LPS Mortgage Monitor has come out with a comprehensive series of charts including the current level of foreclosures, delinquencies by year of origination, length of time homeowners have not made a payment in judicial states, states with largest drops in non-current mortgages and foreclosure rates in judicial vs non judicial states.
The states with the biggest declines in non current mortgages are all non-judicial states in which the mortgage foreclosure process is not delayed through the court system. Expect the non-judicial states to see the quickest return to a stable residential real estate market by repossessing properties from owners who are no longer able to afford them.
Foreclosure inventories remain 2.5 times higher in judicial states, causing a large shadow inventory which puts downward pressure on home prices.
Is the fastest cure for the current real estate crisis a speedy resolution of the foreclosure process and putting homes into the hands of owners who are able to afford them?
The next major threat is a withdrawal of funding of good borrowers as agencies are shut down and banks refuse to re enter this very high risk arena. The supply of cash buyers is a shallow pool.