This article is a follow-up to a previously written piece on how homeowners can walk away from a home in foreclosure, and what they should expect if this is their choice. Just leaving a home to its ultimate fate in the foreclosure is obviously the least-desired option, and can result in the most damage to the homeowners' credit and the house itself, if it become a target for squatters or vandals. With property values declining and foreclosure victims owing more on the mortgage than their homes are worth, though, many more will consider whether or not to abandon their home.

When examining this option, though, numerous questions should be raised by the owners. It is not an easy decision to leave a house in foreclosure, and many consequences may be forthcoming, from renting a new apartment while the previous house is being foreclosed, to informing the mortgage company of their decision to give up. Many of these aspects will be left up to the homeowners for the final decision, but they should keep them in mind when searching out options to stop foreclosure, or considering leaving the house to move on with their own lives.

Informing the Bank

Once the owners have made the decision to move out and give up their fight to keep the home, the lender will continue foreclosing on the house. This process will not stop. However, the foreclosure victims will have to decide whether or not to inform the bank that the house will be empty from now on, which may make it a target for break-ins and theft. The ethical decision may be to inform the bank, either through a phone call or in writing to the lender or its attorneys, and let them deal with the security of the property. Homeowners may even be able to write the county and inform them that the house will be abandoned due to the foreclosure status.

Reasons that the owners may with to avoid this, though, include the fact that they are still responsible for the house as long as they own it, and the possibility of informing government or bank representatives who will use their knowledge of the empty house to take advantage. If either party knows that the homeowners will be moving out, they may wish to keep track of them in order to hold them accountable for any damage that occurs to the property once it is abandoned. Homeowners who want to make a clean break and leave the entire experience behind them may just wish to move on.

Forwarding Address

This leads to the issue of leaving a forwarding address with the local post office. Unless homeowners wish to continue receiving mail from the lender, its attorneys, and the local government and court system, as well as assorted junk mail, they may wish to avoid this. If the post office informs the lender of the new address, then the lender can still have official papers served on the owners to have them appear in court for the eviction hearing or sue them again after foreclosure.

Of course, one alternative to this would be transferring all of the relevant bills and personal accounts to a mailing address at a PO Box or commercial mail receiver, such as the UPS Store. Homeowners moving into an apartment can keep their mail as private as possible and avoid the bank or local government knowing exactly where they live and being able to keep harassing them long after the foreclosure process has ended.

Explaining an Abandoned Home to a Landlord

Many homeowners who decide to leave their home will be able to move into a second home or live with friends or family until they have recovered financially and are able to purchase or rent a new home. Many others, though, will have to find some way to explain right away to a landlord why they have not made a mortgage payment in some months and are now trying to rent a new apartment. This is an awkward situation, at best, but it can be approached two ways.

First of all, the homeowners can be completely up front with the potential landlord and explain why they have fallen behind on the mortgage, and why they decided to leave the house. They may wish to explain that the bank was unwilling to work with them, despite their now-stable income and temporary financial setback, and that they would rather move on with their lives than fight for a house that is not worth it. Reasonable landlords are aware of the fact that some renters may be renting exactly because they are looking for a fresh start. Offering the owner an extra security deposit or offering to pay rent in advance for a few months will help persuade them to give the homeowners the benefit of the doubt.

Alternatively, if the homeowners have been able to save up a significant amount of money while facing foreclosure, they may be able to avoid a credit check for an apartment altogether. By explaining their concern for privacy and not having their credit scarred even further with another inquiry, and by offering to pay 6-12 months rent in advance, many landlords can set up an agreement where credit will not be checked. Paying half a year or a year's worth of payments in advance is like having money in the bank, as well, and will ensure that the owners have a stable place to live for at least the short term.

There are a number of aspects that must be examined when considering the possibility of abandoning a house to foreclosure Renting, informing the bank, and setting up a new mailing address are just a few of these that homeowners may overlook, but which should not be left to chance. Leaving behind an unaffordable house to be dealt with by the banks and courts is never an easy decision and should not be made lightly, but homeowners need to consider all of the consequences of this action before making their move.

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