Here’s an interesting tidbit from Diana Olick over at RealtyCheck.
Former Credit Suisse analyst Ivy Zelman, the one that came up with the infamous mortgage rate reset chart, said on average it takes 417 days for a lender to send a foreclosure notice after a borrower stops making mortgage payments.
Yep, 417 days. More than a year. Oh, and it can take another year after that for the bank to finally reclaim the property and boot out the homeowner.
You may even get a couple thousand if you play nice and return the keys to the lender and don’t steal anything.
Of course, this is just the average number of days it takes, and I’m not sure where she pulled the figure from. But it does highlight the incredible backlog banks and mortgage lenders are dealing with.
Zelman was making a point about the shadow inventory, which is the pending supply of homes not included in the official numbers.
So when you see those numbers released by the census bureau each month that show supply slipping, it’s not entirely accurate, not by a long shot.
That’s why we might see even more downward pressure on home prices throughout the year.