New Jersey had highest rate of foreclosures in the nation in 2015
(TRENTON) – Legislation sponsored by Assembly Democrats Mila Jasey, Jerry Green, Jamel Holley, Elizabeth Muoio and Vince Mazzeo to codify the state’s Foreclosure Mediation Program into law to help reduce the staggering number of foreclosures in the state and help homeowners keep their homes was approved Monday by the General Assembly.
The bill (A-1029) would codify the Foreclosure Mediation Program into state law. The program was established in 2009 by the New Jersey Judiciary in response to an alarming increase in residential foreclosures. New Jersey had the highest rate of foreclosures in the nation in 2015.
“Foreclosures not only affect homeowners, but neighborhoods and the state as a whole,” said Jasey (D-Essex/Morris). “Last year we led the country in foreclosures. The mediation services provided by this program can help homeowners avoid foreclosure and reinvigorate our housing market by reducing our dismal foreclosure rates. It is essential that we keep these services going.”
“Foreclosures wreak havoc on families and communities,” said Green (D-Middlesex/Somerset/Union). “This bill would help ensure that the mediation services provided under the program continue to be available to homeowners who are at risk of losing their homes.”
“No homeowner wants to lose their home,” said Holley (D-Union). “Making this program a permanent fixture would ensure that homeowners facing foreclosure will always have an alternative. It would also help chip away at the foreclosure crisis that has loomed over the state for too long.”
“The city of Trenton had the second-highest metro foreclosure rate in the country last year, which makes any attempt at progress even more challenging,” said Muoio (D-Mercer/Hunterdon). “This bill ensures that the program will endure so that homeowners can take advantage of these mediation services, which will not only help homeowners but the municipalities where they live.”
“Foreclosed properties can sit vacant for extended periods of time, which can affect property values of nearby homes,” said Mazzeo (D-Atlantic). “We should give homeowners who are struggling the opportunity to keep their homes and avoid the ripple effects of foreclosures on neighborhoods.”
The bill would require that, at the time the homeowner-borrower receives a notice of intention to foreclose, pursuant to section 4 of P.L.1995, c.244 (C.2A:50-56), a homeowner-borrower must receive written notice of the option to participate in the Foreclosure Mediation Program. Upon the filing of a mortgage foreclosure complaint against an eligible property, the homeowner-borrower must again receive written notice of the option to participate in the Foreclosure Mediation Program. The written notice must be available in both English and Spanish.
The bill would authorize eligible homeowners to submit a mediation request, thereby initiating the process of scheduling a mediation session with their lender. Along with the mediation request, the homeowner may have to submit additional information that may be necessary for creating a loan modification, or other agreement, but will not have to pay any fees to participate in the program.
The bill would also create a dedicated, non-lapsing fund within the General Fund to be known as the “Foreclosure Mediation Fund.” The fund would be comprised of receipts equaling $50 from every foreclosure complaint filing fee, along with all fines imposed on lenders for noncompliance with obligations of the mediation program under the bill. Pursuant to R.1:43 of the Rules of Court, foreclosure complaint filing fees have recently increased from $200 to $250. Instead of establishing those fees at $250, this bill would allow the judicial branch to maintain the role of determining foreclosure complaint filing fee levels, so long as $50 of each fee is contributed to the fund.
The bill was approved X and now awaits further consideration by the Senate.