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Posted by on Jul 2, 2012 in Foreclosures/REOs, Strategic Defaults | 4 comments | Print Print

Average 16 Months of Free Rent

Hat tip to T&W for sending this along, from

After conducting a survey with current and former clients, reported that lenders are taking longer before beginning the foreclosure process. The agency surveyed underwater homeowners it has or is working with and found that from January to June of this year, respondents who received a foreclosure start notice were 11 months behind on their payment.

Last year, it took an average of 9 months of nonpayment before the foreclosure process started.

Receipt of a Notice of Default, Foreclosure Complaint, and Notice of Trustee’s Sale all counted as foreclosure starts for the survey.

In 2010 and 2009, the average number of months before foreclosure began was 7, and in 2008, it was 4 months.

According to the foreclosure agency, the data indicates lenders are now only beginning to attend to delinquencies from the first and second quarter of 2011. This means strategic defaulters have been given a longer time period in which they could reside in their home rent free before the foreclosure process begins.

In the first and second quarter of 2012, properties averaged 16 months of delinquency before getting foreclosed on. Based on the survey results and other data, said this reflects an increase in the number of months a borrower is delinquent before foreclosure starts are filed and foreclosures are completed. This implies lenders and servicers are processing older foreclosures and homes that have been in default for over a year.

Jon Maddux, CEO of, questions if this delay on the lender’s part is intentional.

“Waiting so long to even begin the foreclosure process is detrimental on a personal, local, and national level. It affects the borrower, their credit and financials, their neighborhoods, the housing market and economy in general,” said Maddux.

With the lengthening not only at the start of the foreclosure process, but also at the end, Maddux said it could suggest lenders are beginning to address the backlog that was created during the robo-signing debacle, but it may be too soon to tell the actual rate of of foreclosure filings in 2012.

“Once this shadow inventory hits the market, housing prices may lower and create a new wave of strategic defaults and foreclosures,” said Maddux.


  1. I wish I could get 16 months off from paying property taxes. 🙂

    If someone is not paying their mortgage for 16 months, I assume in most cases they are not paying their property taxes either. Or does the county go after such a homeowner for taxes owed?


  2. 16 months, wow. I thought it would be higher. So many stories of 3 year free rides.

    As far as I know the bank pays the property tax (and insurance)and adds it on to default amount. They have to protect their interest.


  3. Clearly, I’m living my live by the wrong rule book…


  4. I found a link to the San Francisco tax office that says that it takes 5 years of unpaid taxes before they county can put a property up for sale.
    In Mn it appears to be 5 years for a homestead also, but it varies by state. One wonders why Ca did not tighten up the period to 2 years during the current financial crisis?



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