“Foreclosure sounds like the end of the line, but actual eviction can take months or years — even after the bank has repossessed a home.
RealtyTrac estimates that 47% of the nation’s foreclosed homes are currently occupied. The percentage actually tops 60% in some hot housing markets, like Miami and Los Angeles.”1
People still living in repossessed homes include both former owners and renters. Either way, their time in the homes is mortgage and rent free.
Even when occupants leave voluntarily, old owners typically take about two months to vacate.
With renters, it can take a year or more. “If someone has a bona fide rental agreement, we have to abide by that,” said Amy Bonitatibus, a spokeswoman for JP Morgan Chase.1
The eviction process can take a long time. The timing varies widely based on local laws and the backlog of cases in individual courts.
Some states, like Alabama and Utah, have a so-called redemption periods of up to a year during which former owners can get their home back if they can find the means to pay off their mortgages.
And banks may be in no rush to kick people out. They will take their time in markets with a lot of homes for sale and depressed prices. Plus, letting homeowners stick around can help protect homes from abuse.
“Although one would think lenders take losses by not moving evictions forward, they’re still faring better by keeping the properties occupied, because “many foreclosed homes get vandalized or squatters move in.” 1
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This information is intended to be used as a general guide. It is not intended to constitute legal advice and is not a substitute for the advice of an attorney. While every effort has been taken to present the information accurately, this document may not be infallible. No warranty is made that these materials are current, complete, accurate, or suitable for any particular purpose. You should seek advice from your attorney before proceeding with any real estate transaction.
Source(s):
1. Half of Nation’s foreclosed homes still occupied, Les Christie, October 24, 2013, CNNMoney, http://money.cnn.com/2013/10/24/real_estate/occupied-foreclosures/index.html?iid=EL , Retrieved October 24, 2013.
