The time between a notice of default on a mortgage loan and foreclosure now averages 176 days.  California law requires only 112 days.  So, while the number of defaults is increasing, the interval between the statutory notice of default and actual sale is also increasing.

Before the recent crisis, lenders typically issued a notice of default after three missed payments, and marched fairly briskly to a foreclosure sale.  I’m now seeing longer periods before initiating foreclosure and even voluntary postponements of sales by the lender.

This trend is particularly important to those who have decided to let the house go to foreclosure.   Where the loan terms are impossible, and without the possibility of modifying the loan in Chapter 13, or the income stream has shrunken, homeowners are trying to calculate how long they can remain in the house before title to the house passes to the lender.

Sadly, in this economy, for many homeowners the only return they will see on their investment in a home is the right to live there, payment free, until the foreclosure.