According to the latest report from RealtyTrac, an estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until next year. While the delays could give home owners more time to catch up on their payments and try to avoid foreclosure, housing experts warn this means the looming shadow inventory of distressed properties likely will continue to plague the real estate market even longer. "The best-case scenario is we don't get back to normal levels of foreclosure activity until 2015, which means the housing market recovery gets delayed by at least a year," says Rick Sharga, a senior vice president at RealtyTrac.
Overall, the number of homes repossessed by lenders in the first half of this year dropped 30% compared to the same period in 2010. But foreclosure processing delays — with lenders taking longer to take action against delinquent borrowers — is stalling the housing recovery. About 1.2 million homes received a foreclosure-related notice in the first six months of this year — or one in every 111 U.S. households. Nevada continues to face the most foreclosures; one in every 21 households in that state received a foreclosure notice in the first half of the year.
The foreclosure process continues to lengthen too. From April and June, homes took 318 days on average to go from the first stage of foreclosure to ultimately where it was repossessed by the lender— that’s up from 298 days in the first three months of the year. In New York, the foreclosure process took the longest at an average of 966 days or 2.6 years; Texas boasted the shortest at 92 days.