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81 "It's been a challenge to determine how to maintain processes, procedures, and safeguards with a much lower volume of work." —Stephen Hladik, partner at Hladik, Onorato & Federman, and Vice Chair of Legal League 100 lender must file a lawsuit in court to foreclose. In a non-judicial foreclosure state, the lender can foreclose without going through the court system. e pandemic delayed foreclosure sales for both types of states, so both have significant backlogs to work through. Some courts were already backed up before COVID-19 became an issue in early March, said Stephen Hladik, partner at Hladik, Onorato & Federman, and Vice Chair of Legal League 100. According to the midyear report from ATTOM Data Solutions, a handful of states already had foreclosure resolution times of over 1,000 days halfway through 2020–times that are much longer now: Hawaii, 1,558 days; Louisiana, 1,341 days; New York, 1,242 days; New Jersey, 1,202 days; and Indiana, 1,033 days. ough not at the 1,000+plus level, the backlogs were large in several other states and municipalities. In Philadelphia, for example, there was a large volume of cases already in the pipeline from 2017-2019. When COVID-19 hit, those cases and everything else was put on hold, Hladek says. Once the moratoria end, new cases will increase the backlog as property owners look to enforce collections of rents or mortgage payments. According to Diaz, depending on how quickly the government starts letting new cases proceed to the courts, it could severely constrain law firms. "Firms could receive a large influx of volume very quickly; most will need time to adjust due to staffing and training issues." Diaz added that most firms have business models based on handling different workflows of cases at different times, not large chunks at a single time, as they could see in 2021. COVID-19 has also constrained the courts' capacity as the courts, and supporting offices were closed down for a while, delaying some cases that will take precedence over forbearance, foreclosure, and related cases on the judicial calendar. With local and state tax dollars down due to the pandemic, the courts' resources will also be down, further constricting the flow of cases of all types. "ere will be months of catch up in the courts," Diaz said. Some states have other issues that can backlog cases even further. ough there wasn't the same backlog in Florida as in Pennsylvania, in the past, a hurricane has resulted in a backlog of six months, said Tony Van Ness, founder of the Van Ness Law Firm, PLC. In Florida, evictions can proceed on a statewide basis with one note. e CDC had issued an order aimed at residential (landlord/ tenant) evictions that enables them to file an affidavit and halt the eviction given they meet the criteria, Van Ness says. "Although this should not apply to REO properties which are not rentals, some courts allow the holdover tenant to claim the under this Order. ere is also the federal Protecting Tenants at Foreclosure Act that if they meet certain criteria (valid lease in effect, arms-length transaction), they can stall an eviction." Technology could help break up some of the logjams, according to Hladik and Diaz. At the end of 2020, courts were just starting to conduct some virtual sheriff 's sales, which can bring in additional interest from nonlocal investors than traditional sheriff 's sales. However, Hladik cautioned that any such sales have to have strict cybersecurity measures in place. In addition to online meetings, some firms have upgraded their internal technology to provide more streamlined processing of workflows, more detailed and accurate reporting, and more efficient handling of files, Diaz says. DEFAULT SERVICING BUSINESS SLOWS It's not just the mortgage holders and tenants that have been hurt by the pandemic. Default servicing professions feel the impact too. "ere has been an unprecedented drop of default servicing work across the country," Hladik said. "It's been a challenge to determine how to maintain processes, procedures, and safeguards with a much lower volume of work."