Consumer Law

Strategies for Dealing with Foreclosure

By M. Stan Herring

The Michigan Collection Law Blog has posted an article that reminds people to have an "exit strategy" when being faced with foreclosure.

This article suggests to first prioritize what kind of residence you need after having to leave the foreclosed property. Second, it is important to look at the resources available to you and what kind of new home that will get you. Some people find their best option is to move into an apartment or a rental home.

The third suggestion strategy is to

...calculate the date that you have to be out of the foreclosed property... home owner can use this period to save up money for a down payment on a land contract, or a security deposit and moving costs. Think about it, living rent and mortgage free for six months is a great boon to anyone's finances. You just need enough discipline to save what you can.

Gary Nitzkin, author of this article and a Michigan attorney, gives the example of one of his foreclosure cases:

Although we had our exit plan in place, the bank did not appear at the sale. I cannot tell you why the bank did that, but I can give you plenty of good reasons why the bank made the right move. First of all, when the bank owns the home, it incurs substantial holding costs on the property such as taxes and utilities. Moreover, the bank has to hire a property maintenance company to visit the property to keep out trespassers, squaters, thieves and vandals. It is far more economic for the bank to keep people in their homes and perform these functions than for the bank to start forking out bailout dollars. Third, the banks already own tons of property. They were not supposed to be in the real estate business, but now they are. The banks are unhappy about this. Finally, there is talk of legislation to put a moratorium on foreclosures.

If you are facing foreclosure and have questions or concerns, feel free to contact us.

Full post as published by Alabama Consumer Blog on April 09, 2009 (boomark / email).