I think most of the problem lies with mortgage servicing companies. They buy thousands and thousands of mortgages in blocks from lender banks. Those banks either don’t or can’t find the hard copy documents in order to turn them over to the new owner, or the new owner has them stored in offsite mega warehouses too mismanaged to find anything. Don’t forget. Everything is digitized, UNTIL you get a court filing. Then a hard copy MUST be presented.
When the bubble bust, many people who could afford to pay, decided not to pay. This exacerbated the problem that was already bad due to the poor quality loans, real distressed buyers and the outright fraudulent loans. All those loans where packaged as grade A+ paper and sold to unsuspecting service providers.
The courts where backed up and foreclosures have continued at close to record levels for years. People seem to think that the worst year for foreclosures was 2007 or 2008. It was actually 2011 with over 3.5 million foreclosures filed. Prior to 2007, half a million was an average amount of foreclosures. Today there are still around 1,000,000 per year. More than 70% higher than historic averages.
http://www.statisticbrain.com/home-foreclosure-statistics/
Lawyers and their clients take advantage of this fact and drag their feet knowing that every month they can delay is one more month of free living, often at hundreds or even thousands of dollars a month, and one more month of billable hours for the lawyer.
The woman in question was to pay $93,000 in mortgage payments over the past six years. However she only paid $36,000 in legal fees. That has saved her at least $60,000 in six years.
How much of that $10,000 a year has she been able to bank or spend on her boating habit, eating out and dog?
Everybody seems to think that the banks are the ones getting screwed. In almost all instances the banks long ago sold any interest in the loans to third party mortgage servicing companies. These companies relied on the banks integrity and lending practices in their decisions to buy the loans.
Besides, even if it was the lending banks getting screwed. We as their customers pay for it in additional fees and higher lending rates when we chose to do business on credit.
The people who refuse to pay their mortgages and then simply squat in the home are the ones costing you and me more money. The banks will get their money one way or the other.