No one likes to deal with foreclosures. They’re an emotional event for the homeowner who loses their home and a legal headache for the bank that needs to limit their losses on the property. In many cases, homeowners will need to be served an eviction notice that states they need to vacate the property before the date the home will be put up for auction. This can leave many homeowners in a scramble trying to find out how to stop an eviction after a foreclosure has already begun.
The sad truth is that once the foreclosure process is set in motion, it’s nearly impossible to stop it from happening. But not all hope is lost, as you may be able to contest eviction by filing for bankruptcy or a hardship claim. It’s important to note, though, that this will only delay eviction and cannot stop it from eventually happening.
But let’s talk about the different types of evictions there are, and a few avenues both tenants and landlords have to protect themselves during the eviction process.
What is a Foreclosure?
Foreclosures are both a single event and a multi-step process, so I understand why some people get confused.
Overall, a foreclosure happens when the owner of a home falls behind on mortgage payments, losing the bank’s confidence that they’ll ever make good on it. This usually doesn’t happen after one or two late payments but rather happens after multiple months of non-payment.
What typically happens is that the bank will issue a Notice of Default which is the last straw. The owner needs to either make payment arrangements with the bank or risk losing the home. If they’re unable to come to an agreement, the bank then issues a Notice of Sale, which says the property will be sold and their ownership of the title is revoked. After that, the bank then lists the property up for auction. The auction itself is the actual foreclosure “event.” The former owner must then leave the property when the title is transferred to the new owner.
If the previous owner gets foreclosed on and won’t leave by the auction’s time, they must be evicted.
The Two Types of Eviction on a Foreclosed Property
Like all things that come along with a foreclosure, the eviction process can be messy and convoluted. Evictions can come in two forms:
The first type of eviction is the one you’re probably more familiar with, where the bank issues a notice to vacate the property by a specific date. This may sometimes involve local law enforcement and changing of locks.
The other type of eviction is what’s known as a “personal property eviction.” If the previous owner is unable or unwilling to remove their things from the home, then a personal property eviction may be served.
Personal property evictions are used as a way to prevent the previous owner from claiming the bank “stole” their personal effects by not letting them in the home to claim those items. They’ll have a deadline to remove any items they want to keep; otherwise, their ownership to anything inside the house is revoked and becomes property of the bank.
How to Stop Eviction After Foreclosure Has Begun
While a foreclosure normally means the homeowner has permanently lost their right to own the property, there are a few ways they can delay the eviction deadline and get more time to clear out. That said, once the foreclosure process begins, it’s incredibly difficult to contest the eviction, so the homeowner must move as quickly as possible.
Contesting an eviction involves going in front of a judge to plead your case. The homeowner may be able to file what’s known as a “hardship notice,” which states the mitigating circumstances which got them to this point. They can also file for bankruptcy to extend the amount of time they’re still allowed to live in the home.
Neither of these is a guarantee, as it’s dependent on whether or not the judge feels the owner has been given a reasonable amount of time to vacate. In either case, even if the judge is sympathetic, the homeowner loses ownership of the property and is then considered a tenant for the remaining time they have left in the home.
How Long Does it Take to Do an Eviction?
As with all things that come along with real estate law, it depends on the state in which the property resides. For the rest of this article, we’ll talk about an eviction process that happens between the owner of a property and the tenant, as you’ll most likely have to deal with this scenario more than the “bank vs. former owner” situation.
Unfortunately, there’s no uniform amount of time that’s required for an eviction to be completed. Depending on whether your property is in a state that’s considered “landlord-friendly” or “tenant-friendly,” the eviction process can range from a few weeks to upwards of a year. Ensure you understand what timeline you might be subjected to if you decide to use a landlord-tenant model in your real estate portfolio. You may need to have a large cash reserve to help you stay afloat throughout an eviction process.
Are There Ways Landlords Can Protect Themselves?
If you’re in a tenant-friendly state, then it’s challenging to evict a bad tenant quickly, so you must know ahead of time what options are available. I recommend joining a landlord or apartment association to find real estate attorneys who can help navigate the process.
In addition, make sure that you do the legwork ahead of time to protect yourself. Requiring credit and background checks along with references can go a long way to ensuring that your tenant won’t be a problem. Even with all of that, things sometimes go awry with even the most reliable tenants (just look at the eviction freezes from 2020), so you must maintain some semblance of savings to help you weather the times when your cash flow takes a hit.
Foreclosure is a messy and emotional process that most of us would like to avoid. But sometimes, things don’t go according to plan, and drastic measures need to be taken. While a tenant will most likely be unable to stop the foreclosure process altogether, there are ways they can extend the timeline before it’s necessary to remove themselves from the property.
If you’re facing a foreclosure, contact an attorney to see if there are ways you can get in front of a judge to delay the eviction deadline. If you’re a landlord needing to serve a tenant an eviction notice, you too should reach out to an attorney in your state who can help you navigate the process. Having someone experienced with real estate law in your corner can go a long way towards ensuring you’re protected no matter which side of the eviction you’re on.