I just Blogged about this: Source: â€œHome Loans in Default Drag On,â€ USA Today
Foreclosure Process Gets Longer!
Posted Under: Market Conditions in Fort Worth, Foreclosure in Fort Worth, Rental Basics in Fort Worth | February 28, 2011 10:16 AM | 64 views | No comments
Personal Experience: 2/6/2011 - one year ago my Buyer made an offer on a home that originally listed as a "SHORT SALE" The offer was 20k off from list price. The home isnow in foreclosure.
Do you think the bank would have been better served to agree to sell the home and accept the 20k spread or hold on to it for 1-2 years and watch it deteriorate and bring down the values of the surrounding properties? Just a thought!
Foreclosure Process Gets Longer
Banks and mortgage servicers are taking more time to foreclose on defaulting home owners--a process that can take up to 2 years now. A backlog in foreclosures has occurred within a number of the nationâ€™s banks, triggered by the large number of home owners defaulting on loans, a lengthy review process for loan modifications, and recent lawsuits that have accused banks of improperly filing foreclosure documents .
Meanwhile, defaulting home owners are being allowed to stay in their homes longer. In December 2010, the average borrower in foreclosure went 507 days without making a mortgage payment, according to LPS Applied Analytics. (Prior to the housing crash, the norm was considered 250 days in default.)
Diane Pendley, managing director of Fitch Ratings, estimates that delinquent borrowers stay in their homes an average of 19 to 20 months before they're evicted. She expects that average to grow to 22 to 23 months by the end of the year--the longest on record.
The delays in the foreclosure process are expected to lead to less inventory of foreclosed homes for sale and higher prices for these homes, in some markets, experts note. However, the longer wait also means foreclosures could weigh on the real estate market much longer, they say.