Although nearly everyone has probably heard something about the high rate of foreclosures across the nation in recent years, New Jersey residents will be sad to hear that their state now sits atop the list of states with the highest rates of foreclosure in the nation. Foreclosure is an unfortunate end to the home owning process for some people, and this story has many important implications for homebuyers and owners alike.
A mortgage is considered underwater if the homeowner owes more on the mortgage than the assessed value of the property, also referred to as negative home equity. In both Newark and Elizabeth, New Jersey, more than half of all homes are underwater, with Paterson just behind at 49 percent.
After seven years of slogging through record numbers of foreclosures, there may be a light at the end of the tunnel for the New Jersey court system—and for struggling homeowners. New Jersey court officials are making strides unclogging a backlog of foreclosure cases and sorting through all of the twists and turns in cases that may involve foreclosure fraud and “robo-signing.”
While national figures on foreclosure showed a 26 percent decline in 2013, the number of foreclosure filings in New Jersey soared by 44 percent. By the end of the year, 1.1 percent of homes in the state were in foreclosure.