Nationwide, foreclosures are down to approximately 3.2 percent, but in New Jersey, the number of homeowners in default is 7.7 percent. New Jersey only ranks behind Florida in the number of homes in the foreclosure process.
However, the figures are a bit misleading. New Jersey’s foreclosure process is done through the court system and takes, on average, 900 days. While the number of houses going into foreclosure is about the same as the national average, they stay in the process much longer. It is also useful to note that Chapter 13 bankruptcy may halt the foreclosure process and give the homeowner a chance to regroup.
Another factor that skews the numbers is the issue of signing practices by banks that unfairly put homeowners in foreclosure. Simply put, many of the signing practices were fraudulent and not in compliance with Fair Foreclosure Act. The New Jersey Supreme Court requested the larger banks review their procedures, and filings took a dramatic tumble from 58,000 in 2010 to a mere 6,000 by the summer of 2011. As the lenders complied, defaults shot up 130 percent in just a year.
Chapter 13 bankruptcy is an option when individuals find themselves overwhelmed by debt due to circumstances such as job loss, divorce or even death of the main income earner. This process allows for debt to be restructured through the Bankruptcy Code and paid off over a period of several years. It is generally possible to keep real property and stop the foreclosure process as long as the homeowner can afford to continue making the mortgage payments.
Source: NJ.com, “New Jersey foreclosure numbers are high for a reason”, Tom De Poto, Dec. 9, 2012