NorthJersey.com

N.J. Bucks National Trend With Drop In Foreclosures

The Record (NorthJersey.com) — Thursday, June 11, 2009

BY KATHLEEN LYNN
NorthJersey.com
STAFF WRITER

While national foreclosure filings are on the rise, New Jersey filings dropped 41 percent in May from a year ago, RealtyTrac said Wednesday.

The cause for the decline is not entirely clear, and it may not point to any long-term trends, analysts said.

One explanation may be that troubled homeowners are seeking help in modifying their loans before they end up in foreclosure, according to Phyllis Salowe-Kaye, head of New Jersey Citizen Action, which counsels homeowners. The non-profit is continuing to see a high demand for foreclosure counseling, she said.

Another possibility: With mortgage rates dipping below 5 percent last month, more homeowners in distress may have been able to avoid foreclosure by refinancing out of troubled mortgages, said E. Robert Levy, head of the Mortgage Bankers Association of New Jersey.

With rates rebounding above 5 percent recently, that escape hatch may be closed for many people, he said.

In Bergen County, one in every 1,239 households received some foreclosure filing during the month; in Passaic County, the number was one in every 589.

Nationally, foreclosures were up almost 18 percent from a year ago, RealtyTrac said.

"May foreclosure activity was the third-highest month on record and marked the third straight month where the total number of properties with foreclosure filings exceeded 300,000," said James J. Saccacio, chief executive officer of RealtyTrac, a California company that tracks foreclosures nationwide.

Saccacio predicted that foreclosure activity will pick up in the months ahead as delays and moratoriums in several states end.

Nevada, California, Florida and Arizona continue to post the nation's highest foreclosure rates. During the housing boom, builders created a glut of homes in those states.

At the same time, lax lending standards and loans that artificially kept down the initial payments let unqualified buyers purchase homes. Now many of those homeowners have fallen behind on their mortgage payments.

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