From NJ Spotlight:
Housing markets have improved and foreclosure numbers dropped across the country since the Great Recession, but a decade on, New Jersey remains mired in a deep foreclosure swamp.
Statewide figures are significantly better than in 2009, the depth of the economic downturn. Yet some analyses cite Atlantic City as the worst housing market in the country, with Trenton not far behind. Overall, New Jersey continues to have the highest foreclosure rate in the country, according to real-estate data firms.
While many factors contribute to the problem, housing advocates point to a lack of leadership from state government as significant. Gov. Chris Christie, who used $75 million from national foreclosure-prevention aid to plug a budget gap in 2012, seldom mentions the issue.
“In the other states where we work, we have governors who have welcomed us and networked us to their housing agencies and counselors,” said a relative newcomer to the state scene, Jessica Brooks, a vice president at Boston Community Capital.
Nonprofit housing organizations like BCC work with lenders and borrowers to prevent foreclosures. Some for-profit groups also have sprung up, like Community Champions of Melbourne, Florida to fight the effects of foreclosure blight. But as the major federal foreclosure relief ends, a lack of state leadership in New Jersey means municipalities must find such partners themselves. Meanwhile, borrowers must remain alert to police their own mortgages, according to a top foreclosure defense lawyer.
Some other nonprofit groups, notably New Jersey Community Capital of New Brunswick and Newark, have bought troubled mortgages directly from federal agencies. BCC works differently, negotiating with banks to get better terms for borrowers whose job situation has improved but whose mortgages are still onerous.
“In New Jersey, no one from the state stepped up… and many of the community-based housing counselors here are struggling just to keep the lights on,” Brooks said.
Nationwide, foreclosures dropped under 1 million in 2016, the lowest figure in 10 years, according to ATTOM Data Solutions, formerly RealtyTrac, of Irvine, California. Yet that firm found New Jersey has the highest rate in the nation. And in December, when foreclosure starts were dropping 17 percent nationwide, they rose 13 percent here as the state’s economy continued to flounder, the firm found.
New Jersey has the highest inventory of homes in foreclosure at 2.8 percent, according to CoreLogic, another Irvine, California, real-estate analytics firm. That is greatly improved since the recession, but New York is the only other state above 2 percent, the firm reported.
New Jersey’s underlying economics are weak. While the U.S. Census Bureau found median household incomes rose 5.2 percent in 2015, the last year for which complete data are available, New Jersey was treading water with a 0.3 percent gain.
Home prices rose 7.1 percent nationally from November 2016 to November 2017 — or 4.7 percent when weighted for owner-occupied units as opposed to those being acquired by real-estate investors — but just 1.7 percent in New Jersey, according to CoreLogic.
Just like the other numbers, New Jersey’s trend in new foreclosure cases offers a mix of good news and bad. Fewer than 35,000 new cases were posted in the state courts’ public access system last year, half the amount of 2009 in the depths of the Great Recession. But that remains well above the 20,253 filed in 2005, itself on the high end historically.
That continued stream of new foreclosures, plus the lingering effects of Hurricane Sandy, provided reason for BCC to expand its efforts to New Jersey, according to Brooks. While the organization’s SUN program is “a drop in the bucket” compared to the problem, it provides a template of what can be done if lenders and borrowers work together on mortgages that are “underwater,” meaning they cost consumers more than the house’s current value, she said.
Throughout the foreclosure crisis, New Jersey consistently has had a high rate of troubled home loans, even as many borrowers got back on their feet financially after layoffs or business losses, Brooks noted. But the lack of state attention to the issue has contributed to low interest here in SUN, which currently is working with only about 60 New Jersey families, she said.
“New Jersey is the hardest place for us to work, and I feel it’s because there isn’t one state (leader) but many locally driven efforts,” Brooks said.