Homeowners Stop Paying their Mortgages

The New York Times ran an article today detailing how some homeowner are no longer paying their mortgages but instead are using that payment to get back on their feet. The number of borrowers taking this approach seems to be on the rise.  Many borrowers  are using that mortgage payment to support businesses, pay off other debt, or even go vacation.  Some are living “rent free” in these houses for weeks, months, and even years.
What’s preventing them from being evicted from these properties in foreclosure?  The sheer volume of properties in foreclosure prevents that courts from foreclosing on these properties.

“In some states, including California and Texas, lenders can pursue foreclosures outside of the courts. With the lender in control, the pace can be brisk. But in Florida, New York and 19 other states, judicial foreclosure is the rule, which slows the process substantially.

In Pinellas and Pasco counties, which include St. Petersburg and the suburbs to the north, there are 34,000 open foreclosure cases, said J. Thomas McGrady, chief judge of the Pinellas-Pasco Circuit. Ten years ago, the average was about 4,000. ‘The volume is killing us,’ Judge McGrady said.”

Read the full article here:   http://www.nytimes.com/2010/06/01/business/01nopay.html?pagewanted=2&hp