As the nation continues its gradual recovery from the Great Recession, foreclosure rates have finally begun dropping in many parts of the country. Unfortunately, however, the number of homes in foreclosure in New Jersey is still increasing, due to a backlog of unprocessed foreclosures that were put on hold during the “robo-signing” investigations that began in late 2010.
New Jersey Law Slows Foreclosure Process
Foreclosure laws vary by state, and as a result, the time frames on foreclosures vary too. The foreclosure backlog caused by the robo-signing controversy will take longer to process in New Jersey and other states that use a system called judicial foreclosure, which requires a lender to get permission from the court before foreclosing on a property.
Because state law requires that a lender must go to court before foreclosing on a home, foreclosure can be very lengthy process in New Jersey. According to RealtyTrac, as of late 2011 the average foreclosure in New Jersey took 964 days — more than 2 1/2 years, compared to a national average of 348 days.
In contrast, states like California, Nevada and Arizona, which have already seen their foreclosure rates begin to decline, use a faster process called non-judicial foreclosure. Lenders in states that use non-judicial foreclosure do not need to get court approval before moving forward with the foreclosure process. This decreases the amount of time between a homeowner’s initial default and the lender’s ultimate repossession of the home. Texas, a non-judicial foreclosure state, had the shortest average foreclosure process of just 90 days.
Bankruptcy Can Provide Foreclosure Relief
For people struggling with unmanageable debt and facing foreclosure in New Jersey, bankruptcy may offer a solution. To learn more about how bankruptcy could help you discharge your debts and keep your home, contact an experienced bankruptcy attorney in your area.