Foreclosure Victims Get Some Relief

NJBIZ — Monday, December 1, 2008

By Shankar P.

Homeowners in New Jersey facing the risk of foreclosures cheered last week as the state Senate passed a bill that aims to keep them in their homes and expand mortgage refinancing assistance.

"The new measures will help keep between 1,500 and 2,000 homeowners that face foreclosure," according to Staci Berger, director of advocacy and policy at the [Housing and Community Development Network of New Jersey], a Trenton-based nonprofit that campaigned for the relief. However, through the end of 2009, about 35,000 to 40,000 New Jersey homeowners are likely to face foreclosure, the advocacy group said in a statement.

The New Jersey Mortgage Stabilization and Relief Act, as the new legislation is called, allows the New Jersey Housing and Mortgage Finance Agency to expand refinancing assistance by $40 million. It would also create within that agency a Housing Assistance and Recovery Program for neighborhood stabilization, enabling nonprofits to buy the homes, "but there's not enough capital and it is not good enough," Berger said.

The bill also bars credit reporting companies from selling lists with information about people who have recently applied for a mortgage, and requires lenders launching foreclosure actions to file quarterly reports with the state Department of Banking and Insurance.

The bill, which passed 29-9, is said to have the support of Gov. Jon S. Corzine.

Berger said she hopes at least two other provisions that didn't win Senate approval find support in the Assembly vote on the bill. One allows homeowners who lose their homes to remain in the property as tenants by paying market rent until it's sold, she said. Another requires creditors seeking foreclosures on adjustable rate loans to offer a six-month "hold" at the borrower's request, allowing them a chance to negotiate a workout, refinancing or short sale options, she said. Berger expects the bill to come up for an Assembly vote after Dec. 15.

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