NEW YORK (MainStreet) — It could take up to seven—yes, seven—years for New York state courts to clear all current foreclosure proceedings, with the average home foreclosure taking almost three years to process. What’s with the delay?
First, it's important to not that the timetables for foreclosure proceedings vary state to state. New York, along with New Jersey, is at the slower end of the spectrum, averaging 900 days from the first delinquent notice to the assignment of real-estate owned, or REO, status (when the lender takes ownership of the property).
But an overabundance of foreclosed properties doesn’t seem to be the problem, at least in New York. According to housing industry monitor RealtyTrac, the state’s foreclosure problem is especially serious, as only one in every 3,795 houses is in foreclosure. Compare that to Nevada, where one in every 97 homes is in foreclosure, or California, where one in every 240 homes is in foreclosure.
The average U.S. home foreclosure timetable is about 400 days, RealtyTrac adds. But timelines are drawing out in states across the country, and while economists say that increased efforts with loan modification and short sales are the primary reasons for slower foreclosures, that’s not why it takes twice as long to foreclose on a home in New York than it does in Florida.
Citing “massive delays” in foreclosure proceedings nationwide, RealtyTrac CEO James Saccacio took a stab at explaining why foreclosures are taking so long to get to the finish line in the Empire state. Saccacio pointed to document foul-ups from mortgage servicers in late 2010 for some of the delays: While those servicers reviewed their internal loan documentation policies, foreclosures backed up in courtrooms across the country. But that was just the beginning, he said. "The second delay occurs after foreclosure has started, when lenders are taking much longer than they were just a few years ago to complete the foreclosure process."