New Jersey still leads the nation in distressed mortgages
Despite some progress, New Jersey still leads the nation in the number of mortgages in distress.
In the first quarter of 2016, the state's distressed mortgage rate was 8.9 percent — more than double the national average.
Economic analyst Patrick O'Keefe of Cohn/Reznick in Roseland says there has been considerable progress in Jersey in reducing the distressed mortage rate, but he says, "Geez, we have got some good news, but it is not as good as we need."
According to O'Keefe, a combination of factors have contributed to the distressed mortgage foot-dragging numbers in the Garden State.
"It starts with the fact that our economy has grown a little bit more slowly than the national economy over the course of the economic recovery," he said.
O'Keefe said a second factor is that housing prices in New Jersey have yet to reconcile themselves to the new reality, as has been the case elsewhere around the country.
And thirdly, New Jersey is what is referred to as a "judicial foreclosure state," which means that the discharge of a foreclosure here is done by way of court proceedings, which are more rigorous but therefore more time-consuming, as is the case in many other states.
"You put all of those together for the past 10 quarters, New Jersey has ranked No. 1 in the number of distressed mortgages, relative to the size of the outstanding mortgages in the state."
He says we are behind other states, but over the last 12 months, there has been considerable progress.
About one-fifth of a decline in the number of distressed mortgages, in the past 12 months. According to O'Keefe, "That is significant."
He says New Jersey had expected that in the first quarter of this year we would continue to see that momentum. Unfortunately, in the first quarter, we actually had a marginal uptick in the number of distressed mortgages.
But, O'Keefe adds, "the underlying momentum is in the right direction."
Joe Cutter is the afternoon news anchor at New Jersey 101.5. Contact him at email@example.com