A recent study estimates that 48% of foreclosed properties are still occupied.
When you first see that stat you may be surprised… but we’re not.
What most people don’t realize is that banks aren’t in the business to own homes.
They are in the business to lend 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 Metro Detroit foreclosed house goes vacant… there is a more considerable chance that the house will fall into disrepair. Often times the bank would rather have you stay in the property even after you stop making your payments and the foreclosure has began 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 awesome! 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 were 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 MI, banks may ask you to leave while wanting you to stay. Confusing, right?
Well in Michigan, there is a 6 month redemption period, giving the homeowner an opportunity to payoff outstanding debt and redeem the property.
There are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure In Metro Detroit
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 years. In Michigan we’ve seen it could take anywhere between 3-18 months depending on the lender. 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 legal requirements during the foreclosure process. During the past few years, a lot of fraudulent activities 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 challenging, expensive and time-consuming, even if you’ve got a perfect case (most people don’t stand a chance).
3) Propose a move-out fee. 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.
4) Rent it back. It may sound crazy, but some banks are willing to take on previous homeowners as tenants in their property. Again they don’t want the house to be vacant. That’s only a short-term fix, as they’ll put an agreement in place to vacate the premises as soon as they find someone to purchase the house. 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 in Metro Detroit like you to find creative solutions.
We can’t help everyone, but we might be able to help you.
Fast Home Offer Guys is a real estate solutions company with its mission to help homeowners in tough situations…like facing foreclosure. We help each homeowner like you personally, and we believe in integrity, transparency and honesty.
We have extensive real estate knowledge of the local Metro Detroit market, legal resources, and funds available to fix most real estate problems and help you redeem and or buy your house for cash quickly.
We buy local Metro Detroit MI houses like yours from people who need to sell fast.
Check out more pre-foreclosure resources and how to stay in my home after foreclosure in Metro Detroit here: