Foreclosures hit a historical high late in 2008 when the housing market came to a screeching halt and the economy entered into the Great Recession. Ever since that day the economy has been struggling to recover and those who have had their homes foreclosed upon have been scrambling to right the sinking ship. However, in the more recent years, the economy has begun to recover and the effects of that recovery has been spread far and wide even reaching those housing that are being foreclosed upon. So, where do we stand today with the amount of foreclosures that we are currently enduring? According to the latest Corelogic National Foreclosure Report, “approximately 660,000 homes in the US were in some state of foreclosure as of May 2014.” This may seem like a lot of homes but this figure is actually down 37% from the 1 million homes in foreclosure in May of 2013. In fact, May was the 31st consecutive month in which there were year-over-year declines in the foreclosure rate. Mark Fleming, chief economist for Corelogic, revealed:
“Significant gains have been made in the last year to reduce the foreclosure stock. Yet, these improvements are occurring disproportionately in non-judicial states. The foreclosure inventory in judicial states is averaging 2.1% which is more than twice the 0.9% average that is occurring in non-judicial states.”
This means that the foreclosure process in 22 judicial states can take, on average, anywhere from 180-400 days according to the Mortgage Bankers Association. The lack of initial court intervention in non-judicial states means that the profess of foreclosure takes a lot less time meaning more judicial states have taken longer to catch up to the rest of the country in liquidating foreclosure inventory. Here are the 5 states with the highest foreclosure inventory as a percentage of mortgaged homes (which happen to be judicial states):
On the list of the 5 lowest foreclosure inventory states, only North Dakota uses a judicial process:
What does this mean for you? While some states have not recovered completely from the housing crisis of 2008, the country as a whole is on the right track thanks in part to a recovering economy. As more Americans rediscover the joy of homeownership the foreclosure inventory will continue to plummet strengthening the overall economy further. Good things are on the horizon and it is a very good thing that we are finally headed down the right path.