Matthew Kamei feared he'd lose his Germantown, Maryland, home if he didn't agree to a payment plan on a "zombie" loan. The 61-year-old Liberian immigrant received a demand to repay a long-forgotten $72,000 second mortgage — plus years of back interest.
Photographer: Alyssa Schukar/Bloomberg‘Zombie’ Second Mortgages Spur New Battles in State Capitols
Debt collectors are blindsiding borrowers with years of back interest on old home loans. States are becoming a flashpoint in the legal battle.
In a room outside the Maryland State Senate chamber last winter, consumer advocates were meeting privately with lawmakers to explain how borrowers were losing their homes over “zombie” loans, old second mortgages that they hadn’t heard from lenders about in years. At the time, the legislature was considering a bill to protect homeowners from unfair attempts to collect these debts.
Then Robert Enten barged in. The lobbyist for the Maryland Bankers Association began shouting about his opposition to the bill, according to three people with knowledge of the event who asked not to be identified discussing a private conversation. Others began shouting back, and the meeting soon broke up. In the weeks after, the bill passed the House of Delegates unanimously but stalled in the Senate and died.