It’s funny that people think this is new. It’s not even cyclical; it’s always been this way but my guess is that people just don’t pay any heed until they notice it happening in their area.
Take for Detroit for instance (which is an extreme case). REO properties that get repeatedly broken in and re-occupied aren’t even worth doing the repeated evictions–usually they just get donated to the city (if the city will even take it). If the lender notices the property could be a potential problem before it forecloses, they’ll just write the property off.
Of course, I doubt we’ll lenders donating properties to the city of San Diego.
