A recent study estimates that 47% of foreclosed homes are currently occupied.
In some markets the number is even higher! 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. But when they have to foreclose on a house… the bank is forced to own the home until they’re able to sell it to get all or most of their money back.
But, what they found is that when a Southern California 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 off vandals and keeps the house in good working order. Many problems arise with vacant homes. Not only crime and vandalism, but the plumbing and HVAC systems will deteriorate if not used on a regular basis.
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.
Man, that sounds great! Let’s all live for free. (wink)
Wait… it can’t be that simple, right?
No bank would purposely neglect to collect payments. The only way that you get to live without making any payments is when some major mistakes were made.
However, you might get lucky! It’s possible, and it’s happened before. But, 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. Even in good neighborhoods, we have seen vacant homes get graffiti and broken windows, causing mroe curiosity to other vandals.
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. Partly because of the ways that the foreclosure laws are structured in CA, banks may ask you to leave while wanting you to stay. I recommend checking out the foreclosure process in California.
There are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure In Southern California
Not all these options are available (depending on your situation and your lenders), and you’ll need some expert and legal advice along the way to help you get through.
1) Wait it out. Honestly, this is a bad option, however it seems to be increasingly common. You definitely shouldn’t abandon and run away from 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.
2) 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 – so 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).
3) 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? It’s known as “cash for keys”. Cash for keys is agreeing with the buyer to vacate the property on good terms. There are so many stories of people trashing the house and destroying everything before they leave. It sounds a little greedy, but greasing the wheels does help everything to run smooth. Plus, you can help out the bank and the buyers by not abandoning the house to squatters before they’re ready to take possession. And you’ll have some money to help get you into your next house.
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. The more you know about the process an what options you have the better off you will be. Do your research and check out the California process or find a lawyer.
We can’t help everyone, but we might be able to help you.
We buy local Southern California CA houses like yours from people who need to sell fast.s