The foreclosure crisis is finally slowing down, except in New Jersey.
Across the country, year-to-year foreclosure numbers have plummeted. For example, a report from August 2013 show that nationwide, foreclosures in July 2013 dropped about 25% when compared to July 2012. However, in New Jersey, foreclosures went up 89% during that same period. Although it has taken 2 1/2 years for the average foreclosure to be completed. New Jersey is speeding up the foreclosure process to clear out the foreclosure backlogs.
So why are there so many new foreclosure filings in New Jersey and how quickly are they moving through the system?
Problem #1: The Banks Cheated
In 2010, New Jersey's supreme court asked New Jersey's six largest mortgage lenders to halt all foreclosures and review their document signing practices, due to possible violations to the Fair Foreclosure Act. The banks were accused of signing off on documents without properly reviewing them first, because they were overwhelmed by the sheer number of foreclosures they were confronted with. The so-called "robo-signing" scandal all but halted foreclosures in New Jersey until September 2011, and instantly created a backlog of about 100,000 foreclosures (by some estimates, the backlog is now at least 160,000 foreclosures). New Jersey's courts are only now beginning to chip away at this glut of foreclosures.
Problem #2: Superstorm Sandy
After natural disasters, foreclosures often spike in affected areas, because many homeowners would rather walk away from their home instead of paying to fix their property and continuing to pay their mortgage. Since New Jersey and New York already were facing major foreclosure problems when Superstorm Sandy hit, the federal government ordered a foreclosure moratorium for affected areas to help homeowners get back on their feet. This moratorium was in effect from November 2012 to mid-2013, but now that it's over, an additional foreclosure spike has already begun. This is only adding to New Jersey's extensive backlog.
New Jersey's Judicial Foreclosure System
New Jersey is a judicial foreclosure state. This means that every foreclosure in New Jersey must go through a complex legal process before the home goes onto the auction block. New Jersey's judicial foreclosure system was conceptualized years ago; it was not designed to handle the high volume of foreclosures that the mortgage crisis created, which has been a large contributor to the backlog problem.
But now, the court system is doing everything it can to clear the massive foreclosure backlog. Foreclosure proceedings can be completed as quickly as 90 days after they start if a homeowner doesn't seek the assistance of an attorney.
If you're a homeowner who is facing the prospect of foreclosure, then the good news is that judicial foreclosure actually favors homeowners who seek legal representation, because it gives homeowners more time to contest the bank's foreclosure decision. If you want to shift the odds in your favor as much as possible, then it's imperative that you hire an experienced foreclosure defense law firm to help you out, especially one that offers loan modification as an ancillary service. We've created a free guide to help you navigate the attorney-finding process; you can download it by clicking the button below.
