MIAMI — In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.
She is like a ghost of the housing market’s painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.
Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.
The reason, lawyers for homeowners argue, is that the cases have dragged on too long.
There are tens of thousands of homeowners who have missed more than five years of mortgage payments, many of them clustered in states like Florida, New Jersey and New York, where lenders must get judges to sign off on foreclosures.
However, in a growing number of foreclosure cases filed when home prices collapsed during the financial crisis, lenders may never be able to seize the homes because the state statutes of limitations have been exceeded, according to interviews with housing lawyers and a review of state and federal court decisions.
“No one gets a free house,” Judge Michael B. Kaplan of the United States Bankruptcy Court in Trenton wrote in an opinion late last year, reflecting what he characterized as a longstanding “admonition” he and others made during the foreclosure crisis. But after effectively ending a New Jersey homeowner’s foreclosure case in November because the state’s six-year statute of limitations had expired, he wrote in his opinion, “With a proper measure of disquiet and chagrin, the court now must retreat from this position.”
It is difficult to know for sure how many foreclosure cases are still grinding through the court systems since the financial crisis. It is even harder to say how many of those borrowers are still living in their homes.
Bank of America, for example, has initiated the foreclosure process on roughly 20,000 mortgages that have not been paid in at least five years. The bank estimates that 90 percent of those homes are still occupied.
The courts are not the only source of delay. Over the years, the federal government has made 69 changes to its mortgage modification programs, forcing lenders repeatedly to scrap previous offers to homeowners and extend new terms.
Of course, the banks have also dragged out this reckoning through shoddy paperwork, botched modifications and general dysfunction as they struggled to cope with a flood of soured mortgages. Many cases were passed among lawyers like hot potatoes and lay dormant on court dockets.
Since housing prices peaked in 2006, roughly 6.7 million Americans have lost their homes to foreclosure. An additional 800,000 people could share that fate by the time all the delinquent mortgages from the crisis are settled, according to a Moody’s Analytics estimate.
“This whole event is going to take 10 years to sort out,” said Mark Zandi, chief economist at Moody’s Analytics. “So we probably have one or maybe two more years to go until it is all over.”
But the laws in places like Florida could prove to be a wild card. In a state where “hanging chads” helped decide the 2000 presidential election, a legal technicality could help settle the state’s foreclosure crisis.
Lawyers for homeowners in Florida contend that lenders have five years to file for foreclosure after a homeowner defaults, normally after several months of missed payments, and the mortgage is “accelerated,” meaning that the bank says that the debt is due all at once. Banks say they have many more years to file for foreclosure, arguing that the five-year clock resets every time a homeowner misses a monthly payment — regardless of when the mortgage was accelerated. Some Florida judges have agreed.
The statute of limitations does not halt a foreclosure case that is continuing in court. But in some Florida courts, homeowners’ lawyers have argued that once a foreclosure is dismissed even for technical reasons, the lender cannot refile a new foreclosure to seize the home if the statute of limitations has passed. Still, the lender has some recourse: It can keep a lien on the house that must be paid off if the property is ever sold.
The issue is now before the Florida Supreme Court.
The lenders’ lawyers have warned in court papers that if the state’s high court sides with the homeowners, “it would spawn a public policy hazard” and dissuade banks from extending mortgages in Florida in the future.
In New Jersey, where the statute of limitations on foreclosures is six years, the issue has just started being argued in the courts. In November, a bankruptcy judge in Trenton grudgingly allowed a Madison, N.J., man to walk away from a $520,000 mortgage that had been in default since 2007.
In concluding his opinion, Judge Kaplan wrote, “the court will proceed to gargle in an effort to remove the lingering bad taste.”
The lender has appealed.
The statute of limitations issue is also coming up in the New York courts.
“It’s becoming a more common way to get out from under these cases,” said Linda Tirelli, a lawyer in White Plains who represents homeowners facing foreclosure.
In June, it also appeared that Ms. Rodolfi was quite literally home free.
When a lawyer then working for her mortgage servicer did not show up for a routine hearing, the judge dismissed her foreclosure case.
But her servicer, Nationstar Mortgage, recently won a reversal of the dismissal, saying the lawyer had missed the hearing because of “inadvertence, mistake and excusable neglect.” Ms. Rodolfi’s lawyers plan to appeal.
“People who are paying their mortgage might see this as a windfall for the homeowner,” said one of her lawyers, Martin G. McCarthy. “But the lenders are more than partly to blame, and in Susan’s case, I wouldn’t feel bad for them.”
For her part, Ms. Rodolfi, 47, said, “If they had just agreed to modify my loan, I would be paying my mortgage, and we wouldn’t be at this point.”
It is easy to see why she has been fighting all these years to keep her home, which Nationstar says is worth $272,000.
Her working-class neighborhood is a short drive from Coconut Grove, a wealthy waterfront enclave of Miami. Her bedroom opens up onto a pool, shaded by palm trees. Outside her house, she parks a small motorboat she named Mermaid. The property includes an adjoining house that she rents out.
She bought the property in 2002 with her husband at the time. The couple amassed a small portfolio of properties in addition to the house she now occupies.
As Florida’s housing market was crumbling, she sold most of her properties. She took a job in a hotel, worked in her father’s luggage shop and chartered boat trips. Still, she could not keep up with her mortgage.
In November 2009, her mortgage servicer at the time, Aurora Loan Services, a unit of the now-defunct Lehman Brothers, filed to foreclose on her house.
Instead of making her roughly $1,300 monthly mortgage payment, she pays her lawyer $500 a month to represent her in court.
In June 2010, Aurora agreed to modify her loan on a trial basis, she said, but waited months to send her the modification deal. When she received the contract in the mail, she refused to sign it, saying that documents had arrived too late.
For months, she heard nothing about her case. It turned out that the law firm that negotiated her modification deal on behalf of Aurora had been shut down after complaints about improper foreclosures, including backdated documents. Nationstar, meanwhile, took over the servicing duties of many of Aurora’s mortgages.
In August 2012, Nationstar made contact with Ms. Rodolfi for the first time, saying it was now servicing her loan.
Nationstar declined to comment for this article, citing the continuing litigation.
Ms. Rodolfi, who now drives a shuttle boat at a local marina, applied for another modification, but Nationstar denied the request.
Again, she applied and was rejected. One reason: “excessive forbearance,” which suggests she was too far behind on her mortgage to ever catch up.
Ms. Rodolfi says she accepts responsibility for falling behind on her mortgage, but she blames her lenders for delaying the modification process. She does not relish the idea of keeping her home through a legal maneuver. She is still seeking a modification, hoping to rebuild her damaged credit and begin a business.
“I screwed up and they screwed up, so now what?” she said.
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