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 of lending money. When a lender is forced to foreclose on a property, the bank has to own the house for a while until they are able to sell it to get their money back.
What banks have began to notice is when a Los Angeles County foreclosed house goes vacant it has a greater chance of falling apart or having unwelcome guests destroy the property. So some times the bank would rather let the previous owner occupy the property until it gets sold, even if they aren’t making any payments. By letting you stay in your property the house stays in working order and vandals are kept out.
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.
In some of those stories, people are avoiding house payments for months, sometimes 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. This typically happened when a major mistake was made.
You never know though, you might get lucky! It’s possible, and it’s obviously happened a couple times but it’s not exactly legal to just avoid making payments, it can get you into 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. Partly because of the ways that the foreclosure laws are structured in CA, banks may ask you to leave while wanting you to stay.
By having you stay in the home, they are able to maintain the value of the property and keep it from falling into disrepair.
There are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure In Santa Clarita
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 get through.
1) Wait it out. Honestly this isn’t the best option, actually it’s pretty bad, but it is starting to become pretty common. You don’t need to run away the second you get the first notice of default. Remember that the foreclosure process can take months if not years to go through. Also, when the lenders are flooded with foreclosures they can fall behind. 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 comes to kick you out. It would be better for you if you took action rather than waiting and having nowhere to go.
2) Go to court. Very rarely, judges are granting stays and postponing evictions. Well actually with the current Coronavirus pandemic, it’s not so rare but this won’t last forever. During normal times this is usually only an option when you have some evidence that the lender didn’t not follow all the legal requirements for foreclosure. In recent years there have been many suits against lending companies for fraudulent behavior – so we may see an increase in courts stopping the foreclosure process. However, banks have very good lawyers and for most people, winning a case against them is a long shot and can be expensive and time consuming.
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”. 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.
4) Rent it back. I know this may sound a little crazy, but some lenders are willing to lease the property back to the previous owners. This isn’t a long term fix tho, they’ll typically want you to agree to moving out when they sell the property. However, in some cases, we can purchase the property and then 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.