The Times, Trenton

Mercer Foreclosures Still On The Rise

The Times of Trenton — Friday, February 13, 2009

BY RYAN TRACY

The number of Mercer County residents on the verge of losing their homes grew at a faster pace in January than during the last month of 2008, bucking a national trend, according to a report from a foreclosure listing service.

In Mercer, 208 properties were hit with default notices, foreclosure auction notices or bank repossession last month, up from 161 in December and 177 in January 2008, according to RealtyTrac, a California-based firm.

In total, there were 2,937 foreclosure filings from January 2008 to January 2009 in Mercer, according to RealtyTrac.

The local figures deviated from a national trend that saw the pace of foreclosures slow by 10 percent last month compared to December. Compared to the same month a year ago, however, the number of foreclosure notices sent nationally in January increased 18 percent.

"I'm not surprised. It's going to get worse," said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, a Newark nonprofit that has an office in Trenton.

Salowe-Kaye said many homeowners still hold mortgages with rates and payment plans that change over time and could become significantly more expensive in the coming months and years.

In addition, "the value of homes are still decreasing," she said. "So what lies ahead in terms of foreclosures, we haven't even hit the peak. We have a couple bad years ahead."

Indeed, the National Association of Realtors said yesterday that median sales prices of existing homes declined in 134 out of 153 U.S. metropolitan areas during the final quarter of 2008 compared with the same period in 2007.

Locally, RealtyTrac reported the vast majority of foreclosure notices — 181 — impacted properties in Trenton during January 2009.

It also reported 14 notices issued in Hightstown, five in Pennington, and two each in "Titusville," "Princeton Junction," and "Hopewell." Although some of these locations are not incorporated towns, RealtyTrac provided no information on how the areas were defined, whether by Zip code or municipality.

Amidst the gloomy statistics, RealtyTrac's finding that the national foreclosure pace had slowed in January appeared to offer a small piece of good news, but the slow-down may have only come on the heels of temporary efforts.

Contributing to the monthly drop was a decision by government-controlled mortgage finance companies Fannie Mae and Freddie Mac to suspend foreclosure sales during the winter holidays. Plus, Florida Gov. Charlie Crist brokered a deal in which lenders in that state agreed to a 45-day halt to new foreclosure petitions.

Meanwhile, a federal regulator on Wednesday urged more than 800 thrift institutions to suspend all foreclosures while President Barack Obama's top economic officials develop plans to keep borrowers in their homes.

The Obama administration plans to spend $50 billion to combat foreclosures of owner-occupied, middle-class homes but is divulging few details. An announcement of the administration's housing plans is expected in the coming weeks.

Locally, officials stressed that property owners facing foreclosure ought to be proactive.

"The most important thing is that people act expediently in dealing with their financial problem, because if you call the bank a lot of times, the bank will work out a payment plan with you," said Mercer Clerk Paula Sollami-Covello.

If speaking to a lender does not help, groups like NJ Citizen Action and Isles, Inc. counsel homeowners. Their phone numbers are (800) 656-9637 and (609) 341-4714, respectively.

Also available is a state program called the New Jersey Home Ownership Preservation Effort. Its website (state.nj.us/dobi/njhope/) lists a 24-hour hotline for homeowners. That number is (888) 995-HOPE.

"Open the mail, answer the phone, try to work things out," said Trenton Mayor Douglas H. Palmer. "This is continuing to get worse."

Palmer said he believed a city task force targeted at mitigating foreclosures is making a difference, while other programs at the state and federal level could help provide much-needed.

Yet if funding comes, Salowe-Kaye emphasized that it must go "directly towards the buying down of the principal of these loans."

She also said Congress ought to mandate that creditors negotiate payment plans that are "based on a person's income ability to pay.

"That has to happen," Salowe-Kaye said. "That's the only way we'll start to move the scale."

New Jersey has taken some action recently to try to create incentives against foreclosures and increase borrowers' rights.

A new state law finalized last month charges creditors $2,000 for initiating a foreclosure proceeding on a typical subprime loan, then places that money in a trust fund for qualified borrowers and nonprofit "foreclosure prevention entities."

The law, tagged S1599 and dubbed the "New Jersey Homeownership Preservation Act," also gives the borrower the right to a request a six-month forbearance period to "pursue a loan workout, loan modification, refinancing, or other alternative," according to a summary on the state legislature's website.

The Associated Press contributed to this report.

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