An article just hit the press today about a family that stopped paying their mortgage last summer when they could not get a loan modification. I’m still trying to grasp what’s really going on here in our Wonderful Land of The FREE….
Ironic that our weekend put us in the company of friends and family that all had a story to tell about a “neighbor” that was not making their house payments and living in the home for FREE! It was a mixed group, some had feelings of resentment…as they were making the payments on their homes that were just as upside down in equity….While “the neighbor” was living “Free” and seemingly living “guilt free” with plans of short selling when the lender finally set a foreclosure date for sale.
Others in the group, much more sympathetic to the situation shared examples of “neighbors living Free” and supported them. The opinion… banks do not do enough to help people that want to do the Right Thing.
One thing is for sure, many banks are allowing people to stay in their homes and not foreclosing for a long, long time. In fact a report last week stated banks are not counting “these defaults” in their numbers!
Foreclosure procedures have been initiated against 1.7 million of the nation’s households. The pace of resolving these problem loans is slow and getting slower because of legal challenges, foreclosure moratoriums, government pressure to offer modifications and the inability of the lenders to cope with so many defaulting mortgages.
The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.
For Alex Pemberton and Susan Reboyras, foreclosure is becoming a way of life — something they did not want but are in no hurry to get out of.
“I tried to explain my situation to the lender, but they wouldn’t help,” said Mr. Pemberton’s mother, Wendy Pemberton, herself in foreclosure on a small house a few blocks away from her son’s. She stopped paying her mortgage two years ago after a bout with lung cancer. “They’re all crooks.”
“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”
A growing number of the people whose homes are in foreclosure are refusing to run away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.
More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property — double the rate of a year earlier.
