Foreclosure-proof Homeowners
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What is shocking, that in each and every case, I have been told by brokers and banks that the owners, have ceased paying their mortgages in some cases for nearly 2 years and have continued to occupy these homes. Now, these are homes in excess of $2,000,000 in the very best neighborhoods in South Florida. Brokers have added that these buyers further complicated things by putting huge home equity lines on top of their mortgages and now have no possibility of selling their homes for amounts needed to cover their accumulated debt.
This may not seem like news, but understand what this means: There is currently an 8-10 month wait to get a court date to have a foreclosure filing heard in Dade and Broward counties.
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There is no clean way to sell the home that would guarantee “clean title” hence a foreclosure is the only means to separate the property from the dead-beat speculator/squattor. Banks do not want to spend the $50,000 required to take a home through a foreclosure and clear the title — only to put the house back on the market for a deeper loss afterwards. Most likely, they have not revealed these owner occupied defaults to their shareholders, thanks to the sheer numbers of non-performing loans on their balance sheets, and the daunting task of foreclosing on all of them. This is the ultimate seizure and full stop of the market whereby everyone is standing in a stalemate. As one broker said to me, “these bums sitting in $3,000,000 homes overlooking the water are likely to be left alone by the banks for 2 years before the banks even get serious about foreclosure.”
From the comments on that story;
My Mother tells me that, in the ’30s, in The Depression, most of the people in her neighborhood paid nothing to live in their homes, except utilities. When they lost ownership through foreclosure, they just stayed, with the bank’s blessing, because, by living there, the bank’s security was better protected than if they left. If they did leave, the bank incurred the increased cost of insuring an unoccupied building, the cost of boarding it up, and producing a general decline in local property values, including its own properties nearby.