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Mortgage Foreclosures Rising in New Jersey and Across the US

For a time at the end of 2010 and beginning of 2011, it looked like the U.S. housing market was starting to show signs of recovery from the foreclosure crisis that hit the country after the 2006 real estate bubble burst. However, a new government report suggests that mortgage lenders are aggressively resuming foreclosure activity in New Jersey and across the U.S., after having paused due to legal troubles.

Foreclosure Statistics

A report the Office of the Comptroller of the Currency issued in December 2011 showed that while the number of foreclosures for the third quarter of 2011 was down by 11.8 percent from the third quarter of 2010, mortgage foreclosures increased by 21 percent from the second quarter to the third quarter of 2011. According to data from CoreLogic, at 6.4 percent New Jersey had the second-highest inventory of foreclosed homes at the end of 2011.

The jump in foreclosures in the third quarter of 2011 returned U.S. foreclosure rates to the levels they had been prior to the slowdown at the end of 2010. Lenders began new foreclosure proceedings on 347,726 homes in the third quarter of 2011, and experts believe that foreclosure numbers will remain near this level for the first few quarters of 2012. The report revealed that there are almost 1.6 million "seriously delinquent" loans in the U.S., where the payments are more than 60 days past due or the borrower is bankrupt and the payments are more than 30 days past due.

Reasons for the Increase

Experts suggest that the reason for the increase in foreclosures has to do with the February 2012 national settlement of the "robo-signing" scandal of 2010. After the allegations that banks were improperly foreclosing on homeowners and not reviewing the paperwork accompanying foreclosure filings to ensure accuracy, many of the largest lenders suspended foreclosures until they could review their processes. Now that the reviews are complete, the lenders are free to recommence foreclosures.

Additionally, experts suggest that lenders have worked through the backlog of the most seriously delinquent borrowers negotiating for alternatives to foreclosure. The lenders claim to have "exhausted alternatives" for those homeowners and are beginning to foreclose.

Consult an Attorney

Facing foreclosure can be an overwhelming prospect. Those who are at risk of losing their homes to foreclosure should contact an experienced lawyer who can discuss their options with them.

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    David Alan Ast
    Firm Partner David Alan Ast has more than 25 years of experience helping people throughout northern New Jersey get a fresh start and move forward with their financial lives. He is committed to protecting the rights of his clients seeking debt relief.
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    Robert L. Schmidt
    Firm Partner Robert L. Schmidt earned his Bachelor of Arts in Business Administration and Finance from Stockton State College in 1990. Three years later, he earned his Master’s degree from Rutgers University School of Business in Camden with a major in finance. Robert then acquired his J.D. from James E. Beasley School of Law at Temple University in 1997.
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