It will take more than a decade to clear up all the shadow inventory in the residential real estate market in New York state, according to new report released by Standard & Poor’s Ratings Services. That is more than three times longer than it will take the rest of the nation, a difference that the report largely attributes to the greater time it takes to foreclose on a property in New York.

The quarterly report defines shadow residential inventory as distressed properties that are 90 days or more days delinquent on mortgages not backed by federal agencies. The length of time it takes to liquidate such properties in New York increased by 40 months to 154 months in the final quarter of last year, compared to the same period of 2009, according to the new S&P report. On the bright side, while it is taking longer to clear distressed mortgages in the state, the default rate is not rising, said Diane Westerback, a managing director at Standard & Poor’s. New York’s default rate, 35.8%, is only slightly higher than the national average of 33.1%.

“The good news is delinquencies aren’t noticeably higher and the frequency of loans defaulting is lower than other states,” said Ms. Westerback. “The bad news is once these loans fall into delinquency, they are hardly moving.”

In general, it takes much longer to foreclose on a loan in New York. Liquidation rates for defaulted loans are lower in New York because it’s one of 21 judicial states that require formal court proceedings to carry out foreclosures. In other states, the foreclosure process is less formal and much faster, taking up to seven months. In contrast, in New York and in New Jersey as well, it can take two years for a loan to go in and out of foreclosure, she noted.

The report noted that a New York foreclosure mediation program established in September 2008 may also be contributing to the longer time it will take to clear the state’s shadow inventory. The program, which requires mediation between borrowers and the bank before a foreclosure is finalized, typically means four to eight meetings. As a result it could add a year to the foreclosure process, the report noted.

According to the report, shadow inventory in Brooklyn will take the longest to unwind at more than 17 years. Bronx was close behind at 16.5 years, and Staten Island recorded 12 years. Manhattan fared the best, coming in at a little more than eight years.

Ms. Westerback said it is difficult to explain what exactly is happening in each borough. However, she pointed out that the type of housing in each impacts the numbers and time it will take to clear the shadow.

According to the report, condos go through the foreclosure process faster than single-to-four family houses, and certain counties have higher concentrations of single-to-four family houses. Meanwhile, co-ops make up 3.1% of the New York state market, and co-ops do not go through the court system and are not subject to the mediation programs.

“There aren’t too many single-family homes in Manhattan,” she said.