Early in the housing crisis, foreclo- sures moved through the system relatively quickly, taking just months from the first default notice to evic- tion. Today, the process in some states can take three years or more. In New York, where Martinez lives, it takes an average 858 days for banks
to foreclose. At that pace, lenders
would need 84 years to clear their in-
ventory, according to Herb Blecher, a
senior vice president at LPS Applied
Analytics, which tracks real estate
data. Homeowners in New Jersey can live “mortgage-free” for an aver-
age 728 days while banks complete the process; in Florida it’s 853 days.
In the hard-hit Las Vegas area, where one in every 19 homes received
a foreclosure notice this year, attorney Jacqueline McQuigg says lenders
“start the foreclosure process but they don’t want to finish it. That never
would’ve happened years ago.” But she and other lawyers say that lenders are better off having owners occupy the properties rather than risk
the vandalism, mold and general neglect that can come with vacancy.
The Segals, in their 50s, have no plans to move out. They can’t sell
and pay off the mortgage. They owe about $519,000, but the property
is worth about $270,000. Their foreclosure case is pending.
Light, 80, faces a similar quandary. The $6,000 he was paying for
mortgages for both houses exhausted his savings. Yet he doesn’t want
to sell because he owes much
more than the homes are
worth. In March, he won the
foreclosure case against one
of his homes—the lender’s paperwork was ruled deficient.
The lender can seek foreclosure again, but the process
would start all over.
“I retired comfortably in
2000 and felt I had plenty of
assets to sustain me,” Light
says. “The real estate crash
devastated me. I’m deter-
mined to stay in my house and
maintain it rather than let it
deteriorate like hundreds of
others around here.”
“I don’t rest easy about this,”
he says, “but I don’t have any-
place to go.” ;
Charles Light hasn’t
paid his mortgage for
nearly two years. He
drained his retirement
funds trying to keep up.
there’s been a negotiated settlement.
Meanwhile, the borrower’s credit
score nosedives, making it difficult to
get future financing for a home, car or
any other big-ticket item.
If you’ve fallen behind on your
mortgage, a counselor may
be able to help. But stay clear
of those who ask for fees up-front, or who guarantee they
can stop a foreclosure or get
your mortgage modified.
Here are some groups that
can guide you.
SEP TEMBER 2011