Processing Delays Manifested: 39% Fewer Foreclosure Starts in 2011
By: Carrie Bay
The number of foreclosure actions initiated in 2011 was down 38.7 percent compared to 2010, according to a new report from Lender Processing Services (LPS).
The company also reported that delinquencies at the end of 2011 were down nearly 8 percent from the previous year and were 25 percent below their peak in January 2010.
The foreclosure inventory, on the other hand, remains near historic highs, at 4.11 percent as of the end of December.
The numbers illustrate the impact of foreclosure processing delays brought on by the robo-signing controversy that surfaced in the fall of 2010, the impact of which remains strong in judicial states.
LPS says foreclosure inventories in judicial states remain 2.5 times that of non-judicial, while foreclosure sale rates in non-judicial states stood at approximately four times that of their judicial counterparts in December.
The company also found that half of all loans in foreclosure in judicial states have not made a payment in more than two years compared to 28 percent in non-judicial states.
Still, on average, LPS says pipeline ratios – which is the amount of time it would take to clear the inventory of loans seriously delinquent and in foreclosure at the current rate – have declined significantly from earlier this year.
The company’s data show that the states with the largest declines in non-current loans are all non-judicial, including Nevada, Arizona, Michigan, and California.
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