According to Barclays Capital, at the end of July 2011 banks held 17 percent fewer REO properties than they held in September 2010. This is likely due in large part to the robo-signing scandal that made headlines right around that time and the extended foreclosure timelines that have been a result. Loans are spending far more time in delinquency and foreclosure than in years prior, with many homes spending nearly a year in foreclosure before reaching REO status. Perhaps not surprisingly, judicial foreclosure states tend to have longer foreclosure timelines than non-judicial foreclosure states.
Barclays also noted that lenders and servicers are more likely to offer loan modifications in states with slower foreclosure processes and that servicers are “a little more generous in their loan modification terms in slow foreclosure states.” Do you think that this is fair?
Thank you for reading the Bryan Ellis Real Estate Letter!
Your comments and questions are welcomed below.