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Foreclosure Sales Slow Economy, Long Road Ahead

In 2007, the average foreclosure process in America, from beginning to end, took 253 days, or about eight months. Today, according to LPS Applied Analytics as reported by CNN, the average foreclosure takes 674 days—almost triple what it was four years ago. The foreclosure epidemic is one of the main factors inflicting damage on the housing market, which has still not made up for the losses it suffered a few years ago when the real estate bubble burst. The ubiquity of foreclosures, and their depressing effect on housing prices, has been cited as both a symptom and a cause of the country’s persistent unemployment problem. Many homeowners enter default after losing their jobs—and on the flip side, as the Wall Street Journal recently noted, plummeting home values tend to trap people where they are, making it harder for them to move to other towns where employment opportunities might be more plentiful. The conundrum is expected to get worse in 2012. New foreclosures climbed by about 21 percent in the third quarter of 2011, with a total of almost 1.33 million foreclosures underway by the end of September. Thanks to a government effort to screen out and correct instances of robo-signing, more than four million homeowners will eventually get the chance to submit their foreclosure cases for review—an ambitious damage-control program that is nevertheless likely to prolong the real estate market’s lifeless condition.