Should Have Been Sold at Auction by Now - Surprise!

A client of mine asked to see a new property listing this week.  Fine.

I took a quick look at the online data for this property, and discovered the seller's lender had filed lis pendis on the deed in July 2009.  Huh?

A filing from last July would typically mean this property is scheduled for auction, liked "yesterday," if not next week.  What's up with that?!

I called the listing agent, who explained that the lender has allowed this seller the luxury of marketing the home and finding a buyer, even at the 11th hour, rather than simply taking it back as REO.  Huh?

I have become so accustomed to foreclosure activity that this was virtually unbelievable to me, until I read an article today from Ris Media that describes exactly what I had stumbled into.

This article isa strong "recommend to read" from me; several major lenders are cited in this article as to their lenience with owners who are in default: Chase, Citi, BOA.  Statistics that are tracked by the likes of RealtyTrac seem to support this concept as well.

Apparently the lenders are starting to understand what those of us on the ground have been saying for the past 3 or 4 years; far better to have a property occupied than to let it go vacant.  And perhaps it's also smarter to stem the flood of otherwise REO properties from coming onto the market, which would only further dilute the entire community value.