From the Record:
Home foreclosure actions nearly tripled in North Jersey’s wealthier communities last year, as housing distress continued to spread beyond the modest neighborhoods that have been the most afflicted.
In a sign of how rising unemployment, especially in the finance sector, has hit higher-income residents, towns from Englewood Cliffs to Saddle River to Wyckoff saw large percentage increases in the number of homeowners facing possible loss of their property — although the numbers remain small.
An analysis of 2008 foreclosure activity by The Record revealed that lenders were at various stages of retaking nearly 370 homes in upper-income towns, where the typical single-family home sold for more than $620,000 in 2007. That was up 177 percent from about 130 cases in 2007 — at a time when foreclosure activity overall throughout Bergen and Passaic counties doubled. And rising jobless numbers means foreclosures are likely to increase in the months to come.
“There’s an old adage — the bigger they are, the harder they fall,” said Robert Stemple, a Re/Max agent in Saddle River. “When you have a million-dollar house, you probably have a large monthly payment.”
The trend continued in the first quarter of 2009, with the biggest percentage gains again in the highest-priced areas. Lenders filed roughly 90 foreclosure proceedings in those communities, out of nearly 1,900 more in Bergen and Passaic combined, according to the analysis of data provided by RealtyTrac, a California company that monitors foreclosure activity.
For many of these households, there is a lag between a job loss and missed mortgage payments. After all, higher-income homeowners are more likely to have severance payments, savings or even 401(k) plans they can tap for several months to pay the mortgage if they lose their jobs.
Sylvine Marabotto of Consumer Credit Counseling Service in Cedar Knolls said she recently spoke with a homeowner who had lost a well-paying job after 25 years. His severance is about to end.
“We are certainly seeing people who have been able to pay for six or seven months, but they’ve run out of places to look for money,” Marabotto said. “They just can’t do it anymore.”
“When their reserves run out and they can’t find a job, or they can’t find a job at the same level they were earning, they won’t be able to afford their homes,” Fedder said.
Some of the biggest jumps in foreclosure activity came in towns such as Saddle River, where the number of properties facing foreclosure quadrupled, from 15 in 2007 to 60 in 2008, and Wyckoff, where it rose from nine to 23. In Closter, 55 homeowners got hit with foreclosure notices in 2008, compared with 18 in 2007.
By year’s end, one in 108 homes in high-end towns faced possible foreclosure, compared with one in 300 during 2007.
But about three dozen homes in high-end towns were sold at sheriff’s auction last year, among the 577 sales overall. Bergen County Sheriff Leo McGuire said he has auctioned a number of homes with mortgages over $1 million and even the occasional property with a mortgage exceeding $2 million.