Brian, you completely miss the point, which is about moral hazard. That is when a government, or in this case a company, has a policy that encourages wrong, inefficient, or immoral behavior by another party in a transaction. In this case the squatter profits by delaying departure, perhaps trashing the place, hurting the (foolish) bank that made the loan. Government policies that enable/encourage squatting cost the general public plenty: neighborhood deterioration, houses kept off the market that could lower prices for honest buyers, and the general injustice of deadbeats living free for years.
Brian, you seem to dislike the big bad banks, but the cost will be spread out to all of us. The banks’ losses will be made up over time via higher interest rates or more stringent lending standards, freezing out young families wanting their first house who should be capable of buying now. You think this is OK? Try thinking beyond superficials and look at the deeper implications of what kind of behavioral results occur from the entitlement society you seem to like.
