New York foreclosure courts face seven-year backlog: RealtyTrac
At the rate the New York court systems are currently working through the backlog of foreclosure cases, it will take more than seven years to clear, according to RealtyTrac. New York is a judicial state, whereby foreclosures are completed through the court system. But as cases mounted, the state developed the largest foreclosure timeline in the country. It currently takes an average of 900 days for a foreclosure to wind through the New York system, according to RealtyTrac, which maintains a count of filings at the county level. At the end of April, New York held an inventory of 39,000 properties that received the initial foreclosure notice or had been scheduled for auction but remain unsold. Daren Blomquist, the editor of the RealtyTrac's monthly reports, said there is some estimation involved because the firm doesn't automatically remove a property from the active inventory if there has been no update or sale within a certain number of days. New York averaged 314 scheduled auctions and 224 repossessions to REO per month so far in 2011. That's down from roughly 700 auctions and 520 REO each month last year. Assuming only half of the 39,000 ends up being foreclosed and the rate of repossession holds, it would take 87 months to clear this inventory, Blomquist said. One California investor said New York is of particular interest because investors like him usually hold the note on the loan and are waiting for the property to move through foreclosure before they can resell. "So, looking at the rate at which these loans are moving through the system, it could take years to work through the backlog," according to the investor, who preferred not to be named. In the meantime, however, home prices in extended-timeline areas aren't seeing the negative effects other states with quicker timelines are experiencing. "One of the biggest drivers pressing prices down right now are distressed properties, and they are not clearing through the system in New York," the investor said. "That's why you haven't seen home prices fall all that much compared to other states." Foreclosure timelines in Florida quadrupled in the first quarter. In the Sunshine State, it takes an average 679 days to complete a foreclosure in the judiciary process, up from 169 days one year ago. But one circuit court in Florida implemented a quicker system to move loans through the system. However, complaints and efforts to block the "rocket docket" arose in April. New York, on the other hand, implemented new rules giving homeowners more protections in February, which may further delay not only the process but a recovery. Write to Jon Prior. Follow him on Twitter @JonAPrior.