THE BURNED OVER DISTRICT

After being forced by their management to crank out as many mortgages as possible, regardless of quality, and then have to foreclose on so many of them that the system became hopelessly clogged, now have the joy of watching homeowners keep their homes without further payments. It seems that mortgage foreclosures are subject to a statute of limitations in some of the worst hit states that require any foreclosure not presented within the time period since default to be dismissed.

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 Jersey and 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.

“No one gets a free house,” Judge Michael B. Kaplan of the United States Bankruptcy Court in Trenton wrote in an opinion late last year, reflecting what he characterized as a longstanding “admonition” he and others made during the foreclosure crisis. But after effectively ending a New Jersey homeowner’s foreclosure case in November because the state’s six-year statute of limitations had expired, he wrote in his opinion, “With a proper measure of disquiet and chagrin, the court now must retreat from this position.”

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.

The courts are not the only source of delay. Over the years, the federal government has made 69 changes to its mortgage modification programs, forcing lenders repeatedly to scrap previous offers to homeowners and extend new terms.

Of course, the banks have also dragged out this reckoning through shoddy paperwork, botched modifications and general dysfunction as they struggled to cope with a flood of soured mortgages. Many cases were passed among lawyers like hot potatoes and lay dormant on court dockets.

The old adage 'You snooze, you lose', could and should come down heavy on the banksters who worked so diligently to steal the lives of millions of Americans for their profit.