Trenton – With the threat of foreclosures looming in New Jersey and around the country, Governor Phil Murphy signed legislation into law, sponsored by Senators Troy Singleton and Nellie Pou, which will establish the “New Jersey Foreclosure Prevention Act” to directly assist those facing foreclosure with the New Jersey Housing and Mortgage Finance Agency (NJHMFA).
“New Jersey has made great strides in addressing the previous foreclosure crisis, and we do not want to see history repeat itself when the foreclosure moratorium is eventually lifted,” said Senator Singleton (D-Burlington), Chair of the Senate Community and Urban Affairs Committee. “With the pandemic decimating the economy, countless people around the state are on the brink of losing their homes. Now law, the New Jersey Foreclosure Prevention Act will help to stave off a wave of foreclosures, and more importantly, keep families in their homes.”
“The COVID-19 crisis rocked our state hard, and left a devastating trail of destruction in many ways, including making it harder for many residents to keep up with their mortgages and hold on to their homes. Finding ways to mitigate the worst aspects of this foreclosure crisis is paramount to the state’s overall economic standing,” said Senator Pou (D-Bergen/Passaic). “This law will allow trained professionals to work hand in hand to help families who have suddenly fallen on hard times due to the pandemic find affordable ways retain control of their properties.”
Under the law, the newly established program will allow the NJHMFA to purchase foreclosed residential properties in order to assist residents in retaining control of the properties. This will allow the NJHMFA to work with homeowners in making their mortgages more affordable. Additionally, through the program, the agency is now authorized to enter into contracts or loans, or both, with qualified community development financial institutions to negotiate, bid for and purchase nonperforming loans of eligible properties and mortgage assets.The goal of the new law is to prevent properties from falling vacant and joining the ranks of thousands of vacant homes that already exist in New Jersey.
The program is funded by the Foreclosure Intervention Fund, which will contain money gathered through a new $350 fee on sheriff’s sales property purchases. Sales consist of vacant or foreclosed properties available in a given community.
The NJHMFA will have 180 days to adopt a funding plan utilizing the Foreclosure Intervention Fund.
In the spring of 2019, the Governor signed into law a major bill package sponsored by Senator Singleton aimed at tackling the state’s foreclosure crisis, and more specifically, addressing the significant number of abandoned and vacant homes throughout neighborhoods and communities. The bills provided clarity on the locations of these homes and offered local and municipal governments the tools necessary to respond.