Foreclosure Inventories – Judicial vs Non Judicial States
Interesting data from Michelle Meyer, BofA Merrill Lynch, regarding foreclosure inventories in judicial vs non judicial states.
Michelle has put together a very succinct presentation of a complicated subject. After the dust settles from the recession and housing crisis, I believe the data will be compelling for all states to offer a non-judicial avenue for resolution of real estate loan defaults (they will not, but they should). Clear Funds is a short term, private lender in Arizona. We are looking into expanding into other states. We will not expand into a state that does not offer a non-judicial solution.[pullQuote position=”center”]The non-judicial system takes the “grey” out of the system for borrowers and lenders.[/pullQuote] It provides an efficient, relatively predictable process for everyone. I believe lenders take this into account and the result is states with a non-judicial process end up with more lenders with more competitive terms than states with a judicial system. Arizona clearly experienced one of the largest volumes of foreclosures in the country and have processed the majority of them. Banks are not holding and attempting to maintain masses of properties. Housing inventories are low. Prices are appreciating. Arizona is a model for a successful, non-judicial system. There are several components that should be improved upon, but the foundation is solid.
The judicial system is just that; judicial. Judicial systems across the country are already bursting at the seems with over loaded lawyers, judges, and court rooms. You can only imagine the impact of imposing thousands of foreclosure cases into those systems. It is inefficient and unwarranted.
– Mike Coffman