From the Housing bubble blog:
Quote:
A poster on housingbubbleblog.com said a dozen of his work colleagues are still living in their homes, haven't made a mortgage payment for over a year and there has been no contact from their lenders. Seems like there's a lot of shadow inventory out there...
Another regular poster on housingbubbleblog.com chimed in with an even more extraordinary story:
Comment by Neil
2009-09-25 11:58:10
Somewhat on thread:
A coworker and I have been amazed at the number of people who are not paying their mortgage but there is no foreclosure notice. His sister was supposed to be foreclosed upon this month… there is a paperwork SNAFU, so their file has been put into a new que for processing. They’ve been told to expect an eviction notice in 4 years.
I’m not kidding, that is not a typo. FOUR years of further rent free living. The processor (working for this Countrywide mortgage) gave them that estimate.
Where? Riverside California So far, 18 months mortgage/rent free for the sister and hubby. There were contacted 9 months ago to be aware that foreclosure proceedings could occur in April. In February it was pushed to September due to ‘paperwork questions.’ Now they’ll pick up the file again in 2013.
When do squatters rights kick in?
Got Popcorn?
Neil
The Housing Bubble Blog » An Egregious Error
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As to the mountains of sidelined cash, there is a lot of speculation as to why Treasury's Timmy Geithner dropped the MMF (money market funds) guarantee. You'll remember last year, in Sept. '08, several MMF "broke the buck", that is their assets were worth less than the money deposited, sparking the Govt. guarantee. The MMF and the big banks still hold mountains of toxic assets that will never be worth more than dimes on the dollar, if a market can even be reestablished for them again. The speculation goes, in order for the PD's (primary dealers who work with the FED) can 'control' markets, they need more cash and the elimination of the guarantee will once again, cause money to flee the MMF and go into bank accounts.
The problem with this remains that MMF's will have to sell somethings in order to fund redemptions and that will put pressure on markets. The Fed and Treasury, with tax receipts falling off a cliff, are once again between a rock and a hard place. I would not be surprised by Panic over the MMF's within a few months. I don't believe that the side-lined
same as cash 
"money" is there at all.
One other point. When the goobermint abandoned the new requirement for financial institutions to "mark to market" their assets, the capitalist structure may have had it's fate sealed. Most banks hold their toxic paper
Off balance sheet in fantasy constructs called SIV's. Accounting trickery may keep your stock price up for a while but it precludes the economic system from having the cleansing of failed enterprises so necessary to it's long term health.