2013 NJ Foreclosure Outlook

Over the past 2 years, I can't tell you how many times I read an article indicating the 'wave of foreclosures is coming in NJ'...and then nothing. In August 2011, 8 months after the foreclosure freeze, the big news was that the judge appointed to review the 'Big Six' banks foreclosure processes cleared them all to resume foreclosures in NJ...and then nothing. Then there was a lawsuit by a family in East Orange that contested their foreclosure because the bank wasn't named on the foreclosure filing, only the servicer of the loan. The judge in that case ruled in November 2011 that all foreclosures going forward had to name the lender in the filing, not just the servicer. It seemed the banks were waiting on the outcome of this case so they knew what needed to be stated on their filings to avoid similar lawsuits. Another case closed, and still nothing. Through 2012, the NJ foreclosure pipeline continued to drip, drip, drip foreclosures into to the market.

In the meantime, borrowers behind on the mortgages (not paying) are living for free for months, even years. Homes where the borrowers have long vacated anticipating the inevitable continue to deteriorate, leaving what resident's call 'eyesores' for months, and again, even years.

The most recent news pertains to the latter. Last week, the Governer signed an act which permits lenders to expedite foreclosure proceedings on vacant and abandoned homes in NJ. The idea is neighborhood stabilization - quickly foreclose on known abandoned homes which are often neglected and in disrepair, and get them on the market, and thus back to an occupied property. The bill is a good one for us REO brokers and agents. It's more inventory, and less dealing with borrowers in denial and tenants and going through the eviction or cash for keys process, which is often time consuming and can drag on for months before the property finally hits the market.

At this point, we'll take what we can get, but a slew of vacant foreclosures in our inventory will please many NJ investors that are ready to buy. With so few foreclosures on the market currently, investors have been calling me daily asking 'anything new'?

No one knows when the gates will open. Or what the banks are waiting for. Google sends me an email everytime there is a new media article regarding REO's in NJ. Chatter has increased on the web and in the papers, but it's all just numbers...days it takes to foreclose in NJ, 60,000 foreclosures in the shadow inventory, 7.7% of all homes with mortgages in NJ are in foreclosure, etc. Just reporters reporting numbers.

OK, so not much of an outlook I suppose. I've felt it coming before, and nothing. It's been two years. At American Realty Services, we are still listing REO's, though not at the clip we were listing them a couple of years ago. They will come eventually, and when they do, we'll be here. We list and sell REO properties to investors and first time homebuyers throughout Northern NJ. If you're looking to buy a foreclosure in NJ, call me discuss the REO market and what you're looking for. If I don't have it now, I will eventually. Eventually.

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