These days the housing market is in such a downturn, many people are in danger of losing their homes. If you are somewhere in the process of foreclosure, you’re on the verge of deciding whether you’ll simply move out of the house or stay.
The bank may be calling you persistently and you want an escape. You might think that as an easy escape moving out will allow the bank to take your home back quicker. Abandoning a home to foreclosure, though, is often the least desirable option when attempting to stop foreclosure is not a good option.
If the owners just move out and abandon the home, this action will not surrender the title to the home. It is simply abandoning the property. The foreclosure process will continue since the foreclosure victims are still the legal owners of the house and the bank will have to take it back through the court system.
The mortgage company can, however, change the locks and prevent the house from vandalism if the foreclosure victims have moved out. This is not considered taking the property back but protecting the lender’s interest from thieves and vandals. The bank will not receive title to the home by having the locks changed, because there is still no transfer of ownership rights.
The homeowners are simply assumed to have abandoned the house and the bank has the right to protect the collateral for the loan. In most cases, if the homeowners return to the property after the locks are changed, they can get in touch with the court system or the county sheriffs department to regain entry into the house. Since, they are still the legal owners during the foreclosure process so they have the right to possess the property even throughout the process.
Moving out of the house or just going through the foreclosure process will have the same negative effects on the homeowners credit history. A foreclosure will still show on their credit report and will drag down their credit scores.
Therefore if you think moving out, will not materially affect the foreclosure process itself as it works through the courts, it will do nothing to help you either to stop foreclosure on the home or recover your credit.
The best thing for you and other foreclosure victims to do is to stay in the property and begin saving up for an emergency fund or paying down other debts in order to utilize their time in the house in the most effective way. It may be better to make good on other debts, such as car loans or credit cards, rather than take on a new housing payment or renting an apartment right away.