The Star-Ledger

Homeowners Got A Bit Of Help From Lenders

The Star-Ledger — Sunday, February 24, 2013

By Tom De Poto / The Star-Ledger

More than 14,668 New Jerseyans struggling or underwater with their mortgage received help from the nation's five largest lenders last year, according to the federal Office of Mortgage Settlement Oversight. Another 5,000 homeowners are in the process of getting relief.

The news followed a report last week, however, that the percentage of troubled mortgages in New Jersey remains among the highest in the nation.

In a deal struck last year between five banks and 49 states, Ally, Bank of America, Citi, JPMorgan Chase and Wells Fargo agreed to help modify or forgive loans that were the result of lending abuses, such as robo-signings.

More than $1.2 billion was distributed in New Jersey by the banks through a variety of programs, including refinancing, short sales and lien forgiveness, according to the OMSO, which was created to monitor the banks' compliance. The average relief was $82,055.

More than 3,100 of the settlements ended in short sales, in which the bank is willing to sell the property for less than is owed on the mortgage, or forgiveness of the loan.

Nationwide, 554,389 homeowners received some form of consumer relief totaling $45.8 billion.

Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, said in a statement that the number of homeowners helped "is simply a drop in the bucket, given the tens of thousands of homeowners facing foreclosure in our state. The banks need to make more of an effort and take a much more creative approach to identify homeowners who could benefit from meaningful modifications and principal reductions."

A survey by the Mortgage Bankers Association released Thursday showed the number of homeowners delinquent on their mortgage payments was at the lowest level since 2008. But in New Jersey, the percentage increased from 16.7 to 17.9 percent.

Some of the blame could be placed on Hurricane Sandy, said Jay Brinkmann, MBA's chief economist.

"Superstorm Sandy had an impact on the delinquency and foreclosure rates in the states that were affected," Brinkmann said, "although the impacts are much more modest that what we saw after Hurricane Katrina in 2005."

Nationwide, the foreclosure rate is 11.25 percent. New Jersey is usually higher because it is among of handful of states that require the process to go through the courts.

Earlier this month, Lt. Gov. Kim Guadagno said the New Jersey HomeKeeper Program helped more than 2,300 homeowners avoid foreclosure. After a shaky start, the program is now awarding more than 250 awards a month, she said.

The program is funded through a $300.5 million grant from the U.S. Treasury Department's Hardest Hit Fund, a federal foreclosure prevention initiative.

The program, which is run by the Division of Consumer Affairs, has awarded $96 million in assistance, with an average loan of nearly $40,900.

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