Interesting Loop Hole Found in Housing Inventory


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Judicial Foreclosures Responsible for 70% of Past Due Loans
Overall, mortgage foreclosures continue to fall, but those in judicial foreclosure states account for nearly 75 percent of the U.S. foreclosure market according to the latest Mortgage Monitor Report by Black Knight Financial Services.  Although judicial states comprise 42 percent of all active U.S. mortgages, these states have more than 70 percent of the country’s past-due loans. Judicial states such as New York, Florida and Hawaii, have mortgages that average more than 1,250 days past due—the highest of all states. Non-judicial foreclosure states have 3.5 times less inventory as the judicial foreclosure states, according to data from the Black Knight report.

See: Foreclosures Drop to Pre-Crisis Levels

“Nationally, the foreclosure inventory rate has declined for 26 straight months, and is currently at its lowest point since April 2008,” said Kostya Gradushy, Black Knight’s Manager of Research and Analytics. “But this can obscure the stark difference that remains between judicial and non-judicial states.”

The report also found that home sales volume has increased during the spring and summer although the numbers don’t tell the whole story of what areas the increase is in. While higher priced home inventory has increased, lower priced homes are harder to find. Short sales as a percentage of distressed sales have dropped to less than 34 percent at the end of June from its peak of 60 percent at the end of 2012.

See: Housing for Sale but Not for First Time Home-buyers

Black Knight also looked into loan modifications which have decreased to about 45,000 mods a month during the last five months of this year. More than half of these mods are handled by Home Affordable Modification Program (HAMP), with May seeing more than 60 percent of the modifications as HAMP mods.

Delinquent foreclosures in judicial state are averaged to 1,084 days compared to non-judicial state foreclosures that hold an average of 775 days delinquent. These numbers should be considered when researching and collecting data on foreclosures and inventory; the difference between judicial and non-judicial foreclosures could mean major changes in the published number of shadow inventory, zombie inventory and accurate foreclosure numbers nationwide.

“Making Homes Affordable Program” 6 August 2014

DS News. “Judicial Foreclosures Make Up Majority of Inventory” 6 August 2014


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