Bank Owned Houses in New Jersey Rose As Job Loss Grew

Bank owned houses rose in number in New Jersey in December as job loss grew. Based on numbers from court records, residential foreclosure postings in December last year increased by 29 percent from the same month in 2008.

Throughout 2009, a total of 62,775 foreclosure actions were filed in the state, far above the 48,698 foreclosures filed in 2008 and the 23,000 filings in 2006.

As the unemployment rate soared to 10.1 percent in December – higher than the nationwide jobless rate – more residents of New Jersey were forced into default and foreclosure.

The biggest rates of foreclosure increase in the state occurred in the counties of Bergen and Atlantic, with increase rates of 48 percent and 55 percent, respectively. The smallest rates of increase were in the counties of Essex and Cumberland, with increase rates of 12 percent and 11 percent, respectively.

Although not all foreclosure filings move on to foreclosure sales, as many distressed homeowners try their best to rescue their homes, a big portion of delinquency filings ultimately end up in lists of bank owned houses.

According to a report released by the U.S. Treasury Department, over 28,000 homeowners with home loans in New Jersey applied for loan modifications under the Obama administration’s foreclosure prevention program. But as of December last year, only 2,027 borrowers were able to have their mortgages modified permanently.

Meanwhile, based on records from the state Foreclosure Mediation Program, over 1,300 distressed homeowners were assisted to negotiate repayment arrangements with their lenders and about 50 percent were able to delay foreclosure proceedings. But analysts contend that job losses will bring most of these temporarily rescued mortgages into eventual foreclosure.

In a separate report released by a foreclosure tracking company based in California, the total number of residential units hit with foreclosure petitions in 2009 in New Jersey was 63,208, representing 1.8 percent of all housing units in the state. Foreclosure activity in 2009 stepped up by 1.1 percent from 2008 and by more than 103 percent from 2007.

Compared with other states, New Jersey was tenth in number of filings and was 14th in foreclosure rate. More than 2.8 million residential units across the U.S. were hit with foreclosure notices in 2009.

In December 2008, the jobless rate in New Jersey was only 6.8 percent. With a 10.1-percent jobless rate in December 2009, it is no wonder that bank owned houses grew in number last December.

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