The Positive Side to the Foreclosure Backlog
America's foreclosure crisis may take longer than anyone expected thanks
to certain state laws prolonging the foreclosure process. For example,
it will take lenders an estimated 10 years to process all of the Illinois
homes now in foreclosure or serious default. The culprit (in large part)
is a state law requiring a certain amount of court intervention in processing
Illinois isn't even the worst of the states. It will take 62 years
to process the 213,000 New York homes now in foreclosure or serious default.
New York's law requires the bank and borrower to meet to discuss foreclosure
terms. One required conference often turns into 10 meetings and many days
New Jersey needs 49 years to clear its foreclosure backlog and Florida
and Massachusetts each need at least 10 years to do the same. Like Illinois
and New York, these states require a certain amount of court intervention
in processing foreclosures. Twenty-seven states require no court involvement,
allowing them to clean up their backlogs in just a few years, instead
of a few decades.
A large part of the problem also stems from the relatively recent discovery
that many major banks were simply rubberstamping foreclosure documents
without verifying the accuracy of the information therein. Because of
the risk of improperly evicting people from their homes, the foreclosure
process came to a near halt while this
"robo-signing" was investigated.
Benefit to Homeowners
This backlog is certainly a boon for some homeowners facing foreclosure
as many can stay in their homes until the bank gets around to them. While
some homeowners are using the time to catch up on missed payments, others
are saving up the money from essentially free rent for the day when they
are finally forced out.
With nearly 800,000 foreclosures being processed across the country each
year, the current situation is sure to continue for some time. If you
are facing foreclosure, contact an experienced foreclosure defense attorney
to discuss your situation and your options.