Housing Defaults Doubled In N.J.

The Record ( — Thursday, January 15, 2009


About 62,500 properties in New Jersey faced foreclosure filings in 2008 — twice the number in 2007, RealtyTrac reported Wednesday. Foreclosures rose about 180 percent in Bergen and Passaic counties.

Nationally, 2.3 million properties were in some state of the foreclosure process in 2008, an 81 percent increase from 2007, according to RealtyTrac, a California company that follows the foreclosure scene. Worst hit were California, Florida and Arizona.

At New Jersey Citizen Action, which counsels distressed homeowners, the jump in foreclosure filings in 2008 came as no surprise to Executive Director Phyllis Salowe-Kaye.

"And 2009 is going to be even worse," she said, because many adjustable loans are scheduled to reset at higher payment levels this year.

"Add to that the fact that home values continue to drop, and the number of foreclosure filings is going to be through the roof in 2009," she said. "I think there is a lot of distress and hardship out there for New Jersey families."

In Bergen County, 3,912 properties had foreclosure filings in 2008, up from 1,411 in 2007. In Passaic, 5,044 properties had filings, up from 1,790 the previous year. Hudson County had 3,950 filings, up from 884 the previous year, and Morris had 2,011, up from 838.

RealtyTrac measures all foreclosure filings, ranging from a lender's legal notice that a borrower is in default all the way through a sheriff's sale of the property. Many homeowners who receive default notices are able to resolve the situation without losing their homes at a sheriff's auction.

Governor Corzine signed a law last Friday aimed at helping homeowners avoid foreclosure. Under the law, $40 million in state funds will be used to offer loans to distressed homeowners and allow non-profit groups to buy properties and lease them back to their former owners, with the hope that the residents will be able to buy the homes back later.

In signing the law, Corzine said foreclosure "hurts the neighborhood, not just the individual." The state expects 16,000 at-risk homeowners to take part.

The state has also set up a $12.5 million mediation program that will help borrowers in trouble negotiate with their lenders. Borrowers can call 888-989-5277 or visit for information.

The toll-free line, which opened Monday, was swamped with more than 5,000 calls a day in its first two days, according to Melville Miller, head of Legal Services of New Jersey in Edison, which operates the line. Because of the volume, many callers have not been able to get through.

"This is a pretty profound human cry for help," Miller said.

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