Is Squatting in a Foreclosure Acceptable?

Posted by Madison on May 20, 2010

We caught an interesting story on our local news recently. Local homeless advocacy groups are helping homeless families squat in homes in foreclosure. The idea is basically, why should people be homeless when there are vacant homes available?

The groups locate homes in foreclosure, enter the home (most recently through a broken back door), then clean it up. Once it’s ready, they help the homeless family move in. Police are on hand, but only take action if a trespassing complaint is filed by the owners (in this case Freddie Mac and Fannie Mae).

Here is the rationale from the group “Take Back the Land”:

Fannie Mae and Freddie Mac have been given public money in order to finance their reckless spending, have been given public money for homes such as this one. This is not Fannie Mae’s house. This is not Freddie Mac’s house. This is public housing.

I’m not sure if this practice is widespread, but apparently it’s been going on for awhile here. Since foreclosures can take over a year, the homeless family could have housing for a long time. Here’s the local story and video.

Locally, the biggest issue appears to be the liability exposure; a few owners asked the homeless families to leave because of the potential for a liability lawsuit.

What do you think? Is it acceptable for homeless families to squat in foreclosures?

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Comments to Is Squatting in a Foreclosure Acceptable?

  1. I actually love the idea of foreclosures being used this way, and it sounds like they’re doing it responsibly and carefully. I’m sure there are liability issues, and I’m guessing we’ll never see Fannie or Freddie officially endorsing it, but I like it!

    Mandi @ Organizing Your Way

    • Mandi, would your answer be different if it wasn’t owned by Fannie or Freddie? Say, if it was an individual?


      • I know I’m late getting back here. I’m not sure I have an answer. I love the idea in theory because ideally they’re using the home while it’s going through this process and being unused, and it sounds like they’re trying to do it responsibly.

        Of course, what that really looks like is probably some trashed houses and other delays in reselling the house, so it’s a lot messier.

        But if it could be done in a way that was mutually beneficial, then yeah, I’m all for it. There are two homes in our neighborhood (out of five total) that are over three years old and still unoccupied because the market crashed just after they were built.

        If they could be used to provide homes for families who didn’t have a home and those families could then in turn help with upkeep and maintenance, I think that would be beneficial for everybody. Are the owners going to trust anybody to do that without causing more problems than it’s worth? Probably not. But it’s an interesting idea!

        Mandi @ Organizing Your Way

  2. It’s an interesting idea, however, I can’t seeing how it would work very well in our litigation happy society. As mentioned above I would think that a lot of people wouldn’t allow it for liability reasons.

    Money Smarts

    • And I guess, since they “break in” many of the owners don’t know it’s going on until down the road sometime….


  3. Maybe we get the homeless folks to sign liability waivers, and everyone’s happy?

    Keith Morris

  4. What would a homeowner in an area with these foreclosed homes be thinking? Let the home set and lose value by being vacant, or have “neighbors” move in who have zero stake in the quality of the area/home?


  5. I guess my concern would be if someone filed a trespassing complaint. The homeless family would be in a mess that way.

    It does frustrate me how many people do not know that they can stay in their house for months after the foreclosure begins.


  6. I have no problems with squatters if the squatter maintains the upkeep on the property. I do have problems with squatters defacing property. The broken windows theory would suggest that in an area with multiple foreclosures, once one property is defaced people would see it as acceptable to deface other properties quickly turning the neighborhood into a slum.


  7. Wow, great idea! It’s a shame the government did not write that as a stipulation for giving money…. Tell them foreclosures have to be used to house homeless families… That would have been a brilliant initiative!


  8. No, it’s not acceptable because they are decreasing the value of someone else’s current or future property without paying anything. That’s theft.

    Budgeting in the Fun Stuff

  9. I agree with Budgeting in the Fun Stuff. Their position is not logical.

    Just because the public funds the program doesn’t mean one group can unilaterally decide to use that asset.

    Bucksome Boomer

  10. I don’t think this is such a good idea. Seems illogical to me.

    Now, I believe in helping those that truly need help, and DEFINITELY believe in generosity. Sometimes you have to give without expecting anything back. Just give, no strings attached. Even if it costs you, sometimes you just give.

    However, this is a case of helping one party while clearly hurting the other. If it were a matter of providing assistance or help voluntarily to someone, that’s great. But in this case, if I understand right, people are using someone else’s property without the owner’s approval, without paying anything.

    This isn’t fair to take advantage of someone’s property like that. Its trespassing.


  11. This is unethical, if not completely illegal. Lots of things are done with public funds. Can we just build a house in a national park, forest or on BLM land just because it is owned by the public, and we, being members of the public, paid for it? No.
    Bottom line, it’s just taking from one group and giving benefits to another. Why is it OK in this instance and not OK in any of the other situations?

    Jeff @ sustainablelifeblog

  12. I have worked for homeless advocacy groups, and this idea makes me feel uncomfortable. It’s not a legal arrangement. It does not give the homeless a legal residence to use to get a job, or as a reference to in the future get a legal place to rent. The amount of time they can stay is indefinite, and may have to move away from job, school, etc. It does not protect the homeowner. There would be no motivation for the temporarily “homed” to take care of this house. It will probably create ill-will with their neighbors who are paying to live there. I’m sorry, this is not a good solution.


  13. I know a man who stayed on in a foreclosed home for almost 2 1/2 years! (rural MI) The house was in his girlfriends name, and she passed away. The bank posted the foreclosure in the local paper, and it had been bought out by a CA bank. So, he said he would just stay until someone came and told him to leave. After 2 1/2 years, no one ever did! He ended up moving to be nearer a job. The house still sits empty, rotting, you cant leave a house with no heat in MI, pipes burst, plaster cracks, etc. What a waste!


  14. This is wrong. If it doesn’t belong to YOU then you can’t live there. I can’t live in a public park. I can’t live in a public restroom. The homes are bank owned, not public, so why should they even be allowed inside?

    It’s not that I’m against helping the homeless, but this is immoral and illegal.

    The Best Money Blog

  15. It’s a great idea until you realize squatters don’t care about the condition of the property, will lower the home’s value, and basically make the home unsellable while they are occupying it. In the end it hurts more than it helps.

  16. Why don’t you brainiacs simply cut out the middleman by advocating for allowing the original mortgage defaulters to squat rent-free in their homes in perpetuity?

    White Trash

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