While the overall housing market is finally starting to recover following the mortgage crisis, homeowners in many areas still face foreclosure. In certain states, a foreclosure can take a very long time to be completed -- sometimes as long as a few years. Read on to learn which states have lengthy foreclosure timelines and the factors that influence how long a foreclosure may take.
Overall Foreclosures Are Decreasing, But Foreclosure Timelines are Increasing
The number of homes being foreclosed is at its lowest level in more than five years, which indicates that the foreclosure crisis is tapering off. However, while data shows that the number of foreclosures is dipping, foreclosure timelines are getting longer.
According to RealtyTrac (an online marketplace for foreclosure properties and real estate data), the timeline for the foreclosure process recently reached a record high. Based on the data, it took on average:
- 477 days (around 16 months) to process a foreclosure in the first quarter of 2013
- 414 days (about 14 months) in the previous quarter, and
- 370 days (about 12 months) in the first quarter of 2012.
In fact, there are multiple states where a foreclosure takes more than a year to complete and, in the states with the longest timelines, a foreclosure can take as long as three years.
This means that if you a facing foreclosure in a state where it takes a considerable amount of time to complete the process, you will have plenty of time before the foreclosure is done to:
- try to refinance of your mortgage under the government’s Home Affordable Refinance Program (HARP) (the deadline to apply was recently extended to December 31, 2015)
- negotiate an alternative to foreclosure, or
- live in your home without making a payment before the foreclosure is completed. (To learn more, see How Foreclosure Can Save You Money.)
Ultimately, the longer the foreclosure takes, the better it is for you.
To learn about your options if you are facing foreclosure, get Nolo's The Foreclosure Survival Guide.
Judicial Foreclosures Take Longer
Depending on your state and your circumstances, a foreclosure will be either nonjudicial or judicial.
Nonjudicial foreclosure. If you’re in a nonjudicial foreclosure state, the lender does not have to go through the state court system to foreclose.
Judicial foreclosure. Judicial foreclosures go through the state court system, which means the courts are involved in every step of the foreclosure. As a result, the judicial foreclosure process often takes a lot longer than a nonjudicial one. Backlogged courts, judges’ schedules, hearings, and required paperwork all contribute to a prolonged process. Courts are simply unable to process a large volume of foreclosures in an expedited manner.
To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see our Judicial v. Nonjudicial Foreclosure topic area.
Homeowner Protection Laws Delay Foreclosures
Another reason that certain states have long timelines is due to foreclosure prevention efforts by the government.
Foreclosure laws. California, Massachusetts, and Nevada, for instance, have all passed laws to increase homeowners' protections from foreclosure, which delayed the rate at which new foreclosures were initiated. (See California Foreclosure Protection: The Homeowner Bill of Rights, for example.) However, lenders are steadily gaining efficiency in how they deal with these laws.
Mediation laws. Some states passed foreclosure mediation laws that delay the foreclosure process. See our State Foreclosure Mediation section for more information.
Hawaii and Oregon (which were historically nonjudicial foreclosure states) implemented new mediation programs that resulted in lenders filing most new foreclosures in court, rather than proceeding nonjudicially.
In fact, a report by the Hawaii Department of Commerce and Consumer Affairs in December of 2012 revealed that lenders did not file any nonjudicial foreclosures after implementation of the mediation law, choosing instead to proceed with the judicial process so they could bypass the mediation program. (To learn more about Hawaii’s foreclosure mediation program, see Hawaii's Mortgage Foreclosure Dispute Resolution Program.)
In Oregon, most lenders chose to proceed judicially following the implementation of the mediation law and an unrelated appellate court ruling on lenders’ assignment recording practices. This slowed the timelines in those states significantly. However, on June 4, 2013, Oregon enacted SB 558 and closed the loophole that allowed lenders to bypass the foreclosure mediation program. The new law expands the program to cover judicial foreclosures, which takes away the incentive for banks to proceed judicially rather than nonjudicially. While it is expected that lenders will go back to using the nonjudicial process in Oregon, mediation will still slow down the process. For more information on Oregon’s foreclosure avoidance mediation program, see Oregon Foreclosure Mediation.
Hawaii's legislature is also working to amend its mediation laws to prevent lenders from avoiding the program, though the bill addressing this issue (SB 1370) has stalled.
The national mortgage settlement. Servicing standards required by the national mortgage settlement are also slowing down the process. Read more about the national mortgage settlement.
Top Five States With the Longest Foreclosure Timelines
The following states currently take an exceptionally long time to complete the foreclosure process.
New York currently has the longest foreclosure timeline, averaging 1,049 days (just under three years). To learn about the specific foreclosure laws in New York, see our Summary of New York’s Foreclosure Laws.
New Jersey has the second-longest timeline, coming in at 1,002 days. To learn about the specific foreclosure laws in New Jersey, see our Summary of New Jersey’s Foreclosure Laws.
In Florida, it takes 893 days on average to complete a foreclosure. To learn about the specific foreclosure laws in Florida, see our Summary of Florida’s Foreclosure Laws.
The foreclosure process in Hawaii takes on average 824 days. To learn about the specific foreclosure laws in Hawaii, see our Summary of Hawaii’s Foreclosure Laws.
Illinois foreclosures take an average of 720 days to complete. To learn about the specific foreclosure laws in Illinois, see our Summary of Illinois Foreclosure Laws.
States With the Fastest Foreclosure Timelines
On the flip side, the foreclosure process in Texas is relatively quick, averaging 159 days. Virginia, Delaware, Maine, Alabama, and Georgia, as well as several other nonjudicial foreclosure states, also have short timelines, generally averaging a few months to complete the process.