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A new report identifies five states with the most homes in foreclosure, and suggests a lengthy foreclosure process may be partly to blame.
The foreclosure process averages 140 days nationwide, an analysis by the website 24/7 Wall St. shows. But in states with the highest foreclosure rates, homes remain in foreclosure much longer -- 220 days on average.
What accounts for the difference? Court and judicial involvement, the 24/7 Wall St. report suggests.
Nine of the top 11 states with the most homes in foreclosure require a court or judge to oversee the process, according to 24/7. Also called foreclosure by judicial sale, it's a formal legal action that can take months and usually involves a short trial.
By comparison, nonjudicial foreclosures -- or foreclosures by power of sale -- do not involve the court and are resolved more quickly.
Some states allow for both judicial and nonjudicial foreclosures, so you may want to check with a local foreclosure attorney to discuss which option is best for you.
The effects of a longer foreclosure period can be seen in the top five states with the most homes in foreclosure. According to 24/7 Wall St., those states are:
5. New York, with 4.6% of homes in foreclosure. The average foreclosure processing period is 445 days -- the longest in the nation.
4. Nevada, where 5.3% of homes are in foreclosure. The average processing period is 116 days.
3. Illinois, with a 5.4% home-foreclosure rate. The processing period averages 300 days.
2. New Jersey, at 6.4%. The average processing period is 270 days.
1. Florida, at 11.9%. The processing period here averages 135 days.
In Florida's case, several other factors are also causing the state's high home-foreclosure rate, 24/7 reports. Those include falling home prices (down 49% since 2006), high unemployment (9.9%), and the highest mortgage-delinquency rate in the nation (17.4%).