Is There an End in Sight? NJ Once Again Worst for Foreclosures
Fewer property owners in New Jersey are at risk of losing their home to foreclosure than in years past, but the state's foreclosure rate is still the worst in the nation, according to new data.
A report released Thursday by real-estate tracker ATTOM Data Solutions finds New Jersey's rate of foreclosure activity — one in every 75 housing units — was the highest among the 50 states and D.C. in 2018. The national rate was one in every 215 homes.
The report counted 47,619 New Jersey properties last year with a foreclosure filing — default notices, scheduled auctions or bank repossessions.
"It's really an economic story here in New Jersey that causes this to linger," Jeffrey Otteau, president of Otteau Valuation Group in Matawan, told the Townsquare News Network. "New Jersey's economic performance since the last recession has been one of the worst in the nation, with a lower recovery in jobs and in wages, which feeds into the foreclosure problem."
As a result of a slower recovery, Otteau noted, home prices in New Jersey are still 9 percent lower than they were back in 2006 before the recession began. Nationally, home prices are up 17 percent since pre-recession days.
"Those who bought their homes just prior to the last recession may have mortgage balances which are higher than what those homes can be sold for today, and that also feeds into foreclosure," he said.
While the nation as a whole has seen significantly steeper declines in foreclosure rates over the years, the Garden State outperformed the national rate in 2018, according to the new report. New Jersey's rate dipped 17 percent compared to 2017. Nationally, the rate dropped about 8 percent.
Otteau said signs in New Jersey suggest "this problem is going to get better soon." The delinquency rate here — the percentage of owners with a mortgage who've missed three or more payments — is approximately 3 percent today, down from about 11 percent five years ago.
"There are fewer and fewer homes that will be feeding into the foreclosure process going forward," Otteau said. "While New Jersey has been at the top of this list for a very long time, it is likely to get better in the near future."
The state saw 18,801 properties start the foreclosure process in 2017. That's down from 21,274 in 2017, when the state experienced a 23 percent drop in foreclosure starts from the year prior.
At 1,162 days, New Jersey ranks among the states that take the longest time to move a foreclosure from start to finish, the report finds.
Otteau said the foreclosure process in New Jersey is "very protective of consumer rights," so judges are "very reluctant to approve a foreclosure until all other possible solutions have been exhausted."
"I can tell you that if we had processed foreclosures more rapidly over the last nine years, home prices would be even lower today because that's what foreclosures cause in a market," he said.