This summer, the National Consumer Law Center’s 2025 Mortgage Conference brought together consumer rights advocates and legal professionals to address some of the most pressing issues in mortgage servicing. One standout session focused on an increasingly common problem: zombie second mortgages—those long-dormant loans that suddenly return with collection demands.
Among the featured speakers was Sarah Shapero, founder of Shapero Law Firm, who presented in the session titled “Zombie Second Mortgages.” Her insights shed light on how homeowners can push back when lenders or servicers attempt to collect on second mortgages that haven’t been active—or even acknowledged—for years.
A zombie mortgage isn’t just a nickname. It refers to second liens, such as HELOCs or piggyback loans, that were issued years ago—often during the housing boom of the early 2000s—and then seemed to disappear. Many homeowners assumed these loans were forgiven, discharged, or otherwise resolved. But years later, collectors are resurfacing, demanding payment or even threatening foreclosure.
According to the Consumer Financial Protection Bureau, this surprise tactic is becoming more common as property values rise. Debt buyers and servicers are seeking to cash in on old loans that were once written off.
Top view of mutiethnic business partners works in domestic atmosphere, sit on floor and discuss financial chart, study home purchase contract together, drink takeaway coffee, involved in paper work
During her presentation, Sarah walked attorneys through several legal avenues available to homeowners when these stale debts come back to life. While federal laws like the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) provide foundational protections, Sarah emphasized that they often aren’t enough on their own.
“These cases aren’t just about the age of the loan,” Sarah noted. “They’re about how these debts are being pursued—often through questionable practices that deserve legal scrutiny.”
Some of the legal paths she outlined include:
Debt Collection Violations: When servicers engage in misleading or aggressive tactics, they may be violating both federal and state consumer protection laws.
Breach of Contract or Waiver: In some instances, lenders failed to communicate for years or even provided documentation that suggested the loan was resolved. That conduct may amount to a legal waiver of their rights to collect.
Sarah also called out the larger pattern behind these cases: institutional abuse. It’s not just one-off mistakes. Homeowners across the country—especially seniors and those in historically underserved communities—are being blindsided by demands tied to loans they believed were no longer a threat.
These debts are often sold off in bulk and resurface without proper documentation. In many cases, servicers can’t produce the original loan agreements, yet still attempt to initiate foreclosure proceedings. According to the CFPB, this tactic is frequently used without verifying the validity of the debt, creating an enormous burden for homeowners who may not even recall the original loan.
One of Sarah’s key takeaways was the importance of choosing the right venue for these cases. Although federal laws like TILA and RESPA offer strong protections, Sarah explained that state courts are often better suited for resolving zombie mortgage disputes, especially when it comes to issues like lien validity, quiet title, or breach of contract.
By pursuing claims in state court, attorneys can use local rules and procedures that judges understand more intimately—particularly in foreclosure-heavy jurisdictions like California.
The NCLC Mortgage Conference is known for bringing cutting-edge issues to the forefront, and this year’s zombie mortgage session proved just how urgent these cases have become. As lenders and debt buyers grow more aggressive in pursuing forgotten debts, attorneys need to be ready with the tools—and the case law—to protect homeowners.
Sarah’s session didn’t just provide legal theory. It offered real-world guidance for practitioners navigating this complex and fast-changing area of law.
If you’ve received a letter about a second mortgage you haven’t thought about in years—or worse, a foreclosure threat tied to it—you’re not alone. And you may not owe anything at all.
At Shapero Law Firm, we represent California homeowners facing zombie mortgage claims. We help uncover whether the lender or servicer has a valid claim, and when they don’t, we take action to protect our clients from foreclosure and wrongful debt collection.
Call us today at 415-906-6134 or visit Shapero Law Firm to schedule a consultation. We’re here to help you defend your rights and protect your home.
With over a decade of litigation experience, Attorney Sarah Shapero, founder of Shapero Law Firm, has secured seven-figure jury trial wins and saved countless homes from foreclosure. A Super Lawyer and Lawyer of Distinction, she brings expertise in foreclosure, employment, and bankruptcy law, practicing in California and federal courts.
Trust her proven track record and commitment to delivering powerful legal results.
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This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by Founding Partner, Sarah Shapero who has more than 10 years of legal experience as a real estate attorney.
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