Processing Delays Bring Foreclosure Low
Problems with processing foreclosures slowed the activity to its most sluggish pace in April, further delaying the point when the market will have addressed the large stockpile of real estate for sale.
RealtyTrac, a leading source and market for foreclosed real estate, released its U.S. Foreclosure Market Report for April. According to the report, 219,258 U.S. properties in April were involved in the foreclosure process, either having received a notice of default, been scheduled for auction or been repossessed. This is a 9% decrease from March and a 34% decrease from April 2010, according to the firm. The report also shows one in every 593 U.S. housing units received a foreclosure filing during April 2011.
“Foreclosure activity decreased on an annual basis for the seventh straight month in April, bringing foreclosure activity to a 40-month low,” said James Saccacio, CEO of RealtyTrac. “This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure.
“The first delay occurs between delinquency and foreclosure, when lenders and services are no longer automatically pushing loans that are more than 90 days delinquent into foreclosure but are waiting longer to allow for loan modifications, short sales and possibly other disposition alternatives,” Saccacio continued. “Data from the Mortgage Bankers Association shows that about 3.7 million properties are in this seriously delinquent stage. The second delay occurs after foreclosure has started, when lenders are taking much longer than they were just a few years ago to complete the foreclosure process.”
Nationwide, the firm reported it was taking, on average, more than a year for a property to have received a notice of default to finally being repossessed, but some states are much slower. In New York State, the firm reported that it took a property 900 days to go through the process. In Florida, 619 and in California, 330.