Foreclosures Slow as Banks Face Backlogs
Nationwide, new foreclosure cases and repossessions have dropped by a third since last fall as banks, as greater scrutiny over banks’ foreclosure procedures and more home owners fighting back in court has slowed the pace. Banks, already facing huge backlogs of foreclosures they’ve already repossessed, also may be reluctant to add on more to their inventory, experts say.
For example, In New York, experts estimate it would take lenders 62 years at their current pace to repossess the 213,000 houses now in severe default or foreclosure, according to LPS Applied Analytics, a real estate data firm. New York boasted the longest foreclosure backlog in the nation. Following behind, in New Jersey it would take 49 years, and in Florida, Massachusetts, and Illinois it would take 10 years to handle the supply of foreclosures at the current pace.
States where courts must review each foreclosure tend to have the longest delays. But in the 27 states without that requirement, foreclosures are much quicker. For example, as comparison, in California, the foreclosure backlog is three years, and in Nevada and Colorado, it’s two years.
“If you were in foreclosure four years ago, you were biting your nails, asking yourself, ‘When is the sheriff going to show up and put me on the street?’” Herb Blecher, an LPS senior vice president, told The New York Times. “Now you’re probably not losing any sleep.”
However, the banks say they is no strategy in delaying foreclosures. “Any suggestion that we have a strategy to delay foreclosures is baseless,” a spokesman for Bank of America said. Instead, one bank blamed delays in state laws governing foreclosures while others said the decline in foreclosures is the product of an improving economy.