New Jersey has Highest Percentage of Foreclosures in the Nation among Mortgaged Homes
Although first place is the ultimate goal in many situations, when it comes to foreclosure rates, it’s an unwelcome victory. According to CoreLogic, a leading provider in real estate data, New Jersey has the highest percentage of foreclosures among mortgaged homes at 5.5 percent. New York and Florida tied for second place at 4.1 percent. New Jersey also had the highest serious delinquency rate at 9.1%, according to the report, again surpassing both Florida and New York. Yet, overall the country’s foreclosure rate is dropping. The recent report states that 605,000 homes in the United States were in some stage of foreclosure as of October, 2014, compared to 875,000 homes in October, 2013, a 30 percent decrease.
So why are foreclosure rates decreasing nationwide, but increasing here in New Jersey? One reason for this is New Jersey’s foreclosure process, says Affordable Housing Alliance foreclosure counselor, Linda Osborn.
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“The process takes much longer from beginning to end and has caused severe backlogs in the county courts,” Osborn states. “This rise in foreclosures is due to the release of the backlog caused by years of the freezing of foreclosures by major mortgage lenders. Foreclosures are now moving swiftly through the process. There will be no more three to five year foreclosure periods. Hurricane Sandy, no doubt, has also played a huge part in the spike in foreclosures, as well.”
“Another reason for New Jersey’s higher foreclosure rate is that the state has changed the rules for registering for foreclosure mediation in 2014”, Osborn tells us. Prior to 2014, homeowners could register for foreclosure mediation in their county and be accompanied by a state appointed attorney and a Housing and Urban Development (HUD) housing counselor free of charge. This strengthened the homeowner’s chances of getting their mortgage modified with their lender. While this program does still exist, the homeowner must register within 60 days of being served a summons and complaint for foreclosure, while no longer receiving assistance from an attorney or counselor. Many homeowners miss their deadline and feel intimidated to go up against a lender’s attorney at mediation. The Affordable Housing Alliance, a HUD certified housing agency, acted as a leader in this service for struggling homeowners.
An additional reason for New Jersey’s high rates is the closing of Atlantic City casinos. According to real estate information company, Realty Trac, Atlantic City, NJ has the second highest foreclosure rate of metro areas in the country. November foreclosure activity in Atlantic City increased 511% percent from this time last year, giving the metro area a foreclosure rate of one in every 389 housing units.
For homeowners facing foreclosure or imminent default on their loan, the Affordable Housing Alliance is available to help. Foreclosure counselors meet with homeowners to devise a plan to propose to the lender and hopefully keep more families in their homes. Counselors work with the homeowners regarding their monthly budget and implement ways to increase monthly income and save money. Qualifying homeowners can lower their monthly mortgage payments and get into more stable loans at today’s low rates. For those homeowners for whom homeownership is no longer a viable option, the Alliance provides options which can avoid foreclosure. Additionally, in an effort to be responsive to the needs of today’s homeowners, there are options for those who have lost their job or who owe more than their home is worth.
Donna Blaze, CEO at the Alliance, noted that nearly 400 clients received foreclosure mediation help in 2014 and these families come from all income levels. “Homeowners most at risk of foreclosure are those who bought their home between 2004 and 2008, at the height of the real estate market in NJ,” Blaze says. “Counseling has been proven to help the homeowner save money and secure a successful outcome quickly. Anyone who is struggling to keep current on their mortgage should call the Alliance to start the process as early as possible.”
What can homeowners do to prevent their home from being foreclosed? The federal government has implemented a number of programs to assist homeowners who are at risk of foreclosure and otherwise struggling with their monthly mortgage payments. The majority of these programs are administered through the U.S. Treasury Department and HUD.
To find out more about these programs and how the Affordable Housing Alliance can help, go to: http://affordablehousingalliance.com/help-with-housing/default.asp
Core Logic, (2014). National Foreclosure Report, October 2014.
RealtyTrac, (2014). Atlantic City Real Estate Trends & Market Info, November 2014.
Affordable Housing Alliance Fiscal Year 2013 Impact Report from NeighborWorks
Last year, AHA helped 37 families and individuals become homeowners. Three hundred thirty seven individuals and families were provided counseling and education. Learn more about our impact in the community with this infographic.