Rice: It’s Time To Start Helping Those In The Sub Prime Mortgage Crisis

Senator Ronald Rice on the Auto Insurance Bill Signing

TRENTON – Chairman of the Senate Community and Urban Affairs Committee, Senator Ronald L. Rice released the following statement following today’s hearing to address the rising number of foreclosures due to changes in the sub prime mortgage market.

“Homeownership provides societal benefits by reducing crime and combating the problems of blighted neighborhoods. Unfortunately the increase in homeownership was fueled by a rise in ‘non-traditional’ mortgages. Large numbers of these loans that started with low teasers rates are spiking and too many residents are losing their homes to foreclosures, and when the interest rates go up, the financial pain inflicted on these working families will be substantial.

“Foreclosures don’t simply affect a single family—they can destroy entire communities. Widespread foreclosures in an area will depress already low housing prices, making it harder for others in that area to get loans or refinancing.

“The foreclosure rate is rising throughout the country. There are already over 100 bills nationwide that address lending abuses or foreclosures. As the sub prime mortgage crisis worsens, the credit market tightens, and the foreclosure rate rises around the State—two things are clear—the problem will get worse before it gets better and there is more than one way to help people.

“Homeowners face different challenges and need different types of help. There is no single resource that residents can access to research ways to solve their mortgage problems. I am introducing a measure to require the Department of Community Affairs to maintain a website that would list, describe and provide links to various federal, State and local organizations that provide guidance related to mortgages and credit problems.

“As a State, we cannot turn our backs on the many working families that have found themselves in this situation. It’s important that we do everything we can to help homeowners remain in their homes.

“In addition to today’s hearing, I am bringing together various financial entities that may be able to assist residents with their credit and mortgage issues. The event will take place on Wednesday, October 17th at Camden Middle School in Newark from 6 to 8 p.m. I hope that this event will be replicated throughout the State, so that people can take the first step towards helping themselves stay financially afloat.”

###