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Millions stop paying for houses but aren’t evicted.

All across the country, homeowners have simply stopped paying their mortgage – for any number of reasons – but have not been evicted by their lenders.

According to a report in the San Jose Mercury News, this newest trend in the world of banks and consumers dealing with the depressed housing market as best they can has come about for two reasons. First, many lenders have been unable to keep up with the high volume of foreclosures they need to enact because of the sheer number of consumers who have become unable to pay their mortgage. Second, though less common, is that banks don’t want to continue to flood the market with foreclosed homes.

The report said that this uncertainty is contributing heavily to the housing market’s ongoing instability, and the backlog for some lenders could last for several months or even years.

“It’s bad all the way around, for the neighbor, the community, the city, state, nation,” Chris George, founder and CEO of CMG Mortgage, told the paper. “It’s a continued indication that there are a lot of people in trouble, particularly with their job situations.”

The report noted that an estimated 40,283 homeowners in the seven counties nearest San Jose, including the San Francisco metro area, were at least three months behind on their mortgage payments but were not yet in foreclosure.

According to the Department of the Treasury, the Obama administration plans to give $600 million in foreclosure assistance to states that have been hardest-hit by the economic slowdown.

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