Herald News

Foreclosures Threaten Whole Neighborhoods

Herald News — Sunday May 3, 2009

BY KATHLEEN LYNN AND DAVE SHEINGOLD
HERALD NEWS STAFF WRITERS

Home foreclosure activity continued to spread throughout Passaic County last year, hitting especially hard in urban areas.

The number of people facing the possible loss of their property nearly doubled, from about 2,600 to almost 5,000. An analysis of foreclosure data by the Herald News found that lenders were at some stage of the takeover process against roughly one in 21 residential properties in the county, compared with one in 41 in 2007.

Hardest hit were Paterson and Passaic, where the wave has spared no neighborhood. Owners of some 2,700 residential properties, or one of every seven, were in default on their mortgages in Paterson, while one in 11 Passaic homeowners fell into the same predicament. Haledon, Prospect Park and Clifton had the next highest rates.

"You can drive through some of these cities and see neighborhoods devastated by foreclosures, with boarded-up buildings," said Phyllis Salowe-Kaye, head of N.J. Citizen Action, which counsels homeowners in trouble. The distressed properties are pulling down values of nearby homes, she added.

The North Jersey foreclosure clusters include:

Low- and lower-middle-income areas accounted for about 74 percent of the roughly 8,900 North Jersey homes in some stage of the foreclosure process last year — from notices of mortgage default all the way to sale at sheriff's auction. In lower-priced areas, where homeowners often live paycheck to paycheck, job losses and other setbacks can quickly lead to a crisis.

The trend continued into the first quarter of 2009, with roughly another 725 cases filed against homeowners in Clifton, Passaic and Paterson. In the suburbs, Wayne saw nearly 50 more and Totowa, 11.

But the 2008 numbers also show foreclosures are a growing problem for higher-income households, especially as Wall Street and corporate job losses hit hard in the wealthier neighborhoods of North Jersey. The New York metropolitan area, which includes North Jersey, lost 35,100 finance jobs and 58,600 jobs in professional and business services between February 2008 and February 2009.

"There's an old adage — the bigger they are, the harder they fall," said Robert Stemple, a Re/Max agent in Saddle River. "When you have a million-dollar house, you probably have a large monthly payment."

An analysis of 2008 foreclosure activity revealed that lenders started the process of retaking nearly 370 homes in higher-income towns, where the typical single-family home sold for more than $620,000 in 2007. That was up 177 percent from about 130 in 2007 — as foreclosure activity overall throughout Bergen and Passaic counties doubled.

Some of the biggest jumps came in places such as Saddle River, where the number of properties facing foreclosure quadrupled, from 15 in 2007 to 60 in 2008, and Wyckoff, where it rose from nine to 23.

The number of cases jumped from 131 to 237 in Wayne, from 34 to 68 in Totowa, and from 14 to 43 in Bloomingdale, according to the analysis of data provided by RealtyTrac, a California company that monitors foreclosure activity.

Sylvine Marabotto of the Consumer Credit Counseling Service in Cedar Knolls said there's no sign that the tide of foreclosures is slowing.

She expects to see more homeowners in trouble, as rising unemployment puts more households at risk.

"It's really not easy for folks to stay in their homes, whether rich or poor," Marabotto said.

Top Top | NJCA Homepage | NJCA in the News