New Jersey Leads U.S. With Most Loans in Foreclosure

By Prashant Gopal May 15, 2014 10:49 AM ET

New Jersey surpassed Florida with the highest share of U.S. mortgages in foreclosure in the first quarter as delinquencies nationally fell to pre-crisis levels.

In New Jersey, 8.12 percent of mortgages were in the foreclosure process, Mortgage Bankers Association said in a report today. It was the only state to have an increase from the fourth quarter, when the share was 7.9 percent. In Florida, the rate of loans in foreclosure dropped to 7.62 percent from 8.56 percent in the previous three months.

New Jersey, which requires court approval for home seizures, is at the epicenter of the foreclosure crisis as banks work through a backlog of delinquent loans that allows troubled borrowers to skip mortgage payments for years. By contrast, hard-hit areas such as Arizona and California have some of the lowest levels of soured loans after allowing lenders to quickly repossess homes after the 2007 real estate crash.

The foreclosure inventory rate in New Jersey “has basically been flat for three years at this high level,” Michael Fratantoni, chief economist for the Mortgage Bankers Association in Washington, said in a telephone interview. “Everywhere else things are improving, and at an accelerating pace in some areas.”

New Jersey led the U.S. in the rate of newly started foreclosures in the first quarter, at 1.06 percent of mortgages, up from 0.99 percent a year earlier, according to the report. Maryland was the only other state with a year-over-year increase in foreclosure starts.

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http://www.bloomberg.com/news/2014-05-15/new-jersey-leads-u-s-with-most-loans-in-foreclosure.html