Measure Would Reduce Municipal Blight, Maintain Property Values for Surrounding Homes
TRENTON – A bill sponsored by Senator Ronald L. Rice which would allow municipalities to require creditors who initiate a foreclosure proceeding to secure and maintain the vacant, foreclosed home was unanimously approved by the Senate Community and Urban Affairs Committee today.
“We’ve seen the negative impact of vacant, foreclosed homes falling into disrepair within a community,” said Senator Rice, D-Essex, the Vice Chair of the Senate Community and Urban Affairs Committee. “When a home stands vacant and the property deteriorates, it can bring down property values of surrounding homes, and it can create a magnet for criminal activity. Through this legislation, we’re trying to require creditors to take responsibility for the homes they’re overseeing, so that these homes do not create a burden for the rest of the municipality.”
The bill, S-1740, would require a creditor that serves a notice to foreclose on a mortgage within a municipality to provide a copy of the notice to the public officer or municipal clerk where the property is located. The creditor would include the full name and contact information of a person located within the State who is authorized to act on behalf of the creditor in regards to the property.
If the residential property becomes vacant at any time after the creditor files notice of intention to foreclose, but before the property is transferred to a third party, and if the municipality determines that the property is in violation of any applicable State or local housing or safety codes, the municipality may give the creditor notice of the violation, and require the creditor to correct the violation. Under the bill, the creditor would be required to correct any violations within 30 days of receiving notice of the violation. If the creditor fails to remedy the violation within 30 days, the municipality would be able to impose penalties for the violation that are consistent with municipal ordinances under current law.
“Lenders need to take a little responsibility for the homes they foreclose on, and, particularly in cases of out-of-state lenders, they need to care a little bit more about what happens in New Jersey as a result of the home they foreclosed on,” said Senator Rice. “With one of the highest rates of homes either in foreclosure or in danger of foreclosure, New Jersey is absolutely dealing with a home foreclosure crisis, and run-down, abandoned, foreclosed homes exacerbate that crisis. This bill gives municipalities a tool to compel lenders to maintain and secure abandoned properties, so they don’t become a burden for the rest of us.”
The bill now heads to the full Senate for consideration.
