According to Ivy Zelman, a Swiss credit analyst, the average number of days before the foreclosure notice is filed on a home after the borrower stops paying his or her mortgage is 417, thanks to a huge foreclosure backlog that threatens to delay and stall many delinquencies indefinitely, potentially leaving the defaulting homeowner in their home. Add to that a number of possibly mandatory loan modifications and other programs designed to help keep homeowners in their homes, says Joan Tabash-Curbow on her blog, the Curbow Effect, and you get about 800 days of “rent-free” living.
The result? Not only are a lot of people living in distressed and defaulted homes (which may or may not be a problem since at least theoretically they’re keeping them up), but there is a massive “shadow inventory” that Zelman predicts will add nearly 8 months of supply to the existing home inventories in many areas.
Is there a shadow market in your area?
What is your opinion about this “rent-free” living?
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Make it 1800 day! Bush, Obama and Geithner give billions, or is it now over a trillion, to their Wall Street buddies. No help for the guy on Main Street so maybe this is the politically correct way for the politicians to have it both ways. All of their BS programs allow this to happen. They certainy coluld never say that but it is what it is. Thus giving the guy with a $2000 per month mortgage about 2 years or $48,000 in free rent. Not a bad bailout for Main Street!
Of course, it all falls apart when the guy like me who continues to struggle to make payments finally says “screw it” and does the same thing even though he could afford to pay.
I hope you’re not endorsing the idea that people should receive free rent when they’ve committed to paying a mortgage while simultaneously bitching that it’s not ok that you will get in trouble if you don’t pay your own mortgage even though you’re able to do so. Please tell me I’ve misunderstood. — Bryan Ellis
Same thing I have been saying for the last year and only a blind idiot would not see this.
Says something for all the politicians and realtors out there telling us things are getting better! I guess one might think things are looking up if one cannot count nor has any idea how an economy really works.
Kind of like what is happening in Greece right now!
Brian,
The banks intentionally set up the market to do exactly what it’s doing right at this moment. It was in their business model to have a high rate on defaults on these junk loans. The best part is they never put up one dime, because all they did was issue the consumer’s own credit back to them. If you don’t know how these mortgage tranactions work, read the Federal Reserves Guidlines, “Modern Money Mechanics”, which spells out how money is created. So, they don’t risk a dime, they then sell the note and get paid, the note is used as a reserve, and they make interest off of it on Wall St., they also collect payments on it, then when there’s a default, they take over the property, collect default insurance (tax payer $$$ via the FDIC), AND sell the property and pocket that too. Both Chase and BofA have posted the best years ever consecutively in 2008 and 2009… wow how can that be? They take all your money, then, kick you out of your house and take that too. Show me proof that a loan ever took place in the transaction. There is rampant fraud on the part of the banks, and your complaining that some people are spending extra time in a home that fraudulently ends up getting taken away.
800 days rent free? Do you know the actual story behind this situation?
Every un-employed person in this country has their own personal situation that creats a story! Every self-employed person in this country who has gone under,victimized by the economic crisis and by the way who don’t count as part of the 9.9% unemployment rate, has a situation that creats a story! I have personal compassion for all the people and businesses that have gone under during this economic crisis. If their not making money working and need their savings to stay alive with basic day to day living needs then I say ” Play The System” and stay in your home as long as you possibly can!
Occupied homes are not a blight to neighborhoods and discourage vandalism and drug and pimp dwellings which drive property values down further.
I help people, by the way, stay in their homes beyond any set foreclosure sale date. I have kept people in their homes for as long as 9 months ( 270 days ) beyond the trustee sale date. No, this is not a BK which I don’t advocate because of credit issues but would certainly add to more months in their homes. For whatever reason a person needs more time I can provide it and actually encourage it! Would you deny a person more time if they just needed extra time to sell off an asset or a business or waiting for a settlement or probate money so they could pay the bank back or pay them off to keep their home? It’s all in the individual stories that each person facing foreclosure has to tell!
It’s a sad day that someone is proud that they perform the service that this person offers. — Bryan Ellis
Bryan:
In response to your statement:
It’s a sad day that someone is proud that they perform the service that this person offers. — Bryan Ellis
Tell that to Delta, GM, and the like when they announce that they will be “restructuring their cash flows to protect their stockholders (IE:stiff their suppliers)”. I agree it’s a sad day but what would you suggest should happen with the little guy? Move into their car so the house can be broken into by vandals and crackheads?
I have read that 37% of California’s foreclosures were non-owner occupied. There seems to be no programs for landlords in default. In 2009, I averaged 1.8 tenants per unit losing their incomes. ASC/WellsFargo offered a mod with the payment being 155% of the rent. How do they think that will work with a house with no equity remaining? How can a struggling landlord justify saving a home that way? I had negative income, and still have not recovered, with a couple units trashed beyond being rentable, and still lacking funds or credit for rehabbing. There were too many payments that needed pulled from thin air. My reserves are long gone. New jobs for the tenants were too slow coming. The legal system for evicting is also too slow to prevent deep losses. Now would be a great time to refinance if my credit had survived and I could show adequate income. I feel like I will never be able to get a good mortgage again, unless I change countries. So, everything is for sale. I hope I can get rid of it all before capital gains go back up. It’s time for a change. It does not help my attitude when I see all these new ideas the government has for ways to take more money from employers. That is what is killing jobs and hiring, the unkonwn future costs of doing business. There will be no recovery while the resultant consumer and business confidence is tanking. The government is the economy’s real problem. It is clearly a mistake for the voters to let all 3 branches be run by one party. Some of my rentals go back as far as 1996, so some equity remains. Unfortunately, the only ways that I can get at the equity is hard money refi’s or selling. I choose the later. I am burnt out. Liquidity will be a major factor in considering future investments. To be the house that sells, mine must offer the best bargain. Thanks Uncle Sam, for stripping my retirement plan.