|Homeowners can often delay foreclosure and stay in the home|
rent free for long extended periods of time.
Strategy for Homeowners Dealing with Financial Hardship - Postpone or Delay Foreclosure, Stay at Home and Never Pay
Homeowners are able to postpone or delay foreclosure and buy valuable time that allows them to work towards a long-term mortgage solution.
Many Ways to Foreclosure Delays
There is no exact science to delaying a foreclosure and there are probably more ways to do so then we know of. However, we do know more than most and we are willing to share.
I want to make a couple things clear...
First; I have found through my own experience that when it comes to fighting foreclosures anything is possible. Many things that have worked in the past that will not work in the future. Likewise, the exact opposite has proven to be true as well.
Second; This is as risky and daring of a venture as any I can think of. Frankly, in principle, it is darn right wrong. Not to mention kinda illegal in a sense, at least arguably so. Having said that, the resulting reward and financial benefit can be out right life changing and in a purely dollar and cents perspective can be worth 100,000's of dollars. If such a return is invested properly it could even result in an early retirement. Though all of that happening is hardly guaranteed. Also, I think it is important to mention that in many situations where homeowners were faced with outrageous mortgage reset payments that hit them because they were unable to refinance after the housing bust. These situations are the typical circumstances that accompany those who find themselves in these "delay, stay, and not pay" situations.
Now back to the topic...
Reasons For Foreclosure Delays
- Ongoing Loss Mitigation Negotiations - If the loss mitigation department is in negotiations with the homeowner and the foreclosure sale is in the way then the lender will often delay the auction to allow for the time needed to finish the ongoing negotiations.
- Partial Payments - Often the lender will delay the sale in return for a partial payment from the homeowner. This amount can be as little as one or two mortgage payments.
- Bankruptcy - If a homeowner files for bankruptcy an automatic stay is put in place. This will stop foreclosure.
- Foreclosure Process Mistakes - If the lender or trustee realizes they have made some sort of error in the foreclosure process then they will often delay the foreclosure.
- No Bids - If no one shows up to bid on the property then the trustee may postpone the sale to give it another try.
- Legal Actions - If the homeowner sues the lender or challenges the foreclosure legally somehow then the sale will be postponed.
- High Loan to Value Ratio - If the property is drastically under water then no one in their right mind is going to buy the home.
Ensuring a Delay
Many homeowners have reported that they were promised that the foreclosure sale was going to be postponed but in reality, the sale was held as originally planned. This type of thing can happen through honest mistakes or this can happen because the homeowner was lied to.
The best way to protect yourself from something like this is to get the promise to delay in writing. The lenders have to do what is promised in writing and not what a homeowner reports they were told.
Another safety measure a homeowner can do is to show up to the foreclosure sale. This allows the homeowner to know if the sale was delayed as soon as possible.
Also, the homeowner may potentially be able to further delay the sale if the trustee gets sloppy and does not follow the foreclosure process particulars regarding a foreclosure sale delay.
Trustee Process for Foreclosure Delay
The trustee must do the following when a foreclosure is delayed
- Show up to the sale at the correct time and location.
- Announce that the sale was postponed.
- Give the reason for the postponement.
- Announce the new date, time, and location of the sale.
If the above procedures are not done properly then you potentially may be able to complicate the process and further delay the foreclosure sale even further.
Delaying, Staying, and not Paying Foreclosure Strategy can Pay Off Big Time
Homeowners who successfully utilize this strategy often realize big time financial benefits. Below I have listed the perks...
- Not Having to Pay Mortgage/Rent
- The monthly mortgage or rent is typically people's biggest bill. Not having to pay that and still having a roof over your head is a huge benefit. The money you would have been paying can be saved for the future.
- This deal can last years and years. I know folks still in this situation from back in 2009!!
- Extra Time to Find Mortgage Solution
- The extra time you get by delaying the auction may allow you to come to some sort of arrangement with the lender that allows you to keep your home. For example, you may be able to get a loan modification that lowers your monthly mortgage payment.
Why Lenders Allow This
Lenders will delay foreclosures and/or allow homeowners to stay in the home for years without making a mortgage payment for a few different reasons.
Often the lender will delay a foreclosure to allow the homeowner more time to overcome to their financial hardship. If you are only experiencing a temporary hardship then you should communicate this to your lender through a mortgage hardship letter.
If the lender wants more time to work out a loan solution with the borrower they may delay the foreclosure.
If the lender wants to sit on a property that has a high loan to value mortgage they may allow the borrowers to stay in the home. It is almost helpful to have a family stay in the home. This at least protects the asset from neglect or worst the risk of further financial costs from common acts of vandalism that abandoned houses are often at high risk of falling victim to.