrible injustice with impunity, but I’ve got another blood-boiler for you. There have been more than 3.4 million foreclosures since the financial crash back in 2008. That’s millions of people who lost their most valuable investment and the place they called home. Turns out those people were relatively lucky, because they escaped the further indignity of “Zombie Titles.”

The Zombie Title phenomenon occurs when a bank notifies a resident that they are foreclosing on his or her home, throws them out onto the street, and then decides not to proceed with the foreclosure. So the residents remain legally responsible for “their home”, because their name remains on the title without their knowledge. This serves the interests of the bank in several ways. First, they can claim they were unable to sell the house, write it off as a loss for tax purposes, and then collect the insurance money, which winds up being slightly more profitable than actually selling the near worthless house in this current market. It also allows the banks to shed any responsibilities associated with ownership of the home, like maintenance, and taxes, while giving them the ability to sell the unpaid debt to debt collectors. So what does all of this mean for the “homeowners”?

Because the banks were not paying taxes or maintaining the property and sold the unpaid debt, county governments and debt collectors started harassing the “homeowners”, who were at this point living in spare bedrooms with family, or in cramped apartments. Thousands of people racked up tens of thousands of dollars in back taxes, maintenance fees, and additional mortgage payments on houses they were thrown out of. Reuters covered several personal stories in a special report last week, each one stomach-turning, but none more so than what happened to Joseph Keller.

Keller and his wife Jennifer (pictured) left their home of 13 years in Columbus, Ohio to live with their daughter Barbara in 2009. He thought his mortgage nightmare was over after that; but it was just beginning. A year later, Keller was being hounded by the county because his house had been looted and vandalized, and was now in violation of local housing codes. The tax collector started sending him notices about back taxes, sewer fees, and bills for waste removal, and a debt collector hired by JP Morgan Chase started coming after him for his unpaid mortgage, which had grown from $62,100.27 to $84,194.69. He had no idea that he still owned the house, and JP Morgan Chase had no legal responsibility to inform him. As if it wasn’t bad enough that the bank added all of this additional financial hardship and stress to his life after already taking the home were he raised his family, the story gets worse.

At 58 years old, Keller has advanced liver disease, hepatitis C, and inactive tuberculosis. He needs a liver transplant to save his life, and last January he was rejected for Social Security disability coverage because of the house still in his name. Without that coverage, he will be dead by the end of this year. This is why people hate the big banks. For extra tens of thousands of dollars, basically a nickel and a dime for an institution that racks up billions in quarterly profits, JP Morgan Chase, and several other banks nationwide are willing to use their limitless financial resources, and the power of the state to bring gratuitous pain and suffering into the lives of innocent people, and even sentence a man to an early death. Keller, a former social worker, a noble and thankless position in our society. He deserves better than this, a better fate than being mercilessly sacrificed at the alter of fiduciary responsibility. Instead he’s just another casualty in the fundamentally broken American banking system.

This is why we have an Occupy Wall Street movement.