According to mortgage-data provider LPS Applied Analytic, 492 days have elapsed since the average homeowner in foreclosure made a mortgage payment. In short, people are defaulting on their mortgage loans faster than banks are able to effectively carry out the foreclosure process. Homeowner’s that owe considerably more on their mortgage than the fair market value of their home have no incentive to keep making payments. Coupled with today’s news that lenders are allowing these homeowners to stay in the property for 12-16 months before foreclosure is a problem because it makes stiffing the bank an even more attractive option to struggling borrowers.
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