Foreclosure Filings Nearly Flat In N.J., But Problem Is Far From Over

The Record ( — Thursday, January 14, 2010

The Record

Foreclosure filings in New Jersey totaled about 63,000 last year, a 1 percent increase over 2008, RealtyTrac said Wednesday. However, the housing market's troubles are far from over, experts say.

"A massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond," said James J. Saccacio, chief executive officer of RealtyTrac, which follows the foreclosure market.

Foreclosure actions
Foreclosure filings — ranging from a late payment notice to sale at sheriff's auction — were up last year in most places:

Location Filings Change
Bergen 4,991 +28%
Passaic 4,524 -1 0%
N.J. 63,208 +1%
U.S. 2.8 million +21%
Source: RealtyTrac

Nationally, foreclosure filings were up about 21 percent in 2009, to 2.8 million. The worst-hit states continue to be Nevada, Arizona, Florida and California.

The foreclosure numbers "would have been worse if not for legislative and industry-related delays in processing delinquent loans," Saccacio said. Those delays include trial-loan modifications, state legislation extending the foreclosure process and "an overwhelming volume of inventory clogging the foreclosure pipeline," he said.

Housing counselors say those factors may stretch out the foreclosure timetable, but not permanently solve the problem of homeowners who got mortgages they couldn't afford to repay.

Sylvine Marabotto, chief executive officer of Consumer Credit Counseling Service in Cedar Knolls, said government programs encouraging lenders to modify loans have slowed calls from desperate homeowners. Many distressed homeowners have gotten into three-month temporary loan modifications, she said.

But lenders have not been quick to turn those temporary deals into permanent modifications, according to both Marabotto and Phyllis Salowe-Kaye, head of N.J. Citizen Action, the state's largest housing counselor.

"The numbers suggest people aren't able to convert their temporary modifications to permanent," Marabotto said. "What happens to those people? The foreclosure is still going to go forward."

Salowe-Kaye said her agency is still being inundated by distressed homeowners. And nowadays, more are in trouble not because they got subprime loans but because they have lost their jobs, she said. New Jersey's unemployment rate is 9.7 percent.

While many lenders are temporarily cutting the interest rates on troubled mortgages, Salowe-Kaye said, many distressed homeowners won't be able to keep their homes unless the amount they owe is reduced. But lenders rarely trim the loan amount, she said.

"A lot of foreclosures are being postponed," she said. "But the house of cards will soon collapse, and a lot of people are going to be put out."

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