A week or two ago it was learned that it takes nearly 1,000 days for a distressed property to wind its way through the foreclosure process in New York and New Jersey and, the assumption at the time was that these were extreme outliers … apparently not.

A CNN/Money report today indicates that in some areas it takes even longer and that the average duration is much higher than I would have guessed.

Nationwide, the average time it takes to process a foreclosure — from the first missed payment to the final foreclosure auction — has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.

It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.

And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren’t paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.

Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.

“In my experience, they never say, ‘I’m not delinquent’ or ‘I want to pay my bill but I’m confused over who to send it to,’ or ‘Oh my God, you mean I didn’t pay my mortgage?’ They’re not in technical default. They’re in default because they’re not paying,” he said.

The robo-signing debacle seems to have been a major factor in extending how long it takes to foreclose on a property and a thousand dollars spent on an attorney appears to be worth many times that amount in mortgage/rent payments that never have to be made.

Following yesterday’s Case-Shiller report on falling home prices, Zillow provided their take on where property values have been heading in this story that included the sobering chart below, little comfort being provided in the fact that home value declines are slowing.

Of course, it would likely be a very different situation if mortgage rates weren’t at freakishly low levels and the backlog of millions of distressed properties moved a little quicker through the foreclosure process, but, that’s what passes for banking policy in the aftermath of the greatest financial bubble that no one saw coming.

Standard & Poor’s reported(.pdf) that the Case-Shiller 20-City Home Price Index fell 1.2 percent from September to October, its sharpest decline in a year, while the 10-City index fell 1.1 percent. Seasonally adjusted data was slightly better, the two indexes falling 0.6 percent and 0.5 percent, respectively.

On a year-over-year basis, the 20-City index is now down 3.4 percent and the 10-City index has fallen 3.0 percent, however, due to price increases earlier in the year, these are both an improvement from the annual rate of decline reported last month.

Nineteen of the 20 cities saw price declines in October with drops of 1.0 percent or more in 11 cities paced by a plunge of 5.0 percent in Atlanta and 3.3 percent in Detroit. Even home values in Washington D.C. fell, down 0.3 percent for the month, but this area continues to lead all others since the housing bubble burst with an annual gain now at 1.3 percent.

After all the better-than-expected news about the U.S. economy reported in recent months, word that the massive backlog of delinquent home loans is about to begin pushing its way through the system again in the months ahead should temper some of the enthusiasm about the U.S. economy in the year ahead. Diana Olick has all the details about the latest foreclosure report from RealtyTrac in this story at CNBC today.

Despite a seasonal slowdown in overall foreclosure activity, and a process still bogged down and backed up by the “robo-signing” processing scandal, the U.S real estate market is about to be hit by another surge of bank repossessions, according to a new report from the online foreclosure sale site RealtyTrac. As banks resubmit millions of documents and courts begin hearing cases again, the backlog of over four million delinquent loans will start surging through the pipeline again.

“November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs [bank repossessions] or short sales sometime early next year,” said James Saccacio, co-founder of RealtyTrac. “Overall foreclosure activity is down 14 percent from a year ago, the smallest annual decrease over the past 12 months, and some bellwether states such as California, Arizona and Massachusetts actually posted year-over-year increases in foreclosure activity in November.”
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Other states, like New York and New Jersey, are still seeing huge delays in the foreclosure process–986 and 984 days respectively, says RealtyTrac, but they too are starting to ramp up, as various moratoria have been lifted and judges have made rulings that will kick-start the process.

I remember when we’d shake our heads in disbelief when the average time to foreclose on a property reached a year. Amazingly, it’s nearly three years now in some places…