Foreclosure activity rises in NJ, while dropping nationwide
Thursday, April 11, 2013
* Distressed properties had piled up over the years as mortgage servers were taken to task.
While foreclosure activity is dropping nationwide, it rose 42 percent in the first quarter of 2013, compared with a year earlier, in New Jersey, RealtyTrac reported Wednesday.
The worst of the foreclosure crisis has passed nationwide, but distressed properties piled up in the Garden State over the past several years as mortgage servicers were forced to deal with allegations of abuses such as "robo-signing," in which mortgage industry representatives signed documents without checking them in their rush to evict homeowners. Several legal settlements have cleared the way for mortgage servicers to begin moving forward on foreclosures again in New Jersey.
Nationally, foreclosure activity was down 23 percent from the first quarter of last year to the first quarter of this year. RealtyTrac, which is based in California and tracks the foreclosure market nationwide, counts all types of foreclosure filings, from the initial notice that a homeowner is in default on the mortgage all the way through to sale of the property at sheriff's auction.
The N.J. Judiciary, which tracks foreclosure activity using different methods, also reported a big jump in the first quarter of this year, compared with last year. It reported 8,571 initial residential foreclosure filings, up 120 percent from last year.
In a report Wednesday, two economists for the Federal Reserve Bank of New York said that the region's backlog of foreclosed properties might become "a drag on the region's home prices."
"When a home enters foreclosure, the incentive for homeowners to maintain or improve the home is significantly reduced. As a result, homes in foreclosure tend to deteriorate more rapidly than otherwise similar homes, diminishing their values," economists Jaison R. Abel and Richard Deitz wrote in the New York Fed's Liberty Street Economics blog. In addition, these properties are "often sold as distressed properties at reduced prices, in part because the foreclosing bank would prefer not to hold them for long."