Castle Pines Homes News -
NEW YORK (CNNMoney) -- The golden age for foreclosure squatters may soon be coming to an end now that the $26 billion mortgage settlement has been approved.
The settlement, agreed to by the nation's five largest mortgage lenders, is expected to speed up the foreclosure process by providing stricter guidelines for the banks to follow when repossessing homes.
The banks involved include Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citibank (C, Fortune 500), Wells Fargo (WFC, Fortune 500) and Ally Financial.
Many foreclosures have been in limbo since fall 2010 following the so-called robo-signing scandal, when banks allowed employees to sign off on thousands of foreclosure documents a month with little verification.
Lenders hit the pause button on foreclosures because they "were afraid that anything they did would be under a microscope," said Eric Higgins, a professor of business at Kansas State University.
As a result, borrowers who were seriously delinquent on their loans have been able to stay in their homes for months or even years without making a single payment. Nationwide, the average time it takes to foreclose on a home -- from the first missed payment to the final bank repossession -- stretched to 370 days during the first quarter, almost twice as long as it took five years ago, according to Daren Blomquist, the marketing director at RealtyTrac.
In some states, delinquent borrowers have been squatting in their homes much longer. In Florida, the average time was 861 days, and in New York it was 1,056 days -- close to three years.
"Perhaps a million foreclosures could have been pursued last year but weren't," said Rick Sharga, executive vice president for real estate investment company, Carrington Holdings.
But that's all about to change, he said. "We're going to see an increase in the speed of foreclosures and a higher number of foreclosure starts."
In fact, there are indications that the pace of foreclosures are already starting to pick up.
While overall foreclosure activity was down during the first quarter, filings were up 10% in the 26 states where foreclosures must undergo court scrutiny, according to RealtyTrac. Source CNN.com
For more information on Castle Pines Homes, contact your Castle Pines Homes expert Bryon Self at 303.990.9320 or visit the Castle Pines Homes