Tags: foreclosure | homeowners | statute | mortgage

From Deadbeats to Happy Homeowners, All Thanks to Legal Delay

By    |   Tuesday, 31 March 2015 08:00 AM

You might think that people who stopped paying their mortgages in the wake of the financial crisis aren't making out so well when it comes to housing.

Well think again.

"Thousands of Americans who have skipped years of mortgage payments are still living in their homes," writes Michael Corkery of The New York Times. And "now a legal quirk could bring a surreal ending to" the foreclosure cases. "They may get to keep their homes without ever having to pay another dime."

And why is that? Because the cases have taken so long to wind their way through the courts that statutes of limitations have been exceeded in multiple states.

Many of these homeowners are in Florida, New Jersey, and New York, Corkery reports.

And the situation is unlikely to be resolved soon. "We probably have one or maybe two more years to go until it is all over," Mark Zandi, chief economist at Moody’s Analytics, told The Times.

Meanwhile, home prices have rebounded since bottoming in 2012, but it hasn’t exactly been a soaring recovery. The S&P/Case-Shiller index of home prices in 20 cities rose only 4.5 percent in 2014.

It's almost nine years since home prices peaked, notes Nobel laureate economist Robert Shiller, co-creator of the index.

"This is the most dramatic slump in housing we've ever had," he told Yahoo.

"The government has taken over risk management through Fannie Mae, Freddie Mac and the FHA [Federal Housing Administration]." Those agencies back the overwhelming majority of new mortgages.

"It's not even much of a private market," Shiller explained.

He reiterated his view that owning a home isn't for everyone. "There is an argument for helping low-income people get a house. I think it makes them feel better about their attachment to this country and themselves," Shiller said.

"But there's no reason to bias people toward owning a house as opposed to getting an education or starting a business — other things people can do."

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You might think that people who stopped paying their mortgages in the wake of the financial crisis aren't making out so well when it comes to housing.
foreclosure, homeowners, statute, mortgage
327
2015-00-31
Tuesday, 31 March 2015 08:00 AM
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