While the national foreclosure inventory has declined for 26 consecutive months to 951,000 mortgages, there remains a significant imbalance between the volume of loans in foreclosure in judicial and nonjudicial foreclosure states.
Foreclosure inventory in judicial states is 3.5 times greater than nonjudicial states, Black Knight Financial Services said in its mortgage monitor report, released Monday with data through June.
More than 70% of loans in foreclosure are in judicial states. Furthermore, more than 60% of these loans have been past due for at least two years, the Jacksonville, Fla.-based data analytics and technology provider said. Loans in foreclosure in judicial states have been delinquent an average of 1,084 days, compared to 775 days in nonjudicial states, Black Knight added.
The states with the highest number of average days past due for loans in foreclosure are all judicial states: New York and Hawaii are each above 1,300 days, while New Jersey and Florida both surpassed 1,200 days.
"Today, the share of loans in foreclosure in judicial states is 3.2%—a significant decline from its January 2012 high of 6.6%, but still more than four times higher than the pre-crisis 'norm,'" said Kostya Gradushy, manager of research and analytics for Black Knight Financial Services.
Black Knight also reported that home sales volume has increased due to seasonal effects. However, distressed sales continue to fall, particularly short sales, which now account for 34% of this diminishing volume. At the end of 2012, Black Knight said short sales represented nearly 60% of all distressed sales.
Meanwhile, even though short sale discounts are shrinking, Black Knight said REO properties remain stable at 25%.