Lenders' Foreclosure Sale Cancellations An Attempt To Slow Growing Stockpile Of Repossessed Inventory, Leaving Abandoned Homes In Legal Limbo

In Central Florida, the Sarasota Herald Tribune reports:

• Across Florida, tens of thousands of foreclosed homes are being left in limbo, between homeowners who have abandoned them and banks that have not yet taken possession of them. Over the past year, banks and other lenders have canceled up to 50 percent of foreclosure sales in some parts of the state, adding to a growing stockpile of unclaimed homes.

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• Pushing foreclosures through quickly used to be in the bank's best interest, so the home could be resold and the bank could recoup the equity in it. Now, depressed housing prices mean few investors snapping up the properties at auction. And banks put off the foreclosure sales in many cases because once they take the property, they become liable for taxes, fees and maintenance, say some analysts and industry watchers. [... A]s long as the foreclosure is pending -- and the foreclosure sale has not taken place -- the banks' ledgers show the mortgage as an asset. And the bank keeps the money it would otherwise spend on maintenance and taxes.

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• Foreclosure sales are set by a judge but can be canceled by the lender for any number of reasons. And once it is put off one time, the case does not go back to court unless the bank wants it to.

For more, see Lenders' latest foreclosure strategy: waiting (Banks know that once they take empty property, it's their liability).

Go here for other posts on homes being left in legal limbo (when a lender intentionally delays completion of a foreclosure to avoid taking title to the repossessed collateral, or fails to record its deed after foreclosure sale. responsibility code violations foreclosure