patrick.net

What do you think the banks are going to do? Start to foreclose on non-paying mortgage or letting squatters live free?

They will increase staff signifcantly and accelerate the process to reduce squat time. Once you missed a couple of payments and they know the home is underwater, they'll never see another payment again.

They won't reduce principal because the number of owners who can pay, who are paying and who are only moderately under water and paying far out numbers the number who are doing this. As soon as they give in to a few people, they will open up the flood gates to *everyone*. Save a few dollars on these homes and lose on EVERY mortgage, or lose more on these, and not lose on the rest of their portfolio.

I agree with SF ace. They will start picking off the homes that stand the best chance to make them money. They will increase their efforts, but also don't want to flood the market either.

Hard to say.

Depends on the state and whether or not legislation is pending to delay foreclosure activity by lenders.

Lenders drank the kool-aid like so many others in the FIRE industries, and imo, they may be wishfully waiting for the RE market to recover, which they think will be sooner than later. They will foreclose then at that time (or so they think).

imo, the RE market isn't going to go back to bubble levels.

~Misstrial

They will do what they done in the recent past - Lobby for legislation to "dissuade" borrowers from gaining the upper hand. Just read yesterday of efforts in this direction and there will be more. Better default while the defaulting's good.

They took the loans, they funded them. The borrowers should pay for their mistake by losing their downpayment (if any) and the banks should eat the property for funding it in the first place. There is no free lunch. These damn borrowers were all high and mighty thinking they were rich just a few years ago now they are crying like little girls. Get them the hell out of the property and let the funders worry about what to do with it. The borrowers in this mess have to learn the bitter lessons they had coming to them for their arrogance and greed. I don't want to look at another man crying like a little girl over his foreclosure, man up pay the piper and move aside. Don't look for a free ride on my back or out of my pocket.

I suspect that many banks will just let an increasing number of squatters stay put, and continue to delay foreclosure indefinitely. It's not an issue of incompetence or lack of staffing. The simple fact is that a great many lenders simply can't afford to foreclose.

If all banks recognized the true value of the mortgages they hold on delinquent mortgages on their financial statements a great many of them may find themselves insolvent. Thus, it is preferable to let the squatters stay indefinitely rather than have to admit reality on the balance sheet.

I am sick to death of all these losers who are squatting for years in homes that they should have long ago been kicked out of. They are not "homeowners", they are home "debtors". They never owned the home. You do not own a house until it is paid off - and even then, you do not own the house because you have to pay taxes on it every year.

I have 2 friends who have been living for free in their former homes for 2 years now. It really makes me see red, because I have always been responsible and had to take a $100,00 haircut to sale on of my homes. These 2 "friends" also took out HELOCs for $100,000 and spent it all during the boom years.

As usual, the crooks and immoral people are doing well cheating and not going to prison, and those of us who have always played by the rules (how stupid) are being screwed.

I've seen this before. Businesses that are essentially bankrupt but not in court yet (the banks in this case) string things out as long as possible while the people at the top loot what's left and hope for just a few more of those wildly out of touch with reality paychecks. Everyone else around them gets screwed. Then they close the doors.