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Don't Rush To Move Even If You're Facing Foreclosure In Your Las Vegas Home

house With foreclosure rates increasing across the nation and here in the Las Vegas valley, more and more homeowners are receiving notices for the sheriff's sale. The conventional advice from legal experts has been to immediately pack up and move, but that is changing. Recently, we've been seeing a new phenomenon coined "bank walkaways," when the bank begins the foreclosure process, then walks away with no word or explanation, leaving the homeowners wondering what happens next. And legal experts aren't sure, either.

Today, if a homeowner leaves after getting a foreclosure notice and the bank fails to finish the foreclosure, the homeowner opens themselves up to being sued by the city for failing to maintain the abandoned property. After all, the home is still in their name. In some cases, water pipes have burst in abandoned homes, creating a flooded basement, water damage, and potential toxic exposure to mold both inside the home and within the neighborhood. If the homeowner had stayed, damage could have been avoided to the property, and the neighbors would be spared from their property values deteriorating further.

In addition, leaving before the bank really owns the home can open the homeowner up to several other problems. These can include:

• a restarted foreclosure process months or years later (after it was assumed things were settled)

• a sold mortgage and a new, more agressive debt collection service coming after the homeowner

• possible legal issues related to taxes, fines, upkeep, code violations, repairs or even demolition costs.

What should a homeowner do if they're facing foreclosure? More experts are advising that they stay in the home, even if they aren't paying their mortgage. While it is still unclear what legal tangles bank walkaways will create, the additional problems homeowners might face if they abandon the property could make the nightmare even worse. In the short term, people will be living in their home without having to pay - in some cases, homeowners will go for a year or more with no one asking for money. If possible, homeowners should be putting away what would have been their monthly mortgage payment in a bank account each month and leaving it there. It could be used in future loan modification negotiations with the mortgage company if it reappears, or as a security deposit on a rental, if people have to move quickly.

Have foreclosure questions? Give me, Yonas Woldu a call - I'm your real estate expert in the Las Vegas valley! Also visit my Vegas Real Property website and the new AskYonas website. For more information on Nevada foreclosure laws, you can also read this online article, and visit RealtyTrac.com to find out what to expect if you're facing foreclosure on your home.

Posted by Yonas Woldu Greater Las Vegas Real Estate on 10/29/2009 10:32 PM

Comments (23)

Don't Rush to Move Even if You're Facing Foreclosure in Your Las Vegas Home in the Mortgage / Finance Channel

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23 Comments on Don't Rush To Move Even If You're Facing Foreclosure In Your Las Vegas Home

OCT

Excellent information. It behooves a home owner to at least make an attempt to resolve the default with the lender through deed in lieu of, send the keys back with notice of abandonment, etc. At least the owner will have a defense if the property is damaged before the bank takes it over.

Yonas - In Canada, we have not been having the large scale foreclosures that the USA has had over the past couple of years.

Your post is the first time that I have seen the topic of "bank walkaways" being discussed on ActiveRain or mainstream USA media.

Thanks for your comments. There is growing attention paid to borrowers who walk away strategically, but banks are just as bad. Homeowners are left holding the bag filled with uuncertainty and liability.

I would add if your loan is FHA don't leave the property on a short sale. FHA will stop the proceedings unless you have some strong mitigating circumstances.

Thank you for sharing. Wonderful post. I appreciate it.

This is a good post. Thanks for sharing your insight. You're bookmarked!

Thanks for all of your comments. It depends what state you are in how quickly foreclosures proceed anyway but this adds a new dimension.

Joe - appreciate you insights!

Great information...I'm hearing now that you should also be asking the bank if they have the original note.

Hi Yonas,

Thank you for this information. It's so important that consumers understand the risks.

Wow.... who knew the risks could be so great.

That is really good advice. With so many foreclosures we are all in "uncharted waters" and it seems that we are learning on the fly.

Thanks for the good advice! Those are pretty good points!!

Great Information that by the way perhaps applies across the market!

Sound advice! As long as the property isn't being trashed, it is better for someone to stay in and pay utilities so there will be less damages to systems in the long term!

Well, this seems like good advice, given the amount of foreclosures going on right now. Also, the liability issue seems really scary as far as who is responsible for the house once the bank pursues foreclosure...

Good post here are some links that people can get for more info if they want to challenge the foreclosure as well

http://timothymccandless.wordpress.com/foreclosed-and-facing-eviction-i-have-a-plan/

http://livinglies.wordpress.com/in-trouble-right-now-press-here/foreclosure-defense-and-offense-the-evolving-audit-process/

http://asndinc.com/index.php

They can also intereact with others going through the same thing

Thanks for all the comments, suggestins, and links. It almost seems as if banks should let home owners to stay put & let them rent after foreclosure at a reduced rate.

Yonas, I am hearing more and more often that banks have no clue how to hanldle the foreclosure process and this seems to prove it is getting worse.

Yonas - Great information. This is something new. I have not heard of "bank walkaways". It is really better for the homeowner to stay put in the house so at least the house is taken care of.

Yonas:

Before the market crashed we used to make it out to Vegas twice a year -- We love it over there... I have been paying a lot of attention to your foreclosure market and it seems a lot the lenders on the east coast are following suit... There is so much uncertainty in the mortgage world right now and all these troubled assets are not making it easier... Thanks for the info in your post and best of luck out there!! JE

Well, Damon, banks are banks, not real estate companies. They aren't ready to handle all the foreclosures all the property that is now theirs, and all the loan modification requests.

Anonymous, yes. this is becoming a problem when the bank starts the foreclosure & the homeowner moves, only to find they are still liable because the bank did not complete the foreclosure.

Jason, look me up the next time you're in town. it's wild in our market.

NOV

Yonas, I think your advice is sound. I also believe we haven't seen the last of the creative solutions brought forth by Government and the Banking industry to address this unique crisis. As Sybil commented we are learning on the fly.

NOV

Thanks for your comment, Steve. I agree with you. Nobody has the silver bullet for fixing housing, so we'll keep trying to implement fixes for a small part of the problem.

NOV

Nice and informative <a href="http://www.ArticleBillboard.com">refinance, mortgage, marketing</a> articles. These should be helpful for my users.

Gia

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