The longer it takes to foreclose on a home, the better it may be for residential mortgage-backed securities, according to Standard & Poor’s. S&P analysts explained that RMBS bonds could benefit in the event housing prices begin to rise. “Potentially higher liquidation values could be realized when a home is sold...and this could reduce the loss severity compared with an earlier liquidation of the loan,” said the analysts. S&P found that foreclosure in states that require court involvement-so-called judicial states—took more than twice as long as in non-judicial states.

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