TRENTON – Today, the Senate Economic Growth Committee advanced the “New Jersey Residential Foreclosure Transformation Act” sponsored by Senate Economic Growth Chairwoman Nilsa Cruz-Perez and Senator Troy Singleton, which would establish the “New Jersey Foreclosure Relief Corporation” as a temporary entity within the New Jersey Housing and Mortgage Finance Agency.
“New Jersey cannot afford to wait any longer to address the foreclosure crisis plaguing our state,” said Senator Cruz-Perez (D-Camden/Gloucester). “We need swift and immediate action to get foreclosed properties out of the hands of banks and occupied by New Jersey residents who need housing. Abandoned, foreclosed properties hurt our communities and our local economies. Through this legislation, our communities would flourish again as empty houses would be reclaimed and renovated to become affordable homes”.
The bill, S-1584, would create a seven-member board to govern the corporation consisting of the Commissioner of Community Affairs, the Executive Director of the HMFA, the Commissioner of Banking and Insurance, and the State Treasurer and three New Jersey residents, appointed by the Governor, who have relevant backgrounds. The Senate President and the Speaker of the General Assembly will each nominate one member for appointment by the Governor. The board would have exclusive authority to approve all financial transactions of the Corporation.
The bill empowers the Corporation to purchase foreclosed residential properties and mortgage assets from institutional lenders in order to produce affordable housing. The Corporation would be limited to sixty days to purchase a property in order to provide prompt conveyance to another public agency, a community development corporation, a developer, or a qualifying household for occupancy as affordable housing subject to a thirty-year deed restriction. The number of bank-owned homes in New Jersey reached an alarming eleven-year high of 23,322 in 2017.
“The continued influx of foreclosed properties has been a major contributing factor preventing true economic recovery in our state,” said Senator Singleton (D-Burlington). “Solving this crisis with this proposal will help increase property values, stabilize the housing market and boost consumer confidence while preserving residents’ quality of life.”
The bill would require the Corporation to make an annual report of its activities to the Governor and the Legislature providing a complete operating and financial statement covering its operations, transactions and holdings during the year. An audit of the Corporations books and accounts would occur at least once per year by certified public accountants.
The corporation would cease operations on December 31, 2022.
The bill advanced from committee by a vote of 4-0-1, and next moves to the Senate Budget and Appropriations Committee for further consideration.