Here is a fascinating data point:
The delay between the first late payment and a foreclosure referral varies widely from state-to-state. It used to be a good rule of thumb that by the time the 3rd payment was missed (90 days) foreclosure proceedings were likely to begin.
But some states allow take 8, 10 even 12 months to foreclose. LPS Applied Analytics reported this week the average length of time it takes to refer a home to foreclosure. The five slowest states:
Massachussets 373 days
California 367 days
New York 344 days
Maryland 358 days
Florida 307 days
A year to foreclosure is considered by attorneys and analysts to be quite a long time. It strongly implies that the banks and law firms processing these are disorganized and under-staffed.
Of course, putting adequate resources is expensive. Its much cheaper to do this in a half-assed, illegal fashion.
Foreclosures are supposed to be hand-crafted legal proceedings. Despite this, many players have been mass producing them, and even with this illegality, the backlog is still enormous.
More Foreclosures, Please . . . (March 25, 2010)
LPS Mortgage Monitor
December 2010 Mortgage Performance Observations
Data as of November, 2010 Month-end
South Florida Sells More Residences in 2010 Than 2006 Peak, But at Highly Discount Prices
(Real Estate Channel 12/29/10)
Florida is No. 4 in nation for slow pace of foreclosing on delinquent homeowners
(Palm Beach Post, Dec. 29, 2010)