Here’s the scenario: A homeowner falls behind on their mortgage due to illness, divorce, or loss of employment. As I have written before, they face stress, and no small amount of it. They may feel fear, shame, a foreboding of disaster, embarrassment, or who knows what else. Not knowing how all this works and wanting to avoid the storm troopers evicting them from their home, they quietly move out, expecting that the bank will take back the house any day now. They may even breath a sigh of relief that they are out.
Except that they still own the house, and may even own it a year, two years or 4 years later. And while their neighbors didn’t see the storm troopers throw them out, they do see an abandoned home where they used to live. If you move you then pay rent where you now live, and cannot buy a new home because of the damage to your credit the delinquent mortgage has caused.
Even if you move out of a home, you are still liable for the property. If squatters move in, you are liable for what they do. If teenagers have a party there and one gets hurt, you are liable. If it burns down, you are liable. If someone trips and falls there, guess what? You’re liable. And when the bank eventually does take the house back and calculates your deficiencies, there is every likelihood that they’ll add the repair costs and damages of neglect to your debt, on top of their legal fees.
So stay. The best thing is to remain. it’s your home. At least if you’re living there the lender won’t have to manage another abandoned property. You can contest the foreclosure if you choose. You can do a short sale or, if you have the equity, sell outright on your own terms. But don’t move out just because you’re behind. I know there are stories of people “gaming the system” and living for free on the bank’s dime, but remaining in good faith while due process plays out gives you shelter, keeps the property maintained, and saves you the rent, costs, and liability of the responsibility of two homes.
It isn’t gaming the system. It is common sense. Even if you don’t intend to remain and want to sell, stay until there is a closing. The most difficult sales I have ever had were when the property was abandoned.
Stay under your own roof as long as you can. it is good for you, it is good for the property, and the bank actually prefers that to managing a derelict zombie house.
