NYT: Foreclosure Victims Stop Making Payments, Wait to Be Forced Out

• June 7th 2010

by Joe Marhamati

A recent New York Times article reported that many foreclosure victims that have had no luck negotiating with the bank or taking advantage of Obama’s foreclosure assistance program have halted their monthly payments altogether.

Their strategy is simple: stop paying the mortgage and enjoy the free rent until the often protracted judicial process sees its way through, and they are physically forced to leave. The article reports that there are 1.7 million ongoing foreclosure proceedings in the U.S. and the sheer volume of legal challenges has created a bottleneck, which has led to a 75 percent increase in the average number of days that a borrower in foreclosure has waited before being evicted. In January 2008 it was 251 days; that number has now risen to 438.

The article notes that a homeowner’s “moral qualms” are easily allayed because of the role the banks had in bringing the financial system to its knees and the need to put food on the table.

From the NY Times:

“We could pay the mortgage company way more than the house is worth and starve to death,” said [Alex] Pemberton, 43. “Or we could pay ourselves so our business could sustain us and people who work for us over a long period of time. It may sound very horrible, but it comes down to a self-preservation thing.”

While this may seem like an easy option with few consequences, the lending industry and its partners warn that borrowers are placing themselves in a precarious spot by taking this stance, particularly with many states having laws that allow lenders to go after people’s assets after the foreclosure process is complete.

This article originally published at https://dc.urbanturf.com/articles/blog/nyt_foreclosure_victims_stop_making_payments_wait_to_be_forced_out/2143.