The Market Ticker
Commentary on The Capital Markets- Category [Housing]

Hoh hoh hoh....

MIAMI — In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

She is like a ghost of the housing market’s painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.

Welllllll maybe.

The point being raised here, the statute of limitations, isn't quite the "home free" (or free home) cup that some people might think.  The Statute of Limitations only runs in the absence of litigation, or in the case of litigation being commenced, where it has been constructively abandoned by the person bringing it.

There aren't many people who have not made a payment in five years and who also haven't been sued for foreclosure, or where the suit was initiated and then constructively abandoned by the entity bringing it.

To be sure that number is not zero; in particular, where the mortgage companies intentionally or recklessly destroyed or lost documents (maybe to conceal their frauds from investors), "robosigned" and never pursued the claim once that was discovered and withdrawn or tossed, or otherwise simply never filed at all, yes, the statute of limitations may wind up with some people getting a "free house."

But this is, really, not a "free house"; it's a house that the mortgage investors paid for and gave away due to their failure to act against the lenders who sold them their bonds, and the government's refusal to go after the fraudsters up and down the line.

Therefore it is hardly "free"; it's more of a case of voluntary abandonment of property, in this case the money used to buy the house.

It couldn't happen to a nicer bunch of people.

H/t: Robin

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