2014- NJ- Where We Are

Posted by kevin on January 2, 2014 under Foreclosure Blog | Comments are off for this article

For the US as a whole, foreclosures are at their lowest level in years. Nationwide, home prices are up 13.6% over the prior year. Unemployment is supposedly below 7% but those numbers are fudged so much that, frankly, I do not know what they mean.

New Jersey, however, is not faring as well as the rest of the US. Unemployment is at about 8.4%. Values of single family homes are up only 4.9% in north NJ. Price levels are comparable to those of 2004 and are 20% below the peaks reached in 2006. In Bergen County, prices rose only 3.6% while Passaic did a little better with 8.8% increases in single family residences.

Nearly 7% of NJ homes are slated for foreclosure according to CoreLogic. That is the second highest amount in the country. Only Florida at 7.1% is higher. In New Jersey, 10.6% of homeowners are at least 90 days behind on their mortgages.

New Jersey is a judicial foreclosure state. That means that a lender must file a complaint and then obtain a final judgment before it can schedule a foreclosure sale. This slows the process down considerable. Even in uncontested cases, it can take 180-200 days to get to sale (double that or more if aggressively contested). On the other hand, in non judicial foreclosure states, the process can be over in 45 days. The trustee of the deed of trust (the equivalent to a mortgage in NJ) sends the proper notices. If the loan is not brought current, the trustee can schedule a sale. Courts get involved only when the borrower files a complaint to stop the sale.

Because the process takes longer in judicial foreclosure states, there is a longer backlog. It is anticipated that in NJ foreclosures will continue at the 2013 pace until well into 2015.

What should you do if you are delinquent on your mortgage or on the brink of becoming delinquent. Time to take stock. If you are our of work, you have to get back into the game. No work, no history of income, no way you are going to be able to get a modification. However, a modification is not right for all people. If your house is still underwater, and comparable rental property is available for 60% of your current mortgage payment, well maybe it’s time to deed the property back to the lender. You will never recoup your money on that house.

Be wary of short sales. I rarely see a scenario where a short sale makes sense to a homeowner except in situations where association fees continue to mount. You do a lot of work on behalf or your lender and all you get in return is a 1099 for the shortfall which, in some cases, leads to a tax liability to Uncle Sam.

Finally, remember that although HAMP (actually MHA with HAMP being their modification alternative) is better- much better than it was a few years ago, you are still at the mercy of the servicer. Sometimes, I have seen really good mod offers; other times I just walk away shaking my head. However, just like the lottery, you gotta be in the game to win.

Feel free to contact our offices to discuss your situation.