NEW JERSEY (WPIX)—
New Jersey's recent good news led many to celebrate too soon: statistics for the first six months of the year showed that foreclosures were down, even given a high unemployment rate.The reality of the situation was, foreclosure notices were being filed so quickly that the courts slowed down in their processing of their paperwork.
"Part of it [July's dramatic increase] is due to a backlog in the courts, which process these documents," said Daren Blomquist, RealtyTrac spokesman. "So they were able to catch up on some of the backlog in July."
Likewise, Kevin Wolfe, chief of the judiciary's civil practice division stated, "The Superior Court clerks have been deluged and unable to keep up with the myriad of filings that come in."
More and more, the number of homeowners in peril New Jersey has been growing. Home foreclosure activity rose sharply -- by nearly 40 percent -- last month statewide. According to data released by the state judiciary, Foreclosure filings increased by more than 30 percent during the first half of this year when compared to the same period last year.
Blomquist stated that July's foreclosures of 6,467 homes was the highest since October 2008.
The fact that relief from the state's Mortgage Stabilization and Relief Act was coming to an end also played a part in the foreclosure rate surge. It provided several programs and funding to delay foreclosures for troubled homeowners in the hope that they could eventually repay their loans.
"It [such programs] slows down recovery and keeps the foreclosure process on these homes in limbo and hanging over the market," said Blomquist.
Nevertheless, "the underlying problems aren't fixed," said Linda Fisher, a law professor at Seton Hall University. While the backlog gave homeowners a few extra months before banks took over, banks had to carry bad loans. Home prices continued to plummet. Jim Silkensen, CEO of the New Jersey Bankers Associated stated that this puts homes at risk of being vandalized and damaged by outsiders.
In clearing up the backlog, court clerks have caught up through June, but the workflow is still irregular.
Advocates said that mortgage modifications are still not bringing enough relief. New Jersey began a statewide program this year to help banks and homeowners come up with a solution.
However, Fisher maintained that "many of the modifications they're agreeing to are pretty cosmetic."
Al Faella, director of the Union County Foreclosure Task Force advised homeowners to seek help immediately; the longer they try to wait out the situation, he warned, "the more difficult it becomes."
