An Inspirational Story for Deadbeats

In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

She is like a ghost of the housing market's painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

Susan Rodolfi at her home in Miami. Ryan Stone The NYT

Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.

The reason, lawyers for homeowners argue, is that the cases have dragged on too long.

There are tens of thousands of homeowners who have missed more than five years of mortgage payments, many of them clustered in states like Florida, New Jerseyand New York, where lenders must get judges to sign off on foreclosures.

However, in a growing number of foreclosure cases filed when home prices collapsed during the financial crisis, lenders may never be able to seize the homes because the state statutes of limitations have been exceeded, according to interviews with housing lawyers and a review of state and federal court decisions.

[...]

It is difficult to know for sure how many foreclosure cases are still grinding through the court systems since the financial crisis. It is even harder to say how many of those borrowers are still living in their homes.

Bank of America, for example, has initiated the foreclosure process on roughly 20,000 mortgages that have not been paid in at least five years. The bank estimates that 90 percent of those homes are still occupied.

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