A recent study estimated that 47% of foreclosed properties are still occupied once they have been foreclosed on.
It’s shocking when you first see that statistic, but it’s unfortunately true.
First, I want to start off by saying that banks aren’t in the business to own homes. They are in the business to loan people money. But when they are forced to foreclose on a house due to missed payments… the bank has no choice but to sell it off to recoup their money back. They’ve already lost money at this point since they loaned you money that you have not paid back. And on top of that, they now have the added expenses of the thousands of dollars in fees that were associated with foreclosing on the property. They even have to keep paying property taxes and insurance to protect their asset. So again, this is why banks are not in the business of owning homes. There’s a lot more behind the scenes than people realize.
But, what they had found is that when a Dallas foreclosed house goes vacant… there is a much greater chance that the house will fall into disrepair. If you think your home might be in too much disrepair to sell, then I suggest reading another one of our blogs How To Sell A House That Needs Work to find out more information about that process. Often times the bank would rather you stay in the property even throughout the foreclosure process to help ward off vandals and to keep the house in good working order.
When a home goes vacant, it starts to fall apart. People love to break into homes that are vacant. It could be just the neighbor kids roaming the neighborhood and just getting bored or it could be local homeless people just trying to find a roof to sleep under. You also put the house at risk of rodent infestations or even pipes bursting with nobody around to notice when you leave a home vacant.
Some people have even heard about homeowners here that they can “stay in my home after foreclosure” and consider it a good way to live rent-free.
In those stories, people are avoiding house payments for months or even years depending on their bank.
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 you get to live without making any payments is when some major mistakes were made.
Sometimes you just get lucky! It’s possible, and it’s happened before. However, it’s not exactly in your best interest to avoid payments that you owe, and it can get you in serious trouble as time goes on.
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 Texas, banks may be forced to ask for you to leave the property as soon as possible, but they could secretly be wanting you to stay. There are a few perfectly legal ways to remain in your home, even after foreclosure. But you might need to talk to your attorney about those details.
How To Stay In My Home After Foreclosure In Dallas
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 this because I’m not an attorney. I’m only informing you about what I’ve seen throughout my career.
Here are some tips for you if you find yourself in this situation:
1) Wait it out. Honestly, this is a terrible option, but it seems to be increasingly common so I still want to discuss it. You definitely shouldn’t run away and abandon your house when the first notice of default shows up. Or when you decide you can’t make your payments anymore so you just leave the house. 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. In case you were unaware, this is actually how it happens. They show up at your door and say you must take everything in your home and drag it to the curb RIGHT NOW. Once you’re done, they change the locks and you are never allowed back into your home again. This can be very humiliating and bad for your self-esteem to allow your neighbors to watch this unfold. You’re already going through a difficult process on top of seeing if you could “stay in my home after foreclosure”. There’s no need to make it worse by allowing this to happen.
2) Go to court. In very rare cases, judges are granting stays and delay 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, there has been a good amount of fraudulent behavior at banks that have been uncovered. Because of this, we may see an increasing trend of homeowners 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.
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”. They basically skip the eviction process and offer you cash to leave the home. It sounds a little greedy, but greasing the wheels does help everything to run smoothly. Plus, you can help out the bank and the buyers by not abandoning the house to squatters before the bank is ready to take possession.
4) Rent it back. It may sound crazy, but some banks are willing to take on previous homeowners as tenants on 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.
It’s really good that you’re reading this page and exploring your options. We help homeowners like you to find creative solutions.
It’s not ideal to allow your home to get foreclosed on hoping that the bank will let you stay. Honestly, it’s a gamble to take that risk. We never know what the bank will do after they foreclose on you. It’s important to take care of the problem now before it affects your credit and before the bank kicks you to the curb.
If you’re interested to know what your options are, reach out to us! We also have a blog going over the 9 ways to stop a foreclosure that I think would be really helpful for you! These 9 ways could help you “stay in my home after foreclosure“. Call us after reading it if you want to discuss it further!
We buy local Dallas Texas houses like yours from people who need to sell fast.