DBRS has conducted recent analysis that showed that the national average timeline from 30- days delinquent to REO is currently at 23 months.
According to the rating agency, New York (at 31 months) and New Jersey (at 29 months) are leading the way.
DBRS estimated the state-by-state timeline by not limiting the scope of the review to only loans that have reached REO as a result of a large inventory of delinquent loans that have not yet done so. Analysts did not use this method of calculating because it would be biased on the low side.
They also did not use a static pool that has had enough time to fully move to REO, which would mean utilizing data that is so old that it does not really reflect what is now happening in the market. DBRS instead made use of the most recent data possible to derive the monthly rate at which loans move to REO and then the agency calculated the average timeline based on those rates.
DBRS calculated the expected time to REO from a state-specific hazard curve from the MBS Data database. The hazard curve gives the conditional probability a loan moves into REO the month since it became 180 days delinquent (D180) given it has not done so prior to that month.