Towns and community development organizations would be able to turn foreclosed homes into affordable housing under a measure approved by the Senate Economic Growth Committee.
Senate Bill 1584, which passed Monday 4-0 with one abstention, would create the New Jersey Foreclosure Relief Corp., which would purchase foreclosed residential properties and the accompanying mortgage from financial institutions, after which the property could only be used for affordable housing for the next 30 years.
“We need swift and immediate action to get foreclosed properties out of the hands of banks and occupied by New Jersey residents who need housing. Abandoned, foreclosed properties hurt our communities and our local economies,” said Sen. Nilsa Cruz-Perez, D-5th District and a sponsor of S1583, in a statement.
The corporation would have 60 days from the foreclosure date to purchase the property so it could transfer ownership to a public agency or community development organization.
The “continued influx of foreclosed properties has stifled New Jersey’s economic recovery,” said Sen. Troy Singleton, D-7th District, another sponsor.
“Solving this crisis with this proposal will help increase property values, stabilize the housing market and boost consumer confidence while preserving residents’ quality of life,” Singleton said.
Under S1583, the corporation would submit an annual report to the governor and Legislature, outlining its activities, operations, transactions and holdings during the year. The corporation would be subject to an audit at least once a year.
The governor, senate president and assembly speaker would each appoint someone to the corporation’s board. The state treasurer, commissioners of community affairs and banking and insurance, and the executive director of the Housing Mortgage and Finance Agency would also sit on the board.