My home is in foreclosure and there is a new lock on my front door. What should I do?

You may live in your home up until the foreclosure sale is over, and sometimes even longer.

Question

I lost my job about a year ago and fell really far behind in my mortgage payments. The bank recently started a foreclosure on my home. I was out of town for a while and came home to find that I'm locked out of my house. What should I do? Do I have to find a new place to live already?

Answer

No, you don't have to find a new place to live just yet. The bank has the legal right to change the locks, but only if you've abandoned (that is, permanently moved out of) the home. Because you still live in the property, the bank can't legally do that. You have the right to stay in your home during the entire foreclosure process.

When You Have to Move Out

You legally own the home until the bank (or a third party) gets title to the home after buying it at the foreclosure sale. So, you don't have to move out until the foreclosure is over.

In fact, you might even be able to stay in the home for a while after the foreclosure sale. Your state might have a law that gives you some time to buy back or "redeem" the property after the foreclosure sale and, depending on state law, you might be able to live in the home during the redemption period.

Why the Bank Locked You Out

The mortgage contract that you signed when you took out the loan most likely gives the bank the right to protect its interest in the home. If you permanently move out of the house, the bank will want to maintain and secure the property to preserve the home's value. As part of this process, the bank will probably change the locks.

Typically, the way the bank finds out if a home is abandoned is by hiring someone to do a drive-by inspection to see if anyone is living at the property. In your case, it's possible that the inspector mistakenly thought the home was vacant because you've been out of town.

When to Talk to an Attorney

The first thing you should do is call your loan servicer. Let the servicer know that you still live in the home and that it must give you access to the property immediately. If the servicer won't make arrangements to let you back into the home, you should contact an attorney who can help you enforce your rights.

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