An increasing number of home owners in foreclosure continue to live in their homes, mostly ignoring the foreclosure action and refusing to pay anything.
The average borrower in foreclosure is unlikely to be evicted for 438 days, says LPS Applied Analytics. LPS says more than 650,000 households haven’t paid their mortgage in 18 months, and in the case of 19 percent of those households, the lender hasn’t made any effort to repossess the property.
In some states like California and Texas, lenders can foreclose without a say-so from the courts. In those states, the action is likely to be quick. But in 19 states, including Florida and New York, the court must approve the foreclosure and resulting eviction and the process is slow.
Source: The New York Times, David Streitfeld (05/31/2010)
Good move Fannie Mae: “In a move that provides relief to thousands of renters who face eviction” READ
Squatters are moving into foreclosed homes and posing as tenants so they can live in comfort until the bank either goes through the eviction process or bribes them to leave.
In a process known as “cash for key,” the squatters call the bank and boldly ask for money in order to move.
“There are people who move in and know exactly who to contact and say, ‘If you want this house, why don’t you come out here and offer me cash,'” says Detective Erin Camphouse of the Los Angeles Police Department’s Real Estate Fraud Unit.
“It’s just cheaper for the banks to do that rather than going into the courts,” she says. “The squatters are getting sophisticated and turning it on these banks who own the properties.”
California real-estate practitioner Steve Smallson says he finds about three squatting cases a month, compared to none all of last year, in his region of Woodland Hills, a middle-class district of Los Angeles. That includes a case in April involving a foreclosed home worth $1 million where police were called after neighbors reported squatters filming pornography in the house.
Source: Reuters News, Jason Szep (0518/)