According to a recent national study done by Jacksonville-based LPS Applied Analytics, Florida is among the top-ranked states when it comes to the amount of time it takes to refer a home for foreclosure.

Mortgages typically go into foreclosure after the third late payment. But the recent study shows that, in Florida, there is on average a 307-day delay between the first late payment and foreclosure referral. The average time in Maryland is 344 days, and 367 days in California.

According to the study, 18 percent of loans with 24 or more defaulted payments have not been placed in foreclosure. Roughly 15 percent of loans with 18 months of late payments have yet to be placed in foreclosure.

The data used in the recent study includes homes in foreclosure a second time, some after failed loan modifications or short-sale attempts. A short sale involves an agreement between a lender and a borrower to sell a property for an amount below the borrower’s balance in order to avoid the costs and hassle of foreclosure. Loan modifications and short sales would naturally extend the time between default and the most recent foreclosure referral, but these types of situations are nevertheless not the majority of the loans considered by the study.

According to Bob Clinton of the Florida Association of Mortgage Professionals, one factor affecting the study is the new federal loan modification program. According to the Treasury Department, the federal Making Home Affordable program has lowered the monthly payments of approximately 505,000 homeowners nationwide. But over 1.4 million have applied to the $30 billion dollar plan, making the plan relatively narrow in application.

Another factor affecting the foreclosure delay is the sheer volume of delinquent loans. Banks are, by and large, unprepared to handle the enormous number of foreclosures and loan modifications.

Some experts are also concerned that the findings of the Applied Analytics report indicate a lack of prudence and due diligence on the part of lenders in managing mortgage loans.

While the foreclosure delay may seem somewhat beneficial for defaulting homeowners, it is also contributing to the downward spiral of the market as homeowner’s associations are unable to collect fees and continue property maintenance while neighboring home values continue to drop.

Source: palmbeachpost.com, “Florida homeowners who don’t pay get lengthy stay,” Kimberly Miller, December 30, 2010.