Although rates for foreclosure starts and sales remain volatile, one underlying trend continues: foreclosure inventory in judicial states is still three times higher than that of non-judicial states, according to ""Lender Processing Services"":http://www.lpsvcs.com (LPS).[IMAGE]
As of the end of January 2013, the share of loans in foreclosure inventory in judicial states stood at 5.69 percent compared to 1.79 percent for non-judicial states, according to LPS' most recent mortgage monitor report. The national average sits at 3.41 percent.
Judicial states also held more aging past due loans. In judicial states, 58 percent of loans in foreclosure inventory are past due by more than two years compared to 33 percent for non-judicial states, according to LPS.
At the same time, foreclosure sale rates in non-judicial states are more than twice as high as the rate in judicial states.[COLUMN_BREAK]
However, LPS noted two non-judicial states, Nevada and Massachusetts, are seeing longer foreclosure timelines after implementing judicial-like processes.
""Nevada's 'time to clear' has extended from 27 months in January 2012 to 57 months as of January 2013. The change in Massachusetts has been even more pronounced. Since June of last year, its pipeline ratio has gone from 75 to 171 months,"" said Herb Blecher, SVP of applied analytics at LPS. ""As California's recently enacted Homeowner's Bill of Rights is closely modeled on the Nevada legislation, we'll be watching that state closely over the coming months to gauge its impact, as well.""
At the current rate, LPS' data revealed it will take 62 months to clear foreclosure inventory in judicial states compared to 32 months in non-judicial states.
""A few judicial states Ã¢â‚¬" New York and New Jersey in particular Ã¢â‚¬" have such extreme backlogs that their problem-loan pipelines would take decades to clear if nothing were to change,"" Blecher added.
The data provider also found new problem loan rates declined slightly in non-judicial states over the last six months, while judicial states have seen a near 20 percent increase. According to the report, much of these new problem loans are 2005-2007 vintages.
LPS also found states with a large number of underwater borrowers struggle with new problem loans. LPS noted sand states such as Nevada, Florida, and Arizona have an especially high share of underwater borrowers--45 percent, 36 percent, and 24 percent, respectively.