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 think about is that banks aren’t in the business to own homes.
Facing foreclosure can be an incredibly challenging experience, but it’s important to know that there are potential ways to stay in your home after the foreclosure process has begun. In this article, we’ll discuss some strategies to help you remain in your home and shed light on why banks may prefer not to foreclose and why many foreclosed homes may still be occupied.
Banks are in the business to loan people money, so when they have to foreclose on a property they have to take ownership and that comes with many hassles for them. They have to handle utilities and other maintenance on the home until they’re able to sell it to get all or most of their money back. Contrary to popular belief, banks and lenders are not eager to foreclose on properties. Foreclosure is an expensive and time-consuming process for lenders, and they often prefer alternative solutions. When a homeowner defaults on their mortgage, the bank suffers financial losses. In addition to the loss of monthly mortgage payments, banks incur legal fees, administrative costs, and expenses associated with maintaining and selling foreclosed properties. With this in mind, banks are sometimes willing to work with homeowners to find mutually beneficial alternatives.
We know that when a Kansas City 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.
We sometimes hear stories in the media about people living for free after foreclosure – and even stories about banks “abandoning” properties.
In those stories, people are avoiding house payments for months, even years.
Well the foreclosure process is often complex and there is a lot at risk for every party involved.
The Process.
Banks do not purposely neglect to collect payments. The only way that you get to live without making any payments is when there are barriers to carrying out the process according to the laws or that there were some major mistakes made in the process.
It’s possible for the banks to make mistakes in the process, and it’s happened before. However, hoping for mistakes in the process and continuing to avoid payments is probably not in your best interest.
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 MO, banks may ask you to leave while wanting you to stay.
There are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure In Kansas City
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 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.
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”. 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. 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.
We buy local Kansas City MO houses like yours from people who need to sell fast.