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. Often times, occupants just don’t know what to do, what actions to take. Sometimes we even get calls from an owner that just did not open their mail until after the foreclosure date has passed.
We cannot stress enough the importance of reaching out to the bank! Call them before they call you! This may not change the end result, but it can definitely change how prepared you are for your next steps after foreclosure.
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, and they really don’t want to own the house. 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.
What banks have found is that when a Central Mississippi 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. This is mostly media hype!
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. We did have one couple come to us that had not made a payment in 18 months. They had signed up with some internet scammer that charged them $5000 to “work on a forbearance” when in fact, that company did nothing. They called me to meet about selling it and I had to tell them the property had already been foreclosed on. The next day, a representative from the bank showed up at their front door and served them with a 30 day notice to vacate.
But you might get lucky and stay for an extended period of time! 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 MS, 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 Central Mississippi
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 in Mississippi are relatively quick, as little as 60 days from the time your lender engages the foreclosure attorney, typically with a filing of a Substitution of Trustee. But, 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). Sometimes it may be best to get it sold, maybe for a profit, or maybe you cut your losses and get a fresh start in a new location.
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. “Cash for keys” is not typically negotiable. We attempted to assist an owner with a sale. When the representative offered them “cash for keys” the owner asked for more and the offer was withdrawn.
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.
At the end of the day, the sooner you reach out and initiate the conversation with your lender, the greater chance of you having multiple options to work with on your property.
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 Central Mississippi MS houses like yours from people who need to sell fast.s