At a recent auction for foreclosed properties in Mercer County, Diann Timian of Ewing Township sat in the courtroom and watched her three-bedroom ranch house offered up to the highest bidder.
“I wanted to have closure,” she said.
Timian grew up in the house, and then returned later in life to take care of her aging parents. She worked for the state for 43 years as a clerk in the state Department of Labor, and now collects a pension, but she and her husband borrowed against the house to pay for college tuition for their two kids. After they divorced Timian couldn’t afford the extra loans, or the $16,000 a year in property taxes.
She now knows she didn’t understand the risk of the refinancing deals. Bankers “weren’t shy in coming by and saying, ‘We can give you this much money to pay off your credit cards and you won’t see the increase,’ which wasn’t true,” Timian said.
New Jersey’s foreclosure crisis is the worst in the nation and doesn’t show signs of letting up. One out of every 171 housing units had a foreclosure filing in the third quarter of this year, more than double the national average, according to housing firm RealtyTrac. The state is also first in homeowners who are delinquent on their mortgage payments.
In October the Atlantic City region had the highest foreclosure rate of any metropolitan area in the country for four months in a row; the Trenton area is number three on the list.
When Staci Berger, president of the Housing & Community Development Network of New Jersey, speaks with housing advocates in other states, she realizes just how different her state’s situation is.
“I was on a phone call with my colleagues around the country and someone said, ‘Now that we have gotten past the foreclosure crisis,’ and I said, ‘Wait a second, some of us aren’t yet.’ So that was really telling,” Berger said. “There are some who feel like this is in their rear view mirror, and we are not there yet.”
New Jersey’s foreclosure crisis has been fueled by the collapse of the casino industry, the effects of Sandy and the state’s highest-in-the-nation property taxes. But Berger says the much of the responsibility for the situation continuing unabated since the recession lies with Gov. Chris Christie.
She points to several policy decisions that allowed the foreclosure rate to rise. For example, in 2012 Christie directed $75 million that the state was awarded in a multi-state settlement with banks over mortgage industry abuses to close a budget gap. The administration says the money went to other housing programs, but it was intended specifically for foreclosure prevention.
That same year New Jersey took longer than any other state to give out federal funds for unemployed homeowners who couldn’t pay their mortgages during the recession.
New Jersey also did not participate in a lawsuit against Bank of America, which ended in a settlement that provided other states millions of dollars for foreclosure relief. And at the legislative level, Christie vetoed bills that would have allowed vacant homes to be rented as affordable housing.
But there are other reasons for the high foreclosure numbers, said Kevin Roberts, the governor’s spokesman. It can take as long as three years for homes to move through the various stages of foreclosure, among the longest in the country, due in part to a requirement that all foreclosures have to be approved by a judge.
Roberts also blamed the backlog on stricter rules put into place by the courts in 2010 following the robo-signing mortgage scandal. However, according to the state court system, there is currently no backlog anywhere in the state on foreclosure proceedings.
Roberts said the state Department of Community Affairs has spent hundreds of millions of dollars in Obama Administration funds to help homeowners with their mortgage payments.
“Now that we’ve gone through and exhausted some of the state resources that were available to us, one of the biggest things we can do is communicate through DCA programs,” he said, in order to “make sure that folks who are on the precipice of going in foreclosure know what is available to them through the federal level.”
Timian, the foreclosed homeowner in Ewing, never got help from the state to avoid foreclosure. But she is moving on, and has since found a small apartment nearby, with a nice landlord — and an affordable rent.