Zombie Mortgages: What Pacifica Homeowners Should Know
You might have heard the term “zombie mortgage” making the news lately. It sounds dramatic, but it’s a real issue.
A zombie mortgage is an old second loan or home-equity line that was thought to be resolved years ago but still exists on the property record.
In some cases, after all these years, debt buyers are trying to collect on these dormant loans. They’re taking another look because rising home values make those old balances worth pursuing.
If you bought, refinanced, or modified your mortgage before 2010, especially during the housing boom, it’s worth taking a moment to understand what zombie mortgages are and how to find out if you’re at risk.
What Are Zombie Mortgages?
A zombie mortgage is a second mortgage or junior lien that was never officially released.
Sometimes the original lender went out of business or sold the loan. Other times, payments stopped during a financial hardship and were forgotten about.
Years later, that same loan can “come back to life” when:
The debt is sold to a new company or collector.
You try to refinance or sell and a lien appears on the title.
A collector contacts you claiming you still owe money.
It’s unsettling. But it’s also manageable once you know what to look for.
Why Are Zombie Mortgages Resurfacing Now?
After the 2008 housing crash, many second mortgages were written off.
As property values climbed again, those old debts became valuable. Companies that buy charged-off loans may now contact homeowners or attempt to enforce liens that still exist on paper.
The good news: California has strong consumer protections.
You still need to verify what’s real and respond carefully if anything surfaces.
How to Check for Old Liens
Step 1: Go straight to the San Mateo County Recorder (this is the key)
This is where zombie loans hide.
What to look for
Search the property by APN or your name and pull:
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The original Deed of Trust (or Mortgage)
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Any Substitution of Trustee
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Any Notice of Default
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Any Notice of Trustee Sale
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A Reconveyance or Full Reconveyance (this is what kills the loan)
Critical rule
If there is no recorded reconveyance, the lien is still technically alive, even if:
Zombie loans exist precisely because this step never happened.
Step 2: Check assignment history (very common zombie clue)
Look for: Assignments to defunct lenders Assignments to Mortgage Electronic Registration Systems, (MERS) Long gaps where the loan disappears and later resurfaces Red flags: No assignments after 2008–2012 Assignment recorded years later, right before enforcement Different servicer names than the original lender
Step 3: Statute of limitations (important but tricky)
This does not erase the lien automatically.
In California: The statute may limit foreclosure, depending on facts But the lien can still cloud title unless formally reconveyed or cleared by court order This is why zombie loans still block sales decades later.
Step 4: Tax records (supporting evidence only)
Check: Was the lender still listed for tax notices? Any tax lien references tied to the loan period? This doesn’t kill the lien. It just helps establish abandonment or inactivity.
Step 5: When a title company becomes unavoidable
You can do the detective work yourself, but:
A title company is needed when: You want to sell or refinance – In both instances a title report will be ordered for you by your realtor in the case of a sale or your lender for a refinance.
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You need to force resolution (quiet title, reconveyance demand)
Title companies have internal databases and underwriting authority you don’t.
What not to rely on
Assessor ownership alone “They stopped billing me” “The bank collapsed” “It’s been 20 years” Verbal assurances from servicers
Zombie loans survive on paperwork, not logic.
What to Do if You’re Contacted About an Old Loan
Stay calm. Don’t make any payments or share personal information until you verify the claim.
Ask for details in writing. Get the loan number, date, and original lender name.
Confirm the lien’s validity. Contact your realtor first to see if they can help. Otherwise, a title company or attorney can confirm whether it’s active.
Seek professional guidance. HUD-approved housing counselors and consumer protection agencies can walk you through your options.
Helpful Resources
Consumer Financial Protection Bureau: What Is a Zombie Second Mortgage?
California Department of Financial Protection & Innovation (DFPI)
These organizations can explain your rights and help you find the right next step.
How I Can Help
My role is to keep homeowners informed and connected to trustworthy local resources.
If you’re preparing to refinance or sell, I can help you:
Connect with local title companies.
Find experienced professionals.
Stay ahead of paperwork issues before they become surprises.
I’m not a lawyer or lender, but I work closely with people who are. And I’m always glad to point you in the right direction.
Staying Informed Protects Your Peace of Mind
Zombie mortgages don’t have to be scary stories. Most homeowners will never face a zombie loan, but understanding the issue helps you stay confident about your home’s title and value.
If you have questions about Pacifica homeownership, refinancing, or preparing to sell, reach out anytime. Staying informed protects both your investment and your peace of mind. And that’s what I’m here for!