Senator Rice Measure Offers Low Interest Loans to Homeowners
TRENTON – Senator Ronald L. Rice today introduced a measure to provide re-financing assistance to New Jersey homeowners who are facing foreclosure because of rising sub prime mortgage interest rates.
“New Jersey is facing a dramatic increase in the number of foreclosures due to changes in interest rates for sub prime loans, especially in the urban communities,” said Senator Rice, D-Essex. “The dream of homeownership has collided with rising interest rates, declining home values and the collapse of sub prime mortgages and without re-financing assistance, these problems are forcing working families from their homes. By offering re-financed loans traditional fixed-rate mortgages, we will help families remain homeowners and provide a better quality of life for all of the State’s residents.”
According to Senator Rice, “The bill would require New Jersey Housing and Mortgage Finance Agency (HMFA) to develop a program that offers those who are faced with home forecloses the opportunity to refinance their high-cost home loans into lower interest fixed-rate loans.”
Senator Rice stated that, “Under the bill, the HMFA would be authorized to offer up to $500 million in low fixed- rate loans for up to 40 years.
Senator Rice said, “Sub prime mortgage borrowers are typically charged higher interest rates and fees because their credit history problems, high debt, lower incomes, or unstable employment history indicate to lenders that they are higher risks, but this measure looks to help those homeowners re-finance themselves into a stable lower loan,” added Senator Rice.
Senator Rice noted that this measure mirrors a program in Ohio. Currently the State of Ohio has directed their Mortgage Financing Agency to issue about $100 million worth of bonds to provide mortgage refinancing for the victims of the sub-prime market collapse.
“Just a few years ago, a competitive housing market with attractive mortgage rates, offered many New Jerseyans an opportunity to became first time homeowners,” said Senator Rice. “Unfortunately, many of these homeowners have found themselves in financial troubles because of rising interest rates and changes to the housing market. The only option for many of these families will be to try and re-finance these loans. I want to ensure the working families of New Jersey who are struggling to make their mortgage payments– assistance is on the way.”
The bill will get first reading on May 21st in the Senate Community and Urban Affairs Committee.