Record-Long Foreclosure Delays Spread Past Judicial States: Barclays Capital

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Procedural problems cut the rate at which homes are moved from foreclosure to REO in half during October and November, but the drop did not occur in judicial states alone, according to research from Barclays Capital.

In October, several major lenders froze foreclosures when employees were found to be signing affidavits without reviewing the documentation, as required by law in 23 states. As a result, the rate servicers were able to move these properties through the process into REO status dropped 57% from the first 10 months of the year. It’s the lowest rate BarCap has ever measured (see chart below).

But states that do not have a judicial foreclosure system saw a 47% drop as well.

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