Foreclosures Slow as Banks Face Backlogs

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.

Source:

“Backlog of Foreclosures Giving Some a Reprieve,”
The New York Times (June 19, 2011)