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 foreclosures.
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 of waiting.
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.