The foreclosure backlog continues to build up and delinquent borrowers are able to spend more time in their homes before the lender repossesses the home. Today, when a borrower defaults, they continue to live in the home, without payment, for one year and nine months. This length of time between default and repossession is more than twice as long as it was three years ago.
The number of defaults in the pipeline has been huge, and lenders have had to pick and choose which ones to deal with. In August there were 4 million homes 90 days late on payment or in foreclosure. Many of the delinquent borrowers are delinquent for the second time. They caught up on their payments once, but now they aren't paying again. Until these foreclosures are pushed through the system and exposed to the market their numbers will continue to weigh on expectations and values.