Zombie mortgages are coming back to life

Planet Money

NPR

Business, News

4.6 • 29.8K Ratings

🗓️ 10 May 2024

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

Karen MacDonough of Quincy, Mass., was enjoying her tea one morning in the dining room when she sees something odd outside of her window: A group of people gathering on her lawn. A man with a clipboard tells her that her home no longer belongs to her. It didn't matter that she'd been paying her mortgage for 17 years, and was current on it. She was a nurse with a good job and had raised her kids here. But this was a foreclosure sale, and she was going to lose her house.

Karen had fallen victim to what's called a zombie second mortgage. Homeowners think these loans are long dead. But then the loans come back to life because they get bought up, sometimes for pennies on the dollar, by debt collectors who then move to collect and foreclose on people's homes.

On today's episode: An NPR investigation reveals the practice to be widespread. Also, what are zombie mortgages? Is all this legal? And is there any way for homeowners to fight the zombies?

This episode was hosted by Chris Arnold and Robert Smith. It was produced by Sam Yellowhorse Kesler. It was edited by Jess Jiang with help from Bob Little. And it was fact-checked by Sierra Juarez. Engineering by Robert Rodriguez with an assist from Patrick Murray. Alex Goldmark is Planet Money's executive producer.

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Transcript

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0:00.0	When voters talk during an election season, we listen, we ask questions, we follow up, and we bring you along to hear what we learn.
0:09.0	Get closer to the issues, the people, and your vote at the NPR Elections Hub.
0:14.0	Visit NPR.org slash elections.
0:20.0	This is Planet Money from NPR.
0:25.0	One spring morning, a couple of years ago,
0:28.0	Karen McDonough was having her tea at her dining room table.
0:31.0	She lives in a cute little two bedroom place in Quincy, Massachusetts. She
0:34.8	looks at her window to the neighborhood beyond and she sees something unusual.
0:39.8	They were like 20 cars and they all came at the same time and they parked like in front of my
0:43.7	house across the street up the street and down the street. I just had this
0:48.9	feeling like something really bad had happened. She was right.
0:53.0	Something bad was definitely happening to her.
0:55.9	And then I saw people get out and then they were like coming to my lawn and I'm like, why is everybody
1:01.9	at my house?
1:03.2	Karen puts on her shoes, goes out to the driveway.
1:05.9	At this point a group of men are milling around the lawn,
1:08.7	casually dressed, except for one guy who seems to be in charge.
1:12.6	There was somebody I think he might have had a uniform on or something
1:16.0	and he had a piece of paper and I said, what's happening and he goes,
1:21.6	we're selling your house and I'm like. and he goes, goes,
1:24.0	I'm like, what are you talking about?
1:26.0	He goes, don't pretend that you don't know
	...

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