A recent study estimates that 47% of foreclosed properties are still occupied.
When you first see that stat you might be surprised… but we see that all the time.
What most people don’t realize is that banks aren’t in the business to own homes.
Banks are in the business of loaning money to people. The problem lies in the fact that, when they have to foreclose on a particular house, the bank is then forced to own the home until they’re able to sell it to an investor or end buyer in order to get all or most of their money back.
The unexpected correlation experts have found is that when a Boston foreclosed house goes vacant, there is a much greater chance that the house will fall into disrepair. This led banks to actually prefer to have you in the property even after you stop paying your payments and the foreclosure process has started because it deters potential squatters or homeless and keeps the systems of the house in working order.
With all the buzz in the media about individuals living rent-free post-foreclosure and reports of banks seemingly deserting properties, it’s easy to see the appeal.
These accounts often depict people evading mortgage payments for extended periods, sometimes even years.
The idea of living expense-free might sound enticing, but is it truly that straightforward?
Definitely Not.
While it’s uncommon for banks to overlook collecting payments, there are instances where errors occur, allowing individuals to reside without making payments. However, intentionally avoiding payments that are rightfully owed is not advisable as it can lead to severe repercussions sometimes lasting over a decade.
Despite the risks, some homeowners may find themselves in a fortunate position of occupying foreclosed properties. It’s crucial to understand that leaving a property vacant can attract vandalism and criminal activities, which is undesirable for both the bank and the community.
Surprisingly, banks may prefer to have occupants in foreclosed homes to maintain the property’s value and prevent deterioration. In certain situations, due to the nuances of foreclosure laws in MA, banks may request occupants to vacate while simultaneously wishing for them to remain.
There are legal avenues available for individuals to continue residing in their homes, even post-foreclosure.
How To Remain in Your Home After Foreclosure In Boston
Not all the following 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 without a doubt up there with the worst options, but it seems to be increasingly common because individuals would prefer not to deal with the truth of the matter. You definitely shouldn’t run away and abandon your house when the first notice of default comes in the mail. Keep in mind that the proceedings and the general foreclosure process takes months and sometimes years. It’s not over until it’s over, so don’t give up too early. At the same time, don’t wait until the county sheriff shows up to evict you to start packing up your belongings.
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, in your respective state, during the foreclosure process. Over the past few years, a lot of fraudulent behavior at banks has come to light – so we may see an increasing trend of using the courts to stop foreclosure as the trust in those lending institutions is being questioned. The truth is though, fighting banks in court with your lawyer(s) 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. Buyers of occupied foreclosure properties spend thousands of dollars on lawyers and the other multitude of expenses in an eviction, so why not save everyone the time and money by negotiating and taking the money that would have been in legal fees for yourself? It’s commonly known as “cash for keys”. It sounds a little greedy, it is, but greasing the wheels helps everything to run smooth in any scenario. Plus, you can help the bank and the future buyers by not abandoning the house and open it up to squatters before they’re ready to take possession.
4) Rent it back. It may sound out of reach, but some banks are willing to take on previous homeowners as tenants in their property while they take the time needed to sort out the sale. That can end up being only a short-term fix though, as they will want you to agree to vacate the premises as soon as a suitable buyer is found to purchase the property. In some cases, as investors and professional home buyers, we can 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 just like you find creative solutions to their unique set of circumstances.
We can’t help everyone, but we might be able to help you.
We buy local Boston MA houses like yours from people who need to sell fast