Each quarter, RealtyTrac compiles foreclosure data from across the country. Last week, the company announced the foreclosure numbers for the first quarter of this year. According to their report, the foreclosure rate was down by 44 percent in New Jersey when compared to the first quarter of 2010.
Although this is good news on the surface, it may not be quite as exciting as it first appears. Many, including the CEO of RealtyTrac, have speculated that the lower foreclosure rate is a result of the backlog of foreclosures. As lenders work their way through the foreclosures that are already in the system, some suspect we will see a spike in the foreclosure rate.
So what exactly is the foreclosure rate? We hear these numbers each quarter, but it may be difficult for some to understand what they mean. In short, the foreclosure rate refers to the number of people who are in some stage of foreclosure. Currently, the New Jersey foreclosure rate is one out of every 401 households. That means that one in every 401 households has received a notice of foreclosure or is in the midst of the foreclosure process.
As lenders begin to work through the foreclosures that are already in the pipeline, we may see that rate increase. Many mortgage lenders are beginning to find solutions that will restore confidence in the foreclosure process. In New Jersey, for example, six lenders have reached an agreement with the state. It that requires a retired judge to monitor the lenders’ foreclosure process to ensure that homeowners are not unfairly foreclosed on.
Earlier this month, 16 mortgage services were ordered to reimburse homeowners who were impacted by the robo-signing debacle. The homeowners who were wrongly foreclosed on will receive compensation.
Source: NorthJersey.com, “Foreclosure activity down in N.J. and U.S.,” Kathleen Lynn, 14 April 2011