Defaulted homeowners more likely to stay at home

March 05, 2012 02:30PM

Lenders have become more willing to keep defaulted homeowners in their own homes, the New York Times reported, marking a contrast from six years ago when the housing bubble burst and defaulted owners were often forced to leave their homes just months after defaulting.

Sometimes, lenders are willing to strike deals with homeowners, the paper said. For example, sometimes, if the owners pay for utilities while the lenders pay home insurance, then the owners can remain in their homes. Some lenders plainly put off foreclosure sale dates.

The average time to foreclose has reportedly tripled to about one year by the close of 2011 from four months in 2007.

“Our whole philosophy is that it’s beneficial to keep people in their homes,” Philippa Brown, vice president for corporate communications at American Home Mortgage Servicing, told the Times. “Our job is to work with homeowners who are experiencing hardship and find ways that will keep them in their homes. We’re open to new ways of doing things.” [NYT]