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In the start of the movie 99 Homes, a family is evicted out of their home for missing three payments on their mortgage.

But it turns out that the bank literally takes over the home itself the very next day,showing up with police officers and kicking the family out. Offering them a $3500 settlement. How is that legal?

Other than the three missed payments, the family supposedly paid the other payments on time. Even if the bank takes over the home, shouldn't they be auctioning the house, taking out the loan amount and giving the rest to the family?

  • Does the film state how long they've been in the house? Realistically, if your home is mortgaged and you've only owned it for 3 years or so, you've likely paid off very little of the principle loan... and, depending on whether you made a down payment, how big it is, and whether the house has maintained its value, it's quite possible that the bank still held 95% of the value of the house... But I've not seen the film, so... – Catija Jan 23 '16 at 21:47
  • @Catija In the movie they at least seem to be living there for a while, given that the protagonist/antagonist's [Good guy goes bad] mom runs a business from within the house. The house was reasonable sized, i'd say it would be valued at atleast 100-200k. But then again, if this is during the housing crisis it may be worth a lot less. – Aayush Agrawal Jan 23 '16 at 21:50
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    Im pretty sure the 3500 is a "Get out nicely" bribe. Land lords, or owners will often bribe a tenant to get out without destroying anything, or to give up the house/apt when they aren't required to. Especially in foreclosure or Eviction situations. It's called CASH FOR KEYS. Instead of riding out an eviction, you pay them, giving them motivation to leave quickly and quietly. – cde Jan 23 '16 at 21:51
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    @cde You are not a "renter" if you aren't "renting" the house... We have a mortgage but we say that we "own" our home... Because we do... Our name is on the deed, not someone else. – Catija Jan 23 '16 at 21:58
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    Have not seen the movie, but we were renting a house and the owner foreclosed. The bank gave us $5000 to move out. The reason is that they want you to move out and not destroy the place which could cost them a lot of money compared to $3500. Edit: Just saw @cde comment and cash for keys is correct. – DustinDavis Feb 22 '16 at 23:05
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Just a generic answer on US foreclosures. From a blog article on "Foreclosure Timeline in Washington State", though this seems to be pretty standard timeline for most states, not including any negotiations required by federal or state law, half payments, back and forth, etc. This is a bare minimum, completely uncontested foreclosure.

enter image description here Day 0 – Borrower misses first payment
Day 60 – Borrower receives Notice of Default (not public record in WA)
Day 90 – Borrower receives Notice of Trustee Sale (public record in WA)
Day 210 – Trustee Sale: Home is auctioned on the courthouse steps
Day 230 – Borrower must vacate the home
Day 237 – Bank begins the “trash out” and clean up process
Day 251 – Bank lists the home on the MLS
Day 281+ – Bank sells home

So generally it goes:

  1. Default. Depends on the contract.
  2. Bank attempts to collect on loan. Fails.
  3. Bank moves for foreclosure. Minimum time spent on notices required by law.
  4. Foreclosure court proceedings. Judge rules for Bank, Bank owns home.
  5. Bank can now start eviction process.

Even when the Bank owns the home completely, anyone living in the home is still a tenant by law, including any rights granted to tenants, or squatters. The bank becomes a land lord. The people in the home are legal squatters at this point, so the Bank has to go through the legal eviction process. A foreclosure is not an automatic eviction.

  1. Eviction Process. In NJ, (Personal Experience as Land Lord) it can be from 1 to 3 months on average.
  2. Eviction granted, notice posted on door. Tenants have a few days to get out.
  3. Tenants ignore Eviction notice after 10 days, Police can evict them by force.
  4. Post Eviction, any remaining items in house supposed to put in storage, house cleaned, prepped for sale.
  5. House goes on Market, sits empty for over a year. Maybe.
  6. Once it sells, any value of the house over the mortgage amount + expenses, if the now evicted borrowers had any equity in the house, is supposed to go to the borrower. The Bank can't make a profit from it. If the house goes for less than the mortgage amount, then the borrower still owes this to the bank. The bank may write it off, then the borrower owes taxes on this written off amount to the IRS. Fun.

At any point, the Bank may offer a Cash for Keys type deal, where instead of fighting the foreclosure or eviction, the bank/Land Lord gives the borrower a few thousand as go away quickly and quietly without breaking anything incentive. The borrower/tenant is not required to accept it. It could also just be relieving them of any debt, depending on the amount.

The Idea that a house would go from default to foreclosure to eviction in 90 days is so wrong that it's patently ludicrous.

Some states, the pre-foreclosure notice period is more than 90 days by itself.

And the idea that there would be a same day eviction is even worse.

In no state is there a surprise eviction. At minimum, there would be a notice physically attached to the front door for a few days prior to a police escorted removal. That 3,500 offered is just to get them to leave quietly. In real life, the equity in the house being returned, if the house sold for more than the mortgage amount, would happen a few months or years AFTER the eviction.

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