Residential foreclosures are rising in New Jersey

The residential foreclosure rate in New Jersey increased 29 per cent in ’09 as compared to ’08. Statistics reveal that a South Jersey county has been hit the hardest. The counties that are witnessing very high number of foreclosures are Bergen, Atlantic and Sussex.

Meanwhile foreclosures of commercial properties have also been increasing. They are up by 68 per cent to 1,471 from 875.

Nationwide, around 2.8 million homes have been foreclosed, registering a spike of 21 per cent as compared to ’08. This was revealed by RealtyTrac, a company that records foreclosures. It has been compiling the data since ’05.

In Pennsylvania, there were 44,732 filings. This is a 20 per cent hike over that in ’08. As the dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, James Hughes, points out, the crisis will not get any better. He says that the crisis started when the borrowers took exotic subprime mortgages. However, the crisis has now boiled down to the middle class taking conventional loans.

Hughes said that there are many sharks, who are influencing people to buy homes at prices that are inflated. These loan products are really scandalous. He also observes that the "shadow inventory" of foreclosed homes is on the increase. Many banks are not announcing foreclosures at the request of President Obama. However, the situation would not last for long.

It may be pointed out here that most residential properties in New Jersey, around 63,000, are in various stages of foreclosure. The figures have been compiled by Office of the Clerk of the Superior Court. In 2006, the number was 25,000. What is plaguing homeowners is the negative equity of homes. Many homes are underwater in the sense that homeowners owe more on their homes than what they are worth.

Hughes says that it is sad to note that middle class homeowners are very badly hit because of job loss. They are cash-starved and just do not know how to make the mortgage payments. The unemployment rate in New Jersey has also hit a high of 10.1 per cent. In fact, it has touched a 33-year high. This has been revealed by the Department of Labor and Workforce Development.

The executive director of New Jersey Citizen Action Phyllis Salowe-Kaye says that there will be fresh foreclosures. They "won’t be kicking in until the end of 2010 and 2011. It’s really a serious issue."

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