(Trenton) – Legislation eight Assembly Democratic lawmakers sponsored to help homeowners facing impending foreclosure, Bill S-1599/A3506, was signed into law today by Gov. Jon S. Corzine.
“New Jersey’s deepening mortgage crisis makes it imperative that we provide direct assistance to ensure families can stay in their homes and out of foreclosure,” said a leading sponsor, Majority Leader Bonnie Watson Coleman (D-Mercer). “We need to open lines for borrowers and lenders to work together to preserve the dream of homeownership that is quickly becoming a nightmare for too many families.”
The law is also sponsored by Assembly members Jerry Green, Ralph R. Caputo, Mila M. Jasey, Nellie Pou, Ruben J. Ramos Jr., Joseph Vas and L. Harvey Smith.
“As the number of New Jersey homeowners facing foreclosure increases, so must our vigilance to provide a means for these families to keep their homes,” said Green (D-Union).
The bill (A-3506) establishes the Mortgage Stabilization Program and Mortgage Stabilization Fund in the New Jersey Housing and Mortgage Finance Agency (HMFA) to provide loans of up to $25,000 to homeowners and lenders willing to refinance a first mortgage that is in imminent danger of foreclosure.
Loans are available to lenders who agree to modify or refinance mortgages for qualifying homeowners to provide for more manageable monthly payments or to calculate a new loan amount.
The measure also creates a $15 million Housing Assistance and Recovery Program Support Fund with HMFA to assist state-certified foreclosure prevention and counseling groups, many of whom are dealing with record numbers of new cases.
The sponsors noted a provision requires banks to maintain foreclosed homes to prevent against neighborhoods becoming blighted by rows of empty houses and unkempt properties.
“The worsening mortgage crisis is forcing the state to navigate uncharted and increasingly turbulent waters,” said Caputo (D-Essex). “It would be a failure of leadership to sit idly by and let entire neighborhoods fall overboard.”
“With tens of thousands of foreclosures across the state last year and Camden, Edison and Newark ranked as three of the hardest-hit cities in the nation, we have to do all we can to preserve their dream of homeownership,” said Jasey (D-Essex).
The bill is among about 40 considered by the Assembly in recent months to help New Jersey emerge strong from the global economic crisis. This includes several bills designed to prevent mortgage foreclosures.
“Foreclosures risk tearing families, neighborhoods, and our economy apart, but this is a lifeline to homeowners and lenders alike,” said Pou (D-Passaic). “While we can only do so much to stem this global economic meltdown, this is another step we’re taking in the right direction.”
“The foreclosure crisis and deepening recession threaten to undo the progress our urban centers have made to rebuild themselves and attract new residents,” said Ramos (D-Hudson). “Keeping families in their homes will ensure that revitalized neighborhoods sound and lenders in good shape so New Jersey can emerge stronger from this worldwide economic turmoil,” said Vas (D-Middlesex). “Helping struggling homeowners and lenders is a smart step that will help keep both afloat and give them the momentum New Jersey needs to weather this storm.”
“Buying a home is a dream for all New Jerseyans,” said Smith (D-Hudson). “This assistance will go a long way to protect that dream by making it easier for residents to stay in their homes and avoid the very real threat of foreclosure that continues to loom over too many of our neighborhoods.”
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