Nephwracks are former human spirits turned Spectres.
Nephwracks have existed for ages, and their constant exposure to Oblivion has causes them to leave their human forms behind, becoming twisted and deformed. Many serve the interests of a Malfean master, and act as their visible presence. It is hinted that if a Nephwrack continues to be exposed to Oblivion, they will eventually become a Onceborn.
The final boss of Hunter: the Reckoning - Wayward is a Nephwrack.