A Look at Efforts to Curb New Jersey Foreclosure Properties
The case of a Middletown family doing everything they can to save their house from getting added to lists of forclosure properties illustrates a progressing program of prevention foreclosure in New Jersey and in other states.
The DeBlasios have been calling their mortgage lender for so many times they have stopped counting. They have talked with HUD-certified counselors, have explored short sale possibilities, have visited nonprofit housing agencies and have followed up on every possible foreclosure prevention option, but they failed.
They are now looking at two rental homes as their house is already in foreclosure.
Joseph Seneca, an economist working with Rutgers University, said foreclosure properties are growing by themselves because they are automatically pushing the cycle of foreclosure, low home prices, market collapse, national economic decline and unemployment.
The federal government launched months ago a program to contain foreclosure properties with billions in funding, with a goal of helping around 9 million troubled American homeowners.
But the program has not been working out as planned. According to the Federal Reserve Bank of Boston, only three percent of defaulting home loans across the country have been modified.
In New Jersey, the rate of loan modification is even much lower compared to the national rate. The state has even launched its own program in addition to the Obama administration’s federal program to contain foreclosure properties.
Under the state Mortgage Stabilization Program, the state will pay mortgage banks up to $25,000 for every distressed loan modified if the lenders lower the home loans to their current values. As of date, no lender has come out to take advantage of the state program.
James Silkensen, co-CEO of the banking group New Jersey Bankers Association, explained that no lender likes to lose so much money. He said that reducing the values of home loans to current value levels will wipe out their finances.
The DeBlasios bought their house in 2005 for $646,000 and then refinanced several months later when it was assessed higher at $730,000 to enable them to start a gasoline station business. At the start, they were able to make their $5,600 monthly payments. When the economy collapsed, their business collapsed and now their home is going to lists of foreclosure properties.
They worked out a short sale, but their lender America’s Servicing Co., one of the mortgage servicers of Wells Fargo, refused. Next month, their house is set to be auctioned off along with other foreclosure properties in New Jersey.
Related Posts:
- Foreclosed Properties on Sale in New Jersey Get Attention
- Brokers Lost Investments to Foreclosed House for Sale Lists
- More Foreclosure Houses for Sale, According to the Treasury
- Short Sales: A Way to Avoid Repossessed Home
- Realtors Cut Number of Foreclosed Homes through Short Sales
