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. These companies often tack on a mountain of retroactive interest and fees, even though that can be legally dubious in some cases, and then move to collect and foreclose on people's homes.

And an NPR investigation found that the practice is widespread.

NPR looked at foreclosure data across several states where records were available. In New York, NPR found at least 10,000 old second mortgages that foreclosure activity had been initiated on in just the past two years. Those loans originated back during the subprime-lending housing-bubble days of 2004 to 2008.

In Maryland, where more detailed information was obtainable, NPR found at least 500 old second mortgages that had been in default and unpaid for more than a decade but now a company has taken the first step toward foreclosure. In other words, more than 500 zombie mortgages in a single state that are now coming back to life as companies file a form with the state indicating they intend to foreclose on the property

https://www.npr.org/2024/05/10/1197959049/zombie-second-mortgages-homeowners-foreclosure

What role do these have here?
Are they just being ignored?

The collection usually uses harassment to drive them into it.

The only advice I know of is if the phone starts ringing. Retain an attorney in the proper field. The debtor’s only contact with the collection agent should be a cease and desist letter requesting ORIGINAL proof of the debt. Which, selling old debt to debt collectors is a scam unto itself, is almost never obtained.

Frothing at the mouth until it was hollowed out by Musk’s DOGE had combating financial scams such as this as one of its core activities.

Since Republicans are generally bullies with no skills beyond stealing lunch money. They hated it.

Most debts are removed from your credit report
seven years from the date of the first missed payment, while the legal statute of limitations to sue for debt is generally three to six years, depending on the state. After this period, debt is considered "time-barred," meaning collectors cannot legally sue, but they may still attempt to collect.

Although I once read that if you admit to the debt any time after that it comes back to life..Not sure how that works just recall reading that somewhere

And while there is a statute of limitations for lawsuits on the debt - that doesn’t get rid of the lien on the home.

I understand that having it come back up later in life is painful, but it was their debt and nothing was really done to discharge it like bankruptcy or paying it off.

An important point is that like any loan the financial institutions should have sent monthly statements, certainly year end summaries.

Is that the debt was real. It was agreed to by the person. Then they walked away from it. Technically they should have had a legal judgement against them and the debt is still there. At the end of the day, it’s their debt. Maybe they can get out of it due to the time or negotiate it down, but legit it’s their debt until they settle it somehow.