Do You Abandon or Surrender Your Foreclosed Home?
When some homeowners know that they will not be able to keep their homes, some choose to simply move out. They may decide to do this for a number of reasons. The bank may be calling them non-stop and they need an escape. They also may think that if they move out of the house the bank will take back the home faster. They may have also simply found another place to live.
However, leaving a home that is being lost to foreclosure is not the most desirable position. Surrendering a house may be a better option for the homeowner. Abandoning a house will have the basic same result as surrendering the house in lieu of foreclosure as far as allowing homeowners to leave the home and move on. However, surrendering a house through deed will allow the individuals to preserve some of their credit.
If victims of foreclosure abandon the home, this will not surrender the home title. The victim is only abandoning the property. The foreclosure will continue because the homeowner is still legally the owner of the house. The bank has to take back the home through the courts. Moving out does not change ownership. This is because they are able to go on vacation, rent out the house, or other things. The court system and the bank do not have the ability to acquire the home just because the owners of the home do not live there any longer. There is no way to tell if the homeowner has moved or if they will be coming back. If the distressed homeowner does not let the bank know that their home has been abandoned, the bank will believe that their letters and calls are simply being ignored.
What the mortgage holder can do is change the locks on the house in order to keep it from being vandalized if the homeowner has moved out. This is not taking the house back. It is protecting the interest of the lender by not allowing the property to be destroyed by vandals and thieves. Changing the locks on the home does not give the bank title of the home because the ownership rights of the home have not been transferred. It is assumed that the homeowner has abandoned the home and the bank can protect the loan collateral.
If the owner of the home comes back to the property after the bank changes the locks, the homeowner is able to contact the county sheriff’s department or the court system in order to gain entry to the house since they remain the legal owners of the home. They can retain possession of the home even through the foreclosure process.
Leaving the home and going through foreclosure will affect a homeowner’s credit in the same negative way as if they had remained in the home and went through the foreclosure process. Only moving out will not do anything to help the distressed homeowner stop foreclosure or help their credit recover. As a matter of fact, it is best if a homeowner stays in the home and either pay down other debts while still in the house or build an emergency fund. Even if the homeowner cannot afford their mortgage, it is best to pay off other debts like credit cars or car loans. This is a better choice than renting an apartment immediately, or taking on a new house payment.