it really isn’t up to the lenders. none of them want to “hold for long term.”
first you got the borrowers draining all of their 401k and savings to save the home, in general in subpar neighborhoods that timespan is quicker than good neighborhoods.
then you got the length of time it takes the bank to even send out the NOD from time of delinquency. that has been extended from just 3-4 months to well past 1/2 year.
then there’s the recurrent postponements that extend the NOD to REO time period from 3.5 months to who knows how long.
then once you get the REO in the bank’s hands the borrower refuses to leave. (I’ve got 5 kids and we can’t move).
so you go from a 7-8 month process from delinquency to REO and we drag it out to maybe a year and a half or two?
looking at the graph above, you say to yourself, wow, we are already at month 17 of the reset, it is almost over!!
But no, remember people still try to pay for a few months after the reset and we got this dragged out process to REO to follow. the REOs we are handling right now may still be from resets that occurred in early ’07! and as opposed to last year and a year ago, very few of these homes in this long trip down the REO road are listed for sale.
