New Jersey suffers from an uptick in foreclosure rates

As many housing markets in the United States slowly recover from the surge of foreclosure proceedings, New Jersey continues to suffer. According a January 2013 report from CoreLogic, New Jersey is one of only four states where the foreclosure percentage rose over the past year.

NorthJersey.com reports that approximately 8.8 percent of homes sold last year in the state were either bank-owned or in some state of foreclosure. Moreover, 23 percent were short sales (where a lender permits the homeowner to sell for less money than is owed on the mortgage). The problem is significantly high in New Jersey's urban areas. However, sources note that foreclosure seems particularly prevalent in South Jersey communities.

When delinquent mortgages are added to the number of properties already in foreclosure, Vineland-Millville-Bridgeton, New Jersey, has the highest rate among the nation's 100 largest metropolitan areas, according to the director of the Ralph W. Voorhees Center for Civic Engagement at the Bloustein School. The Atlantic City-Hammonton MSA and Trenton-Ewing are close behind.

Furthermore, New Jersey homeowners are also struggling in Essex, Ocean and Union counties. RealtyTrac reports that parts of New York and Northern New Jersey have a 97-month catalog of foreclosed properties, which is the amount of time it will take for the properties to be resold. This is the largest sale backlog in the country.

Options for financial relief

As the housing market continues to stress the East Coast, it does not help that New Jersey carries one of the highest unemployment rates in the country. As a result, many residents are finding themselves with little financial hope.

The good news is that there are options for those suffering in the state. Two main avenues of financial recovery are loan modification and bankruptcy. New Jersey bankruptcy courts have established a program, the Loss Mitigation Program (LMP), which helps lenders and debtors reach a mutually agreeable alternative to foreclosure. Possible resolutions include loan modification, loan refinance or forbearance. Loan modification helps debtors alter the terms of their mortgage loans, making payment obligations easier to fulfill.

Additionally, bankruptcy is an option for those drowning in debt. Chapter 7 or Chapter 13 bankruptcy can stop foreclosure actions immediately, providing time to adjust payment obligations or reorganize finances. In some cases, filers can even keep their homes.

Nevertheless, recovery options often depend on one's particular situation. If you meet with an experienced bankruptcy attorney, you can explore your viable alternatives to foreclosure.