U.S. homeowners facing foreclosure were a record 611 days late paying their mortgages on average as legal disputes delayed bank repossessions, Lender Processing Services Inc. said today.
That was up from an average 599 days in July and 478 days in August 2010 for homes that had received a notice of foreclosure and weren’t sold or repossessed by banks, according to the Jacksonville, Florida-based real estate data company.
“You’ve got this bunching up in the later stages of the process,” Herb Blecher, senior vice president for analytics at Lender Processing Services, said in a telephone interview. “The bottlenecks are still there.”
The time to resolve mortgage delinquencies has grown from a year ago, when banks delayed filings after claims of “robo-signing,” or pushing through documents that weren’t verified, spurred investigations by attorneys general in all 50 states.
Foreclosures take longest in so-called judicial states, which require court approval to seize properties, led by New York, where the average home was in the process for 767 days. It was followed by Florida with 757 days, New Jersey with 708, Hawaii with 681 and Washington, D.C., with 676, Lender Procession said. The shortest averages were in Wyoming at 398 days, Nebraska at 407, Alaska at 411, Idaho at 416 and Arizona at 418.
Starts Outnumber Sales
The 24 judicial states, which had 2.1 million homes with mortgages at least 90 days late, accounted for about 25 percent of foreclosure sales, Blecher said. Non-judicial states had 1.9 million seriously delinquent homes. Foreclosure starts outnumbered foreclosure sales by a factor of three to one nationwide, with higher ratios in judicial-foreclosure states.
“All else being equal, non-judicial states are going to be poised for a recovery faster than judicial states,” he said.
While the foreclosure timeline has grown, the total number U.S. of homes with delinquent mortgages declined to 6.4 million in August from 6.98 million a year earlier and a peak of 8.12 million in January 2010, Lender Processing said.
There were 247,957 foreclosure starts in August, up 20 percent from July and down 12 percent from a year earlier, before the “robo-signing” dispute began, the company said.
Negotiations to settle the foreclosure disputes with the five largest U.S. banks, including Bank of America Corp. and JPMorgan Chase & Co., have faced infighting among attorneys general. California Attorney General Kamala Harris, whose state has the second-highest U.S. foreclosure rate, rejected a proposed deal to resolve the disputes, calling the agreement “inadequate,” according to a Sept. 30 letter she sent to the U.S. Justice Department and the Iowa attorney general, who is leading talks for the states.