Foreclosure activity in the United States has doubled each year, but remains below pre-pandemic levels. But where is New Jersey when it comes to foreclosure?
About 324,000 households nationwide will receive foreclosure notices in 2022, according to Rick Sharga, executive vice president of market intelligence at Attom. That’s what I mean.
While it sounds like a lot of people are getting foreclosure notices, it’s actually significantly lower than before the pandemic, and doesn’t indicate a tsunami of foreclosure issues.
why is this happening?
The U.S. has committed two years of incredible government intervention and a very high level of financial hardship by the mortgage services industry to prevent unnecessary defaults and foreclosures that may have been strictly due to the COVID-19 pandemic. He said he was coming out of hard work.
“So about 8.5 million borrowers have taken advantage of government programs to help them through what could have been financially difficult times,” said Sharga.
The government has also suspended most foreclosure activity for about two years, much slower than is usually seen in the normal market, he explained.
The industry is slowly returning to more normal levels of foreclosure activity.
Foreclosure activity in an average year represents about 1% of borrowers in the market, he said. These borrowers usually find themselves in some sort of financial hardship, such as job loss, loss of income, divorce, unexpected bills, or the death of a family member, and are unable to make their mortgage payments on time.
According to Sharga, three or four missed payments in a row will initiate the foreclosure process.
Across the United States, we didn’t see much in the first two years of the pandemic as government programs slowed things down.
But he said those numbers were slowly approaching normal levels again now that the program has expired.
What about New Jersey foreclosure rates in 2022?
New Jersey will record one of the highest foreclosure rates in 2022 and rank second overall for foreclosure activity rates, Sharga said.
Between 16,000 and 17,000 households in New Jersey received foreclosure notices through 2022.
Why is this?
Sharga said one of the reasons for New Jersey’s high foreclosure rate last year is that it’s one of the slowest states to process foreclosures. As new foreclosures enter the pipeline, there is some backlog building up in the court system.
Also remember that before the pandemic, New Jersey was also one of the countries with a high rate of foreclosure activity, and many of these foreclosures were pending during the pandemic.
“What we see in many cases are old loans that were already in trouble and are going through foreclosure proceedings today in New Jersey. It’s inflating,” said Sharga.
Which New Jersey city had the highest subway foreclosure rate in 2022?
Shaluga said it would be Atlantic City.
Atlantic City didn’t have that many foreclosed homes in 2022. The number was only 764 units. However, according to Sharga, it was effectively the highest proportion of any major metropolitan area in the country when compared to the population and number of housing units there. .
He said it speaks to the local market economy. If the economy of the market is booming, it is unlikely that many foreclosures will occur. But when the economy weakens, as in Atlantic City, foreclosure activity will be more active.
What else has impacted New Jersey regarding increased foreclosure activity?
It is influenced by two metropolitan areas: New York City to the north and Philadelphia to the south. Shalga said these two cities have a relatively high number of foreclosures and a high frequency of foreclosures due to their large populations.
New Jersey is part of both the New York City and Philadelphia metropolitan areas, so the state’s numbers are often affected by what’s happening in those two cities, he added.
What is the average foreclosure time in New Jersey in 2022?
Average time to foreclosure decreased both quarterly and yearly across the country in 2022. However, in New Jersey, foreclosures took an average of 2,041 days. This is not normal, he said, Sharga.
Judicial states that enforce foreclosures through the court system tend to take longer from the start, Mr Sharga said.
Pre-pandemic New Jersey’s timeline was probably somewhere in the 1,000- to 1,200-day cycle, he said.
“What happened with all the foreclosures across the country was that there was a two-year delay due to the government moratorium, adding about 730 days to all foreclosure proceedings,” Sharga said. rice field.
As those government moratoriums expire, Sharga said average hours across the country are starting to drop a bit. He expects the same to happen with the number of foreclosures in New Jersey.
What are the key points?
In 2022, New Jersey generally appeared to be approaching pre-pandemic foreclosure levels faster than other states, Sharga said.
But that doesn’t mean the state’s economy is in serious trouble or that the housing market is terribly weak.
Nationwide, foreclosures are not a major problem. This is not 2008 or the Great Recession, he said. This is just the market returning to normal.
What are the predictions for New Jersey in 2023?
“Attom does not expect national foreclosure activity to return to pre-pandemic levels of 2019 until the third or fourth quarter of this year. We may return to 2019 levels a bit sooner than that, but again, we don’t think a large wave of foreclosures threatens to sweep the coastline anytime soon,” Sharga said. increase.
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Jen Ursillo is a reporter and anchor for New Jersey 101.5. You can reach her at [email protected].
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