There was an interesting piece over at the WSJ blog recently. The part that really caught my attention was the claim that some borrowers are remaining in their homes for up to two years after they stop making mortgage payments. I had heard of people staying in homes for 6-12 months but never anything like that. Clearly these sorts of things vary by region but it is another indicator of the deep hole the US housing market is trying to dig out of. Here are some excerpts from the piece:
Some borrowers remain in their homes for a year or two after they stop making payments, waiting to be ejected through a clogged foreclosure system. Around 2.6 million households are more than 90 days overdue but still not yet in the foreclosure process, which can take more than a year.
Distressed borrowers are staying put for long periods partly because the federal government has leaned on banks to try to avert as many foreclosures as possible by offering lower payments, a time-consuming process. New state laws also require banks to take more steps to determine which borrowers might be rescued. Further slowing the process, many banks and other loan servicers still don’t have enough capacity to handle all the requests from borrowers for help.