Yet again, Atlantic County tops nation in foreclosure filings
Over the first six months of this year, one out of every 54 homes in Atlantic County was the subject of some foreclosure activity.
Statistics of new default notices, scheduled auctions and bank repossessions found Atlantic County continues to leads the nation, according to data from RealtyTrac.
“We’ve been talking about Atlantic City for quite some time, because its been near the top (of national foreclosure rankings) for the last year or so,” said Daren Blomquist, a senior vice president at Irvine, California-based RealtyTrac.
Other South Jersey counties are also busy with foreclosures, and New Jersey itself tops the national list. About 1 percent of the state’s homes had new activity from lenders trying to take homes back, according to RealtyTrac.
In South Jersey, there were new filings from January to June 2016 on one house out of every 70 in Cumberland County, and one out of every 107 in Ocean County — about the same rate as the state on the whole.
Cape May County had the lowest rate in the region, with one out of every 137 homes seeing new filings, the company’s research found.
As Blomquist sees it, much of what is putting the state on top of the list is the state’s foreclosure process, which is the longest in the country. At an average of 1,249 days per home, it’s almost double the national average of 629 days.
And it traces back to the so-called “robo-signing” scandal after a national housing bubble burst in 2008 and kept collapsing for several years. Some mortgage holders were trying to foreclose on homeowners so fast that employees signed massive numbers of documents to kick residents out, often with no knowledge of the cases’ facts.
“New Jersey tried to respond,” Blomquist said, including with a Supreme Court judge ordering a moratorium that lasted parts of two years. “Unfortunately, it broke the foreclosure process.”
And Atlantic County is seeing the worst of the ongoing effects of that hangover feeding its statistics, he adds.
“It has the double whammy of the shock waves in the economy over the last few years,” including 8,000 people losing jobs when four Atlantic City casinos closed in 2014. The second whammy is that “dysfunctional” process, he says.
But to Anthony D’Alicandro, of Dwell Real Estate in Linwood, that nearly 3½-year process to take homes back suggests that Atlantic County hasn’t yet really seen the effects of those casino closings two years ago in its foreclosure rolls.
“These are foreclosures that have been in the process the last three or four years,” said D’Alicandro, who has been in South Jersey real estate since 1991 and is seeing the effects of the foreclosures “everywhere. It’s at the bottom of the market, it’s at the top of the market. You see homes that have been vacant two, three, four years, or homes that people have been living in” as lenders try to take them back.
“We’ve got probably another solid 18 to 24 months of high foreclosure activity,” by his estimate, although he believes that the housing-bubble burst was actually harder on the local market than those casino closings five or six years later.
“I don’t think that’s going to have quite the same impact that the crisis had from 2008 to ’10,” he said.
He sees some positives in the market, including demand for those houses that lenders take back. That comes about half from investors looking to buy rental properties and half from first-time buyers, D’Alicandro says.
“There are investors coming coming from New York, Philadelphia, North Jersey” and more places within a short drive, he says, because “you’re getting returns like you don’t see in any other market.”
He has sold foreclosure homes in Ventnor, for instance, at prices as low as $40,000 to $80,000. The owners are putting some work in and “turning around and renting them for $1,200, $1,400 (or more) a month. The net return they can see on their investment is 10 percent, and I don’t know anywhere else you can get that kind of return consistently.”
But most of those houses can’t get financing, because of stolen copper pipes and other damage done while they were vacant. The first-time buyers are going into homes in better shape at higher prices where they can get mortgages.
And the ones that “are not financeable and need total renovations, every time one hits the market, there are multiple offers,” D’Alicandro says.
Those offers, though, are as much as 70 percent lower than they were at the height of the local market, he adds.