‘Zombie’ Second Mortgages Spur New Battles in State Capitols

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 ...