Long foreclosure processing period benefits no one, experts say

TRD New York /
Dec.December 07, 2012 09:00 AM

As reports have noted, the time it takes to process a foreclosure varies from state to state, and New York and New Jersey have some of the longest average processing times in the nation. While some observers have said the relative delays is good for borrowers — they have time to get back on their feet financially — new evidence shows it may not be good for their neighborhoods overall, the New York Times reported.

Unlike in some states, in New York and New Jersey a foreclosure must go through the court, which, while it may assure fairer outcomes, has created a massive backlog of properties awaiting foreclosure. Recent studies have shown that buyers in states with judicial foreclosure proceedings were no less likely to eventually have the home repossessed than in other states.

“The best outcome is to prevent the foreclosure,” Paul Willen, an economist and policy adviser at the Boston Fed, told the Times. “But if it’s clear that can’t be done, it’s in society’s interest to get the foreclosure done as soon as possible.

Neighborhoods where foreclosures languish also suffer, experts noted.

“Borrowers should be considered quickly for loan modifications,” Michael Calhoun, the president of the Center for Responsible Lending, told the Times. “They’re more successful if they’re done early on.” [NYT] –Guelda Voien

Related Articles

Nationwide foreclosures are at a 15-year low (Credit: iStock)

Foreclosures nationwide fell to 15-year low in 2019

494 Broadway and Thor Equities' Joe Sitt (Credit: Google Maps)

Thor faces foreclosure on site where lender says it’s seeking “unrealistic rents”

Maefield Development's Mark Siffin and 20 Times Square (Credit: Maefield)

Lender forecloses on Maefield’s billion-dollar Times Square project

Thor Equities' Joe Sitt and 725 8th Avenue (Credit: Google Maps)

Thor facing foreclosure at Theater District building

Home foreclosures dropped nearly 20% in Q3, report shows

Home foreclosures dropped nearly 20% in Q3, report shows

Manhattan’s 10019 zip code, which covers Midtown, Times Square, Herald Square and Midtown South, saw the most foreclosures in the borough with eight. (Credit: iStock)

Manhattan foreclosures soar 118%, driven by mortgage defaults

15 East 63rd Street and Oleg Cassini (Credit: Google Maps and Getty Images)

Oleg Cassini’s former UES headquarters faces foreclosure

Mayor Bill de Blasio and Frank Carone (Credit: Getty Images)

City tapped De Blasio donor to take over foreclosed properties