Some States Still Bogged Down By Foreclosures
July 23, 2013
The backlog of homes in foreclosure is still clogging the pipeline in some states, according to a report by the Federal Reserve Bank of New York. The large volume of loans in states that have a judicial process for foreclosures appears to be hampering the housing recovery, the report states.
States with judicial foreclosures have maintained higher foreclosure rates than states that do not require foreclosures to be approved by the courts. The length of time a loan remains in the foreclosure process in judicial states is significantly longer, the New York Fed notes, calling out Florida, New Jersey, and New York as the most extreme examples of this.
States with judicial foreclosures, however, have seen a “modest” improvement in home prices.
"One potential explanation for this relationship is that potential homebuyers in the judicial states recognize that a large number of distressed sales have yet to occur, and this consideration has influenced the prices they are willing to offer for homes currently on the market," analysts concluded.
Source: “Backlog of foreclosures continues to block housing recovery,” HousingWire (July 22, 2013)
Updated: June 18, 2018