In New York State, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure, according to calculations by LPS Applied Analytics, a prominent real estate data firm.
Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.
In the 27 states where the courts play no role in foreclosures, the pace is much more brisk — three years in California, two years in Nevada and Colorado — but the dynamic is the same: the foreclosure system is bogged down by the volume of cases, borrowers are fighting to keep their houses and many lenders seem to be in no hurry to add repossessed houses to their books.
“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?’ ” said Herb Blecher, an LPS senior vice president. “Now you’re probably not losing any sleep.”
Bottom line: slow and steady won’t win this race.
All this accomplishes is a reduction in the rate at which home prices are falling (presumably to prop up the real estate market as long as possible) and reduces stress upon the big banks (who have unofficially become real estate investment trusts). The only thing delays in foreclosures, as unpleasant as they are, will mean is a slower recovery since delinquent homeowners aren’t paying their mortgages, their property taxes, HOA fees, etc.
Those states who have a lawful and judiciously efficacious — not of the JP Morgan foreclosing on deployed soldiers variety — will claw their way out of fiscal Hell faster than those who do not.
New York Times
Backlog of Cases Gives a Reprieve on Foreclosures