Clogged Foreclosure Pipeline

Clogged Foreclosure Pipeline

At first glance, the housing market coupled with the foreclosure rate may seem to be improving, which initially may appear to be an upswing in the economy. In actuality, that is far from accurate.

The sad truth of the matter is the rate of new foreclosures is only slowing because foreclosing lenders are so swamped with the properties already active in foreclosure that they simply don’t have the time or resources to keep up. It used to be you could estimate that a foreclosure sale would take place in 4-6 months after the loan went into a defaulted status, or in other words, a payment was missed. Now, that timeframe is closer to 8-10 months. I read a statistic the other day that claimed between 20-25% of loans that have been delinquent for a year have not yet entered foreclosure status. A year – pretty crazy, right?

For those of us not in the lending business, this cloud has a silver lining: we have time now. A few years ago, you had to scramble to get your documentation into your lender in the hopes of possibly getting the foreclosure sale postponed so you get the chance to have your voice heard. Now we have more time to secure workouts and to close short sales. This allows for a far greater chance for sellers in financial hardship to find long-term relief. To get started, call Emily today!

Melissa

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