And it’s getting worse. Every time a state or federal government steps in and demands a moratorium on foreclosures, it just makes the process take even longer. As the rate of foreclosures increase, the system falls ever more behind.
A new cottage industry for lawyers has blossomed as people who are living for free in their foreclosed homes hire lawyers to delay and string out the foreclosure process with legal challenges. What they are saving by living in the house for free more than covers the lawyers fees and can provide several more months or a few years of free livin’.
Currently, the average home squatter can squeeze out over a year in mortgage-free living. While in New York and Florida they can ride the foreclosure gravy train for a year and a half.
If the trend in the graph below continues, I calculate the average free-loading-home-squatter can sit in their house for almost a year and a half by the end of 2010 and for almost two years by the end of 2011.
The average rental in the U.S. is about $1,020 so renters are losing out on between $12,240 and $24,480 in free money. Another way to look at it is that every home squatter living mortgage-free gave themselves a $6/hr raise.
And of course, none of this addresses higher rentals like where I live, where the average renter is losing out on between $21,600 and $43,200 in free money. Or how about all the cash these people pulled out of their homes to take vacations, buy cars, put in granite countertops, jacuzzis, hardwood floors and stainless steel BBQ’s and firepits. Which they now get to enjoy, and never have to pay for.
Makes me sorta wish I could go back in time, buy a $2M home and just sit and enjoy it for a year or two, or three…without a single payment.
Ahhhh…the squatters life!