The number 518 may not seem like an impressive integer, but residential homeowners in Florida should be aware of its existence.  That is the average number of days that a house spends in foreclosure before it is sold at judicial sale.  That is nearly 1 ½ years.  The definition of a “Free Rider” is a homeowner who defaults on a note and mortgage, and purposefully refuses to pay any part of that mortgage (or negotiate a modification, short-sale, or deed-in-lieu).  The homeowner essentially lives rent free for a substantial length of time in a de facto modification of $0.00.

The Free Rider now uses the money that would have gone to pay the mortgage, homeowners’ insurance, etc. to survive the economic crisis that grips this country (or to run their businesses).

The problem is that the lenders are still not giving the borrowers a lot of options.  Modifications, real modifications (i.e. principle modifications to reflect the true value of property), are out of the reach of borrowers.  Short sales move haltingly through the system that has been established, and even then, the borrower has to sign a significant deficiency agreement or promissory note.  A deed-in-lieu is also not available without a corresponding deficiency agreement.  The end of the line, despite the path, is the same for the borrower: ruined credit and, eventually, bankruptcy.  The lenders are part of the problem, not part of the solution.

The landscape is starting to look more and more like the days of John Dillinger, “Baby Face” Nelson, and the rest of the notorious figures of the Depression Era.   The common denominator is that banks were perceived as the villains, and the individuals who robbed them as heroes to be admired (not unlike Robin Hood).  Homeowners have become desensitized to stigma of foreclosure – bad credit – bankruptcy.  There is no shame in it when your next door neighbor is rowing the same boat along side of you.  So why shouldn’t the Free Riders have free reign?

The only proviso is that homeowners cannot do this alone.  Only the assistance of a qualified attorney can prolong the foreclosure process for 518 days or longer.  Otherwise, the attorney of the lender, who pursues the foreclosure, is getting paid for getting a judgment as fast as they can.  In the end, it’s cheaper for the borrower to pay an attorney rather than the mortgage.  The moral of the story is that even a Free Rider cannot ride for free.

They CAN ride for less!