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New Jersey Foreclosures Rates Rising

Following the resolution of various home lender disputes - such as the robo-signing clash in which it was alleged that lenders were blindly signing foreclosure documents without verifying the information contained therein - foreclosures are starting to pick up steam in New Jersey. This is a reversal of recent New Jersey foreclosure trends, as many lenders had previously halted foreclosure activity while many of these disputes were ongoing.

According to RealtyTrac, from May 2011 to May 2012 foreclosure filings in New Jersey rose 86 percent. This rise indicates that one in every 1,903 New Jersey homes was in some stage of foreclosure in May of 2012.

Past Alleged Wrongful Conduct by Lenders

As referenced above, many national lenders recently faced numerous allegations that they violated laws in their attempt to evict distressed homeowners behind on their mortgage payments. Recently, a $25 billion national settlement was reached between five lenders and government officials regarding these alleged wrongdoings.

New Jersey Chief Justice Stuart Rabner also ordered six lenders to show they were now following proper foreclosures procedures. Moreover, another recent court order required many lenders to refile foreclosure notices as prior versions did not appropriately name the lender.

However, with these disputes now largely resolved, lenders have drastically increased their foreclosure filings - which was a major contributing factor to the recent May increase in New Jersey.

According to the Mortgage Bankers Association, 16.7 percent of mortgages are either in foreclosure or have late payments in New Jersey - drastically higher that the national average of only 12.5 percent.

Locally, in Passaic County there was a 112 percent increase in homes experiencing some type of foreclosure activity in May when compared to the same period a year earlier - with Bergen County seeing a 79 percent increase during the same timeframe.

While foreclosure can seem daunting to homeowners, it is important to know that options are available, such as bankruptcy. Bankruptcy can not only halt foreclosure proceedings but a Chapter 13 bankruptcy may also give the homeowner an opportunity to get caught up on payments.

Source: The Record, "Foreclosure activity on the rise in N.J." Kathleen Lynn

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