How foreclosed owners are getting free homes

Lagging court cases and the constant changes to mortgage modification programs may be the reason as to why many troubled home owners could skirt the law and keep their homes without ever having to pay another dime.

A legal quirk could bring surreal endings to many foreclosure cases around the country and allow many to keep their homes without ever having to pay another dime.

How is this possible? According to an article from The New York Times, lawyers for many homeowners are arguing that these foreclosure cases have dragged on too long.

States that must approve foreclosures in court before they become final are facing huge backlogs in the court system, which has caused some foreclosures to drag on for years. When these cases get dragged out five years or more, some home owners are citing the state's statutes of limitations for reason why lenders can't take possession of the home now. There are tens of thousands of homeowners clustered in states like Florida, New Jersey and New York, where lenders must get judges to sign off on foreclosures.

Currently there is no data available on exactly how many troubled home owners may be able to skirt the law this way. However, many defaulting home owners do continue to live in their homes long after the foreclosure process has begun. For example, Bank of America alone has started the foreclosure process on about 20,000 mortgages that have not been paid in at least five years – 90% of those homes are still occupied too.

The courts are not the only source of delay, according to The New York Times. Over the years, the federal government has made 69 changes to its mortgage modification programs, forcing lenders repeatedly to scrap previous offers to homeowners and extend new terms.