Says Trio of Bills to Help Those Already in Foreclosure or Facing Foreclosure ‘An Economic and Moral Imperative’
TRENTON – Following news reports that New Jersey rose past Nevada in the second quarter of this year in the number of mortgage defaults, Senate Economic Growth Committee Chairman Raymond J. Lesniak today said that Governor Christie and his administration have not done enough for people already in foreclosure or facing down foreclosure, and suggested that the Governor support a trio of bills Senator Lesniak sponsored to address the foreclosure crisis in the Garden State.
“It’s pretty clear that this Administration has dropped the ball when it comes to New Jerseyans defaulting on mortgages and losing their homes as a result of an escalating foreclosure crisis in this State,” said Senator Lesniak, D-Union. “If the Governor wants to do something about it, his first step should be to support my bills which help State residents in danger of foreclosure, and help transform already foreclosed, abandoned homes into affordable and market-rate housing.”
A report today from the Bloomberg News noted that in the second quarter, New Jersey passed Nevada in the rate of homeowners with seriously delinquent loans – those either 90 days late or already in foreclosure. Currently, New Jersey is only behind Florida in the number of serious delinquencies, making the State the second worst in the nation in seriously delinquent home loans.
“We cannot ignore the foreclosure crisis in New Jersey, with a record-number of homeowners either losing their homes, or on the brink of losing their homes,” said Senator Lesniak.
The first bill that Senator Lesniak sponsored, S-2156, which was approved unanimously last month by the Economic Growth Committee, would create an expedited foreclosure procedure for abandoned, foreclosed properties which had fallen into disrepair. To qualify for expedited foreclosure consideration, a home must be vacant and abandoned, and meet at least two other conditions of proof to show that it has fallen into a state of disrepair. Senator Lesniak said the goal is to reduce a process which can take up to a year in most foreclosure cases, and compact that into a few months for homes that are abandoned and a blight on the rest of the neighborhood.
The second bill, S-2157, which was approved by a vote of 3-2 by the Economic Growth committee last month, would direct the State Housing and Mortgage Finance Agency (HMFA) to facilitate the financing and purchase of foreclosed properties by private investors from institutional lenders, and convert those properties to affordable and market-rate homes. HMFA would be required to use its bonding capacity – with no recourse to the State – as well as federal funds and State Affordable Housing Trust funds to finance the purchase of homes by for-profit and not-for-profit corporations.
Both bills represent different aspects of S-1566, which the Senator sponsored – and the Governor vetoed – earlier this year.
“I believe in second chances, and I think the Governor missed a potential home run in failing to sign S-1566,” said Senator Lesniak. “We know that abandoned, dilapidated properties drive down residential property values in surrounding homes, resulting in more homeowners paying more into their mortgages than their homes are worth, and we know that increased urban and suburban blight attracts criminal activity. I hope that when we get these bills to the Governor’s desk a second time around, that he’ll consider signing them to put foreclosed, abandoned and run down homes back to good use.”
Senator Lesniak will also be formally introducing a bill on Thursday to direct the HMFA to expand participation in the New Jersey Homekeeper program, a foreclosure mitigation program operated with federal funds from the “Hardest Hit” fund awarded to states facing the highest number of homes in danger of foreclosure. Recently published news reports have noted that the State has only expended 10 percent of the funds to which it is eligible, helping only 750 families stave off foreclosure out of the thousands of New Jersey homeowners who might benefit and be eligible for financial assistance on their mortgages.
“Beyond simply dealing with the aftermath of the foreclosure crisis in the Garden State, New Jersey has to be proactive, protecting homeowners from having their homes foreclosed on,” said Senator Lesniak. “At a time when thousands of families are struggling to keep up with their mortgages, it’s discouraging that a State program has not made the most of federal funds to which we are entitled, and helped more people stay in their homes. These bills represent a good starting point for the Governor and his Administration to reverse their dismal record in dealing with the foreclosure crisis, and represent a one-two punch which will hopefully protect homeowners from foreclosure and create new housing opportunities from abandoned properties for families who’ve already lost their homes.”