TRENTON –Legislation sponsored by Senators Ronald L. Rice and Dana L. Redd to create the New Jersey Homeownership Preservation Act which will help provide needed assistance to those facing foreclosure was approved by the full Senate today by a vote of xx to xx.
“There are an increasing number of households that are becoming victims of foreclosures,” said Senator Rice, D-Essex. “These foreclosures have created an economic downturn in New Jersey. When a home is foreclosed upon, it isn’t just families who are affected. We have seen, first hand, that the negative impact creates a domino effect that leads to an increase in crime and a decrease in area property values.”
The bill, SCS-1599, would establish a Mortgage Stabilization Program Fund in the New Jersey Housing and Mortgage Finance Agency (NJHMFA). The program would provide assistance to homeowners and lenders willing to refinance covered mortgages in order to ensure that homeowners have access to affordable mortgages.
Senator Redd, D-Camden and Gloucester, stated that the Mortgage Stabilization Program proposed in the bill, is similar to the federal program and would provide a financial incentives for lenders willing to renegotiate loan terms.
The bill, would also create the New Jersey Housing Assistance and Recovery Program (HARP), which would provide funding to support a third party sponsor who enters into a lease-purchase agreement with a homeowner at risk of losing their house to foreclosure.
Senator Rice noted that the bill offers funding to sponsors who acquire the title to the homeowner’s property and agrees to permit the homeowner to continue to live there at an affordable rental price in the hopes that the renter will be able to buy back their home.
“This legislation will keep families in their homes, and help maintain some stability for the residents of New Jersey,” said Senator Redd. “Every day more families are being foreclosed on, and as elected officials, we have to responsibility to devise a plan that will provide stability in our housing industry.”
A second housing bill, sponsored by Senator Rice, S-8, is part of a multi-bill package aimed at providing an economic stimulus and relief at a time of national economic crisis.
Senator Rice stated that the measure provides the financial backing to help slow the rapid pace of foreclosures in the State of New Jersey.
According to Senator Rice, the bill would appropriate $12.5 million from the Long Term Funding Obligation and Capital Expenditure Fund to the Department of Community Affairs (DCA) and the Administrative Office of the Courts (AOC) for foreclosure counseling. The measure would also appropriate $51,471,000 in federal funds to the DCA for the Neighborhood Stabilization Program which will help residents remain in their homes.
Both measures now head to the Assembly for consideration before being enacted by the Governor.