Foreclosures in New Jersey rose 11 percent from July 2007 to July 2008, RealtyTrac said today. Nationally, foreclosures were up 55 percent, RealtyTrac said.
One in every 751 households in New Jersey was in some stage of foreclosure in July, compared with one in every 464 nationwide, RealtyTrac said.
Foreclosures are rising because many homeowners who got adjustable, subprime, interest-only or other exotic mortgages during the housing boom now find that their monthly payments have re-set to higher levels that they cannot afford. Because property values have declined across most of the nation, these homeowners can’t simply sell their homes to shed their mortgage burden.
In addition, as home prices soared during the first half of this decade, many homeowners borrowed against their home equity, but now can’t afford to repay those loans.
As in our profiled examples - these are the same two common reasons why people lose their homes. Both areas show people taking on too much debt - either buying the house at peak and having payments that are not affordable or buying prior to peak and then withdrawing all the equity to the point where payments are also not affordable. During the bubble people felt they could either refinance again with low down payments (read as not paying down equity) or just sell the property. However the bubbles burst and now people are stuck. Foreclosures and short sales are the only way out for many people.