As a result of the revamped foreclosure process, property repossessions are expected to surge during the course of 2012.
In 2011, issues including the robo-signing scandal, slowed the foreclosure process. This year, though, industry experts forecast there to be between an estimated 900,000 and 1 million homes that will move from delinquency to real estate-owned status throughout the year.
"For 2011 we hit 804,423, not quite the 825,000 we were on pace for because of a slowdown in November and December," RealtyTrac vice president Daren Blomquist told HousingWire. "We are expecting close to 1 million REOs in 2012 as some of the delayed foreclosures finally complete the process this year."
Meanwhile, analysts from JPMorgan Chase said that a number of changes made to lending regulation and policy has made it possible to restart the foreclosure process at a more rapid pace. However, it was noted that as more currently non-distressed homeowners become delinquent, it will add downward pressure to the speed of the process.
In January 2012, there were roughly 66,500 home repossessions. This is an 8 percent increase from the previous month, but a 15 percent decline from January 2011.
However, just because the the foreclosure process is set to be more streamlined, a number of industry experts say this doesn't mean that homes that enter the REO inventory will sell any faster. According to Freddie Mac, it takes an average of 200 days to sell an REO property. But despite the extended time frame, it was noted that there were approximately 538,000 REO sales last year.
In order to unload distressed properties at a more efficient rate, a new government-sponsored program hopes to sell REO homes in bulk at auction to investors. In turn, these homes can be either resold for a profit or converted into affordable rental units, cutting down on the vacancy rate in some local housing markets.
Additionally, the Department of the Treasury recently expanded the reach of the Home Affordable Modification Program with the intention of helping more distressed homeowners. With the changes, experts hope more borrowers will be able to qualify for reduced mortgage rates and principal reductions by adding higher incentives for them to start the process.