Backlog of Foreclosures Continues to Block Housing Recovery

July 22, 2013
Housing Wire  
mortgage lending news

National foreclosure trends reveal a large disparity in performance between states that have a judicial foreclosure process and those that have a non-judicial foreclosure process, according to a new report from the Federal Reserve Bank of New York. The key distinction is in the average number of days a loan remains in the foreclosure process. The judicial states continue to have a relatively high number of properties in foreclosure, with Florida, New Jersey, and New York standing out as the most extreme examples. Moreover, the large volume of loans in the foreclosure process in judicial states appears to be blocking home price recovery in those states. "One potential explanation for this relationship is that potential home buyers 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," conclude the New York Fed analysts.
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