Throughout the country, people continue to default on their home loans — but lenders have backed off on forced evictions, allong many to remain in their homes, essentially rent-free.
Several factors are driving the trend, industry experts say, including government pressure on banks to modify loans and keep people in their homes.
Allowing borrowers to stay in their homes helps protect the bank’s investment as it negotiates with the homeowner, said a spokesman for a major lender. “If the person’s in the property, there’s less chance for vandalism, and they’re probably maintaining the house, he said. Economists say the situation wo’t last forever, but in the meantime the “amnesty” may allow at least some homeowners to regain their financial footing and avoid eviction.
For some reason, banks are being more lenient with homeowners who are behind on their loans. Whether it’s a strategy to try and slow down the volume of foreclosures or simply a matter of the banks being able to keepup with volume is something that banks only know for sure.
Lenders say the trend reflects their efforts to work with borrowers to modify loans to avoid foreclosure.