A recent study estimates that 47% of foreclosed properties are still occupied.
When you first see that stat you may be surprised. You may also be asking yourself, “How can I stay in my home after foreclosure?”
But, 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.
This Allows Some People to Stay In Their Home After Foreclosure (for awhile…)
What they found is that when a Fort Worth 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.
Man, that sounds great! Let’s all live for free. (wink)
Wait… it can’t be that simple, right?
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 are made.
But you might get lucky! It’s possible, and it’s happened before. 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. Partly because of the ways that the foreclosure laws are structured in TX, banks may ask you to leave while wanting you to stay.
However, there are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure In Fort Worth
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 up to a year or more. It’s not over until it’s over, so don’t give up too early. If you have only received a notice of default then you may still be in Pre-foreclosure. If so, definitely call your lender and discuss your options. You may be able to apply for a Loan Modification such as Home Affordable Modification Program (HAMP), the Home Affordable Refinance Program or for a Forbearance.
On the other hand, don’t wait until the sheriff shows up to evict you to start packing up your stuff. Once you receive an eviction notice you only have 3 days vacate the property.
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”.
You do not have to move out on the sale date. If you are still living in the home after a foreclosure, the new owner will have to evict you. You’ll get a notice to vacate (usually giving three days’ notice) before an eviction is filed. Some lenders will pay moving expenses in order to avoid the time and expense of an eviction proceeding (called “cash for keys”).
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.
Getting Help
It’s also a good idea to talk to a HUD-approved housing counselor if you want to learn about different loss mitigation options. You can use the Consumer Financial Protection Bureau’s Find a Counselor tool to get a list of HUD-approved housing counseling agencies in your area. You can also call the Homeownership Preservation Foundation (HOPE) Hotline, which is open 24 hours a day, seven days a week, at 888-995-HOPE (4673
At Texas Best Homebuyers we buy local Fort Worth TX houses like yours from people who need to sell fast. We might be able to help you. Talk with a local real estate expert, like Texas Best Home Buyers: We know the local Fort Worth real estate market well and are very experienced in the foreclosure process here in TX. Give us a call at (817) 808-4911 and we can help you understand your options such as loan modification, short sale or deed in lieu of foreclosure. We can guide you toward the resources that can possibly help you.