How can we fix South Jersey’s troubling foreclosure mess?
A new report finds the foreclosure crisis in South Jersey is more severe than any other part of the state.
The report finds New Jersey has highest foreclosure rate in the nation.
Darren Spielman, the executive director of the Senator Walter Rand Institute for Public Affairs at Rutgers-Camden, said the average foreclosure rate in the Garden State is 1 in every 639 housing units. But six of the eight counties with the highest foreclosure rates are in South Jersey.
He said this is the result of lower incomes in South Jersey.
“The economy hasn’t rebounded the same way it has up north coming out of the recession. There are still pockets of low employment," he said.
He noted when properties are sitting for years as real estate owned, which means they’re foreclosed and owned by a bank or the municipality, they lose about half their value, which in turn drags down the value of other homes in the area.
The report points out that along with the high number of foreclosures, South Jersey has a high percentage of lower and middle-wage individuals living in homes and apartments they can’t afford.
“If you look at the six counties with the highest foreclosure rates, nearly 61 percent of renters are in housing that is unaffordable based on federal guidelines, and more than half of owners are in unaffordable housing," he said.
To address this, he said we need “to create an efficient process to get foreclosed properties back on the market in a way that they can get into the hands of residents in an affordable way.”
To enable lower and middle-income wage earners to have a chance to buy foreclosed properties, he said we need to convene a group of stakeholders, including politicians, representatives of the judiciary and financial institutions, to speed up the foreclosure process.
Then there needs to be a way for nonprofit organizations working with municipalities can acquire these REO and abandoned properties in bulk.
The report also recommends developing a process that allows homeowners to voluntarily sign over their home to the mortgage lender, which would enable families to recover financially more quickly.
The report calls for creating a South Jersey loan fund to provide nonprofit organizations with funds to acquire and rehab properties in foreclosure, review the housing assessment process, and foster a market-driven vacant property re-use program to ensure developers and contractors have quick access to suitable vacant properties at realistic prices.