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, which is a long drawn out process that most banks and credit unions in Manitoba want to avoid!
But, what they had found is that when a foreclosed house in Winnipeg goes vacant… there is a much greater chance that the house will fall into disrepair. Often times the bank would rather have you in the property even after you stop paying your payments and the foreclosure is started because it keeps people from breaking in, and stops the house from falling into disrepair.
There’s been a lot of talk in the news about people living for free after foreclosure – and even many stories about banks “abandoning” properties.
In those stories, people are avoiding house payments for months at a time, even years in some cases.
That sounds too good to be true! Let’s all live for free. (wink)
Wait… it can’t be that easy, right?
No bank would purposely stop collecting payments out of the kindness of their hearts. The only way that you get to live without making any payments is when some major mistakes were made by the bank.
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 that’s something you should avoid at all costs.
So why are so many foreclosed homes actually occupied? It’s important to remember that no one, especially the banks and credit unions, 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 interests to keep it occupied. Partly because of the ways that the foreclosure laws are structured in Manitoba, banks and credit unions may ask you to leave while at the same time wanting you to stay. Does that sound confusing? It’s not….
There are a few perfectly legal ways to remain in your home, even after the foreclosure process has started.
How To Stay In My Home After Foreclosure In Winnipeg
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 idea which unfortunately 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 takes 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 lawyer) can prove that the bank or credit union has neglected a legal requirement during the foreclosure process. During the past few years, a lot of fraudulent behaviour 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). This is usually a route that you should try to avoid, unless it’s very obvious your bank or credit union has done something very wrong.
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 can help out the bank and the buyers by not abandoning the house to squatters before they’re ready to take possession. It’s a bit “out of the box” but you would be surprised at how of this works, while also giving you a bit of money for moving expenses which is nice.
4) Rent it back to you. 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, the I Buy Winnipeg Houses team can even purchase the property and rent it back to you. There are many ways we can help you to stop foreclosure on your Winnipeg home.
It’s really good that you’re reading this page and exploring your options. We help homeowners like you to find creative solutions, and we will be honest and transparent with you when discussing these possibilities with you.
We can’t help everyone, but we might be able to help you!
We buy local Winnipeg Manitoba houses like yours from people who need to sell fast.