“an almost ten fold increase” in N.J. Foreclosures

From Businesswire:
ForeclosureS.com: Northeast Foreclosure Activity Up Sharply

“California based ForeclosureS.com, a real estate investment advisory firm and nationwide foreclosure lists publisher, reported today that 2006 foreclosure activity in the Northeast is up sharply from 2005 levels.”

“”According to our research, foreclosure activity in New Jersey reached a level of 4,425 filings in the first quarter of 2006 as opposed to just 459 in the same quarter in 2005. That’s an almost ten fold increase,” warned Ms. McGee. She added that she expected the situation to get worse through the rest of 2006 and into 2007.”

“Ms. McGee expressed concern that homeowners were still using their houses as ATM machines. She continued, “Freddie Mac just reported that 88% percent of the loans they purchased in the first quarter of 2006 were cash-out refinances. With the real estate markets going flat, the refinance resource will dry up. And with interest rates continuing to rise, payments on so-called exotic adjustable loans would become unaffordable for many households.””

“Ms. McGee pointed to a recent report from the FDIC stating that 49.5% of recent purchase money loans were categorized as “high risk loans.” “These interest only loans and option payment ARMS are financial time bombs that are going to lead to trouble for many homeowners,” she said.”

“She added that she found it “amazing” that some lenders were still pushing home equity loans and lines of credit up to 125% of the home’s value. “With markets cooling down and prices leveling off, that’s another recipe for disaster,” said Ms. McGee.”

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67 Responses to “an almost ten fold increase” in N.J. Foreclosures

  1. I don’t think anyone here is particularly surprised by this.
    I’m just wondering how bad things are going to get, especially since this would appear to be the beginning of the downward slope.

  2. Anonymous says:

    Bad!

    Will do just fine if you are not stretched in a suicide risky loan scenario

    Boycott Houses and avoid being a bagholding underwater homie.

    Booooooooyaaaaaa

    Bob

  3. Richard says:

    i was in cranford this weekend looking at a few houses. the broker took me by one that was a real s*ithole. seems the guy who bought it got in over his head with the mortgage payments and now has to sell. problem is it’s a POS, he’s done no work to it and its small. he’s also asking way more money than he’ll get for it. i see foreclosure next up.

    as this article shows, we’ll be seeing more of this in the coming future.

  4. Anonymous says:

    tenfold increase! I don’t believe it.

  5. Anonymous says:

    Maybe we could ask here for a weekend recap of #homes listed on realtrytrac.com pre-foreclosure tab for a couple of zips – just the number ??

  6. Anonymous says:

    RE-elect McGreevy… he will grease the pipline of recovery.

  7. Anonymous says:

    hi, i’m new to nj and decided to follow a lot of people’s advice and rent for now. only thing is I can’t seem to find a good site for townhouses/condos for rent. I tried to search for 2 bedroom condos/townhouses with a $4000 maximum just to see if it was because my budget was way off. still no luck.
    Is it possible nobody’s renting out townhouses in nj??

  8. Anonymous says:

    one word …HUGE!

    -K

  9. Anonymous says:

    Anon 2:11

    rentals are all over, depending on what town. Call the local RE agents for their rental list.

    check http://www.nj.com/enter/index.ssf?/realestate/%3f

    http://www.4wallsinnj.com/?OVRAW=nj%20rental&OVKEY=nj%20rental&OVMTC=standard

    http://www.rentalhouses.com/find/NJ/

    rentals also listed craigslist.com

  10. UnRealtor says:

    Get the weekly Sunday paper to find local rentals. Some people still don’t use computers, so there are a bunch of listings in the newspaper not available online.

  11. Anonymous says:

    thanks so much for the rent info anon 2:29

  12. Anonymous says:

    good news for all of us who are waiting… hopefully we can find some bargains.

  13. Anonymous says:

    Mortgage Delinquencies Increasing
    By THOMAS J. LUECK
    Published: January 14, 1990
    http://query.nytimes.com/gst/fullpage.html?res=9C0CE5DA163BF937A25752C0A966958260

    THE slump in the New York region’s real estate market, now in its third year, is increasing the financial strain on homeowners, would-be sellers and lenders alike as delinquent mortgage loans and foreclosures spread across New York, New Jersey and Connecticut.

    More than 4 percent of the mortgage loans to individuals and families in New York City and its suburbs are now past due by at least two months, according to several studies. At those rates of delinquency, analysts say the region does not face anything close to the deep economic woes of Texas, Oklahoma, Colorado and other states around the Southwest, where more than 20 percent of the mortgage loans are delinquent and over 20,000 foreclosed homes are being sold off by the Federal Government.

    Buyers Hang Back in Muddled Market
    By THOMAS J. LUECK
    Published: January 28, 1990
    http://query.nytimes.com/gst/fullpage.html?res=9C0CE6D81430F93BA15752C0A966958260

    A TWO-YEAR slump in property values has pushed down home prices in the New York region and mortgage interest rates also have fallen, but the reductions show little sign of attracting the huge numbers of buyers who were locked out of the region’s giddy real estate market in the mid-80’s.

    CONSUMER’S WORLD; In Today’s Housing Market, Is It Better to Buy or Rent?
    February 10, 1990, Saturday
    By LEONARD SLOANE (NYT); Style Desk
    Late Edition – Final, Section 1, Page 50, Column 4, 923 words
    http://select.nytimes.com/gst/abstract.html?res=F3061EF7345C0C738DDDAB0894D8494D81

    The decision to own or to rent a home has traditionally been based on three elements: cost, personal preference and investment. But the recent decline in house and apartment prices has made a such an investment less of a sure thing and has helped to convert many potential…

    .

    TALKING: Default Sales; Foreclosed Property Bargains
    By ANDREE BROOKS
    Published: April 15, 1990
    http://query.nytimes.com/gst/fullpage.html?res=9C0CE6DE173CF936A25757C0A966958260

    A GROWING number of residential properties are being offered at below-market prices by lenders who have foreclosed on defaulting homeowners and troubled developers. The Dime Savings Bank of New York, for example, has 600 foreclosed homes available, and other banks also have large stocks of seized houses that they want to sell quickly.

    Most of these foreclosed properties can be obtained for 60 percent to 90 percent of what similar houses and apartments would bring in today’s market.

  14. Anonymous says:

    This one is going to happen faster than 15 years ago.

    Why?
    1. Higher leverage ratios/riskier loans

    2. Interest rates going up as opposed to early 1990’s down.

    3. Higher levels of information transparency. 24 hrs. news, BLOGS!!!

    Booooooyaaaaaaaa

    Bob.

  15. Anonymous says:

    can ordinary folk buy foreclosed properties? someone told me you need a license or something and it goes thru some kind of auction. anyone have experience buying foreclosed properties?

  16. Anonymous says:

    Anon 2:40

    Other sites to look for NJ rentals:

    http://www.rent.com
    http://www.apartmentratings.com
    http://www.housingmaps.com
    http://www.bestrentnj.com

    HousingMaps is kinda cool – it scours Craigslist for rentals and displays it on Google Maps.

    All the best,

    Dream Theaterr

  17. Anonymous says:

    You dont need a license for buying foreclosures. Its just like buying a house. You can buy before the foreclosure by contacting the buyer directly, you can buy at the auction (risky) or you can buy from the bank once they take the home back.

  18. Anonymous says:

    ot, how do you know that these banks are reliable?

    BankUnited – 5.00% (min $5K)
    interState Net Bank – 5.00% MMA (min $10K for APY/$2.5K to avoid fee)

  19. hi, i’m new to nj and decided to follow a lot of people’s advice and rent for now. only thing is I can’t seem to find a good site for townhouses/condos for rent. I tried to search for 2 bedroom condos/townhouses with a $4000 maximum just to see if it was because my budget was way off. still no luck.
    Is it possible nobody’s renting out townhouses in nj??

    Where are you looking maybe I can give you better sources
    KL

  20. Friend sent this to me – self-explanatory:

    Property Address
    228 70th St
    West New York, NJ, 07093

    Market Value*
    $373,583

    Default Amt
    $472,550

  21. Anonymous says:

    Ouch

    Take a look at this.

    According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries’ combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America’s stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.

  22. Anonymous says:

    BOYCOTT HOUSING!

    NO MAAS to RIPOFF home prices.

    Do not be a bagholding underwater mtg slave.

    It’s not worth it.

    Bababababababa BOYCOTT Houses!

    Cheers

    Bob

  23. Anonymous says:

    I found a great 2 bedroom place in Hoboken that will be a good fit for my wife and I for at least 5 years. The place has been on the market for a while with no offers so we ultimately decided to throw caution to the wind and make a low ball offer (20% below original asking price). Owner is yet to respond but I think they are seriously thinking about it. I am starting to get a bit nervous and would be interested in hearing any guesses on the size and duration of the upcoming correction based on previous NY / NJ experience.

  24. Anonymous says:

    You are screwed if you buy the condo. In 5 years, the condo will be worth much less that what you paid for. You will sell the condo at a loss and wonder why you ever bought a condo at the height of a RE bubble. Did your mother raise a fool?

  25. Anonymous says:

    CONDO’S DROPPED 50% IN EARLY 1990’S.

    DO SOME DAMN HOMEWORK. SO WHAT YOU BID 20% LESS THAN OLP!!!

    IS OLP IN NOSEBLEED TERRITORY?

  26. Anonymous says:

    anon5:35-

    I’m not quite as harsh as anon5:50, but you should really consider the possibility that the value of this property may drop even below your lowball and may not rise for another few years.

    I have had had some serious questions about Hoboken and stated them on this blog several times. You may want to find out what the purchase price was for the condo and calculate some % return that seems fair to the seller based on that and see which figure works out better for you. Then they “win” and you “win.”

    JM

  27. Anonymous says:

    In response to anon 550 I did do my homework and I am comfortable that my offer is at least 15% below what comparable properties in Hoboken are going for now. My question simply was and is does anyone have any specific info on the size and duration of recent price drops in NY / Northern NJ.
    Thanks.

  28. “In response to anon 550 I did do my homework and I am comfortable that my offer is at least 15% below what comparable properties in Hoboken are going for now. My question simply was and is does anyone have any specific info on the size and duration of recent price drops in NY / Northern NJ.
    Thanks.”

    If you’re confortable with what you can afford, go ahead and buy. There’s no one who can predict the future. If you plan to be there for the long haul, everything will be just fine.

  29. Anonymous says:

    anon6:10-

    you can get info for Hudson county recent sales from the county records office…probably worth the trip…they’re pretty nice on the phone.

    many people like zillow.com or domania.com on this blog…

    I look at MelissaData.com’s new residential sales at http://www.melissadata.com/lists/ezlists/ezHomeowners.aspx

    ***Note: there’s been some debate about the accuracy of the data on that site, but I think you can get some directional information there with some confidence.***

    As Grim says, Caveat Emptor!

    JM

  30. grim says:

    Anon buying in Hoboken,

    If you already made the offer, why bother asking now?

    If your offer is accepted, I hope you have at least 20-25% down, are taking a 15 or 30 year fixed, and have a cushion of at least 6 months expenses.

    Also keep in mind that the “long haul” might be 20 years or more, with no appreciation.

    grim

  31. Anonymous says:

    As I said at 1:55 PM,
    tenfold increase in foreclosure filings, I don’t believe it.

    See following at http://goliath.ecnext.com/comsite5/bin/pdinventory.pl?pdlanding=1&referid=2750&item_id=0199-5044831 from approx. 12/2005

    SACRAMENTO, Calif. — ForeclosureS.com a California real estate information publisher and investment advisory firm, reported today that new filings of foreclosure cases in New Jersey had begun to creep up at the end of the third quarter.

    “New filings moved up to 3668 at the end of the third quarter of 2005 from 3228 in the second…

    I saw a news blurb on another site from around 2002 that said 1 in 422 households in new jersey was currently at some stage of foreclosure (looks like nj population of approx. 8MM and 3MM households).. Perhaps that’s where the 459 number came (1 in 459 households). In any event, this same outfit said 3228 and 3668 filings in 2nd and 3rd quarters of 2005. Hard to believe it was only 459 in 1st quarter.

  32. grim says:

    Anon @ 6:44,

    Did you try emailing or calling them in response? I’m sure you’ll find many of these folks to be both available and willing to help with questions.

    While I’ve talked with the folks at RealtyTrac quite a bit, I haven’t yet talked to anyone at Foreclosures.com.

    I was planning on giving them a call, but I’ve been much too busy with (real) work lately.

    grim

  33. Anonymous says:

    REINVESTOR101 @6:15

    There’s no one who can predict the future. If you plan to be there for the long haul, everything will be just fine.

    LOL. I remember this kind of advise from the MSNBC folks (Jim Cramer & co. )during March 2000.

  34. UnRealtor says:

    “I am comfortable that my offer is at least 15% below what comparable properties in Hoboken are going for now.”

    Considering properties today cost 100% more than they did 4-5 years ago, the market is in decline, and there’s a ton of inventory and new construction flooding the market, it seems you’re buying at the wrong time.

    20% off insane prices is still insane.

  35. Anonymous says:

    Hoboken was hit really hard during the last downturn, as was JC. The difference this time is they are much closer to gentrified, at least Hoboken is. So I do not think the drop will be as big, in the early 90’s you could buy in hoboken or JC for pennies on the dollar. This time will be different as HOB is a premium area today. prices will fall but the big metric to look at in Hoboken is how does my payment compare to the fair rent on what I am buying. If the rent and the mortgage are very close, when you figure in the tax benefits and the total costs they are roughly equivalent, then definitely buy. Hoboken rents are going up, supply is tight. I personally do not think the rents will ever go down, so if you can buy an 1100 sqft 2 bdr for 400k in a good part of hoboken, you are doing fairly well.

  36. grim says:

    Here is the RealtyTrac info:

    New Jersey

    2005
    January 2,282
    February 2,109
    March 1,750
    First Quarter 6,141

    2006
    January 3,474 (Up 52%)
    February 3,278 (Up 55%)
    March 3,708 (Up 112%)
    First Quarter 10,460 (Up 70%)

    Q1 – 1 in every 316 households in foreclosure.

    grim

  37. UnRealtor says:

    “This time will be different…”

    Famous last words!

  38. Anonymous said…
    I found a great 2 bedroom place in Hoboken that will be a good fit for my wife and I for at least 5 years. The place has been on the market for a while with no offers so we ultimately decided to throw caution to the wind and make a low ball offer (20% below original asking price). Owner is yet to respond but I think they are seriously thinking about it. I am starting to get a bit nervous and would be interested in hearing any guesses on the size and duration of the upcoming correction based on previous NY / NJ experience.
    5:35 PM

    My two cents on a Hoboken 2 bedroom condo.

    It better have a parking space, or else be in a great location [East of Willow Avenue or below 2nd Street]. Otherwise BE CAREFUL.

    Case in point.

    I bought a shoebox piece of crap 1BR condo down the block from Grimaldi’s Pizza on Clinton and 1st in 1998 for $165,000. I sold it it late 2002 for $275,000. It was sold in 2004 for $385,000. Last year, I’m sure the value clipped $425,000 briefly. IT IS A PIECE OF GARBAGE, and anyone who bought today at north of $375,000 [as an example] might very well find themselves doomed.

  39. Another thing – BUY ON THE TOP FLOOR unless there is cement between the floors!!!!!

  40. ‘Just to please the Joneses, they had DEBT over their eyeballs” !!!!

    Too bad Personal Bankruptcy law made it more difficult to ersae debt nowadays !!!!

  41. Anonymous says:

    Another thing – BUY ON THE TOP FLOOR unless there is cement between the floors!!!!!

    9:18 PM

    Well, you may want to think twice about that top floor if the roof is flat!

  42. Anonymous says:

    RE-elect McGreevy… he will grease the pipline of recovery.

    2:02 PM

    Okay Johnny Cakes, I see where you are going with the greased pipeline.

  43. Enjoy your studio luxury condo you paid 600k for just for the sake of being near your 40k a year paying job in coveted NYC.

    Fake Yuppie syndrome spreads

  44. delford says:

    The last down turnlasted 10 years, I know people who purchased during the last real estate bubble, and sold 10 yeara later for exactly the same price., zzero appreciation in 10 long years.

    Co-ops and COndos got hit even worse, with many selling for 50% to 60% less than the original sales price.

    Like others have said be prepared to stay for the long term, which many people seem to be describing as 5 years. Five years is nothing, I think you shouls plan on 10 years, perhaps more.

  45. Richard says:

    here’s a good example of a seller and probably realtor who got greedy and way overpriced their property and are now stuck with a smaller buying pool. MLS #2250855 in Madison started out at $677.5k ni February. Now while it’s a cute house it’s on a dead end street in a not so great part of Madison with the midtown direct train running right behind the backyard. Also note the freight train will start running off hours providing train noise 24×7 for your pleasure. It’s been dropped 3 times and is now $597.7k for an $80k drop off list and it’s STILL overpriced.

    To quote someone else from here, Will A Greater Fool Please Step Up?

  46. Richard says:

    lavalette is gross. the town looks like something out of a jaws movie.

  47. Pat says:

    Ha. I wouldn’t turn down a beachfront there, tho, if anybody’s giving them away.

  48. Anonymous says:

    From my limited experience with Realty Trac, I get the feeling that the numbers may be somewhat redundant i.e. if a property gets a NOD, then makes payment to catch up, then falls behind again after two months, it counts as another foreclosure property. I’ve seen the same property listed 3 or 4 times in a calendar year.

    The mortgage holders are struggling to keep their noses above water.

  49. Anonymous says:

    RE:

    Like Delford said, count on 10 years from the peak until you recoup….

    I bought in Hoboken in ’96 for the same price the seller paid in ’86.

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