Rice Proposes Foreclosure Prevention Act

Senate Community and Urban Affairs Committee Chair, Senator Ronald L. Rice, D-Essex, speaks at a meeting of his committee.

TRENTON – Senator Ronald L. Rice released the following statement today regarding his new proposed legislation to rescue families that have become victims of the foreclosure crisis and to help keep others from falling behind in their mortgage payments.

“In 2008, between 13,000 and 16,000 New Jersey homeowners are likely to face foreclosure as a result of high-cost, subprime loans. Because we are all facing tough financial times, it’s even more important that we step up and provide real and lasting solutions to the residential mortgage crisis. Too many families are losing their homes and it’s time for the Legislature and interest groups to work together to reduce the devastating impact these foreclosures have on our residents and communities.

“This legislation would take a big step towards in easing the residential mortgage crisis. My proposed New Jersey Homeownership Preservation Act would provide needed assistance to a Foreclosure Prevention Fund, by charging a $2,000 fee to lenders or loan servicers when they initiate foreclosure proceedings on high-cost loans.

“By creating a Homeownership Prevention Fund, we can provide counseling services and education, emergency foreclosure prevention assistance to homeowners, and also fund efforts by non-profits to purchase foreclosed properties from lenders and put them to productive use. The measure would require lenders to give homeowners the time they need to try to refinance or pursue another alternative to foreclosure. The bill would also protect borrowers by prohibiting credit reporting agencies from selling lists of people applying for mortgages, and would mandate reporting requirements for loan servicers about problem loans.”

CLICK HERE TO READ A COPY OF SENATOR RICE’S DRAFT LEGISLATION