Expensive Homes Take Longer to Foreclose

?Data from national mortgage trackers and other financial analysts indicate that foreclosures take longer for more-expensive homes than for less-expensive ones. The data from the first half of this year shows that nearly 400,000 homes in the U.S. were repossessed by lenders or sold to others at foreclosure auctions. The time disparity shows up when you see that the more-expensive homes were delinquent an average of about 650 days at the time they were repossessed or sold, while the less expensive homes were delinquent an average of just 330 days, or about four months less total time in default.

After dividing homes into categories of inexpensive homes valued under $417,000 and the more costly homes valued from $417,000 to $999,999, the research showed that homeowners in the more expensive houses had more time in their homes without having to make mortgage payments in 45 out of 50 states and the differences in time ranged from days in some instances to several months in others.

Various bank spokesmen have maintained that loan size does not affect the foreclosure process and that lenders are not showing favoritism to wealthier people. Instead, they point out that people who can afford to buy expensive homes might have more resources to delay foreclosures and that other factors are probably affecting the time lines. One of those factors might be the type of loan itself as loans below $417,000 are most often owned by the twin mortgage giants Freddie Mac and Fannie Mae who both have simpler foreclosure processes that lead to faster resolutions than loans held by other lenders. The larger loans found on more expensive homes tend to be held by other lenders or investors who might be putting off having to take the larger losses that can occur when expensive homes go into foreclosure.