In this day and age the amount of people unable to pay their mortgages is on the rise. Be it medical bills, loss of income or a change in circumstances, many people are running into shortages in their lives leaving them coming up short for that monthly mortgage payment. While these times in life are stressful and demanding some families are making this work for them and not against them.
With the amount of people unable to make payments rising the total number of open foreclosures increases as well. LPS Applied Analytics has reported that over 650,000 homes have not paid any mortgage payments in the past 18 months leaving only 19 percent of the homes having action taken on them for repossession. That leaves 526,500 families not paying their mortgage and no action being taken on them at this time.
With the banks and courts so overwhelmed with repossession cases it’s no surprise that the time limit between being delinquent on mortgage payments and an actual foreclosure is expanding immensely. According to LPS in January of 2008 the average time between being delinquent on payments and actual foreclosure was about 251 days. Just two years later add on about half a year longer and families now have an average 438 days before eviction.
Some families are taking advantage of this fact and refusing to pay their mortgage, taking the time they have left in the house to save what they would have been paying towards the mortgage and live a “free rent” life until that dreaded eviction day.
“A growing number of the people whose homes are in foreclosure are refusing to slink 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.
This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads.”
However, this method of life will not work in all states of this country. States such as Texas and California can pursue foreclosures outside of the courts which makes the foreclosure time much quicker than others. Meanwhile 19 other states including, Florida and New York can only foreclose with judicial rule, slowing down the process for many. It has been reported that in Florida the average time a property stays in foreclosure is 518 days while in New York the time is a little over a year and a half – 561 days.
“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 souring mortgages.”
With many families refusing to pay the mortgage they may be able to buy themselves a little time to save and get their life back on track for the time being. However, with falling credit scores and the impending eviction day in the future, families are tacking on money as well as stress to their lives; owing almost double the actual value of the homes. Some are banking on the house being taken away and the lenders only getting a certain amount for it.
Most people playing this no mortgage paying game seek the advice of an attorney. One attorney helping Floridians with foreclosure in the forthcoming is Mark P. Stopa who sends out close to 2,000 letters a week to families in the distressing position of not being able to pay their mortgage. He informs them that they may be able to keep their home for years possibly even if they have no defense. Stopa’s biggest defense being to file a motion to dismiss cases and the courts not moving them for some time.
“About 10 new clients a week sign up, according to Mr. Stopa, who says he now has 350 clients in foreclosure, each of whom pays $1,500 a year for a maximum of six hours of attorney time. “I just do as much as needs to be done to force the bank to prove its case,” Mr. Stopa said.”
Lenders are struggling to work out a solution with families facing foreclosure since the numbers are increasing in value. Many families take a similar standpoint and feel that before the crash lenders were not willing to work with them when times were hard on their families, hence many are not trying to work out any sort of solution now with mortgage payments but rather just riding the wave until the crash of the foreclosure consumes their house. However, in many states there is a process that allows lenders to pursue families who have “substantial assets postforeclosure” which may affect them in the long run after the house is gone and they try to move on with their lives.