As New Jersey residents know, a poor economy often leads people into financial turmoil. In the most recent recession, many people lost their jobs. Not only that, but the housing market struggled as well. Both of these factors can force many people into serious debt.
When homeowners face mounting debt, foreclosure may become an issue. The recession brought with it a spike in foreclosure filings, but recent data shows that last year’s number of foreclosure filings saw a significant decline. However, some have attributed this to the lingering effects of the robo-signing problem rather than a recovering economy.
Robo-signing refers to the practice of signing foreclosure documents without properly reviewing them. Because many major banks were handling foreclosures this way, the government stepped in. Since then, foreclosures have become extremely backed up. Many lenders are reviewing old cases and refiling others. Some even stopped all foreclosures temporarily.
RealtyTrac, a foreclosure listing firm, said that the activity brought a dramatic drop in foreclosures last year. There was a 34 percent decrease in filings in 2011 compared to 2010, and the number of filings in December was the lowest since November 2007.
Despite these numbers, RealtyTrac expects foreclosure filings to rise again this year. For some New Jersey residents, this could be a nerve-racking prediction. Unfortunately, some circumstances — often uncontrollable — lead consumers into serious debt. When this happens, there are a few options to find relief. Bankruptcy may be a good choice, as it can not only stop a foreclosure, but also allow a person to create a repayment plan.
Source: Businessweek, “2011’s foreclosure rate lowest since pre-recession,” Associated Press, Jan. 12, 2012