The Wall Street Journal's Nick Timiraos writes that in states where the court system must play a role in the resolution of failed residential loans, the process of resolution is full of snags and slows-downs. Timiraos writes, "Some reports have shown that borrowers in judicial states are more likely to get help from lenders and may face slightly lower foreclosure rates, in part because of the higher costs to foreclose. At the same time, housing markets in non-judicial states may recover sooner as they more quickly digest the supply of bank-owned properties."
Thursday’s report on mortgage delinquencies from the Mortgage Bankers Association offered a mixed bag. The good news is that the share of problem loans in the system is down from one year ago.
The bad? Mortgage delinquencies, after adjusting for seasonal factors, didn’t decline much in the first quarter from the previous quarter, and foreclosures remain at very high levels.
But increasingly, the national numbers don’t paint as useful a picture about what’s happening on the foreclosure front, a point that Jay Brinkmann, the trade group’s chief economist, made on Thursday. National figures are “dominated by some problem areas that are both large and are going to have a much longer timeline to work out,” he said.
Brinkmann is referring to states like Florida, New Jersey and New York, which require banks to process foreclosures through courts. Banks, their lawyers, and courts have been overwhelmed by the caseload. The robo-signing scandal has added a new layer of scrutiny to banks’ paperwork, further extending timelines.
In so-called non-judicial states, foreclosures typically don’t take as long, and as more delinquent loans exit the pipeline through foreclosure, the top-line foreclosure statistics for these states are looking better.
Here’s an example: Take the top six states with the highest volumes of seriously delinquent loans (those that are 90 days or more past due or in foreclosure). The share of loans 90 days or more past due is falling in all of them.
- Source: Mortgage Bankers Association
But in three of them—judicial states of Florida, New Jersey and Illinois—the share of loans in foreclosure is rising.
In the non-judicial states of California and Arizona, foreclosures are falling. Nevada, also a non-judicial state, has seen less of a decrease in foreclosures, though it also has the worst delinquency problem in the country.
Some reports have shown that borrowers in judicial states are more likely to get help from lenders and may face slightly lower foreclosure rates, in part because of the higher costs to foreclose. At the same time, housing markets in non-judicial states may recover sooner as they more quickly digest the supply of bank-owned properties.
URL to original article: http://www.builderonline.com/builder-pulse/all-real-estate-is-local-----so-is-the-foreclosure-mess.aspx?cid=NWBD110523002
For further information on Fresno Real Estate check: http://www.londonproperties.com
No comments:
Post a Comment