The 23 states that require court orders to foreclose and other states that have enacted legislation that delays foreclosure processing will take twice as long as the rest of the nation to clear backlogged foreclosure inventories at their current rate.
The foreclosure inventory in judicial states remains three times that of non-judicial states and pipeline ratios — the rate at which states are currently working through their existing backlog of loans either in foreclosure or serious delinquency — are almost twice as high in judicial states than non-judicial states, according to the Lender Processing Services’ January Mortgage Monitor.
“On average, at today’s rate of foreclosure sales, it will take 62 months to clear the inventory in judicial states as compared to 32 months in non-judicial states. A few judicial states — New York and New Jersey in particular — have such extreme backlogs that their problem-loan pipelines would take decades to clear if nothing were to change,” said LPS Applied Analytics Senior Vice President Herb Blecher.
Blecher said certain non-judicial states, such as Massachusetts and Nevada, have recently enacted ‘judicial-like’ legislative and/or legal actions which have greatly extended their pipeline ratios. Nevada’s ‘time to clear’ has extended from 27 months in January 2012 to 57 months as of January 2013. The change in Massachusetts has been even more pronounced. Since June of last year, its pipeline ratio has gone from 75 to 171 months.