A study released Nov. 26 by the W.P. Carey School of Business at Arizona State University reported that variations in mortgage laws from one state to the next could be hindering a full housing recovery.

The study, which was headed up by the university’s Assistant Professor Andra Ghent, noted that states with streamlined foreclosure processes have nearly recovered from the crisis, while those with long and drawn out procedures still are struggling.

The study noted that as a rule, non-judicial foreclosures move more quickly than those in judicial states. Ghent pointed out that even though Arizona was one of the states hardest hit by the housing crisis, it has moved through its backlog of foreclosures quickly because it does not require court approval of foreclosures. Phoenix, for example, experienced a strong uptick in home prices over the course of the past year.

“The key is quick resolution of the situation,” Ghent explained in the study. “For example, if a state requires a longer period before foreclosures can happen, then that generally means the homes deteriorate more as the borrowers realize they're going to have to leave and stop taking care of the property. This is bad for the neighbors and the property values.”

New York and Florida, which both have judicial procedures for foreclosures, still are struggling because properties can get hung up in the foreclosure process for as long as two years, the study noted.

While foreclosure procedures historically have varied from state to state, Ghent suggested that the introduction of nationwide foreclosure laws would prevent procedures from dragging on and disrupting the overall housing market — although such a move would pit states’ rights against the federal government.

“Nobody pays attention to mortgage laws for 50 to 60 years at a time,” Ghent said. “They only examine these laws after a major event, so the time to change is now.”

Read the mortgage study.