By Desirée Taylor
When Jon Pardi purchased this home 10 years ago, he planned to build equity and memories. But that’s all in jeopardy now because he faces foreclosure. Pardi’s trying not to panic.
“When the day comes when I am losing my home, I am sure I won’t feel quite as calm,” Pardi said.
Pardi is among thousands of homeowners in the Garden State facing foreclosure. In fact, New Jersey now leads the nation — close to 12 percent of mortgages in the state are more than 90 days delinquent. Florida’s a close second at 11.7 percent, New York — 9.11 percent, the U.S. as a whole — more than 5 percent. New Jersey lags, in part, because it requires foreclosure cases go to court.
“The reason is New Jersey is stricter than other state in terms of preventing foreclosure actions from going forward,” said Jeffrey Otteau of the Otteau Valuation Group. “And so the result is, since other states are clearing their foreclosure backlog and New Jersey has not, what we’re left with is a greater number of pending foreclosures.”
But lenders are now addressing the backlog at a faster rate.
The foreclosure crisis is hitting some communities harder than others. Among them, urban areas and towns devastated by Superstorm Sandy.
“In places where those concentrations exist, we are going to see more homes boarded up. As a result, property values in those selected places are likely to decline,” Otteau said.
New Jersey Citizen Action provides counseling to homeowners like Pardi who are facing foreclosure. But the executive director says funding for assistance programs has dried up.
“It’s about time that Governor Christie came up with some programs that are going to deal with the people who are being hardest hit. And it’s hardest hit by the hurricane, hardest hit by the housing crisis, and hardest hit by job losses,” said Phyllis Salowe-Kaye.
Because foreclosures affect not just homeowners, but also entire communities, there’s been growing support in Trenton for a bill that would empower municipalities to compel creditors to maintain vacant properties.
Some municipalities are also considering using eminent domain to seize underwater mortgages. But getting the funding could be a roadblock.
“It does seem adequate funding exists for that to happen on any large enough scale to make a difference,” Otteau said.
Otteau expects it will take about 18 months for the foreclosure numbers to come down to single digit normal levels. In the meantime, Pardi says he will continue to fight to keep his home.