I got this question the other day.
"Hey, can you answer this question for me? How are
judicial foreclosures slowing the recovery down?”
Here is the deal. The housing market has continued
to show slow signs that it is strengthening for some states.
It all depends on whether or not the state is a non-judicial
foreclosure state or a judicial foreclosure state.
Let’s briefly go over what the difference between a judicial
and a non-judicial state. A judicial foreclosure state is
one in which the lender has to go through the court system
to pursue a foreclosure. In a non-judicial foreclosure, the
lenders can foreclose on a property without court approval.
For judicial states, the judicial procedure is a long
process and takes many months to complete a foreclosure.
With the number of foreclosures that are plaguing these
states, the courts are backed up and are unable to keep on a
time frame.
The judicial procedure is what is going to prevent the
housing market from recovering quickly. The inventory that
is currently on the market at this time in the judicial
foreclosure states are still relatively high and thus keeps
the prices down on the homes within these states.
There is a lack of judges to handle the court cases in the
judicial foreclosure states. Many states have rehired
judges from retirement to assist with the back log of
foreclosure proceedings.
Another reason is the amount of fraud in these states. As
the files go through the process, they need to check the
documents for accuracy and many of the cases that are in the
court system are tagged with fraud. So many mortgages were
with MERS that the lenders are having to go back through and
correct the issues before they can foreclose on the
property. So that is my answer. What do you think?
Charles Gardner, Realtor
Charles.gardner@ziprealty.com
http://ZipRealty.com/agent/cgardner
Phone: 281-940-HOMZ (4669)
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