8% Of NJ Mortgage Holders In Foreclosure Process

The Record ( — Thursday, November 17, 2011

The Record

About one in 12 New Jersey mortgage holders were in the foreclosure process in the third quarter, reflecting a backlog caused by the "robo-signing" mess, the Mortgage Bankers Association said Thursday

About 8 percent of mortgages are in the foreclosure process in the Garden State, compared with 4.4 percent nationwide, the mortgage trade group said.

In addition, about 3.8 percent of New Jersey mortgage holders, and 3.5 percent of U.S. mortgage holders, are "seriously delinquent" — 90 days or more late on their payments, the group said. Housing counselors say many homeowners can't pay their mortgages because they've lost their jobs.

"We're inundated," said Phyllis Salowe-Kaye of N.J. Citizen Action, the state's largest housing counselor. "It's the economy. It's unemployment, it's underemployment. People's unemployment insurance has run out."

The state's unemployment rate was 9.1 percent in October, state labor officials said Thursday.

New Jersey's foreclosure pipeline has slowed dramatically in the past year, since state courts ordered lenders to show they were not "robo-signing" legal documents - that is, pushing through paperwork without checking its accuracy. Although lenders were cleared to start filing foreclosures again in August, they have been reluctant to move forward in light of a recent legal ruling that threw out a foreclosure filing because the lender wasn't properly identified. That case is to be heard on appeal by the state Supreme Court.

The Mortgage Bankers Association said the third-quarter data showed that nationally, the rate of mortgage holders who have missed one month of payments has gone down, a sign that fewer homeowners are in distress.

Still, Michael Fratantoni, an MBA economist, warned that the weak job market continues to slow the housing recovery.

"We are not out of the woods yet," he said.

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