After millions of people have lost their homes to foreclosure, many analysts expected the nation to be littered with neighborhoods blighted by vacant homes. While many neighborhoods are indeed suffering the negative effects of foreclosure blight, a surprising number of troubled homeowners remain in their homes.

The length of the foreclosure process itself, challenges to the legitimacy of banks’ foreclosure filings, bankruptcy, and ongoing foreclosure prevention efforts have dramatically lengthened the time between receiving a foreclosure notice and the actual eviction.

For better or for worse, hundreds of thousands of homeowners find themselves in ‘foreclosure limbo,’ where they either have already been foreclosed upon or are still desperately trying to save their homes, but not yet evicted.

According to RealtyTrac Inc., there are currently about 1.2 million U.S. homes in foreclosure — and homeowners are still living in about 70 percent of them.

Lengthy Foreclosure Process Adds Cost, But May Create Opportunity

In states like Florida that have judicial foreclosure processes, the average foreclosure takes an average of 271 days from beginning to end. Before the housing bust and the recent legal problems in the foreclosure process, it took an average of only 147 days.

Some homeowners in limbo are still trying to negotiate loan modifications even though a foreclosure action has been filed. Others have given up fighting the foreclosure and are simply waiting for the eviction notice to arrive. In some cases, a home foreclosure has been put on hold as part of a Chapter 13 bankruptcy.

Others are actively challenging a bank’s attempt to foreclose, citing the legal problems often referred to as “foreclosure-gate,” where banks are accused of submitting legally insufficient or even fraudulent paperwork to courts.

John Courson, president of the Mortgage Bankers Association, says that homeowners who fight foreclosure are wasting their time — as well as adding unnecessary cost to the process and threatening the housing recovery.

“The fact that they’re in default, to the extent that the loan has proceeded to foreclosure, is an indication that likely any attempt they’ve made, or lenders have made to assist them, have not been successful,” he recently told Bloomberg. “The end result is still going to be the same, unfortunately.”

Foreclosure defense lawyers disagree. “It’s a slow-moving animal and, in the case of foreclosures, there are a multiple of defenses to a foreclosure action,” said one Miami foreclosure defense attorney.

“It’s not like a life of luxury waiting and wondering whether you’re going to lose your house any minute,” he added. “You’re not writing a check every month, but it’s not a lifestyle anybody would be jealous of.”

Source: Bloomberg, “Comedian, Wrestler Couple Hang on to House in Foreclosure Limbo,” David McLaughlin, November 14, 2010