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68 Auction.com analysis of public record data from ATTOM Data Solutions. But not long after that moratorium was lifted, completed foreclosure auctions in New Jersey began to rise, increasing 43% in 2012. And that increase was not just a one-year catch-up. Completed foreclosures in New Jersey increased for the next five years, returning to the pre-moratorium level of more than 9,500 in 2014 and eventually hitting a peak of more than 23,000 in 2017—up an eye- popping 652% from 2011. at trend stands in stark contrast to what was going on nationwide, where completed foreclosures peaked in 2010 before beginning a steady downward trend that continued through 2019. No national foreclosure moratorium was implemented during this time. Much of the national decline following 2010 was driven by states such as California and Arizona, which were less impacted by the robo-signing issue and did not implement a statewide foreclosure moratorium. ese states also employed the more streamlined, non-judicial foreclosure process. But even in other judicial foreclosure states that were more impacted by robo-signing, the pattern of prolonged foreclosure pain was not as extreme as it was in New Jersey. NO MORATORIUM, TWO-YEAR BACKLOG One example of this is Ohio, where the state legislature considered but never enacted a statewide foreclosure moratorium. After hitting an initial peak in 2010, completed foreclosures in Ohio declined 13% in 2011, much less than the 67% drop in New Jersey. Completed foreclosures in Ohio rebounded higher for the next two years—a relatively brief uptick compared to the six-year upward trend in New Jersey—before embarking on a six-year downward trend from 2014 through 2019. During the thick of the housing crisis, Ohio registered a much higher foreclosure rate than did New Jersey. Completed foreclosures in Ohio between 2008 and 2014 represented 4.5% of the state's housing units, similar to the 4.4% foreclosure rate nationwide, while completed foreclosures in New Jersey during the same timeframe accounted for just 1.3% of all housing units. But in the last five years, while Ohio and most other states were experiencing a strong housing recovery, New Jersey continued to work through a backlog of delayed foreclosures. Completed foreclosures in New Jersey between 2015 and 2019 represented 2.7% of the state's housing units, compared to a 1.9% rate in Ohio and a 1.3% rate nationwide during the same period. LEGACY DISTRESS STILL LINGERING And New Jersey is far from done working through the long tail of legacy distress from the last recession, even as another recession hits. Fifty-seven percent of all completed foreclosure auctions in New Jersey in 2019 were tied to properties purchased during the housing bubble of 2003 to 2008 according to the ATTOM data. Nationwide, the percentage of completed foreclosure auctions tied to bubble- era purchases first fell below 57% in 2015 and dropped to a new low of 39% in 2019. SLUGGISH HOME PRICE RECOVERY New Jersey's low-grade foreclosure fever over the past five years has contributed to a slower rebound in home values when compared to Ohio and the nation as a whole. An analysis of median home price data from ATTOM shows that while New Jersey home prices have increased 40% since bottoming out in February 2012, they are still 7% below the pre-recession peak in July 2007. By comparison, Ohio home prices have jumped 110% from the bottom and are 25% above their pre-recession peak. Nationwide, median home prices are up 82% from the bottom and are 17% above their pre-recession peak. Lingering legacy foreclosures contribute to slower home price growth in at least two ways: the market uncertainty associated with a shadow inventory of unresolved distress; and the drag on surrounding home values that comes with an elevated share of distressed sales. e more sluggish housing recovery in New Jersey also meant that housing markets there were more susceptible to subsequent, more localized market shocks: Hurricane Sandy in 2012 and Atlantic City casino closings from 2014 to 2016. By contrast, housing markets in Florida and Texas were more prepared to absorb the shock of the hurricanes that hit those states in the summer of 2017. Before the hurricanes hit, median prices in Florida had rebounded 99% from the bottom and were just 9% below the pre-recession peak while median prices in Texas had rebounded 75% from the bottom and were 45% above the pre-recession peak (home prices were not hit as hard in Texas during the Great Recession). FINALLY, FORBEARANCE e bigger home equity cushion in both Texas and Florida certainly helped to soften the foreclosure impact caused by the 2017 hurricanes, but policymakers and servicers also implemented a highly effective foreclosure prevention strategy that combined an instantly activated, but relatively short-term, foreclosure moratorium with pro-active forbearance that transitioned into sustainable loan modification for distressed homeowners. In Houston, for example, Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) all enacted 90-day foreclosure moratoriums for areas impacted by Hurricane Harvey just days after the hurricane hit the city in late August 2017. Fannie and Freddie ended that moratorium after the initial 90 days while FHA extended its moratorium another 90 days, through the end of February 2018. Pro-active forbearance was offered to impacted homeowners concurrent to those foreclosure moratoriums. Fannie Mae, for example, authorized servicers to "grant an initial forbearance plan of up to six months with the possibility of extension to any borrower who they suspect has been impacted by a natural disaster." In the Fannie Mae example, servicers were encouraged to identify the best loan modification option for distressed borrowers to help them transition out of forbearance and not fall behind on mortgage payments. In an analysis published in September 2019, two years after Hurricane Harvey, Fannie Mae found that 55% of loans in hurricane- impacted areas that became delinquent after the hurricane were modified. e Fannie Mae analysis also found that Feature By: Daren Blomquist

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