Judicial Foreclosure Fallouts

As the housing market continues to inch towards improvement, a backlog of foreclosures continues to slow it down. Industry analysts are now suggesting that one of the foreclosure laws intended to protect consumers is partially to blame for this clog in the system.

Judicial vs. Non-judicial Foreclosure

States have variations in their foreclosure laws, one of which being whether the courts get involved in the proceedings or not. In a non-judicial foreclosure state, lenders are not required to obtain court approval before foreclosing on a home. On the other side, judicial foreclosure states require that the lender file complaint with the court, prove they made good faith efforts to collect on the debt prior and wait for the court to manage the foreclosure. The average judicial foreclosure now takes upwards of 300 days or more to complete.

Many are now blaming much of the backlog in foreclosure processing on the judicial process, stating that the numerous foreclosure filings presented to the court are slowing down the completion of the process. Further, the high volume of foreclosure cases the court is required to process is causing delays in the economic recovery we have been hoping for. For borrowers, many are left up in the air about their eviction date and their financial futures as they wait for the courts to complete a process that may have been avoided had the lender extended mortgage debt help prior to getting the courts involved.

Since each state carries different specifics in terms of the foreclosure laws, anyone at risk of losing their home should consult a foreclosure attorney to review their case. In many cases, an attorney can help negotiate an alternative solution before the home enters, what could be, a lengthy foreclosure process.