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Long, slow foreclosures

By Marcie Geffner · Bankrate.com
Wednesday, November 17, 2010
Posted: 11 am ET

Homeowners who've stopped making their mortgage payments can expect the foreclosure process to be a long, slow grind, and some new stats from LPS Applied Analytics in Jacksonville, Fla., suggest the timeline is stretching out to be even longer as the foreclosure crisis persists.

A few observations from the latest LPS data:

• Loans in the foreclosure pipeline are now delinquent more than 500 days, on average, in five states -- New York, Florida, New Jersey, Hawaii and Maine -- all of which use a judicial process. Many other states aren't far behind, and even the smallest averages are still 358 days, or just one week short of a full year.

• The average length of time that delinquent loans have been in the foreclosure process has increased in every state since January 2008. The biggest increases have occurred in Florida and New York, among the judicial process states, and Maryland, California, Virginia, Nevada, Massachusetts, Rhode Island and Arizona, among the non-judicial states.

• The degree of delinquency of loans that are at least 90 days late also has continued to rise.

LPS said in a statement:

As of the end of September, 32 percent of 90-days-or-greater delinquencies could be categorized as 'extremely delinquent,' with borrowers not having made a payment for 12 months or more. The average days delinquent for loans in the 90-days-or-greater delinquency category is 316 days, and the average loan in foreclosure has not had a payment in 484 days, or roughly 16 months.

Still, it's important to remember that these figures are averages. That means some homeowners are practically rushed through the process, while others may be left in their homes for even longer periods. In some cases, a lengthy delay benefits the lender. In others, the homeowner gets the advantage.

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4 Comments
J. H.
November 18, 2010 at 4:52 pm

I agree that a Short Sale is the answer. Tooo many people have been allowed to take advantage of the system (living in their homes for months at a time, while making no payments). We did apply for a Loan Modification though, for almost 2 years straight! The system there was so crewed up, it never went through. Now our house must sold, plain and simple. And I am going through a divorce, after being married almost 20 years... how sad.

Alex Casteel
November 18, 2010 at 9:41 am

In Arizona, a non-judicial state, the pace of foreclosures does not seem to be slowed at all; just a steady stream. A typical time line that I as a real estate brokerage owner see anywhere from 8 - 10 months from first missed payment to Trustee's Sale.

Razor
November 18, 2010 at 6:55 am

It has become a joke. In New Jersey there are practically no foreclosures going through. The foreclosure unit has decided to stop processing anything. They have forgotten that they are to serve. The fact that the bank has leant money to a person and is not being paid back gives them the right to foreclose. The foreclosure unit should be dismantled and everyone fired. All these delays are just going to stretch the recession on and on. Judges are just as bad. Rewarding these people who have been so irresponsible, while those of us who have lived responsibly get nothing and in some ways pay the price for those morons is unjust.

Larry Fleckinger
November 17, 2010 at 6:21 pm

I think the lawyers should be looking into why the big banks can break the law with their robo-signing and stop foreclosures until they get this mess figured out. Short sales are the answer to all the legal wows. In a short sale the Seller signs off on the sale and it is a clean deal….no need for robo signers.