Lenders Swamped By Foreclosures Let Homeowners Stay
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Banks are so overwhelmed by the U.S. housing crisis they’ve started to look the other way when homeowners stop paying their mortgages.
The number of borrowers at least 90 days late on their home loans rose to 3.6 percent at the end of December, the highest in at least five years, according to the Mortgage Bankers Association in Washington. That figure, for the first time, is almost double the 2 percent who have been foreclosed on.
Lenders who allow owners to stay in their homes are distorting the record foreclosure rate and delaying the worst of the housing decline, said Mark Zandi, chief economist at Moody’s Economy.com, a unit of New York-based Moody’s Corp. These borrowers will eventually push the number of delinquencies even higher and send more homes onto an already glutted market.
“We don’t have a sense of the magnitude of what’s really going on because the whole process is being delayed,” Zandi said in an interview. “Looking at the data, we see the problems, but they are probably measurably greater than we think.”
April 7th, 2008 at 19:17
This is just delaying the inevitable, but allowing homeowners to stay in properties may help the communities stay together a bit longer. Rather than having empty houses with broken windows and no copper pipes, these houses will at least be safe for a while. Of course, once the banks determine they can make more money from foreclosing and kicking people out to sell the houses on the market, that will be the policy again.
April 11th, 2008 at 4:24
It makes absolute sense for lenders to allow people to stay in their homes. Abandoned homes become run down, many homes are being vandalized when abandoned, the lenders are swamped with foreclosures and can’t get to them quick enough, the market is flooded with homes and none of them are selling -what good is a vacant house to a lender that sits empty and ill kept for a year?
Corwin Grant
http://www.foreclsoureslam.com
April 11th, 2008 at 4:25
It makes absolute sense for lenders to allow people to stay in their homes. Abandoned homes become run down, many homes are being vandalized when abandoned, the lenders are swamped with foreclosures and can’t get to them quick enough, the market is flooded with homes and none of them are selling -what good is a vacant house to a lender that sits empty and ill kept for a year?
Corwin Grant
http://www.foreclosureslam.com