Foreclosures Have Hit the Wealthier Neighborhood Hard

May 18th, 2009 | Tags: Foreclosure

Home foreclosures are no longer being confined to the humble neighborhoods of the US. Rising unemployment is driving even the wealthier communities towards economic distress. In fact, property foreclosures increased three times in North Jersey – an address of the decidedly rich. Property owners in the comparatively well-to-do pockets of Englewood Cliffs and Wyckoff may have to mortgage their homes.

According to statistics available with The Record, about 370 homes in the upper class neighborhoods are at various stages of foreclosure. Even in 2007, a residential single unit sold for $620,000. True, till now, foreclosures were confined to the not-so-rich, where job loss can lead to crisis that ultimately causes owners to mortgage their homes. Hackensack, Paterson, Passaic, are some of the neighborhoods where homes sold for $400,000 or even less.

In 2008, however, the focus shifted to the affluent what with job losses happening in the corporate houses and Wall Street. North Jersey in the New York area saw loss of 35,100 jobs in the finance sector and 58,600 business and other corporate jobs in the last one year. The trend was noticed in early 2009, where lenders filed foreclosure proceedings against 90 properties.

With the unemployment level above 8 per cent in North Jersey, non-governmental agencies are surprised at the calls they are receiving from places, where there was hardly any problem in the past. These social service units are being inundated by calls from Alpine and Tenafly.

The wealthier communities do have access to some savings or severance payments even when they lose jobs. This helps them to pay the bills for some time before they go completely broke. Sylvine Marabotto, an employee of Consumer Credit Counseling Service said that she knew a homeowner who loss a lucrative job after 25 years. Even his severance will end soon. Marabotto said that she knew of several people who just do not know where to look for other sources of income. The numbers of such people who are unable to make the mortgage payments will rise. They will no longer be able to keep their houses once their source of sustenance runs out and they cannot find a job.

Small wonder, then, addle River saw a very big jump in foreclosures. The number of homes facing foreclosures nearly increased four times between 2007 and 2008. In another town Closter, 55 residents got foreclosure notices as against 18 in 2007. The trend is surely quite discomforting.