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Both of these questions are covered under the "Law of Adverse Possession".
"Adverse possession is a process by which premises can change ownership. It is a common law concept concerning the title to real property (land and the fixed structures built upon it). By adverse possession, title to another's real property can be acquired without compensation, by holding the property in a manner that conflicts with the true owner's rights for a specified period. For example, "squatter's rights" are a specific form of adverse possession.
Adverse possession does not apply where mortgages are concerned. This is part of the link you posted:
Hostile or adverse use of the property - The disseisor entered or used the land without permission. Renters, hunters or others who enter the land with permission are not hostile. The disseisor's motivations may be viewed by the court in several ways: Objective view--used without true owner's permission and inconsistent with true owner's rights. Bad faith or intentional trespass view--used with the adverse possessor's subjective intent and state of mind (mistaken possession in some jurisdictions does not constitute hostility). Good faith view--a few courts have required that the party mistakenly believed that it is his land. All views require that the disseisor openly claim the land against all possible claims.
Adverse is hostile and without permission and every state has a different law about how long someone must occupy the property before adverse possession applies and usually it is years before it would apply. And in most cases it is very hard to accomplish. Someone is only "hostile" once they are foreclosed on, so all the years they have lived there and paid their mortgage would not apply.
Not to be a smart pants here but did you read both references? If you did, and you understand them, then you will see that like all things legal "possession is nine tenths of the law".
On the other hand, what about someone who does NOT owe the mortgage, some stranger who may stumble upon an abandoned house and unbeknownst to anyone "lives there" for an acceptable period of time to be defined as a "squatter." Could this person lay claim?
(I'll read more and try to answer my own question)
Adverse possession does not apply where mortgages are concerned. This is part of the link you posted:
Hostile or adverse use of the property - The disseisor entered or used the land without permission. Renters, hunters or others who enter the land with permission are not hostile. The disseisor's motivations may be viewed by the court in several ways: Objective view--used without true owner's permission and inconsistent with true owner's rights. Bad faith or intentional trespass view--used with the adverse possessor's subjective intent and state of mind (mistaken possession in some jurisdictions does not constitute hostility). Good faith view--a few courts have required that the party mistakenly believed that it is his land. All views require that the disseisor openly claim the land against all possible claims.
Adverse is hostile and without permission and every state has a different law about how long someone must occupy the property before adverse possession applies and usually it is years before it would apply. And in most cases it is very hard to accomplish. Someone is only "hostile" once they are foreclosed on, so all the years they have lived there and paid their mortgage would not apply.
True up to the point that the homeowner stay in the house past the foreclosure date. From that point on they are trespassers and hostile.
Quote:
Originally Posted by newenglandgirl
I did, but drew no definitive answer about the mortgage holder being a squatter. Here's a snippet a few years old:
On the other hand, what about someone who does NOT owe the mortgage, some stranger who may stumble upon an abandoned house and unbeknownst to anyone "lives there" for an acceptable period of time to be defined as a "squatter." Could this person lay claim?
(I'll read more and try to answer my own question)
Once the homeowner is foreclosed on any occupancy past the foreclosure date allows them to hold the property by Adverse Possession until the sheriff evicts them or they leave.
IMO we will hear more about people just staying in their houses after the foreclosure date since some sheriffs are refusing to put out family's in some areas. I don't know if any will win claim
to their property by Adverse Possession if they get lost in the shuffle but I'm sure some will.
There is actually a great advantage to this for both the people living in the house and the bank. The bank usually has no plans to sell, and if it was empty it would be destroyed by non-maintaince or druggies moving in. The people who don't move keep the lawn cut, water the flowers, and pay the utilities. If they weren't there increasing numbers of cities are charging heavy fees for doing it for the bank, or fining them for non-maintaince.
It there wasn't an advantage to the bank, they wouldn't be letting people stay. Think of it as free maintaince.
The 08 WSJ article, not surprisingly given the source, has a misleading title. The people weren't squatters at all-- they still had legal title to the property and an absolute right to live there. For various reasons, the lenders hadn't commenced or completed foreclosure proceedings. But such niceties are of little importance to the Journal who, as the mouthpiece for the banks, tries to promote moral hazard for individual borrowers, while institutional borrowers (or their organization, the Mortgage Bankers Association) are free to pursue "strategic default." (sorry about the link-- Daily Show's actual link was 404ed)
I predict that no former homeowner is going to regain title to his/her property through adverse possession. For one thing, in the scenario nightbird47 sets out immediately above, the possession isn't hostile, because the lender is letting them stay there. There are also all sorts of legalistic ways to defeat an adverse possession claim as part of a foreclosure suit in a judicial foreclosure state, or in an action to determine title in a non-judicial state. Finally, the possession periods (for example, 10 years in Texas and Missouri, the states where I'm licensed) are simply too long to pass without the lender or subsequent title holder doing something-- and all they have to do is file suit for possession and the 10-year countdown stops, at least according to the law I'm familiar with.
The vast majority of those being foreclosed upon did not pay their mortgages.This is not some vast conspiracy or example of moral hazard (the new buzzword, along with entitlement). It is a matter of expedience gone wrong. Yes, they should have crossed their t's and dotted their i's. But, all this is going to do is allow defaulters to hang on a bit longer. Now there's your moral hazard! And it will further drag out the housing slump.
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