No. 16 - Real estate foreclosures: the effects of the 2015-16 reforms on the length of the proceedings

In 2015-16, within a broader reform action aimed at improving the legal framework for the management of non-performing loans, significant changes were made to the rules governing real estate foreclosure proceedings in Italy, also with the objective of speeding up lending recovery. In this note, we use data on individual foreclosure proceedings to analyse the effects of this reform action on their duration. This is done by comparing the length of the main phases of the proceedings before and after the introduction of the new rules. Our results show that the reforms have shortened foreclosure proceedings in Italy: in particular, the median time needed to sell the assets has been reduced by around 40% (from 39.5 to 23.5 months), while the median length of the operations preceding the actual sale has decreased by 11% (from 28.5 to 25.5 months).