So, as you begin to pro approach how to own a foreclosed or pre-foreclosure property, we need to do so uh in the prism of our times. Uh. The most recent market shake-up outside of covid 19 was the 2008 financial crisis.
Uh. This crisis brought unprecedented strain uh to the new jersey, housing market, lenders to homeowners, and the courts, but thousands of investors made significant money, taking risks and grabbing slices of the foreclosure pie.
To give you some context: in 2006, lenders filed almost 22 000 foreclosure actions in new jersey in 2010. That number grew to over 65 000 out of sixty-five thousand, and this is important. Only six percent of homeowners contested their foreclosure action.
That means 94 of foreclosure matters was the bank pushing papers through the court with no one else involved, except the court signing off and reviewing what they submitted. Now there were issues with robo-signing and pushing through documents that weren’t properly executed.
Potential fraud claims etc. So new jersey ended up appointing a special master at during this time to inquire into the document, preparation, practices of lenders and effectively told new jersey’s, six largest banks, GMAC, Bank of America, JP Morgan Chase, Wells Fargo, Citibank, and west.
One that they couldn’t file foreclosures in September 2011. This moratorium was lifted as to the six-month injunction that originally, that’s. What it was for it was a six-month, pause. Okay, during all this time, the sheriffs.
The counties where the properties were located were being flooded with sales applications, with sales applications for lenders who already obtained final judgments, meaning that they could proceed to the final steps in some counties.
Backlogs surpassed two years or more bergen county is an example of that. If it took a bank one and a half years to push the foreclosure documents through the court, they could simply wait around for an additional two years before the properties.
The first sheriff auction date came up now. The crisis has made the courts more effective. Though I mean there was a lot of reform that happened in the sheriff’s, department uh in the court itself. A lot of communication committee meetings, et cetera the backlog, started to disappear in the in early 2019.
Only one year before COVID 19 forced New Jersey into a lockdown right. So, a year ago, before March of this year, which is 2020, this video is being recorded in December. 1St 2020. You know, uh the courts.
Finally, just got over the 2008 financial crisis, so new jersey judges started setting down strict schedules for foreclosure matters that were contested with trial dates set within nine months to a year, uh from the when the complaints were filed and the answers were filed right, the sheriff Practically limited their heavy lap backlogs by holding more auctions and auctioning more properties in one session or going from every other week to every week, so they also were able to move their backlog in getting these things sold.
The new jersey, judiciary, pre-financial crisis, is not the same court system that will be adjudicating foreclosures in a covet 19 world. Okay, but, alas, it’ll, come down to the volume of foreclosures, and if the statistics are uh indicative of what is going to be coming from this pandemic, the consequences of this pandemic is that there is not going to be a wave, but a Tsunami of evictions and foreclosures thanks
7 Steps to Buying a Foreclosure in NJ Video 1 of 16
