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Borrowers Losing Their Homes are Staying in Them Longer for Free

When Eric Peterson buys foreclosed homes through courthouse trustee sales these days, the majority of borrowers are still living in the home rent-free, waiting to be evicted.

That is a dramatic change from last year, when most properties were vacant by the time of a foreclosure sale.

"Borrowers are savvy now and they know that once they lose the house, they can milk the system for time and cash," said Peterson, a managing director at the Sacramento private-equity firm Praxis Capital Inc., a large buyer at trustee sales in seven Northern California counties.

"A year ago, nobody knew what 'cash for keys' was," said Peterson, referring to the payments of $1,500 to $3,000 that a borrower typically receives from a servicer to move out.

"It's like all the defaulted borrowers held a secret meeting and now they all know," he said.


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wish I could read this

complete article without logging in or registering... arg.