Report: Numbers Of NJ Foreclosures Down To Lowest Point Since Housing Market Collapse
The report from the Special Committee on Residential Foreclosures made 17 recommendations ranging from improving public outreach and understanding of the foreclosure process to changes the Legislature and courts might consider to improve the further streamline the process and assist homeowners.
TRENTON — The number of pending foreclosure cases in New Jersey is down to the lowest point since the housing market collapse a decade ago, but there is still more both the courts and state lawmakers should do to further address the ongoing crisis, according to a report from a special New Jersey Supreme Court committee.
Released Thursday, the report from the Special Committee on Residential Foreclosures made 17 recommendations ranging from improving public outreach and understanding of the foreclosure process to changes the Legislature and courts might consider to further improve the process and assist homeowners.
The report’s release comes amid a new push by Democrats to advance legislation previously vetoed by former Gov. Chris Christie that would create a mechanism for the state to purchase foreclosed properties and convert them into affordable housing.
The legislation, known as the Residential Foreclosure Transportation Act, was not cited in the judiciary committee report. Instead, the committee recommended mostly tweaks to existing rules and laws and highlighted improvements the state has made to reduce foreclosure cases following the national housing crisis and recession of 2008.
New Jersey was among the hardest hit states by the crisis and the number of foreclosure filings rose from an average of 25,000 a year from before 2006 to more than 65,000 in 2009. The increase flooded the judicial system with active cases, which peaked at 144,032 cases in June 2011.
But in the ensuing years the number of new filings has returned to pre-recession numbers and as of June this year, the number of active cases was down to 27,229.
Similarly, the average time it takes for a foreclosure case to move through New Jersey courts from start to judgement has decreased from a peak of 1,360 days (just under four years) in 2011 to 148 days, the report noted.
Despite progress in reducing filings and streamlining the process, the report acknowledged that more improvements can be made and that thousands of old cases continue to languish on court dockets, preventing those homes from being resold.
“Unresolved foreclosures cause measurable harms far worse than unfavorable media coverage: lingering foreclosures depress property values, burden municipalities, and reduce tax revenues necessary to support education, emergency response, and other public services,” the report said. “Vacant and abandoned properties detract from New Jersey’s communities and cause economic and safety risks that undermine quality of life.”
Among its 17 recommendations, the report suggests revising state law to require a foreclosure case to be filed within six months of a notice of intent to foreclose, as well as modifying the procedures for sheriff’s sales to ensure they occur within the 120 days currently required by state law.
Another recommendation would expand the authority of the Superior Court Clerk to improve oversight of languishing cases.
“The recommendations set forth by this committee will further improve effort to resolve housing disputes in a fair and equitable manner that benefits homeowners, lenders and communities throughout New Jersey,” said Judge Glenn A. Grant, the state’s acting administrative director of the courts and the special committee’s appointed chair.
The committee also included a collection of appointed attorneys, sheriffs and lawmakers. It was convened last May by Chief Justice Stuart Rabner to review the status of foreclosures throughout the state and put forward recommendations on how the process could be further improved.
Meanwhile on Monday, lawmakers on the Senate Economic Growth Committee voted to advance the Residential Foreclosure Transformation Act.
The bill, which is sponsored by Sen. Troy Singleton, D-7th of Palmyra, directs the New Jersey Housing and Mortgage Finance Agency to create a temporary program to purchase foreclosed properties for resale or rent as affordable housing.
It also specifies that towns that choose to contribute affordable housing funds to the program will receive credit and bonuses toward their state-required affordable housing quotas.
The bill was first introduced by Singleton when he was an assemblyman in 2012 and was approved by the Democratic-controlled Legislature three times only to be repeatedly vetoed by Christie, who argued the state already had programs to address the glut of foreclosures.
Lawmakers are more optimistic about the measure’s fate this year with Democrat Phil Murphy in office. During his successful campaign, Murphy often suggested that a way to increase the state’s affordable housing stock was to purchase foreclosed homes for that purpose.
During Monday’s hearing, advocates, New Jersey builders and affordable housing groups lobbied in favor of the measure.
“This bill is good public policy,” said Jeff Kolakowski, of the New Jersey Builders Association. “It’s about creating a clearinghouse to help weed through the backlog of foreclosures we have in New Jersey.”
Staci Berger, president and CEO of the Housing and Community Development Network of New Jersey, spoke in favor of the measure, described it as a creative solution to both foreclosures and the state’s affordable housing shortage.
“We have homes with no people in them and we have an enormous housing crisis in affordability,” she said. “Taking (houses) that don’t have people in them and turning them into places that can have people in them, it doesn’t seem like rocket science.”