Recent studies have found that almost 50% of all foreclosed properties are still occupied by the owner.
Does that surprise you? And does that make you wonder how and why? Banks do not want to own homes – and that is the one thing that most people do not realize.
Banks make their money by loaning money, not foreclosing on Denver houses. And when they foreclose on a house, they own that property until they can resell it. This is tying up their money they could be doing more with.
What banks have found out over the years, when they foreclose on a Denver, CO house and it sits empty, it becomes victim to disrepair and vandalism. To keep that from happening, a bank would rather the current occupant live there, even after foreclosure proceedings have started, to keep the house occupied and livable condition.
Live Free In An Abandoned House?
There have been several stories in the media how people are living in houses for free after banks have “abandoned” them after foreclosure. Those stories would make you believe that these people live in these “abandoned” houses for months or even years – and while that sounds great, REALITY CHECK!
After a bank has made an investment in a Denver, CO house, they are not going to let anyone skip payments and not make any effort to collect on it. There would have to be some major mistakes by the bank for that to happen, and banks are careful not to make those types of mistakes. You can “bank” on that!
And what if you were lucky enough for that to happen – very unlikely that would ever be possible, but not totally unheard of. However, avoid paying your mortgage isn’t legal and you could find yourself in a lot of trouble if you do avoid making payments.
So why are there Denver houses that have been foreclosed on still occupied? Remember, the bank does not want vacant houses because they tend to attract crime and vandalism.
Therefore, by keeping a foreclosed Denver, Colorado house occupied, the banks realized they have a better chance of the house staying maintained, protecting the bank’s investment. The foreclosure laws are structured in a way that while a bank can demand you to vacate a house, they want you to remain in the house – for a time being. And this can be done totally legally – even once the foreclosure has started.
How Can You Stay In Your Denver Home After Foreclosure?
Depending on the bank/lender, there are several options, and only the bank/lender can provide you the right advice. But here are 4 ways that Property Scouts has seen happen:
1) Wait out the foreclosure. To be honest, this option is a bad option, but it does seem to be more common today. When you receive the first notice of default, you certainly shouldn’t pack up and leave your Denver, CO house. The foreclosure process can take months, even years to be complete. So, until the process is over, don’t give up. However, waiting until the local law enforcement knocks on the door isn’t the best thing either.
2) Take it to court. There have been some rare cases where a judge has granted a stay and delayed the eviction. This is a valid option and if you, or your attorney, can show proof of negligence by the bank during the foreclosure process. Banks have been discovered to have performed fraudulent behavior in recent years, so it isn’t totally unlikely. It can be expensive and time-consuming to fight the bank or lender in court, but if you have a good case, it would be worthwhile.
3) Request a move-out bonus. Many times, a buyer that still occupies a foreclosed Denver house will request the bank’s consideration to pay them for turning over the property keys within a specific timeframe. Banks often jump at this request because it keeps the house occupied and saves them a lot of legal expense.
4) Rent the house. If your bank doesn’t go with the move-out bonus request, ask to rent the Denver, CO house back for a specific timeframe. While this only a short-term fix for you, banks are often eager to keep the house occupied and will agree to this. In some cases, Property Scouts can purchase your Denver, CO house from the bank, then rent it to you, and you never have to move a thing.
We hope that this has provided you some options to explore, and if you have any questions about other creative solutions, give us a call.
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