Amidst New Jersey’s continued foreclosure crisis, the full Assembly on Monday approved legislation sponsored by Assemblywoman Bonnie Watson Coleman to ensure that the state’s foreclosure mediation program continues.
The bill (A-3396), passed by a vote of 52-21-2, was part of a special hearing recently held by the Assembly to make sure the state moves more quickly and efficiently to help New Jersey homeowners facing foreclosure. New Jersey has the nation’s second highest foreclosure rate, but the state was initially slow to spend $300 million in federal foreclosure aid to help beleaguered residents.
New Jersey’s Foreclosure Mediation Program was established in 2009 by the New Jersey Judiciary in response to an alarming increase in residential foreclosures. The bill (A-3396) ensures the continuation of the Foreclosure Mediation Program by establishing it in statute.
“”This is not a free ride,” Watson Coleman (D-Mercer/Hunterdon) said. “Both sides need to act responsibly and show interest in reaching a reasonable agreement, but it gives homeowners a chance. That’s vitally important for our residents, our neighborhoods and our economy, which can all be destabilized by foreclosure. No one should lose their home when they have a chance to save it. This is too valuable a program to squander.”
The bill authorizes 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 be required 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 requires lenders to have a representative attend the mediation session, either in person or by telephone, who has authority to reach a mutually acceptable loan modification, loan workout, refinancing agreement, or other resolution.
If either party fails to attend a mediation session or make a good faith effort to mediate, courts will have the authority to penalize the party through a fine of up to $1,000, through allowing the other party to recover reasonable attorney’s fees and litigation expenses, or through any other sanction the court deems appropriate.