What Happens When a Foreclosure House Is Abandoned?
Due to the glut of foreclosures in the late 2000s, it's hard to find a town that is not affected by distressed or abandoned properties. These homes, once maintained, now sit vacant, inviting theft and vandalism, while bringing down the value of the surrounding homes. Often it takes years of paperwork to deal with an abandoned home. Time is not kind to a home that is not maintained.
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Abandoned Property
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Homeowners who owe more than their home is worth may simply pack up and walk away from the home. This also may happen when homeowners realize they will never recoup the money on their investment, even if they can afford to pay the mortgage. But more often, homeowners are several months behind on payments. They can't afford to keep the property maintained, and they may see no point in staying.
Often Bank is Unaware
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If you walk away from your home without notifying your lender, the bank thinks you are simply avoiding its calls and letters. It has no idea what condition your home is in. It doesn't know if you are on extended vacation or have died. Lenders usually discover that the house is abandoned when they send a field inspector out to speak with you regarding your past due mortgage payments. The lender makes a decision on the property after inspecting it to determine its condition.
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Sold at Auction
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If the bank decides that the home needs only minor cosmetic touches to make it more appealing to bidders, it may try to sell it at auction to the highest bidder. The money from the proceeds helps pay off the outstanding mortgage. If the lender feels that the property is unsalvageable, it likely will not put a dime into it – the bank already is losing money. Banks may charge off the property entirely or take a loss on their books. At this point, the home becomes abandoned by both the homeowner and lender.
Decay and Vandalism
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Homes left to decay do not take too many years to become unrepairable. If left unattended for long, an abandoned home succumbs to the elements, especially in humid or wet climates. In wintry climates, homes can sustain damage from snow and ice. The home can fall into decay quickly. Abandoned homes also are hot spots for crime, vandalism, drugs and squatters, who may move in and take over the premises. Feral cats, raccoons, rats and other vermin may move in seeking shelter. Plant overgrowth may destroy the roof and siding. When a home gets to this point, a total teardown usually is in order.
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References
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