1 in 10 NJ Mortgages are Still in Trouble, Data Shows
New data shows that one in 10 New Jersey residential mortgages are still in trouble, eight years after the great recession began.
The Mortgage Banker's Association's National Deliquency Survey shows 10.2 percent of Garden State home mortgages are either in foreclosure or at least 90 days in arrears.
At 10.2 percent, the New Jersey distressed mortgage rate or DMR, is twice the national average of 3.95 percent. And our DMR is again the highest in the nation for the seventh consecutive year.
Patrick O'Keefe, director of economic research for Cohn/Reznick in Roseland, says the reasons are varied. Our state has recovered much slower from the economic turndown, and that includes the housing sector. He also says the New Jersey housing sector was hit somewhat harder than most states in terms of the downturn, back in 2006-2009.
"We are a judicial foreclosure state, which means that the courts supervise discharge of impaired mortgages. We afford ourselves more protections but it means that it takes longer to clear the foreclosure through the system," O'Keefe said.
According to O'Keefe, a lot of residential mortgages in trouble is a problem for the state and local neighborhoods that goes beyond just the economic numbers. He suggests that the number of pending mortgage forclosures influence price appraisals of neighboring properties. Simply stated, many times those facing foreclosure have less incentive to keep a residence in shape or even pay taxes on it.
O'Keefe said the good news is the total number of mortgages in trouble has been slowly shrinking across the U.S. and in New Jersey.
"We are making progress," O'Keefe said. "We are just making it at a slower pace than elsewhere."