A recent study estimates that 47% of foreclosed properties are still occupied.
Surprised to discover this stat?
Most people don’t realize that banks aren’t in the business to own homes. Banks are in the business of lending money.
But when a bank has to foreclose on a house, they are forced to own the home until they’re able to sell it so they can recoup all (or most) of their investment.
In the same study, they also found when a Chicago foreclosed house goes vacant, there is a much greater chance for the house to fall into disrepair. Often times the bank would rather still have you in the property, even after you stop making mortgage payments and the foreclosure process has begun because it wards off vandals and keeps the house in good working order. Even without you doing a single repair on the house – the mere fact that there is a living, breathing human being inside it, day in and day out, can be enough of a deterrent.
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 have sometimes been avoiding house payments for months, even years. Man, that sounds great! Let’s all live for free. 😉
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 if the bank makes some major (unintentional, of course) errors. You might get lucky – it’s happened before. However, it’s not exactly legal to avoid payments, and doing so can get you into serious trouble.
So why are so many foreclosed homes still occupied? It’s important to remember that the bank has invested a significant amount of money into your house. And they want to protect that investment at all costs. As we mentioned earlier, vacant homes are an easy target 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 IL, banks may ask you to leave even thought they really want you to stay. Weird, I know.
There are a few perfectly legal ways to remain in your home, even after foreclosure.
How To Stay In My Home After Foreclosure In Chicago
Not all of these options are available (depending on your situation and your lender), and you’ll need some expert advice along the way to help you get through.
1) Wait it out. Honestly, this isn’t the wisest option, but it seems to be increasingly common. Do not run away and abandon your house when the first notice of default shows up. Remember that this process often takes months, 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, a judge may grant a stay and delay the eviction. 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 not easy, expensive, and time consuming, even if you’ve got a perfect case. Unfortunately, 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 smooth. Plus, you’ll help 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. 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 like you to find creative solutions.
We can’t help everyone, but we might be able to help you.
We buy local Chicago IL houses like yours from people who need to sell fast.