"an almost ten fold increase" in N.J. Foreclosures

From Businesswire:
ForeclosureS.com: Northeast Foreclosure Activity Up Sharply

"California based ForeclosureS.com, a real estate investment advisory firm and nationwide foreclosure lists publisher, reported today that 2006 foreclosure activity in the Northeast is up sharply from 2005 levels."

""According to our research, foreclosure activity in New Jersey reached a level of 4,425 filings in the first quarter of 2006 as opposed to just 459 in the same quarter in 2005. That's an almost ten fold increase," warned Ms. McGee. She added that she expected the situation to get worse through the rest of 2006 and into 2007."

"Ms. McGee expressed concern that homeowners were still using their houses as ATM machines. She continued, "Freddie Mac just reported that 88% percent of the loans they purchased in the first quarter of 2006 were cash-out refinances. With the real estate markets going flat, the refinance resource will dry up. And with interest rates continuing to rise, payments on so-called exotic adjustable loans would become unaffordable for many households.""

"Ms. McGee pointed to a recent report from the FDIC stating that 49.5% of recent purchase money loans were categorized as "high risk loans." "These interest only loans and option payment ARMS are financial time bombs that are going to lead to trouble for many homeowners," she said."

"She added that she found it "amazing" that some lenders were still pushing home equity loans and lines of credit up to 125% of the home's value. "With markets cooling down and prices leveling off, that's another recipe for disaster," said Ms. McGee."