Is Your State Still Struggling With Foreclosures?

The housing crisis flooded the real estate market with foreclosures, and while the number of foreclosed homes on the market has declined significantly in the last year, some states are moving through the backlog faster than others.

Foreclosure processes vary among states, one of the biggest differences being whether or not foreclosures require court action. The 24 states with such a requirement — called the judicial foreclosure process — hold more than two-thirds of the national foreclosure inventory, according to the CoreLogic foreclosure report from September 2013.

The lopsided foreclosure distribution has continued to grow. The 70.8% share of national foreclosures belonging to the 24 judicial states is a bit of a jump from last year, when it was 67.3%. The average share among those states from 2000 to 2006 was 57%.

The judicial process tends to slow things down. Of the states with the most completed foreclosures in the last 12 months, Florida is the only judicial state. Florida has the highest volume of homes in foreclosure, but also accounted for the most completed foreclosures: 115,000. California had the next highest completion figure, at 52,000 in the last 12 months, followed by Texas, Michigan and Georgia. Those five made up for nearly half of the completed foreclosures in the country, according to CoreLogic.

The 27 non-judicial states (including D.C.) hold 29.2% of the foreclosure inventory but accounted for 57.1% of completed foreclosures in the last 12 months. While that means judicial states completed a significant chunk of foreclosures, it also shows the difference in speed.

A longer processing period can be advantageous for homeowners who want to fight the foreclosure, and the distressed-property discount can be helpful for aspiring homeowners in the area who are unable to afford median-priced homes.

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At the same time, foreclosures hurt the value of nearby properties, and a drawn-out process keeps the consumers from moving on from the financial hardship and its effect on their credit profiles.

The five states with the highest share of homes in foreclosure, as a percentage of mortgaged homes, are all judicial states: Florida (7.4%), New Jersey (6.5%), New York (4.8%), Maine (4.0%) and Connecticut (3.7%).

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