With real estate foreclosure rates three percent lower for 2012 than the year prior, it appears that the country's foreclosure crisis may well be improving. However, while the overall average for the country may be getting better, not all states are experiencing a lower number of foreclosures. In fact, 25 states actually saw increases in their foreclosure rates for the year 2012.

According to a recent story in Forbes, the states that experienced the largest increases in foreclosure rates in 2012 included Florida, Illinois, New York, Indiana and New Jersey. The primary reason behind these increases appears to be the way these states conduct foreclosure proceedings, as 20 of the 25 of them use judicial foreclosure.

Judicial foreclosure laws have rather stringent filing requirements. To illustrate, detailed documents verifying mortgage information must typically be submitted in all attempted foreclosures, while some states also require a judge to authorize any attempt to re-initiate foreclosures.

This all serves to slow the foreclosure process down considerably, and may explain why these particular states are experiencing upswings in foreclosure while the rest of the country is seeing declines.

Consider the difference in processing times. In a state such as Texas, one that does not have judicial foreclosure laws, the foreclosure process takes an average of five months or less. By comparison, a state such as New York, with stringent guidelines, can take up to three years to process a foreclosure.

All of these figures indicate that while the overall housing market may be stabilizing, the impact of the foreclosure crisis is far from over. Unfortunately, this means many families may still be facing the challenges of foreclosure in the not too distant future.

Stay tuned for more from our Phoenix bankruptcy blog ...

This post is for informational purposes only and is not to be construed as legal advice.

Source:

Forbes, "Worst of foreclosure crisis is over but problems remain," Morgan Brennan, Jan. 17, 2013