How long can you stay in house during foreclosure?

The final step in a mortgage foreclosure is a public sale of the property. Until that sale, the homeowner has every right to full possession of the property.

Attorney Tom Olsen: Brad, you're on News 96-5 Go ahead.

Brad: Hey, how's it going? Long story short, I own a house I purchased about 11 years ago. It has ended up going into foreclosure.

Attorney Tom Olsen: All right.

Brad: Recently I found that the foreclosure sale is cancelled. It never went through. There's a certain entity paying the taxes on the house for the last four years. How many years do they have to do that before they can take over possession?

Attorney Tom Olsen: Okay.

Brad: The house is still deeded to me and my name.

Attorney Tom Olsen: When you pay real estate taxes on somebody else's piece of property, you get what's called a tax certificate. That tax certificate will begin accruing interest. Once you own that tax certificate for two years, you can apply for a tax deed. If you apply for a tax deed and if it is successful, that will make you the owner of the property and make it free and clear of all liens and encumbrances including mortgages.

The answer is two years Brad, but realistically, your lender's not going to let it go because your lender's mortgage lien would be wiped out if they let this tax deed go forward.

Brad: Okay. My ultimate goal as circumstances have changed for myself over the years, I'd like to be back in the house. Do I have any options as far as that goes?

Attorney Tom Olsen: Well Brad, the property is still in your name. You have 100% rights to be in that house unless you've leased it out to a tenant.

Brad: Right, so I have it.

Attorney Tom Olsen: Brad, you can move back in there and in a mortgage for closure, as you might realize now, the very last step is a sale on a courthouse steps. The sale becomes final 10 days after that. That is when you've really lost title, you no longer own it.

Brad: Let's say I was scheduled and cancelled about three years ago, and there's been no further action in the past three years.

Attorney Tom Olsen: Well that means you still own it Brad, so feel free to move back in.

Brad: I appreciate that. Yes, that was my question. If there's any legal ramification to moving back into it.

Attorney Tom Olsen: No, you have every right to do so. By the way, when I say sale on a courthouse steps, I mean back in the old days, they used to literally have sales on the courthouse steps. Mortgage foreclosure sales now happen online. You can bid online.

Chrissy: The internet.

Attorney Tom Olsen: Yes, the internet.

Chrissy: It's all on the internet.

Attorney Tom Olsen: Exactly. All right, thank you Brad for calling. Hey folks my name is Tom Olsen. the name of the show is Olsen on Law. You're listening to News 96-5.