The number of homes entering foreclosure across the nation is at its lowest level in years, but a persistent backlog has left New Jersey stuck at year's end with the nation's second-largest percentage of homes in some stage of foreclosure.
Nearly 7 percent of New Jersey homes are in the foreclosure pipeline, behind only Florida at 7.1 percent, according to real estate data provider CoreLogic.
New Jersey also has the country's second-highest number of homes — 10.6 percent — that are at least 90 days behind on mortgage payments.
For the most part, the high foreclosure numbers stem from a drawn-out foreclosure process and a severely backlogged pipeline of cases.
"The rest of the country, about 75 percent of the U.S., will have cleared out their foreclosure backlog by summer 2014," said Jeffrey Otteau, of the Otteau Valuation Group, an East Brunswick, N.J.-based real estate consulting group. "New Jersey will probably be digesting, working and chopping through all of this until spring 2015."
New Jersey's foreclosure process typically takes a long time — 200 to 400 days on average, according to a study by Legal Services of New Jersey. But the process is now taking an average of about 1,000 days in part because of a past freeze on foreclosures and a subsequent logjam.
"You had a slow drip in the bathtub, but it had nowhere to go," said Sam Khater, deputy chief economist for CoreLogic. "After a while it builds up, and that's what happened in Jersey."
The state's well-off suburbs close to New York City have fared relatively well, Otteau said. But the state's urban centers, including Newark and Trenton and its rural and exurban areas, including Sussex County in the north and Cumberland County in the south, have been hardest-hit by foreclosures.
Foreclosures due to damage from Superstorm Sandy, which devastated parts of Ocean and Monmouth counties in 2012, have also contributed to the uptick, Otteau said.
The state announced this month it will stop taking applications for federal foreclosure relief money because it has almost run out. It received $300.5 million from the Troubled Asset Relief Program, which went to states with a high number of foreclosures.
"Nobody's paid any attention at all to New Jersey until recently," said Robert C. Hockett, a professor of law at Cornell University.
In Newark and Irvington, officials want to move forward with a plan to use eminent domain to seize underwater mortgages, a plan Hockett helped devise. It has faced zealous opposition from Wall Street and Washington.
Teresa Stevens-Hamilton of Port Redding, N.J., has been in the foreclosure process for more than a year.
"It's been horrific," she said. "We expected someone to come to our door and kick us out."