From NJ Spotlight:
The Garden State has the country’s highest percentage of foreclosures among mortgaged homes — and that’s just the beginning
Early this year, banking and real-estate analysts concluded that New Jersey had achieved a dubious distinction, passing Florida to become the state with the highest percentage of foreclosure among mortgaged homes, 6.2 percent as calculated by CoreLogic, a leader in real-estate analytics. (That percentage was actually an improvement from a year earlier.)
Meanwhile, Florida’s rate dropped to 6 percent from 10.1 percent in 2012, and housing markets around the country are recovering far faster from the Great Recession.
New Jersey also took another unfortunate first place, passing New York for the average length of time to complete a foreclosure, at 1,103 days or just over three years, according to CoreLogic.
No end in sight: New foreclosures increased nationwide in January, before dropping again in February, according to RealtyTrac. But in New Jersey they kept rising, up another 126 percent, the firm found. Actual bank repossessions were up 90 percent from a year ago.
Those trends continue. State court records show that through April 15, lenders filed 15,150 new foreclosure cases in New Jersey this year, the sort of number seen only in the depths of the recession. In Atlantic City, foreclosures are up 254 percent from a year ago.
A long wait: In New Jersey, even a completed foreclosure is no guarantee that a house will come back on the market and be reoccupied anytime soon. According to RealtyTrac, it takes 830 days to sell a home in foreclosure here, though that is slightly less than in New York and well behind Massachusetts’ average of 1,299 days.
Zombie foreclosures: New Jersey courts closed 12,639 foreclosure cases by entering default judgments against the borrowers in 2013. But CoreLogic found only 5,888 homes actually went to sheriff’s sale in that time. The borrowers or tenants might still occupy some foreclosed properties, but many stand vacant, “zombie foreclosures.” Even after obtaining foreclosure judgments, banks do not have to maintain a property until taking possession at a sheriff’s sale.
Those empty homes serve as a drag on the market, keeping down prices that collapsed during the recession and leaving many borrowers “underwater,” owing more on their mortgages than the properties are currently worth.
RealtyTrac sees that situation, though still drastic, getting better in much of the country. But again, not in New Jersey. In the first quarter, the number ticked upward here to almost a quarter-million mortgages, 19 percent of the total.