Many Stay at Home for Free as Banks Defer Evictions | RISMedia

Deferred evictions mean some owners who are underwater or severely behind on their payments continue to occupy their homes without being ousted.  This is much more of a problem in areas more troubled than the South Bay, but we've seen it happen here too. 

But some short sales in the area display this same behavior - - somehow, the offers that come in never seem to get approved.  In some cases, the short sale is just a sham, giving the homeowner the opportunity to tell their lender that the home is listed for sale when in fact they have no intention of moving out!

The meaning of all this is

FT.com - Cleaning up toxic mortgage assets a slow task

Nearly all new mortgage lending is coming through government-sponsored entities (GSE's) like Freddie Mac and Fannie Mae.  These entities cap the level of individual mortgages, such that the low end of the market is supported.  But what about the higher end - - homes requiring larger "jumbo" mortgages?  That money comes from private investors, and those sources dried up when the mortgage crisis hit.  Why haven't private sources re-entered the marketplace?  Because they haven't figured out what to do with their existing portfolios yet!  One factor in particular is the struggle from the holders of first and second mortgages.  As this Financial Times article explains, second mortgage holders are no longer willing to allow first mortgage holders to exercise their "first in line" rghts when it comes to loan modifications and collections, slowing the process for all. - David