U.S. Foreclosure Rate Slows as Repossession Timeline Lengthens
Chicago Tribune
By Alejandro Lazo
Increased scrutiny of how lenders foreclose on Americans has dragged the repossession process out to unprecedented lengths, driving down the pace at which banks are taking back homes.
Big banks are taking longer not only to push borrowers into foreclosure but also to move homeowners through each stage of the process than in previous years, according to a report by RealtyTrac released Thursday.
The extended timelines have meant a reprieve for troubled borrowers. But economists said the delays could hold back a national housing rebound if foreclosures remain a significant part of the market for years to come.
...Some economists are concerned that a slower foreclosure process will mean that the housing recovery will take longer to get going. Foreclosures tend to sell at a discount, and, when making up the bulk of sales in a market, give the perception that prices are falling. In addition, residential builders are struggling to compete with foreclosed homes. Homebuilding has typically been an important boost to an economy exiting recession.
"Clearing this stuff out and getting this stuff over with is just essential, and so in the long run the faster these things can be resolved now, the better," said Richard Green, director of University of Southern California's Lusk Center for Real Estate. "That is the only point at which the market can resume normalcy."