A recent study estimates that 47% of foreclosed properties are still occupied. When you first see that stat you may be surprised… but we’re not.
What most people don’t realize is that banks aren’t in the business to
own homes. They are in the business to loan people money. When a house forecloses, the bank is forced to own the home until they’re able to sell it and get back the money.
What banks want
What they had found is that when a foreclosed house goes vacant, there is a much greater chance that the house will fall into disrepair. Often times the bank would rather have you in the property even after you stop paying your payments and the foreclosure is started because it wards of vandals and keeps the house in good working order. There’s been a lot of talk in the media about people living for free after foreclosure – and even many stories about banks “abandoning” properties. In those stories, people are avoiding house payments for months, even years.
No bank would purposely neglect to collect payments. The only way that you get to live without making any payments is when there were some major mistakes. However, it’s not exactly legal to avoid payments that you owe, and it can get you in serious trouble. So why are so many foreclosed homes occupied? It’s important to remember that no one wants the house to be vacant. Vacant homes are targets for vandalism and crime.
Staying in the property can help the bank maintain the value of their investment, so it’s actually in their best interests to keep it occupied. There are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure
Not all these options are available (depending on your situation and your
lenders), and you’ll need some expert advice along the way to help you
- Wait it out. Honestly, this is a pretty bad option, but it seems to be
increasingly common. You definitely shouldn’t run away and abandon
your house when the first notice of default shows up. Remember that the proceedings and the process takes months and sometimes years. It’s not over until it’s over, so don’t give up too early. On the other hand, don’t wait until the sheriff shows up to evict you to start packing up your stuff.
- Go to court. In very rare cases, judges are granting stays and
delaying evictions. This is really only a valid option if you (and your
attorneys) can prove that the bank has neglected a legal requirement
during the foreclosure process. During the past few years, a lot of
fraudulent behavior at banks has been uncovered and we may see an
increasing trend of using the courts to stop foreclosure. Fighting banks
with lawyers is very difficult, expensive and time-consuming, even if
you’ve got a perfect case (most people don’t stand a chance).
- Propose a move-out bonus. Often buyers of occupied foreclosure
properties spend thousands of dollars on lawyers and other costs of
eviction, so why not save everyone the time and expense by taking
some of that money yourself? Known as “cash for keys,” you can help out the bank and the buyers by not abandoning the house to squatters before they’re ready to take possession.
4) Rent it back. It may sound crazy, but some banks are willing to take
on previous homeowners as tenants in their property. That’s only a
short-term fix, as they’ll want your agreement to vacate the premises as soon as they find someone to purchase the property. In some cases, we can even purchase the property and rent it back to you.
It’s really good that you’re reading this page and exploring your options. We help homeowners like you to find creative solutions.
We can’t help everyone, but we might be able to help you.