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 the public doesn’t understand is that lenders are not in the business to own property.
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.
But, what they had found is that when a Salt Lake 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.
The media has talk a lot about borrowers living for free after foreclosure in Utah– and even many blogs and 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?
No bank would purposely neglect collecting payments. One way that you get to stay in the home without making any payments is when someone at the bank has made a mistake.
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? Remember, banks don’t want the houses to be vacant. When houses go vacant, they become 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. Because of the way the foreclosure laws are structured in Utah, banks may say one thing but really mean another or 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 Salt Lake City
Remember not all these ideas or options are available (a lot will depend on your lender and your circumstance), and you’ll need some advice from the experts along the way to help you get through it all.
1) Wait it out. Honestly, this is a pretty bad option, but it seems to be increasingly common. Don’t move out right away and leave or abandon your property 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 the other side of things, don’t wait until you get an eviction notice from the sheriff either.
2) Go to court. In very rare cases, judges are granting stays and delaying evictions. This is only a valid if you (and your attorneys) can prove that the lender has not gone through the legal requirements during the Utah 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. Trying to fight the lender with attorneys is a long road, very difficult, too expensive and wastes a lot of time, even if you’ve got a good 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 may sound a little greedy, but a little money may help you when getting into a rental or expenses down the road. Plus, it helps out the lender and the new buyers by not vacating the house to squatters before they’re ready to take possession.
4) Rent it back. It may sound right, but some lenders are willing to take on previous borrowers as renters 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 scenarios, we can even buy the house and lease 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 Salt Lake City Utah houses like yours from people who need to sell fast.