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Owners Continue Staying in Homes 3 Years After Foreclosure

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Mortgage Scandal


Although this blog primarily deals with investing in rental properties, I recently read an article from CNN Money that is so strange I just feel compelled to blog about it! 

A bizarre fallout of the robo-signing scandal is that today, defaulting homeowners can continue staying in their homes years after stopping payments of their mortgage.  Wow, talk about a sneaky way to build wealth…forget about being a landlord, I can apparently just stiff my lenders on my monthly mortgage payments and pocket the difference!

Since the scandal hit the papers, the government has made foreclosure processes much more stringent, extending the average time taken to close a foreclosure property by several months. On top of that, homeowners have found that they now have the power to further delay the process in several ways, ranging from challenging a foreclosure notice to declaring bankruptcy, each of which hampers the lender’s ability to efficiently close the foreclosure process.

Reports state that the average time taken to declare a property foreclosed has shot up from 253 days to a massive 674 days. The figure varies across cities, with the processing times in Florida and D.C. nearing almost 3 years.  Obviously this is not helping the real estate market recover.

Things have gotten to a stage where several homeowners are not even attempting to keep up with their mortgage financing payments. Mortgage borrowers everywhere are taking advantage of the reported chaos in the documentation records of lending banks to fight their foreclosure cases. Many are winning on the basis of mere technicalities.

To continue reading this story, click here.

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