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RENEE MONTAGNE, HOST:

This is MORNING EDITION from NPR News. Good morning. I'm Renee Montagne.

And in the midst of the housing crisis, it turns out that the old expression - location, location, location - applies to foreclosures. Depending on the state, it can take an average of three months or three years to process a foreclosure.

As NPR's Yuki Noguchi reports, the disparity in how fast states complete foreclosures is becoming even more pronounced.

YUKI NOGUCHI, BYLINE: The fate of thousands of troubled homeowners in Central Florida rests in the hands of Lee Haworth. Haworth is foreclosure administrative judge for the 12th Circuit in Florida.

JUDGE LEE HAWORTH: We were hit pretty hard.

NOGUCHI: Haworth's caseload exploded from less than a thousand six years ago, to a backlog he estimates is now 20 times that. State budget cutbacks forced a reduction of staff, just as cases started flooding in.

HAWORTH: You know, I used to say that we were sailing with a skeleton crew and then starting in 2007 we started throwing the skeletons overboard.

NOGUCHI: The story of the troubled housing market is increasingly a tale of two types of states. About half of states don't require courts to oversee and approve foreclosures.

According to research firm RealtyTrac, cases in the non-judicial state of Texas take about three months to resolve. Compare that to states like New York and Florida, where foreclosures are handled with judicial oversight.

Judges like Haworth say this gives homeowners greater due process in foreclosure. But it also takes longer, often much longer, because of hearings and required paperwork. It takes more than 800 days on average - that's over two years - to resolve foreclosures in Florida. Haworth says that's largely because he and other judges often work solo.

HAWORTH: What we don't have are the people behind the scenes to help prepare the enormous amount of the paperwork, to set the calendars, to drill down into the statistics to see which cases are languishing so we can move those ahead on the docket. That key infrastructure is missing.

NOGUCHI: States with judicial foreclosures are trying to address the backlog. Florida, for example, increased its budget for next year to re-hire staff and retired judges.

In New York, where foreclosures are taking nearly three years to process, courts are trying to sift out cases where homeowners can't afford even a modified home loan to expedite those cases.

Foreclosure filings everywhere slowed down dramatically two years ago, after several big banks admitted to robo-signing paperwork to cut corners. Last month, the five biggest mortgage companies settled that case. And now foreclosure filings are expected to resume, adding to the foreclosure backlog in judicial foreclosure states.

JAY BRINKMANN: The problem is that we are seeing this difference get more and more exacerbated.

NOGUCHI: Jay Brinkmann is chief economist for the Mortgage Bankers Association. He says by many measures, national housing statistics show signs of recovery. Even some hard-hit states like Arizona, which is a non-judicial state, are starting to show some signs of housing recovery.

BRINKMANN: We're really seeing it's not so much a national problem. It's an Illinois problem. It's a Florida problem. It's a New Jersey problem.

NOGUCHI: It's not just that the non-judicial states are further along in their housing recovery. The backlog of foreclosures in judicial states, Brinkmann says, creates a lack of certainty for potential homebuyers in those markets. Why would you buy if you thought the market might be soon be flooded with cheap homes?

Also, Brinkmann says, a long drawn out mortgage process is costly for banks. The banks have to shoulder the higher costs, not only for paperwork and lawyers, but also for the homes themselves, including property taxes, cleanup and maintenance.

BRINKMANN: Point is, all of those costs are going to be going into future mortgage rates. But they're going to be going into future mortgage rates differentially.

NOGUCHI: Brinkmann says history has shown that in states where default and foreclosure take longer, mortgage rates increase or fewer borrowers qualify for mortgages.

But not everyone agrees that a slower process is necessarily bad. Mark Fleming is chief economist for CoreLogic, a research firm. He says in some ways a slower system may be helping some housing markets get back on their feet.

MARK FLEMING: Is there a right or a wrong way to do this? I don't know. You ask your child, how do you want your band aid ripped off, fast or slow? Some like it slow, some like it fast. It all depends on your preferences, right?

NOGUCHI: Another thing to remember: there are many factors that shape a housing market, and the pace of foreclosure is only one of them.

Yuki Noguchi, NPR News, Washington.

MONTAGNE: You can see a map showing how long it takes to foreclose in most states by going to NPR.org.

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