Judicial States’ Foreclosure Inventories And Timelines Continue To Grow

Lender Processing Services' (LPS) September Mortgage Monitor report continues to show significant differences between states that process foreclosures following a judicial versus nonjudicial foreclosure process.

Ranked by the percentage of loans that are non-current, seven of the top 10 states are judicial foreclosure states. Foreclosure inventories in these states continue to climb, accounting for nearly 7% of the entire active loan count, LPS says.

Additionally, foreclosure timelines in these states continue to extend at a greater rate than in nonjudicial foreclosure states. The time from last payment to foreclosure sale in judicial states is 761 days, which is six months longer than in nonjudicial states. Â Â Â

In turn, foreclosure sales in judicial foreclosure states remain very low, with only 1.6% of those states' foreclosure inventories moving to sale.

Overall, foreclosure starts in September were slightly below the three-year average, LPS adds. Foreclosure timelines continue to increase across the board – almost 40% of loans in foreclosure have not made a payment in two years, and 72% have not made a payment in a year or more. New problem-loan rates increased sharply over the last two months, with 1.6% of loans that were current six months ago now 60 or more days delinquent or in foreclosure.


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