As discussed in a previous blog post, it is taking mortgage companies an extraordinary period of time to foreclose on properties these days. Unfortunately, the delay in the foreclose process seems to be a “double-edged sword” depending on the homeowners’ goals.
In some cases, it is a benefit to the homeowners, since they may be able to live in their home for a year or more before the foreclosure is completed. This delay allows the family to stay in “their” home and allows their children to finish the school year in a familiar setting with friends and teachers they adore. In other cases, it is purely a financial decision. The delay provides time for the family to save money, since they are not paying the mortgage loan on the house or rent on another property. When the day comes to move out of the home, the family has the funds needed for moving costs and for the security deposit and rent on the new apartment or house.
On the other hand, the family down the street has made the decision to move on with their lives and have already moved out of the house. The house represents a negative time in their lives and they want a fresh start in new surroundings. In other cases, a member of the family has accepted a new job in another state, so they have no option but to move. These homeowners want the mortgage company to foreclose as soon as possible so this chapter of their lives can be closed. The family has moved on, unfortunately the house is still legally their responsibility. These families receive stack after stack of letters from the mortgage company offering workout plans and other alternatives to foreclosure. On top of that, the homeowners association (HOA) is sending threatening letters regarding tall grass growing in the law, mosquitoes in the swimming pool, and delinquent assessments, dues and fees. The HOA is threatening to file a lawsuit against the homeowners if they do not pay the debt. Pay a debt to the HOA for a house they do not live in? Yes, the HOA assessments, dues and fees are still the homeowners’ financial responsibility until the property is no longer in their names, so the HOA debt must be paid. As the old saying goes, these families can’t get the “monkey, aka house, off their backs”!
As a result, the delay in foreclosing on a house can be a good or bad thing depending on the homeowners’ goals. As the homeowners, you can ask the mortgage company to expedite the foreclosure sale but often that is unsuccessful. You can also look at signing a deed in lieu of foreclose or possibly quit claiming the property to the mortgage company. These options will be covered in a later blog.