With a foreclosure rate more than twice as high as the national average, New Jersey is aiming to help thousands of homeowners with a new housing counseling program.
The New Jersey Housing and Mortgage Finance Agency announced recently that it will spend $1 million to provide housing counseling for up to 2,000 homeowners facing foreclosure.
“Foreclosures continue to threaten homeowners in New Jersey, creating housing instability for thousands of people every year,” said Lt. Governor Sheila Y. Oliver, Commissioner, and Chair of the New Jersey Housing and Finance Agency board. “By providing housing counselors who will work with the homeowners in the court’s mediation program, we are hoping to provide many more residents, regardless of income, access to resources that may help save their home.”
New Jersey’s foreclosure rate is currently 0.16 percent, compared to a national average of 0.06 percent, according to industry data.
“Mediation can save a home from foreclosure, yet too many homeowners enter the foreclosure process with their mortgage lender without and understanding of the type of relief that may be available to them,” the New Jersey Housing and Mortgage Finance Agency stated with the announcement of the new program.
Under the program, homeowners served with a foreclosure notice will be made aware of available housing counseling services through the U.S. Department of Housing and Urban Development. Counselors will be able to provide services such as creating an action plan, negotiating with the lender, and providing post-mediation counseling.
Counseling will be available to homeowners who are “the subject of an active residential mortgage foreclosure action,” who request counseling within 60 days of foreclosure notice, who live in the property facing foreclosure, and who are not currently in bankruptcy.
The New Jersey agency referenced research by the Urban Institute that suggested that homeowners who receive housing counseling when facing foreclosure are three times more likely to receive a loan modification and 70 percent more likely to remain current on their mortgage after receiving that loan modification.
“Foreclosures crush families and blight neighborhoods,” said Ras J. Baraka, mayor of Newark, New Jersey. “Governor Murphy’s new housing counseling program is an important addition to Newark’s existing stabilization partnerships that give owner occupants the opportunity to modify their loans, write down the balances and forgive back payments.”
Executive Director of the New Jersey Housing and Mortgage Finance Agency Charles A. Richman said, “Housing counselors serve a vital role in mediation and provide valuable assistance in guiding a homeowner facing foreclosure to explore options.”