Foreclosure Backlog Delaying Seizures
A report from LPS Mortgage Monitor on Wednesday indicates that the amount of time required to process foreclosures in the US has ballooned to 1.75 years, or 611 days, more than twice as long as it took on average three years ago, when the average processing time was just 251 days. Even earlier this year, the average was 523 days. The backlog of foreclosures is so steep, that lenders have had to begin prioritizing which loans to deal with and push others to the side, leading to the ballooning foreclosure times.
The backlog of foreclosures is especially steep in states like Florida, New York and others, where court approval is required before seizures can take place. In these states, the average processing time is a full six months longer than in non-judicial foreclosure states, where trustees handle cases. The mortgage industry has gotten better over the past year at dealing with the backlog, hiring additional staff and refining the process to improve efficiency, but the sheer amount of homeowners in default means that it could take years for processing times to return to normal.
As of August 1st, there were more than 4 million Americans either in some stage of foreclosure or seriously delinquent, or at least 90 days behind on payments. Many of the delinquent borrowers were actually repeats, meaning they had been behind before and caught up, only to fall behind again. The one bright spot in all this is that new serious delinquencies are actually in decline.