From the Asbury Park Press:
New Jersey’s percentage of home mortgage loans in foreclosure continues to rise, even as rates nationally have fallen to the lowest level since 2008, a report released Wednesday showed.
New Jersey now has the second-highest percentage of mortgage loans in foreclosure — at 8.4 percent — behind only Florida, at 14.3 percent, according to the report by the Mortgage Bankers Association.
The results come even as other states that were hard-hit victims of the mortgage meltdown that began in 2008 have moved off excessive inventory.
In Michigan, for example, only 3 percent of all home loans are in foreclosure, and in California, that rate is down to 3.29 percent. Both states had been among the leaders during the housing bust.
Jeffrey Otteau, an appraiser and New Jersey real estate market analyst from East Brunswick, said the problem for the Garden State is only going to get worse.
A 2010 court-ordered moratorium on foreclosure filings — issued because banks and mortgage companies often did not have proper documentation — helped build New Jersey’s backlog, Otteau said in an interview.
Meanwhile, New Jersey has a lengthy court process that stretches out the foreclosure process for more than a year.
“The housing market had benefited from it. It lowered the tide, and reduced the number of short sales,” Otteau said. “But now is the time to deal with it, to clear this out at a point where the market can digest it and get to the other side.”
More foreclosures are on the way, Otteau said, but banks just haven’t bothered to file for them yet, even though the moratorium was lifted last August.
“The number is really larger,” Otteau said. “We’re just not clearing the backlog. All the results are putting New Jersey at or near the top.”