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NJ Bad Mortgages Comprise 10.2% of Total

Even as Wall Street has doubts about the fed lifting interest rates, Main street mortgages are in trouble. According to an article in Forbes, bad mortgages comprise 10.2% of total mortgages in New Jersey which concluded that banks were giving NJ homeowners a chance to “catch up.”  

However, recent data from Realty Trac’s August 2015 U.S. Foreclosure Market Report™, says

New Jersey foreclosure activity increased 3 percent from a year ago — driven largely by a 295 percent year-over-year increase in bank repossessions and 38 percent year-over-year increase in scheduled foreclosure auctions — and the state posted the nation’s third highest state foreclosure rate for the third month in a row. One in every 539 New Jersey housing units had a foreclosure filing in August.

On Tuesday, September 15th an article appeared in Forbes , “Fewer and Fewer Distressed Property Sales,” [full article here ] in which Lawrence Yun wrote the following:

Distressed home sales reached their lowest point since the housing market crash nearly a decade ago, and look to all but disappear by this time next year. That is, sales of homes as the result of a foreclosure or in an underwater situation (where the mortgage debt amount was larger than the market price) comprised only 7% of the total in the latest data. That’s a marked improvement, considering the figure had been a third higher or more just a few years ago: 36% in 2009, 34 % in 2010, and 33% in 2011.

After discussing the issue of distressed property on the basis of a national average, he analyzes figures at the state level, and points out the situation in New Jersey:

When analyzing at the state level, there are few worthy differences. Arizona and California suffered greatly during the housing market downturn with an over 30% price plunge and an unending vista of foreclosures in some neighborhoods. Yet, these two states carry one of the lowest numbers of bad mortgages. Arizona’s seriously delinquent and foreclosure rate is now only 1.88% and California at 2.08%, both essentially at half the rate of the national average. At the other end, the bad mortgages comprise 10.2% of total in New Jersey and 7.7% in New York. Policy differences had an impact. Homes were quickly foreclosed on and sold to investors or to first-time buyers in Arizona and California, while homes  were not foreclosed on for months and years on end in New Jersey and New York – presumably to give homeowners a chance to catch up. One direct impact of this divergent policy is that home price growths in these Western states are solid while home price growths have been much more limited in the said Northeastern states. Despite these examples, the overall national trend is for falling distressed property sales in upcoming months and into next year.

On Thursday September 17, 2015

U.S. Foreclosure Activity Decreases 6 Percent in August Following Five Consecutive Months of Annual Increases

Bank Repossessions Up 40 Percent From Year Ago; Nevada, Maryland, New Jersey Post Top State Foreclosure Rates

SUMMARY OF HIGHLIGHTS FOR NEW JERSEY

New Jersey foreclosure activity increased 3 percent from a year ago — driven largely by a 295 percent year-over-year increase in bank repossessions and 38 percent year-over-year increase in scheduled foreclosure auctions — and the state posted the nation’s third highest state foreclosure rate for the third month in a row. One in every 539 New Jersey housing units had a foreclosure filing in August.

Foreclosure starts decreased from a year ago in New Jersey (down 38 percent) and 29 other states , including California (down 29 percent from year ago), Florida (down 40 percent),  Texas (down 17 percent), and Maryland (down 26 percent).

Bank repossessions increased from a year ago in New Jersey (up 295 percent) and 35 other states, including Florida (up 23 percent), California (up 31 percent), Texas (up 168 percent), and Ohio (up 35 percent).

Despite the national decrease, scheduled foreclosure auctions increased in New Jersey (up 38 percent), from a year ago in 22 other states, including Pennsylvania (up 18 percent), New York (up 64 percent), South Carolina (up 38 percent), and Massachusetts (up 21 percent).

Foreclosure activity decreased 5 percent from a year ago in August in Atlantic City, New Jersey, but the city still posted the nation’s highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more. One in every 307 Atlantic City housing units had a foreclosure filing in August, nearly four times the national average.

Another New Jersey city, Trenton, posted the second highest metro foreclosure rate — one in every 384 housing units with a foreclosure filing in August.


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Formed in 1989, Denbeaux & Denbeaux is a law firm dedicated to providing top level legal representation to its clients. The partners, Marcia Denbeaux and Joshua Denbeaux, as well as senior and associate attorneys, represent individuals and businesses in New Jersey State and Federal Courts.