From the Star Ledger:
The number of New Jersey homes in foreclosure dropped in the first six months of the year, according to a report from RealtyTrac, from 18,417 last June to 10,733 this year, easing fears of a flood of filings.
Nationwide, foreclosure filings were up 2 percent from the previous six months, but down 11 percent from the same time period last year, according to the report.
In February, the New Jersey Supreme Court unfroze foreclosure procedures and clarified what information must be included in paperwork that initiates the process, known as the notice of intent to foreclose. At the time, it was estimated there were 50,000 to 100,000 unprocessed foreclosures in limbo.
Yesterday’s data also followed a national financial settlement in February with five major lenders on foreclosure-processing abuses known as “robo-signing.”
“We had been concerned after the settlement that we’d see a real rise in foreclosures,” said Stan Humphries, chief economist at Zillow, a real estate firm. “We are seeing an increase in some states, but that rate is well below what it was previously,” he said, noting that foreclosure filings peaked in the summer of 2009. Since then, banks, mortgage brokers and even some states have moved aggressively to stem the tide.
Foreclosure activity in New Jersey in the second quarter of 2012 significantly increased compared to the same period in the previous year, according to a report from Irvine, Calif.-based RealtyTrac.
But a real estate expert said the timing couldn’t be better for an increase in foreclosures, with the state’s housing market improving and banks becoming more proactive in the foreclosure process, following a lift of the state’s moratorium and a multibillion-dollar national foreclosure settlement.
“The moratorium had the effect of delaying an increase in foreclosure inventory from worse times to better times,” said Jeffrey Otteau, president of Otteau Valuation Group. “What we’re seeing now is the problem is not getting worse but better, because banks are now moving forward.”
According to the report, foreclosure actions in New Jersey declined 10.44 percent from May and 1.32 percent from the first quarter of 2012, but increased by 65.91 percent from the second quarter of 2011. In the United States, foreclosures declined 3.96 percent from May, 2.55 percent from the first quarter of the year and 8.21 percent from the second quarter of 2011.
But Otteau said regardless of the increase in foreclosure filings, New Jersey is beginning to close the gap between the number of homes entering foreclosure and the amount of completed transactions, which he said is a greater indicator of a state’s health in the real estate market.
“The housing market this year is in its strongest position of the last five years and better able to absorb the distressed inventory that is being introduced into the market,” Otteau said, noting that, year to date, home sales are up 24 percent and inventory is down 14. “Between the properties going into foreclosure and the ones we’re selling, we’re down to a net gap of only about 400 houses a month. By next year at this time, we should be seeing a sales surplus, and some states have already reached that point. Our foreclosure problem should begin to shrink.”