Christina Mlynski | Housing Wire |
While the housing market is on the mend — with progress even in the hardest-hit states — the backlog of homes in foreclosure and real-estate owned properties is still clogging the pipeline, analysts claim.
The East Coast is a testament to such findings, where the duration of the foreclosure process is high in large part to judicial foreclosure procedures in states using that process, according to the Federal Reserve Bank of New York’s latest report.
The volume of distressed properties continues to impact housing momentum, and consequently, there is a compelling need for improved public policy on the local and national levels to minimize losses and externalities resulting from foreclosures and REO inventory, explained Diego Aragon, Richard Peach and Joseph Tracy of the NY Fed.
As of March 2013, nearly 3% of all first-lien loans secured by one-to-four-unit residential properties were 90-plus days delinquent, essentially unchanged from the June 2012.
In contrast, the percentage of loans in foreclosure, which leveled off around 4% from 2011 through 2012, declined to 3.5% by early 2013, the report noted.
The decline in the percentage of loans in the foreclosure process was due to a sharp decrease in the number of loans flowing into foreclosure, such that for the past nine months more loans have moved out of foreclosure than moved in.