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56 lender takes title to a property. "Unfortunately, outed foreclosure laws can leave these homes vacant and vulnerable for years, fostering the spread of community blight," says Robert Klein, Chairman and Co-founder of Community Blight Solutions in Cleveland, Ohio. "As long as these properties remain vacant, they contribute to a self-perpetuating cycle of blight and instability in the community. Houses that stand empty suffer structural damage from weather and climate changes, and vacant properties are hubs for crime, drug activity, and [are susceptible to] fires and become havens for squatters." A STATE OF FORECLOSURE Is yours a judicial or nonjudicial state? e answer can mean a difference of 280 days on average in the foreclosure process, according to Fannie Mae. "I often jokingly tell my clients that ' judicial' is a Latin word meaning really slow foreclosure," Hladik said. Klein said that, in general, states that use mortgages conduct judicial foreclosures and states that use deeds of trust conduct nonjudicial foreclosures. e most problematic stage in the foreclosure process can be the sometimes three or four years it takes in judicial states to get the required court action on a foreclosed home. Absence certainly does not make the heart grow fonder in the foreclosure process. "e longer properties remain vacant, the greater the chance problems will occur, including vandalism, crime, and lower property values," said Klein, whose company focuses on two main initiatives: fast-tracking foreclosure legislation and replacing with clear polycarbonate boarding the unsightly and ever-present plywood on vacant and abandoned properties. Hladik added, "While most counties in Pennsylvania move foreclosure cases, the judicial process certainly adds to the timeline involved." Pennsylvania's foreclosure inventory peaked in August 2012 when unemployment reached 8.3 percent. CoreLogic reported that the Quaker State's foreclosure inventory was down to 1 percent in March, which reflects a year-over-year decrease of 0.3 percentage points. Prior to fourth quarter 2015, Pennsylvania's foreclosure timeline of nearly 2.25 years, measured from the date the borrower last paid the sale, was 36 days greater than the average for judicial foreclosure states, according to Fannie Mae data. Hladik notes that such states—New Jersey and Delaware—are other examples. ey still have longer foreclosure timeframes, but cases are "certainly" moving faster through the former's foreclosure process than before. Also, lenders, servicers, and investors are stepping up. "On a local level, lenders and servicers are more accurate in their valuation assessment of properties, and thus have better calculated upset bids at the public foreclosure sales," Hladik said. "Also, we see more [foreclosed homes] being sold to third parties at those sales. is is good: it means less properties in REO management and that investors are fixing these properties up and reselling them. A rehabbed property is better for the whole neighborhood." Another factor pumping the brakes on Pennsylvania's foreclosure process is the increased number of contested foreclosures. "ey can literally take a few years to get to trial," Hladik adds. Hladik calls Pennsylvania very diverse, with 67 counties and "almost 67 different methods of conducting foreclosure sales. e main challenge in foreclosures is the costs involved these days. With the deposit to schedule a sheriff 's sale increasing from anywhere to $3,000 to $4,000, the cost has gone up enormously." e Pennsylvania State University graduate puts the cost spotlight on Philadelphia, where the city runs the gas, water, and sewer utilities. When a property goes to sale and the lender takes it back, it must pay all past-due taxes, water, sewer, and gas costs before obtaining the deed to the property. "is cost can be thousands of dollars and often can equate to the value of the property itself," he said. "Foreclosure sales in Philadelphia can prove incredibly expensive." As a result of foreclosure costs approaching or equaling the value of many abandoned properties, lenders may decide not to foreclose, which only exacerbates the city's blight problem. As Stern & Eisenberg, P.C.'s lead attorney for Maryland, Virginia, and the District of Columbia, Kevin Hildebeidel has his expert eye on various backlogs in different states and other municipalities. For example, D.C. courts are concerned about approximately 3,000 foreclosure cases still on the docket after being inadvertently stalled between 2010 and 2012. In downstate New York, 80,000 outstanding cases not surprisingly draw substantial focus. "One would think that in a truly up market, some of these houses would regain equity and therefore, owners might be inclined to cash out," says Hildebeidel. "Unfortunately, the length and complexity of judicial foreclosure proceedings still gives borrowers the upper hand when it comes to delay and costs. Many appear to prefer staying in the house effectively 'rent free' during the pendency of the case." e system breakdown goes further than judicial versus nonjudicial to types of judges, elected or appointed. Hildebeidel maintains that the former are not inclined or even "loathe" to order any kind of adequate protection payments or equitable payments to balance the scales in this stalled scenario. "Until this can be accomplished, a large number of cases may continue to linger in the judicial and particularly the elected judicial states," he added. Although a bill is presently pending before the state legislature, Pennsylvania does not have a statute providing for streamlined foreclosures of vacant or abandoned properties. Hladik notes that the time and cost involved in foreclosing a vacant property exceeds that of an owner- occupied property. "is is because the lender must obtain orders for special service of process and also must publish notice of the foreclosure, thus escalating time and cost," he added. e second major geographical difference, other than the judicial versus nonjudicial state foreclosure setup, is seasonality and weather, according to Jerry Rowell, Managing Director of Assurant Field Services. Vacant properties require higher levels of preventative maintenance and, therefore, tend to have increased risk exposure. "irteen out of 21 predominantly judicial foreclosure states are located primarily on the East Coast and northern tier," Rowell said. "e seasonal weather extremes in those states cause challenges to the industry when maintaining vacant properties. Examples of this are freezing winters and humid summers where conditions can seriously damage or cause hazards to properties." LESSONS FROM LOSSES Positive things arose from the foreclosure crisis, as well they should—some gain ought to come from the considerable pain. Lenders and servicers are much better equipped in loss mitigation and borrower assistance, according to Hladik. "More than 20 counties in Pennsylvania have adopted mediation programs, and the early intervention in the foreclosure process has assisted many borrowers," Hladik said. "ese types of programs simply did not exist more than 10 years ago." Hildebeidel reminded that another hard- hit aspect of the housing crisis was the image and reputation of lenders and servicers. "e pendulum of public opinion has swung very far against them," said Hladik. "But, for the most part, they kept doing business, which means they kept paving the way, so to speak, to the American Dream of homeownership, which is on sound footing once again." And to support Hladik's point, those mortgage companies

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