The New Jersey legislature is considering a bill designed to reduce foreclosures while providing new assistance to municipalities seeking to rehabilitate vacant properties.
The bill (A-5130/S3244 ), titled the “New Jersey Foreclosure Prevention Act,” would create the New Jersey Residential Foreclosure Prevention Program within the state’s Housing and Mortgage Finance Agency (HMFA). The bill would enable the HMFA to purchase eligible properties and mortgages assets from their institutional lenders in order to create new affordable homes.
The bill also gives the HMFA the ability to allocate grants to nonprofits, municipalities, and other governmental agencies to purchase eligible properties for redevelopment into nonprofit or affordable housing or to provide foreclosure and mediation assistance to homeowners facing foreclosure.
Funding for these programs would come from a new $350 fee collected from purchasers of foreclosed properties at a sheriff’s sale. The bill was approved on January 7 by the Assembly Appropriations Committee and is being taken up today by the full Assembly. A vote is scheduled for the Senate Community and Urban Affairs Committee on January 14.
According to the bill's text, "During each month from April 2020 through August 2020, the number of New Jersey households that deferred or did not pay their mortgages exceeded 160,000." Assemblywoman Mila Jasey, D-Essex, co-author of the bill, said the bill to mitigate loss and stave off foreclosures from this wave of pandemic-impacted housing crises.
“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,” said Jasey in an interview with the radio station WKXW-FM. “Foreclosed properties fall into disrepair and adversely impact neighborhoods and pose a threat to safety and health.”
According to data published by RealtyTrac, New Jersey had a foreclosure rate in November of one in every 11,096 residential properties. ATTOM Data Solutions determined New Jersey had the nation’s highest foreclosure rate in 2019, but in the third quarter of 2020 the state ranked fourth in the nation for foreclosures. Last month, the Federal Housing Finance Agency reported that nearly half (44%) of the nonperforming loans sold by Fannie Mae and Freddie Mac in the first half of the year came from New Jersey, New York, and Florida.