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Miami Foreclosure Lawyers on Remaining in a Foreclosed Home

A recent story from The New York Post detailed how new numbers from foreclosure research firm RealtyTrac reveal that some 4,500 urban New Yorkers are continuing to live in properties that have since reverted back to bank ownership.

In fact, our Miami foreclosure lawyers understand that in the five boroughs of New York City, some 75 percent of bank-owned foreclosure properties are still being inhabited by their former owners. On a national level, that number is about 50 percent.

Part of this has to do with the fact that the foreclosure process is deeply dysfunctional, not only in New York, but across the country. Banks have often failed to comply with national mortgage settlement terms (case-in-point, the recent lawsuit filed by New York state Attorney General Eric Schneiderman against Wells Fargo).

This has not left many local authorities eager to press eviction and, surprisingly, the banks haven’t seemed too eager to push it either – at least for now. The reason has to do with the immense backlog of cases.

The glut of foreclosed properties means that even auction sales may not be successful or yield what banks know these properties to be worth. Still, for however long banks hold onto these properties, they are responsible for the upkeep and home maintenance. That may not sound like a lot for a multi-billion dollar corporation, but multiply it by the many millions of foreclosures that remain on the market, it can get quite costly.

So in turn, a non-eviction scenario can be mutually beneficial in some regards. While the former homeowner gets to live rent-free, the bank is able to avoid the cost of home maintenance.

However, there are few protections for homeowners in this situation. In the end, they are still going to face eviction at some point.

That doesn’t mean that you can’t negotiate some sort of agreement with the bank. For example, with the help of an experienced foreclosure attorney, you may be able to shake hands on a deal that involves maintaining the property for a certain amount of time, agreeing on a solid date to leave and then negotiating to receive some cash from the banks to cover moving expenses in return.

In years past, it was fairly common for homeowners to move out soon after receiving those initial foreclosure notices. However, in the wake of the housing crisis, this gave way to something called the “bank walkaway.” This is a situation in which the banks, overwhelmed with the sheer volume of foreclosures on its plate and unwilling to pay the costs of home maintenance, simply don’t follow through with the foreclosure action.

In turn, people who had already moved out (thinking they had been evicted) hadn’t legally been removed as the homeowner of record. As such, they were sued by cities and homeowners’ associations for failure to maintain “abandoned” properties, which were still in their names.

Leaving before the bank actually owns your home can lead to all sorts of legal headaches. In some cases, overwhelmed mortgage lenders could take nine months or more to initiate foreclosure proceedings, even after they have sent you notice.

By the same token, there are also pitfalls with remaining in the home after the bank has retained it, but before you are evicted.

One of the biggest ways it can impact homeowners is by leaving them in limbo. They are left trying to determine whether they are supposed to move out, whether police will show up one day and force them out with little to no notice and whether they will have enough time to gather their things.

In either case, the input from an experienced foreclosure lawyer can help you navigate what your rights are and how you can take advantage of each opportunity in your situation.

If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.

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