A Better Bubble in California

The recent freeze on home foreclosures brought cheers from some quarters—especially owners of the more than 1 million homes nationally due to be repossessed. But the delay may only prolong the pain, say housing analysts. Local markets can’t rebound until they hit bottom, the logic goes, and they can’t do so until states clear backlogs of distressed properties. This has produced a striking “two Americas” scenario, in which states with fast-track foreclosures are, all else being equal, bouncing back long before their slower counterparts.

Both California and Florida, for example, have among the highest foreclosure rates in the U.S. But Florida is one of 27 states that require a judge to review every docket, snarling foreclosures for an average of six extra months. Like 22 other states, California is swifter, allowing banks to flip properties without court approval. If this invites fraud, it also heralds recovery: Golden State home prices are up 20 percent from their low, while the Florida market is still deep underwater. Florida’s new, two-question “rocket docket” process may help—if not much in this crisis, then perhaps in the next.