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Friday, July 15, 2011

1,000,000 American Foreclosures Delayed until 2012

In the United States an estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until 2012, according to the latest report by RealtyTrac.

While the delays give more home owners time to catch up on their payments and try to avoid foreclosure, housing experts warn this means the looming shadow inventory of distressed properties likely will continue to plague the US real estate market years to come.

"The best-case scenario is we don't get back to normal levels of foreclosure activity until 2015, which means the housing market recovery gets delayed by at least a year," says Rick Sharga, a senior vice president at RealtyTrac.

Overall, the number of American homes repossessed by lenders in the first half of this year dropped 30% compared to the same period in 2010. But foreclosure processing delays (lenders taking longer to take action against delinquent borrowers) is stalling the foreclosures.

About 1.2 million homes received a foreclosure-related notice in the first six months of this 2011, roughly one in every 111 American households.

Nevada has the most foreclosures; one in every 21 households in Nevada received a foreclosure notice in the first half of 2011.

The foreclosure process continues to lengthen too. From April and June, American homes took an average of 318 days to go from the first stage of foreclosure to being repossessed by the lender — up from 298 days in the first three months of 2011. (In New York State, the foreclosure process took the longest at an average of 966 days or 2.6 years; Texas boasted the shortest at 92 days.)

Source: “Delays in Bank Processing Push Likely U.S. Foreclosures Until 2012, Stalling Recovery,” Associated Press (July 14, 2011)

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