Foreclosure timelines are growing more bloated, largely due to sustained government intervention in the housing market, according to RealtyTrac's March U.S. Foreclosure Market Report. At the same time, foreclosure activity continues to subside, drifting closer to pre-meltdown levels, RealtyTrac reported.
"Although the overall national foreclosure trend continues to head lower, late-blooming foreclosures are bolting higher in some local markets where aggressive foreclosure prevention efforts in previous years are wearing off," said Daren Blomquist, vice president at RealtyTrac. "Meanwhile, more recent foreclosure prevention efforts in other states have drastically increased the average time to foreclose, which could result in a similar outbreak of delayed foreclosures down the road in those states."
REO sold image via Shutterstock.
The average time it took a lender to repossess a home in the first quarter of 2013 jumped by 15 percent from the fourth quarter of 2012, rising from 414 days to 477 days. Last quarter's average timeline is the longest that RealtyTrac has recorded, the company said.
At the same time, repossessions of foreclosures in March dropped to their lowest level since September 2007, decreasing 3 percent month over month and 21 percent on an annual basis to 43,597 properties.
The number of foreclosure filings -- default notices, scheduled auctions and bank repossessions -- fell by 1 percent in March from the previous month to 152,500 properties, RealtyTrac said. That's down 23 percent from a year earlier, according to RealtyTrac.
Daren Blomquist said legislation enacted in the last eight months in California, Oregon and Massachusetts is partly behind the increase in foreclosure timelines. In addition, servicing standards stipulated in the National Mortgage Settlement are also causing the five largest lenders to slow down many foreclosures, he said. He added that many of those standards could be included in the Consumer Financial Protection Bureau's new servicing rules, hinting that those rules could also drag out foreclosures.