That's not even fair, the condo association may have put hundreds of thousands of dollars of liens on his place because he was negligent and caused the water damage. The guy is a dumb ass.
I don't buy the understaffed excuse, all these people the bank isn't foreclosing on will surely be accruing major late fees and interest as they are not paying any principle (I wonder how that is accounted for in the books). Eventually the bank will own their property or it will have its pound of flesh. Doesn't make much sense from the bank's perspective to flood the market with more properties as it is just shooting itself in the foot driving down the value of its whole portfolio and encouraging more people to default or walk. There is no rush either as the notes on most of these places are now held by the Fed in its new lending facilities and the banks have Treasuries in return. The plan is cleary to just try and wait it out and hope that the excess inventory works itself off and the market stabilizes. The hope is that time and inflation and maybe higher taxes will eventually cure the problem. Somehow I doubt it will play out in such a rosy way.