Foreclosures are taking weeks longer to complete than a year ago and many now last 13 months or more.
Joe Raedle, Getty Images
Nationwide, foreclosures in the first quarter took an average 400 days from default notice to the day the bank reclaimed the property, market researcher RealtyTrac reports today.
That's up from 340 days a year ago and more than double the average 151 days it took to foreclose in the first quarter of 2007, at the start of the nation's foreclosure crisis.
Foreclosure times are stretching out partly as a result of last fall's revelations that many foreclosure documents were improperly prepared.
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The delays mean homeowners may live in homes longer without paying. Delays also mean bigger losses for the loans' owners, says economist Christopher Thornberg of Beacon Economics.
April foreclosure activity hit a 40-month low, mainly because of processing delays, RealtyTrac CEO James Saccacio says. Default notices, scheduled auctions and bank repossessions were reported on 219,258 properties in April, down 34% from a year ago.
In some cases, lenders are taking longer to begin foreclosing on loans more than 90 days delinquent because they're waiting longer to allow for modifications or short sales — when lenders take less for a house than what's owed — or other alternatives, Saccacio says.
In New York and New Jersey, the average foreclosure took more than 900 days in the first quarter this year, more than three times the 2007 average, RealtyTrac says.
New York's delays may stem from an October requirement that lawyers seeking court approvals for foreclosures affirm that they reviewed court documents and asked mortgage servicers to verify their accuracy. Since October, foreclosure filings have tanked. Last week, 150 were filed. Before October, filings passed 750 a week, says Paul Lewis, chief of staff to the state's Deputy Chief Administrative Judge Ann Pfau.
Lawyers "are not bringing the cases, which makes me assume they're having trouble" meeting the requirements, Lewis says. A 2009 law that homeowners and companies try to negotiate a settlement to avoid foreclosure also has added time to the process, Lewis says.
In New Jersey, foreclosures have slowed pending a final rule on what attorneys will have to attest to when bringing foreclosure cases, says foreclosure attorney Bruce Levitt.
Florida foreclosures averaged 619 days in the first quarter vs. 470 a year ago. Cases stalled after some law firms' foreclosure work came under investigation and replacements had to be found.
The substitutions are just "trickling in" for law firms hit by the controversy, says Circuit Court Judge Lee Haworth in Sarasota, Fla. He also suspects that new firms are "scrubbing" foreclosure paperwork more than previous firms and may be starting over on some.
Foreclosure times are stretching out partly as a result of last fall's revelations that many foreclosure documents were improperly prepared. Bu the main cause is the borrower can not pay his debts to the lender. A wise counsel from an attorney should be sought for this matter.
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Thanks for the comment Gerry, it is greatly appreciated! I totally agree that an attorney should be involved!
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