A recent report identifies five states with the most homes in foreclosure, and suggests a lengthy foreclosure process may be partly to blame.
The foreclosure process averages 140 days nationwide, an analysis by the website 24/7 Wall St. shows. But in states with the highest foreclosure rates, homes remain in foreclosure much longer—220 days on average.
What accounts for the difference? Court and judicial involvement, the 24/7 Wall St. report suggests.
Nine of the top 11 states with the most homes in foreclosure require a court or judge to oversee the process, according to 24/7. Also called foreclosure by judicial sale, it’s a formal legal action that can take months and usually involves a short trial.
By comparison, nonjudicial foreclosures—or foreclosures by power of sale—do not involve the court and are resolved more quickly.
Some states allow for both judicial and nonjudicial foreclosures, so you may want to check with a local foreclosure attorney to discuss which option is best for you.
The effects of a longer foreclosure period can be seen in the top five states with the most homes in foreclosure. According to 24/7 Wall St., those states are:
5. New York, with 4.6 percent of homes in foreclosure. The average foreclosure processing period is 445 days—the longest in the nation.
4. Nevada, where 5.3 percent of homes are in foreclosure. The average processing period is 116 days.
3. Illinois, with a 5.4 percent home-foreclosure rate. The processing period averages 300 days.
2. New Jersey, at 6.4 percent. The average processing period is 270 days.
1. Florida, at 11.9 percent. The processing period here averages 135 days.
In Florida’s case, several other factors are also causing the state’s high home-foreclosure rate, 24/7 reports. Those include falling home prices (down 49 percent since 2006), high unemployment (9.9 percent), and the highest mortgage-delinquency rate in the nation (17.4 percent).
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