To get a sense as to how serious the real estate problem is, a national study shows that it would take more than 10 years to clear up all the pending foreclosures in Connecticut.
And of course Connecticut is not the worst state for real estate problems.
Next door in New York state, it would take lenders 62 years at the current pace to repossess the 213,000 houses now in severe default or foreclosure, according to calculations by LPS Applied Analytics, a prominent real estate data firm,” according to a New York Times story.
In the 27 states – including Connecticut, New York and Massachusetts – homeowners in default on their mortgages can live for years for free because it now takes much longer for banks to foreclose and evict homeowners. In each of these states judges must approve foreclosures.
There are 21,762 home owners in Connecticut that are 90 days or more behind on their mortgage payments, the report (available below) shows.
“At the current pace of foreclosure sales (and please note, these sales are when the lender takes possession or there is some other involuntary liquidation – not if you or I were to purchase a foreclosed property from the bank), it would take 245 months, or just over 20 years, to work through the loans currently either 90+ days delinquent or in foreclosure,” Mitch Cohen, Sr. Vice President, Managing Director, of MPRG, told CtWatchdog. MPRG represents LPS Applied Analytics.
The problem for banks will get worse and homeowners will have even more breathing room as millions of additional homeowners stop paying on their mortgages as more people lose their jobs or are unable to find new work.
Of course banks themselves have caused much of the delay by initially submitting fake documents to courts in the 27 states that require judicial approval for foreclosure. Now owners can hire real estate attorneys for as little as $1,500 a year for force banks to jump through hoops to prove they actually own the mortgages.
Plus, banks in some states are delaying foreclosure because they don’t want to end up managing hundreds of thousands of unwanted homes when few are buying.
“If you were in foreclosure four years ago, you were biting your nails, asking yourself, ‘When is the sheriff going to show up and put me on the street?’ ” said Herb Blecher, an LPS senior vice president. “Now you’re probably not losing any sleep.”
“Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.”
Click below to see data from all states:
- Homeowners In Default Are Living Free For Years In Their Homes Without Making Mortgage Payments
- Home Foreclosures: Bank Of America Joins Other Banks In Ct and 22 States In Freeze
- Wave Of 4 Million Foreclosures Coming Soon
- $25 Billion Mortgage Settlement Appears As More Hype Than Help
- Ct Atty Gen Investigating GMAC/Ally Defective Foreclosure Documents, Demands Halt To Foreclosures
- Massive Foreclosure Investigation Launched In All 50 States