In an effort to reduce the loss of family wealth brought on by foreclosures and create equity in the purchase process for people who are committed to living in a community rather than flipping foreclosed homes, a bill sponsored by Assembly Democrats Britnee Timberlake, Cleopatra Tucker and Verlina Reynolds-Jackson would establish the “Community Wealth Preservation Program” and make foreclosure sales more fair. The full Assembly on Thursday passed the bill 46-30.
The bill (A-793) would offer homeowners in foreclosure, or their next of kin, the opportunity to purchase back their home at a foreclosure sale and thereby preserve their family wealth. It would also create an avenue for people who want to live in the community instead of just selling the property by establishing a special regulated program that reduces the required deposit amount from 20% to 3.5% and expands the number of days all the purchase price dollars are due from 30 to 90 days.
“New Jersey leads the country in housing foreclosures. Leading New Jersey in this statistic are our urban areas. Black and brown wealth is hemorrhaging through the loss of foreclosed property, and the people who live in the community often do not have deep enough pockets to even participate in the foreclosure process. This bill is a creative opportunity for families to save their wealth at the time of a foreclosure sale,” said Assemblywoman Timberlake (D-Essex, Passaic). “The legislation also levels the playing field for people who want to purchase an abandoned home to restore and live in for a minimum of 7 years, instead of flipping the home.”
The bill would also require anyone who purchased property with financing to occupy the residence for an 84-month period and subject investors who misuse the program to flip properties to steep fines.
“The current process for buying foreclosed houses favors companies that have the money to purchase property at sheriff sales and resell it for a profit,” said Assemblywoman Tucker (D-Essex). “By enacting the changes detailed in this bill, we can give people vested in the community a better chance of securing a home at these sales.”
“Making housing accessible and affordable is critical and the ‘Community Wealth Preservation Program’ can do that for many New Jerseyans who want to own a home and join a community,” said Assemblywoman Reynolds-Jackson (D-Mercer, Hunterdon). “We know what barriers stand in the way of a homeowner’s success at sheriff sales and with this legislation we can make a difference.”
The bill now heads to the Senate.