As a result of the moratorium on foreclosure actions many of the nation’s top financial institutions put in place late last year, there is a massive backup of about 1 million homes in mortgage delinquency that should have been foreclosed on by now, according to a report from USA Today. Currently, experts predict that about 2 million homes will be foreclosed on this year, down from the more than 3 million that would normally go through the process given current delinquency rates.
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As a consequence, property values in many parts of the country are being dragged down by the delays, and artificially restricting the recovery of the housing market, the report said. Some 6 million homes nationwide are currently in some stage of foreclosure or severe delinquency. Industry tracking firm RealtyTrac found that foreclosures in June were down 29 percent on a year-over-year basis and the average foreclosure process now takes 318 days as of the end of the second quarter, 41 days longer than during the same period last year.
However, the moratoria on foreclosures put in place by banks is not solely to blame for the delays. Many state governments also put restrictions on how many seizures banks could process as a result of the robosigning scandal that came to light late last year.
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