04/21/2026
Zombie mortgages can sometimes be dealt with in bankruptcy and if the statute of limitations has passed you might be able to eliminate the debt.
The early-2000s mortgage crisis is roaring back to life for some homeowners, as debt collectors revive old mortgage debt they believed had been put to rest — and tack on at least a decade’s worth of interest and fees.
They’re known as “zombie mortgages,” and Chicago-area attorneys say a quiet wave of them is growing more intense as rising home values make the stored equity in these homes a target for predators.
Lisa Segura, a Chicago-resident, has debt collectors pursuing her on a 2006 mortgage of $47,000.
The loan was the smaller of two Segura took out in an 80/20 format to finance 100% of the $235,000 purchase of her Cape Cod bungalow in Clearing, a few blocks west of Midway Airport. Segura believed the $47,000 loan was laid to rest during a modification of the larger one, a $188,000 mortgage, in the early 2010s.
It has not shown up on her payment portal or credit reports in more than a decade, she said, which seemed to confirm that the debt was exterminated.
Then in 2024, a New Jersey mortgage company — not the original lender but a latter-day buyer of the old debt — launched a foreclosure effort on the dormant loan. To the unpaid balance of about $28,000, the collector has so far added $21,000 in interest and fees.
Read more here: https://www.chicagobusiness.com/real-estate/residential/ccb-zombie-mortgages-chicago-homeowners-20260415/?utm_source=facebook&utm_medium=soc-own
