Foreclosure Sales UP

Posted by kevin on August 10, 2016 under Foreclosure Blog | Be the First to Comment

WSJ states that foreclosure sales are up while new foreclosures are down in NJ and NY. NJ has 6.2% of its home mortgages in foreclosure. Although down, that puts NJ #1 in the country. NY comes in at 4.6%. Most of the other states have less foreclosures not because their economy and housing market are in better shape than NJ and NY, but because they have already completed most of their foreclosures.

NJ and NY are called judicial foreclosure states. That means a lender has to file a lawsuit and obtain a judgment before it can foreclose. In non-judicial foreclosure cases, the borrower signs a Deed of Trust instead of a mortgage. If the borrower defaults, the trustee (after performing steps required by state where the property is located), lists the property for sale. The borrower then must file an affirmative lawsuit (in a short period of time) to attempt to put off the foreclosure. The result is that in non-judicial foreclosure states, there is lot less litigation, and houses go to sale much more quickly.

While foreclosures are still up in NJ and NY, foreclosure sales are up also. I can see two reasons for that. First, borrowers who have ask judges to put off sales because of hardship have exhausted the good will of a vast majority of the judges. Second, housing values have gone up over the last three years. When prices were down, mortgage holders put off the sale. They did not want to get stuck with the maintenance of the property while at the same time take a bath on any resale. However, with 30% rise in prices over the last 4 years, mortgage holders can recoup more money and. perhaps, even be made whole.

There are still strategies that will keep you in your house with the goal of getting a modification. But it is getting tougher.