For a couple of years, banks and services were processing foreclosures very slowly. When the housing bubble popped, they weren't prepared to deal with the flood of defaults that hit. And there wasn't much reason for them to rush: if distressed properties hit the market slowly, then prices don't drop as quickly. But then last fall, foreclosuregate struck. Now foreclosures are being processed very, very, very slowly. While this means a longer, more painful path to recovery for the housing market, some distressed borrowers don't mind one bit.

That's a message contained in a New York Times article yesterday. David Streitfeld reports that, at the current pace, it will be decades before foreclosures are all worked through in some locations. In New York State, it would take 62 years. In New Jersey, it would take 46 years. In Dade County, Florida, the average time to foreclose is currently 738 days.

During this delay, some borrowers are able to hold onto their home without paying anything. One of the article's sources, a lawyer from Florida named Mark Stopa, explains how his clients break down into three kinds of borrower groups:

Some are unemployed or disabled and just getting by. Others are able to save money and improve their financial situation as their case drags on. The third group are those who have strategically defaulted. They can afford to pay but are taking advantage of the banks' plodding pace. Often the members of this group rent out the foreclosed home and keep the proceeds.

While those first two groups are truly distressed and making the best of a bad situation, that third group is another story. These individuals aren't just saving money by not paying their mortgage, but earning extra income at the same time. States where banks cannot go after that income really need to rethink their laws, because there should be consequences for such behavior.

Read the full story at the New York Times.