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 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. 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. You may be surprised to realize this isn’t a great deal for the banks!
When a Louisville foreclosed house goes vacant, there is a much greater chance that the house will fall into disrepair. Oftentimes the bank would rather have you in the property even after you stop making your payments and the foreclosure is started. Why? With someone still living in the home, there is less chance of vandals or vagrants breaking in, and the house is more likely to stay in good repair.
Lately, there have been stories in the media about people living for free after foreclosure — and even 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 purposefully neglect to collect payments. The only way that you get to live without making any payments is when some major mistakes were made. If it seems too good to be true… it probably is.
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 interest to keep it occupied. Partly because of the ways that the foreclosure laws are structured in Kentucky, 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 Louisville
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 take months and sometimes years. 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).
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 smoothly. 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. 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.
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.
And, there is always the option of selling before you are forced into foreclosure. For many, selling quickly to a real estate investor like We Buy Houses in Kentucky has helped them avoid foreclosure and even put money in their pockets.
We Buy Houses in Kentucky is owned and operated by Daniel and Catherine Close. We offer cash for houses in Louisville, Kentucky and surrounding areas, including: Bardstown, Fern Creek, Highview, Jeffersontown, La Grange, Lyndon, Mount Washington, Newburg, Okolona, Shelbyville, Shepherdsville, Shively, St. Matthews, Taylorsville and Valley Station. We also buy homes in Southern Indiana, including these areas: Clarksville, Jeffersonville and New Albany.
We buy local Louisville, KY houses like yours from people who need to sell fast!