Turning A House Into A Home

Home ownership has often been a symbol of "making it" in our society. It has often embodied the manifestation of the American Dream for many New Jerseyans. But, with the pressures of a struggling economic resurgence here in our state this dream has not been able to turn itself into reality for too many of our neighbors. Whether it is growing families…..idealistic 1st time buyers….or those in life’s various transitional stages, we must ensure that achieving a piece of this dream can become attainable again.

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Research tells us...and our natural inclination reaffirms that owning a home not only creates wealth but also helps to create a sense of purpose in one’s life. Furthermore, national studies have shown that for every new home that is sold, two jobs are created. This coupled with the increased economic activity associated with the sale and purchase of homes would significantly boost our state’s economy.

However, when the housing market suffered its historic nosedive, many middle-class families saw a substantial loss in their home equity. The equity that homeowners build is an integral part of their family’s wealth and savings. For most families, their homes represent their most valuable asset, and losing it to foreclosure or not being able to even afford to buy one creates both long- lasting financial and psychological effects.

That is why, I have tried to champion increased home ownership and foreclosure prevention during my time in the Legislature. The housing slump may be the most significant brake on our state and our nation’s economic recovery. It is vital that we experiment with creative ways to help homeowners dig out from under a mountain of negative equity and re-establish their financial stake in our society.

According to figures in the Lender Processing Services Index (LPS) Home Price Index data, in today’s depressed real estate markets, foreclosed homes sell at an average discount of 29 percent and short sales at an average of 23 percent. And of course, having an ongoing supply of such properties for sale adds pressure on home prices. Thus, saturating the market and restricting the movement of housing inventory....slowing economic activity.

I have worked to develop a creative approach to initiate a pilot program called MAP or the Mortgage Assistance Pilot Program. The MAP program would allow a homeowner, with negative home equity and who is in default of a mortgage owned by the New Jersey Housing & Mortgage Finance Agency, to lower the remaining principal owed on the mortgage to an amount more reflective of current market realities in exchange for conveying an equity share in the property to the agency.

The pilot program would help these homeowners be able to afford to stay in their homes without encouraging homeowners who are current on their mortgages to default, reducing the foreclosures and short sales that are stifling the recovery of the housing sector.

Additionally, recognizing that vacant and abandoned properties undermine the health, safety, and economic vitality of neighborhoods, thus depressing their property values, and reducing revenues to municipalities it is incumbent upon policymakers to act in order to stem this negative tide. In that vein, I have advanced a measure that would require the responsible party for a vacant and abandoned property to register such property with the municipality in which the property is located and would provide enforcement tools to help ensure that these properties are properly maintained. As stated previously, vacant and abandoned properties negatively impact public safety and neighboring property values, affecting communities throughout the State. The proposal would help ensure that municipalities are able to hold those responsible for maintaining these properties to account.

All of us recognize how the prevalence of vacant parcels throughout a neighborhood can have a chilling effect on the prospects of home sales. To sit idly by and not act in this regard could potentially destroy the fabric of our communities and stifle any economic growth we are witnessing. Turning a house into a home is more than a line in a song, it is a community imperative that we must embrace or face losing much more than just a few properties.

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