22 Apr Foreclosure Prevention Efforts Bring Longer Foreclosure Timelines
If 13 and a half months sounds like a long foreclosure timeline, try more than one year and nine months on for size. Recent reports from two major sources confirm that drawn out foreclosures have been the norm for 2013’s first quarter.
As reported on DSNews.com, the online foreclosure marketplace RealtyTrac recently revealed that the average time to foreclose went up in 39 states in the first quarter of this year compared to the previous quarter. The rise from 414 days to complete a foreclosure in the previous quarter to 477 days in the first quarter is, RealtyTrac says, likely due to continuing foreclosure prevention efforts. The new number was the highest average since the first quarter of 2007.
Meanwhile, Moody’s Investor Services published in their Servicer Dashboard that foreclosure timelines increased for all servicers in the fourth quarter. Known to have a high concentration of its loans in judicial states, GMAC had the longest foreclosure timelines across all categories of loans. Bank of America however, which has been transferring its non-performing loans, has experienced shorter foreclosure timelines as of late.
Overall, REO timelines were flat, though California and Florida had shortened theirs in the fourth quarter, and Moody’s predicts REO liquidation timelines will slowly improve. They also made the correlation of a strong Ocwen presence in those states.
Moody’s also stressed that to ensure accuracy in the loss mitigation process for residential mortgage-backed securities, servicers should update their net present value (NPV) model inputs using the most recent reliable information available, including property valuations, home price trends, REO discounts, and borrower’s income and willingness to pay.