If you are letting a property go into foreclosure remember that YOU are still liable for the property until the bank forecloses on the property and takes title to the property. The bank DOES NOT own the property until a foreclosure sale takes place and the redemption period ends (typically 6 months in Minnesota).
This means that you need to continue to pay for homeowners insurance. If you fail to keep insurance on the property, your lender will get (forced place) insurance for you. These insurance policies may be very expensive. I have had clients tell me that the forced place policy was up to $1800 per month! The bank does not absorb the cost of the insurance policy. If you fail to pay for the policy, the insurance company will collect directly from you and report it to the credit bureaus.
You are also responsible for anything that happens on or to your property. If you fail to shovel the walks, mow the lawn, etc. you may be fined by the city. Some cities are even going so far as to take property owners to court if they fail to pay the fines that are levied against their properties.
One simple solution is to put a responsible tenant in the property while you are letting it go to foreclosure. I work with a property management company that will place a tenant in your property at no fee to you. All tenants are carefully screened and property condition is monitored during the term of the lease. Rent collection and evictions are also included in the property management services.
If you are interested in placing a caretaker / tenant in your property email me at MaryAlice@MNRealEstateTeam.com
