New Jersey plays catch-up in foreclosure market | South Salem NY Real Estate

Foreclosures are down nationwide, but linger in New Jersey. Joe Raedle/Getty Images

Despite a drop in foreclosures nationwide, New Jersey continues to play catch-up.

A report today from RealtyTrac showed foreclosure activity dropped signnificantly as banks have been encouraged to work with homeowners to find ways to kep them in their homes or unload them through short sales, in which the property is sold for less than the debt owed on it.

Bank repossessions were down 17 percent nationally last year, according to RealtyTrac. Foreclosure filings dropped 3 percent. That represents a drop of 36 percent from a peak in 2010, the firm said.

But foreclosures surged in New Jersey by 55 percent over last year. New Jersey, along with Florida and Illinois, saw the largest increases in foreclosure activity.

So-called judicial states like New Jersey, in which the process must go through the courts, take longer to resolve cases. A backlog built up in 2011 when courts ordered the the mortgage industry to address charges the companies employed questionable procedures in order to streamline the process, often hurting homeowners.

In New Jersey, the foreclosure process can take up to three years to complete, leaving a larger than average backlog.

While foreclosure activity declined last year, the inventory of homes in some stage of foreclosure or in banks’ possession climbed 9 percent to 1.5 million homes, RealtyTrac said.

Florida accounted for the biggest share of foreclosure inventory last year, or 20 percent of the national total.
The Associated Press contributed to this report