House Foraclosures: New Jersey Foreclosures Comparatively Lower

House Foreclosures: New Jersey Foreclosures Comparatively Lower

December 14th, 2007

According to a mortgage banker’s group (Thursday 13th December 2007) although foreclosures are rising across the nation, the numbers in New Jersey is relatively lower. During the third quarter of all the mortgage loans in the state, 1.56 were in foreclosure – a rise of 0.9% from the figures of the same period during the previous year. Across the nation the foreclosure peaked to 1.69% from 1.0% from the previous year slot. This was a record.

Considering the national foreclosure scenario New Jersey is better off and standing up to the crisis. But that should not be a reason for complacency. Foreclosures are a fall out from predatory lending of sub-prime loans leading to a slump in the hitherto booming real estate market. The worst affected are on-to-four family houses. Economists in general are alarmed that this will lead to recession. The Bush administration, after pow wows with the lending giants, has come forward with a patchy solution by offering a five year freeze on escalating interest for a period of five years for some borrowers. Some experts opine that this would do nothing else but postpone the problem.

New Jersey occupied the 23rd position in foreclosure rankings and 28th in delinquencies. The first three highest offenders were Ohio, Indiana and Michigan respectively. Those with the lowest rates were Wyoming, Oregon and Washington.

In New Jersey the delinquencies (those lagging behind 30 days in payment) in the third quarter rose to 4.91% this year from 4.03% during the same quarter in 2006. The national rate for delinquencies was 5.81% marking a 4.84% jump from the previous year quarter.

The foreclosure numbers in New Jersey at the end of the previous quarter was 7.27% - that is 5.61% rise from 2006 during the same time period. The largest offenders came from the sub-prime loans, whose rates of interest had gone up beyond reasonable limits. The economic gloom is also telling on the prime borrowers who are also struggling to keep alive their mortgages. In this category the foreclosure numbers in New Jersey rose by 0.72% from 0.52% of 2006. With prices of houses falling this group too is finding it difficult to salvage equity and sell off the unit to clear debts. A loan value of 90% has gone up to 115%.

The banker’s group surveyed 45 million loans advanced by 120 lenders.