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New Jersey takes the national top spot in rate of foreclosures|

New Jersey residents can now claim, at least for a while, to lead the nation in something that homeowners everywhere know about. The question is whether this new distinction will be a source of pride, because the new top ranking is in home foreclosures.

Specifically, measured as a percentage of homes subject to mortgages, in the past calendar quarter New Jersey has slightly more than eight percent in some stage of the foreclosure process.

The good news is that percentage is actually about one percent less than it was a year ago.

The bad news is the state is the only one in the country to report an uptick in the number of foreclosures in the most recent three months compared to the three month period before that.

The focus of curiosity about this recent increase in foreclosure rates centers on two considerations: First, why is it happening? And second, is it a completely bad development, or is there anything positive in it?

To answer the first question we need to go back to 2010, when the New Jersey Supreme Court ordered major lenders to take another look at how they issued loans. While those lenders were complying with the Court’s order, foreclosure filings plunged by more than 50,000.

That dramatic decrease, however, did not necessarily mean that the housing market was healthy. And as soon as the lenders finished their court-ordered review, the foreclosure filings that had been held up in the interim started to move through the process again. The result: New Jersey has now shot to the top of the nation’s foreclosure rankings.

As for the second question, as the logjam of pent-up foreclosures clear through the legal process, it is possible if not probable that New Jersey will lose its crown at the nation’s foreclosure leader. And the number of distressed loans more than 90 days past due is actually decreasing.

Aside from national and state rankings, statistics and percentages, though, for homeowners in financial distress stopping foreclosure is a deeply personal matter. With assistance from an attorney who may be able to help with debt relief strategies including loan modification, debt repayment plans or debt reorganization, it may be possible to not only deal with foreclosure notices but to potentially avoid foreclosure altogether.

Source: The Star-Ledger, “NJ now tops nation in foreclosure rates,” Tom De Poto, May 15, 2014

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