From the Record:
The rate of new foreclosures fell in New Jersey in the second quarter but was still the highest in the nation, followed by Maryland and Florida, a new Mortgage Bankers Association report said.
Loans in New Jersey on which foreclosures were started in the April-June period amounted to 0.9 percent of total outstanding loans in the state, down from 1.06 percent during the first quarter.
Meanwhile, New Jersey loans in any stage of the foreclosure process remained at the high level of 8.10 percent of total loans as of June 30, barely changed from the first quarter. That also was the highest percentage in the country, and more than three times the national rate of 2.49 percent. Florida had the second-highest rate and New York was third.
Reasons for New Jersey’s high levels of foreclosures include its comparatively sluggish recovery from the recession, the winding down of assistance programs that kept foreclosures at bay, and a slow judicial process, according to industry observers.
Elevated unemployment rates, particularly in New Jersey’s larger cities, and a recent decline in government funding for programs that have helped people avoid foreclosure, have resulted in many more homeowners falling behind this year on loan payments, said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, which provides counseling for cash-strapped homeowners. In addition, some homeowners who have had their loans modified at lower interest rates have still been unable to keep up and are back in default, she said.
“Put it all together and the statistics are not shocking to me,” Salowe-Kaye said.
Like New Jersey, the states that have the second- and third-highest rates of loans in foreclosure, Florida and New York, handle lenders’ foreclosure filings in state courts instead of administrative processes, and the judicial foreclosure processes tend to take longer, sometimes years. Only two of the 15 states with the highest percentages of loans in foreclosure, Nevada and Rhode Island, handle foreclosures administratively. The states with the lowest loans-in-foreclosure percentages were Wyoming, North Dakota and Nebraska, respectively. Of these, only North Dakota is a judicial foreclosure state.
“New York and New Jersey have the longest judicial time frames in the country,” said Robert E. Kafafian, chief executive officer of The Kafafian Group, a bank consultant in Parsippany.
RealtyTrac, a California company that tracks the foreclosure market, reported earlier this year that New Jersey’s foreclosure process takes an average of about 1,100 days, or more than three years. A state moratorium on foreclosures, in response to lender abuses, stalled the process and created a backlog of cases in 2010 and 2011.