By Mike Colpitts
Millions of homeowners are living in their homes without paying mortgages as more mortgage holders revolt against banks and mortgage servicing companies in America’s growing foreclosure crisis.
Some mortgage borrowers are trying to work with banks and mortgage companies. Others have tired over the hassles it takes to work with lenders to work out a loan modification, and still others are just taking a free ride until someday someone knocks on the front door and kicks them out.
The number of U.S. properties that are 30 days or more delinquent or in foreclosure totaled 6,870,000 as of January 19th, according to Lender Processing Services Inc., a data and analytics provider to the real estate industry that tracks residential defaults. Mortgage borrowers across the country are revolting against paying mortgages that have become unaffordable and some have no money to pay.
As unemployment remains high, more workers lose jobs, and mortgage borrowers see their home prices decline further wiping out equity, more homeowners are going without paying mortgages. The states with the highest percentage of non-current mortgages are Florida, Nevada, Mississippi, Georgia and New Jersey. Delinquencies rose 17.9% in the last year, according to Lender Processing Services.
The time it takes mortgage servicing companies to foreclose on a home is getting longer as the volume of foreclosures increases to more than two years in many cases. Bank of America, the nation’s largest bank and mortgage lender after it purchased troubled Countrywide Home Loans at the height of the financial crisis has 1.3- million homes in default.
The bank developed a new division to handle its surplus of troubled properties. “We believe this will best serve customers,” said BofA CEO Brian Moynihan, “both those seeking homeownership and those who face mortgage challenges.”
The extended timetable gives occupants time to save money to rent another home or apartment, and prevents neighborhoods from suffering the damage left by vacant properties, which are sometimes broken into by vagrants and thieves.