The average homeowner in foreclosure hasn’t made a mortgage payment in 507 days, according to a report published by Lender Processing Services, Inc. That’s a 25% increase from an average of 406 days at the end of 2009.
Such long processing times are leading to a huge inventory of houses in some form of delinquency or foreclosure. Nearly 4.8 million homes are in foreclosure, a nearly 10% increase from this time last year, the company found, and 7.8 times higher than historical averages.
And since few foreclosed houses are selling, the backlog is growing even more.
“Foreclosure inventory increases (up almost 10% during 2010) are being driven both by elevated levels of foreclosure starts as well as a very limited amount of foreclosure sale activity,” according to the report.
Mortgage modifications may not provide much relief. At the current rate, it will take four years to modify all the loans that homeowners want to change, according to a report by Fitch Ratings that was covered in a story by American Banker. The number of modifications completed each month continues to decline, with only 36,500 completed in December, down from 86,500 in April 2009.
Federal efforts like the Home Affordable Modification Program (HAMP) are making “little more than a dent” in the huge volume of distressed loans, Fitch found.