Barclays: Foreclosure Backlogs Are Worst in Florida, New York
By Nick Timiraos
The Wall Street Journal
March 15, 2010
A recent report from analysts at Barclays Capital sheds light on how court procedures and efforts to delay foreclosures have swelled the backlog of busted home mortgages in some of the nation’s hardest-hit housing markets.
Unsurprisingly, foreclosure backlogs remain the longest in so-called judicial states, including Florida, Illinois and New York, where judges are required to sign off on foreclosures. (This Page One story last year examined the workings of one such Florida courtroom). Markets in those states generally have the slowest rates of properties that go into foreclosure and back to the bank, and while that could ease the pain on the way down, it also threatens to delay any recovery.
Barclays analysts estimated the total of loans that had been liquidated through the foreclosure process since January 2008 as a fraction of all loans, and then compared that statistic to the share of loans that are currently 90 days or more past due and are waiting to go through foreclosure.
While Las Vegas has the largest share of loans that are seriously delinquent, at 23%, that market is about 38% finished with its liquidation process. Only Denver, which has a much smaller share of delinquent loans, is further along—it may be 46% finished with its liquidation process. Other Western markets, including Los Angeles, San Francisco and San Diego, have cleared through around one-third of their delinquency backlogs. Barclays analysts say that, indeed, California “may lead other bust states in a recovery.”
The New York metro area, on the other hand, has suffered from far less severe price declines than the West, but among the top 10 markets, its backlog of dud loans is second only to Las Vegas, with a delinquency pipeline that represents 21% of all loans. The analysts also say it is “remarkable” that Miami, one of the hardest hit housing markets in the bust, is just 18% of the way through its process of liquidating delinquent loans.
% liquidated % delinquent % finished
Boston 3 8 27
Chicago 3 12 22
Denver 7 8 46
Las Vegas 15 23 38
Los Angeles 5 11 31
Miami 3 15 18
New York 6 21 21
San Diego 6 10 38
San Francisco 5 8 37
Washington 4 9 32
Source: LoanPerformance, Barclays Capital
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