Asbury Park Press

Foreclosures Down In NJ, But Picture Not Rosier

Asbury Park Press — Monday, May 16, 2011

Associated Press

A falling number of home foreclosures in New Jersey does not mean the state's struggling homeowners are finding ways to keep their houses.

"I think that we're not feeling any change because we're still dealing with people who have received their notices and are trying to get help," said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, which offers legal help for homeowners facing foreclosure.

During and after the Great Recession, foreclosures in New Jersey — like many states — skyrocketed.

RealtyTrac, an Irvine, Calif.-based firm that monitors court filings related to foreclosures, found that the number of initial legal notices of intent to foreclose went from 31,000 in 2006 to more than 50,000 in 2009. And the number of homes actually taken over by lenders increased even more dramatically — from 2,200 in 2006 to 10,800 last year.

The increase brought with it concerns that lenders and courts were not filing all the legal protocol necessary to take back possession of a home. One of the main problems was "robo-signing," in which employees signed foreclosure documents — sometimes by the hundred — without checking them for accuracy.

In December, state Supreme Court Chief Justice Stuart Rabner stepped in and ordered six of the nation's biggest mortgage lenders to show why their foreclosure operations shouldn't be suspended in New Jersey.

After that, the number of foreclosure-related filings dropped quickly. And they haven't bounced back since a special court master was appointed in March to monitor foreclosure proceedings.

Last month, there were 1,185 foreclosure-related court filings — a number below the normal monthly tally before the recession and just one-sixth as many as there were in April 2010.

RealtyTrac says the average New Jersey foreclosure, from beginning to end, now takes 908 days. That's more than twice the national average and trails only New York — and only by about two weeks.

Kathleen Witcher, president of the Irvington chapter of the NAACP, has been trying to help people in her community stay in their homes despite the double-crunch of rising unemployment and rising property taxes. She said she appreciates the "robo-signing" crackdown but doesn't believe it will make much of a difference in the long run.

"It doesn't mean that Wells Fargo, Morgan Chase and other bankers aren't going to put people out of their property," she said.

In fact, she said, she's getting more calls than ever from stressed homeowners and seeing more boarded up homes. And most people she tries to help still end up losing their homes, she said.

Citizen Action's Salowe-Kaye said that while court filings may be less frequent, plenty of borrowers who fall behind on payments are still getting threatening letters from the owners of their mortgages.

Daren Blomquist, a spokesman for RealtyTrac, said the data nationwide backs up those observations.

"The numbers are less," he said. "But there's still kind of this overhang of distressed properties that the lenders will probably have to foreclose on eventually."

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