NJ lawmakers move on new foreclosure bill – and fee to fund it
New Jersey lawmakers are moving to enact a new foreclosure prevention program in which the state Housing and Mortgage Finance Agency or its contractors could purchase eligible properties or mortgage assets.
Assemblywoman Mila Jasey, D-Essex, said the purpose of the bill, A5130/S3244, is “to buy properties and assets in foreclosure to mitigate loss and stave off foreclosure.”
Jasey said the bill is needed despite earlier foreclosure-related efforts, including a foreclosure mediation program.
“New Jersey’s foreclosure rate is still the highest in the nation, and we are fearful that this situation will be dramatically exacerbated by the pandemic,” Jasey said. “Foreclosed properties fall into disrepair and adversely impact neighborhoods and pose a threat to safety and health.”
“New Jersey has the unfortunate distinction of having the highest rate of foreclosures in the nation,” said Matthew Hersh, director of policy and advocacy for the Housing and Community Development Network of New Jersey. “Unfortunate is how we characterize the data, but devastating is how this data play out in real life for real families.”
The bill was approved Thursday by the Assembly Appropriations Committee and is due to be taken up by the full Assembly Monday. It is also scheduled for a vote in the Senate Community and Urban Affairs Committee on Thursday.
Hersh said the proposal has been raised in various forms for nearly a decade in the Legislature but that the current plan would be more effective and efficient because the program would run through the HMFA, not a new agency.
“It provides a necessary tool to be used in our state’s ability to stem a chronic foreclosure problem,” Hersh said.
The bill would grant HMFA the power to purchase eligible properties and mortgages assets from its institutional lenders to produce affordable homes. It also allows grants to nonprofits, municipalities and other governmental agencies to also purchase them to redevelop into nonprofit or affordable housing or provide foreclosure and mediation assistance to prevent foreclosure or mitigate loss.
The programs would be funded through a new $350 fee collected from the purchaser of a foreclosed property at a sheriff’s sale. Hersh called that “a real opportunity to establish a regular, revolving stream of capital for purchasing eligible properties.”
Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at email@example.com.