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Sam Gendusa September 23, 2013

Judicial foreclosure states are facing extended foreclosure timelines and creating a property backlog. What does this mean for residential mortgage-backed security (RMBS) investors? Longer timelines can mean greater risks. The latest Servicer Dashboard report suggest RMBS investors in judicial foreclosure states will notice increased carrying costs to accompany the extended timelines.

What is judicial foreclosure? Does where I live operate by a judicial or non-judicial foreclosure process? Time frame and terms vary by state, but both processes relate to how each state handles real estate foreclosures. A judicial foreclosure begins when a lender files a complaint describing the debt, the amount owed, and the borrower’s default. The complaint is asking the court to allow the lender to foreclose and for the owner to take possession of the property. Non-judicial foreclosures involve no court intervention. In other words, in states operating by judicial foreclosure, properties cannot be sold at auction until they have gone through the court system.

According to RealtyTrac, judicial only states include Connecticut, Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Carolina, and Vermont. Judicial foreclosures are also frequently practiced in Arkansas, Hawaii, Oklahoma, South Dakota, and Wisconsin.

RMBS investors in these states are facing a backlog of properties and extended foreclosure deadlines. These states continue to be overwhelmed with pending foreclosures! Real estate experts believe foreclosure timelines will continue to lengthen.

With foreclosures still pending for millions of properties, the details and reporting surrounding these cases can be overwhelming! Our document retrieval company, Blue Streak Docs assists with the unique needs of real estate attorneys and mortgage professionals. We understand the time and dedication it can take an office team to execute property title searches, current owner searches, property report retrieval, and document recording. Happily offering those services, we free up your staff to tackle bigger issues! For more information about Blue Streak Docs, contact us today at 727-479-0007.


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