Trenton – The Senate Community and Urban Affairs Committee today advanced legislation sponsored by Senator Troy Singleton that would protect homeowners in foreclosure from an excessively low intervening offer.
Under current law, someone with an interest in a foreclosed property that is for sale at a tax sale is only required to pay nominal consideration for their interest in the property, which is not defined by current law.
The bill, S.3373, would amend current law to prohibit any individual interested in purchasing a foreclosed property at an offer that is less than the fair market value. The bill will change tax lien laws to ensure that someone who has an interest in a property under foreclosure pays at least fair market value for that interest in order to acquire the property at a tax sale.
“When properties are foreclosed, opportunistic investors can easily obtain the foreclosed properties, redeeming its tax lien,” said Senator Singleton (D- Burlington). “These investors prey on disadvantaged homeowners who are in the midst of foreclosure proceedings. The homeowners lose the title to their property, and these investor purchases are detrimental to the overall property value. This legislation will protect the rights and dignity of the homeowner during the foreclosure process, with added protections against predatory investing practices.”
This bill would take effect immediately.
The bill was passed by committee by a vote of 5-0.