The gist of this report is that, in light of MERS / US court rulings / bureaucratic delays, it is now routinely possible for a homeowner who is delinquent on their mortgage payments to literally live in their home for YEARS without making another mortgage payment before foreclosure proceedings can be concluded to evict them.
Banks holding these delinquent mortgages are realizing that, between the high legal costs of foreclosure, and the typical damage / lack of maintenance that accumulates over the years required to evict the former homeowner and resell the property, they are 'losing' a fortune. To accelerate the process, and reduce the legal fees and repair costs, banks have now started paying LARGE BONUSES to delinquent homeowners in an attempt to pursuade them to voluntarily leave the property and permit a 'short sale'. We're talking about $20k-$50k-$90k cash bonuses being paid to delinquent homeowners, in exchange for cleaning up the house, mowing the lawn, and leaving !!!
The ultimate 'moral hazard' situation now appears to exist ... where delinquent homeowners must decide to either continue living rent-free for years in the same property while awaiting foreclosure, or to accept a $20k-$50k-$90k cash incentive payment to immediately move into a rental property ( where the cash payment represents several years worth of rent payments ). Or put another way, they must now decide between living rent-free where they are, or living rent-free in a new apartment, for the next few years !



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