Posted by kevin on August 10, 2016 under Foreclosure Blog | 
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.
Posted by kevin on January 2, 2014 under Foreclosure Blog |
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.
Posted by kevin on October 12, 2012 under Foreclosure Blog |
RealtyTrac reported that foreclosure activity around the country dropped to the lowest point since July, 2007. True or false? Good news or not good news?
When you delve deeper into the numbers, you see that the biggest decreases were in so-called “non-judicial” states. In those states, the lender is not required to file a lawsuit to obtain a foreclosure judgment. What happens is the borrower, at closing, signs a Deed of Trust. Under the terms of that document, upon default, the trustee is allowed to foreclose after proper notice. The process is very quick and certainly not owner/borrower friendly.
In states requiring judicial foreclosure, foreclosures are actually up. For example, Florida shows a 24% increase in foreclosures. RealtyTrac says that you could expect an increase in the judicial foreclosure states especially where the courts temporarily halted foreclosures during the robo-signing controversy.
Well, New Jersey is a judicial foreclosure state and foreclosures were put on a hold for about a year beginning in late December, 2010 because of the robo-signing scandal. Inventory of mortgages in default increased. Then, lenders put a hold on foreclosures pending the Supreme Court decision in Guillaume. That happened in late February. At that time, the talk among the foreclosure bar (that means attorneys active in foreclosure practice) estimated that New Jersey was backed up over 75,000 foreclosures. You can rest assured that the lenders are not going to walk away from these properties.
So, why do we not see a deluge of foreclosure activity in New Jersey. Well, my opinion is that the lenders realize that the real estate market is weak. If they flood the market with thousands of foreclosed homes, the market will only get weaker. Better to sit on properties and spread out the process so that the lender can get a better price on each foreclosed home.
Sorry to be the bearer of not so good news.
