by Calculated Risk on 3/05/2012 03:32:00 PM

From economist Tom Lawler:

Yesterday the Washington Post carried two stories on foreclosures that are definitely worth reading. One is entitled “We don’t believe in living for free: Md. couple fight foreclosure on million-dollar home for years without ever making a payment”. It basically chronicles how a Maryland couple (who were real-estate speculators) were (amazingly) able to buy a million dollar plus home with no money down in 2006 (getting a million dollar first mortgage from a now defunct Mississippi lender and a second mortgage from another lender) for their primary residence, and who have not made a mortgage payment in five years. They’ve been able to do this by “using every tactic in the book” to hold off foreclosure. It is a good but disturbing article, and can be read at A million-dollar mortgage goes unpaid for years while couple fights foreclosure. You will probably be amazed that the couple, one of whom was convicted of bankruptcy fraud (related to real estate transactions) in 2000, agreed to be interviewed for the article.

CR Note: These people bought the house with no money down and never made a single mortgage payment. It would NOT be a tragedy if they lost "their" house. Prior to the Depression, people usually put 50% down and financed their homes for 5 years with a balloon payment. During the Depression they couldn't refinance even if they could make their payment. Losing their homes WAS a tragedy. There is no comparison to this couple in Maryland.

Lawler: The second is entitled “The foreclosure crisis: Two strategies,” which discusses how various legislative and other actions have dramatically lengthened Maryland’s foreclosure timelines, which “some economists and housing experts contend” has worked to “stifle” a recovery in the “Free State.“ It also does a comparison of the housing busts in Prince George’s County, Maryland and Prince Williams County, Virginia, that is similar to my “A Tale of Two Counties” piece last year. See: Maryland vs. Virginia: Two different approaches to foreclosure

CR Note: From the 2nd article:

“The real issue is the length of time of the process. If you just keep pushing back foreclosures that would happen anyway, it just delays the inevitable,” said Thomas A. Lawler, whose firm, Lawler Economic & Housing Consulting, provides market data, analysis and forecasts. “I am not saying therefore everyone should have a fast process that is not fair, but a fair process should not leave a house in foreclosure for multiple years.”