Banks let foreclosed homeowners stay in homes

As an unrelenting flood of foreclosures shows no signs of letting up, what’s a bank to do? The answer for some banks is to look the other way and let defaulting homeowners remain in their homes. The percentage of borrowers over 90 days late on their loans increased to 3.6 percent at year’s end, the highest in at least five years, according to the Mortgage Bankers Association. Mark Zandi, chief economist at Moody’s Economy.com, said lenders that allow borrowers to remain in their homes are skewing the foreclosure rate and putting off the worst of the housing bust.