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Price Declines Inevitable for Many States Due to Backlog: Agency

Based on its database, ""YouWalkAway.com"":http://www.youwalkaway.com/ foresees an inevitable decrease in property values due to backlog and delays in processing foreclosures.

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The foreclosure agency said that 40 percent of its client base comes from California and Florida. In these states, the years' worth of backlog building up could ultimately be detrimental to the regions' housing markets, the agency said.

For example, in Florida, 45 percent of YouWalkAway.com clients are in pre-foreclosure status, and on average, they are 17 months past due and still have not received their first formal foreclosure notice.

In California, 59 percent of the agency's clients are in pre-foreclosure status, and on average, they are 15 months behind and still haven't received a foreclosure notice.

""Eighty-five percent of the homeowners we're working with are in pre-foreclosure and have not made a mortgage payment for an average of 14 months,"" said YouWalkAway.com CEO Jon

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Maddux. ""It is astounding to realize these numbers haven't been reported by other foreclosure monitoring services, because these homeowners aren't technically in foreclosure. This data points to significant backlog, eventual foreclosure activity and predicts a drop in value for home prices. ""

According to the agency's database, states such as Minnesota, North Carolina, Maryland, and Texas may also face a wave a foreclosures, which will depress home prices. In those states, more than 80 percent of the agency's clients reported they are, on average, about 14 months behind, but still not in foreclosure.

""Unfortunately new homeowners and investors may see a significant devalue of their properties due to the substantial amount of shadow inventory. The longer it takes to begin the foreclosure and process the property through the system, [the] longer it will take for housing market recovery,” said Maddux.

According to the agency, the current delays in foreclosure processing combined with the volume of shadow inventory indicates the road to recovery may be longer than what has been assumed.

*States with the highest % of clients not in foreclosure, average months delinquent*

Minnesota (96%) 12 months
North Carolina (88%) 13 months
Maryland (88%) 19 months
Texas (85%) 16 months
Oklahoma (84%) 8 months
Washington (79%) 13 months
Nevada (79%) 13 months
Georgia (75%) 12 months
Michigan (73%) 18 months
Virginia (72%) 18 months

About Author: Esther Cho

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