Is there trouble on the homefront?
Posted by the Ocean County Observer on 11/16/06
BY DON BENNETT
STAFF WRITER

TOMS RIVER — Storm clouds might be forming over the slowdown in the housing market in New Jersey, according to a home foreclosure database reporting a 44 percent increase in a key indicator of foreclosures to come.

SheriffSalesOnline.com, a service for subscribers, said the number of lis pendens — or notice of public action — filed during the third quarter rose from 2,486 last year to 3,577 this year.

"Lis pendens are the first legal step taken in the home foreclosure process that indicate a homeowner is behind in his or her payments and headed for foreclosure," said Jeffrey Posner, president of the service that provides information to its members

"A house in a lis pendens proceedings means it is about eight or nine months away from being sold in a sheriff's sale," Posner said.

Ocean County Clerk Carl W. Block was unruffled by the 31 percent increase in lis pendens filed in the third quarter of this year compared to last in the county.

A year ago there were 492. This year there were 696.

"It's too early to say it's a trend. Something may happen. In a slowdown like this, you'd expect them to go up," Block said.

"'It's not too grim until you see actual foreclosures," he said.

Between the time a lis pendens is filed and foreclosure, Block said, a lot of things can happen. The property owner can recover or sell the property.

Home prices in New Jersey during the second quarter dropped an average of 11.6 percent, compared with 16.3 percent nationwide, according to the National Association of Realtors.

That group forecasts sales of existing homes are expected to remain at the current pace, while new home sales, down 17 percent this year, are expected to drop 8.7 percent next year.

The drop in prices and increase in properties where owners are having a tough time making mortgage payments could be a a "temporary opportunity for bargain-hunting home buyers," Posner said.

More than $200 billion worth of adjustable-rate mortgages reset at higher rates this year. Next year mortgages worth $1 trillion will reset at higher rates, Posner said.

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