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Banks held approximately 476,000 homes that they repossessed from delinquent mortgage borrowers as of the end of July, representing a 17 percent reduction from the 574,000 REOs on the books 10 months earlier in September 2010, according to Barclays Capital.

The research firm estimates there were 1.57 million home loans that were at least 90 days delinquent, but not yet in foreclosure at the end of July of this year, and another 1.91 million already in the foreclosure process.

The rise in processing times primarily has been driven by the time that loans spend in delinquency and foreclosure, according to Barclays. According to Barclays’ analysis, the average number of months a loan has spent in foreclosure has climbed from around 10 months just before October 2010 to more than 12 months today.

C.A.R.