New Jersey Foreclosure Trends and Hope on the Horizon

October 10, 2012 (Press-News.org) New Jersey Foreclosure Trends and Hope on the Horizon

RealtyTrac, a firm that tracks the U.S. foreclosure market, reported that August 2012 foreclosures were up nationally by 1 percent from July, but down 15 percent from August 2011. Bank repossessions, called REOs for short, were also down 2 percent in August from July 2012 and down 19 percent from the year before. That's good news for homeowners and communities in general, but 20 states still saw increased foreclosure activity in August 2012 from the previous year.

New Jersey Numbers

Among those states was New Jersey, which saw a 101 percent annual increase in foreclosure starts. New Jersey was also above the national average for the number of foreclosure filings in August 2012, with a rate of one in 1,461 homes, while nationwide the rate only was one in every 681 homes. The Garden State also landed at number 32 of 50 states on the distressed-housing list.

New State Law Targets Financial Predators

Help is on the way for New Jersey homeowners from state legislation passed in June 2012. The Foreclosure Rescue Protection Act, or FRPA, seeks to protect defaulting homeowners by stopping treacherous "foreclosure consultants." These predators have been "fixing" homeowners' mortgage problems by buying their mortgages at prices below the homes' values and renting the homes back to the owners. The consultants then turn profits by selling the homes for fair market value.

The FRPA seeks to weed out those preying on distressed homeowners by requiring consultants to be licensed by the New Jersey Department of Banking and Insurance. The law mandates that these contracts be written in large print in the language of the homeowner's choice. To protect against unfair purchasing, the law further requires a consultant to pay at least 82 percent of a home's value as determined by an independent appraiser. Above all, the FRPA allows the homeowner to rescind the agreement at any time, making the process less certain and less attractive to a shady consultant.

Homeowner Assistance

Things may also be looking up for New Jersey homeowners when it comes to foreclosure assistance through the state-run, federally funded Homekeeper Program. The state is tweaking the program to ensure more struggling homeowners are assisted financially when faced with losing homes to foreclosure.

In early October 2012, New Jersey Gov. Chris Christie acknowledged that New Jersey's Homekeeper Program was not being implemented the way it was intended. Launched in 2011, New Jersey's program received $300 million from the federal government to assist underwater New Jersey homeowners that meet certain criteria. However, only $42 million of the $300 million had been distributed by the first part of October 2012.

The Homekeeper Program's director, Richard Constable, said the previous Commissioner made the criteria for receipt of funds too stringent, rejecting many who should have received much needed help. Constable has multiplied the number of staff members administering the program and is using public announcements and faith-based groups to increase publicity.

Though times are still tough in New Jersey's housing market, glimmers of hope are breaking through for those struggling to stay in their homes. New legislation and increased attention on the Homekeeper Program are significant steps in the right direction to protect the public and get things back on track.

Article provided by Law Offices of Phillip F. Drinkwater III
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