Legislation sponsored by Assembly Democrats Jerry Green and Jamel Holley to make it easier for not-for-profits to help families facing home foreclosure gained final legislative approval from the Assembly on Monday.
“The process can be streamlined for homeowners who have help from a church or another not-for-profit organization to save their homes from foreclosure,” said Green (D-Middlesex/Somerset/ Union). “In these cases, the transfer of ownership is temporary. The home will return to the ownership of someone who lives in the home.”
The intent of the bill (A-4687) is to exempt certain sales of residential property to a purchaser operating as a housing assistance and recovery program (HARP) form the payment of realty transfer fees. Under a HARP, a not-for-profit entity, such as a church organization, partners with a back to rescue homeowners in danger of foreclosure eviction. The not-for-profit entity works with the mortgage holder to purchase the property and then leases the property back to the original homeowner at an affordable rent.
“Too many New Jersey residents are seeking help to save their homes from foreclosure and more time to climb out of financial difficulty,” said Holley (D-Union). “If not-for-profit organizations are able to help homeowners facing foreclosure then they should be allowed to help. The state can help by easing a bit of the red tape involved in the process.”
The bill states the goal of HARP is to help financially strengthen the homeowner within a seven-year period, and then resell the property back to that homeowner, or member of the family living with the homeowner. The purpose of the sale or transfer to the HARP is to stop foreclosure or eviction proceedings; therefore, it does not make sense to charge a realty transfer fee because the property will be returned to the seller.
To discourage fraud, if the property is sold to someone other than the original seller, or a person residing with the seller, then an amount equal to twice the realty transfer fee would be collected at the time of that subsequent sale.
The bill, which passed both houses unanimously, now heads to the governor’s desk.