The U.S. foreclosure process reportedly is slowing, enabling delinquent borrowers to stay in their homes for months after they stop making mortgage payments.
Freddie Mac, one of the two government-owned entities that finance about half all US mortgages, says that homes are taking as long as eight months to work their way through its foreclosure pipeline, two months longer than was typical before the housing crisis began, the Financial Times reported.
The delay is the result of more borrowers staying in their homes for months after foreclosure proceedings have begun, requiring Freddie Mac to evict them before it can put those homes back on the market, the Times reported.
Fannie Mae, the other government-owned mortgage finance company, declined to say how long its process took.
A record number of foreclosures is contributing to the slowdown, but so are mounting legal questions surrounding bank procedures to repossess homes from delinquent borrowers, the Times reported.
Meanwhile, the government last week spelled out just how much the most expensive rescue of the financial crisis will end up costing taxpayers — as much as $259 billion for mortgage buyers Fannie Mae and Freddie Mac. That figure would be nearly twice the amount Fannie and Freddie have received so far, the Associated Press reported.
By contrast, the combined bailouts of financial companies and the auto industry have cost taxpayers roughly $50 billion, according to the Treasury Department's latest projections. And the bailouts of Wall Street banks alone, which sparked public fury, have so far brought taxpayers a $16 billion return.
Fannie and Freddie were battered by losses on loans they backed, once the housing bubble burst and foreclosures soared. The two companies buy home loans from lenders, package them into bonds with a guarantee against default and sell them to investors.
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