In an effort to prevent foreclosures and evictions throughout the state as a result of COVID-19, four Assembly Democrats sponsor a housing relief bill that would mandate uniform mortgage forbearance and establish a rent pause with affordable repayment options for residents impacted by the pandemic. After previously passing the Senate by a unanimous vote, the legislation passed the full Assembly by a vote of 46-22-3 on Thursday.
The bill (A-4034/A-4226/S-2340) sponsored by Assembly members Britnee N. Timberlake, Benjie Wimberly, Angela McKnight and Shanique Speight combines significant principles from their original housing bill (A-3948) introduced in April while adding language from Senate bill S-2340.
Under this new legislation, mortgage servicers would be required to grant a mortgage forbearance to homeowners or qualifying residential landlords with limited savings and a gross household income that does not exceed 150 percent of the Area Median Income (AMI) after hardship who submit a written request affirming they have been financially impacted in a negative way as a result of the pandemic.
Renters in a similar financial situation with an income that does not exceed 100 percent of the AMI after hardship would also be given relief under the bill, with the legislation prohibiting landlords from evicting renters for 60 days after the conclusion of the Public Health Emergency.
During both the emergency and the following grace period, qualifying renters would not be subject to eviction notices, penalties or fees. For both renters and owners, there would be no impact to credit.
Reasons for financial hardship of both renters and owners include a reduction in hours or loss of employment due to the closure of non-essential businesses, funeral costs associated with COVID-19 and increased child care costs due to school closures – among others.
To prevent catch-up payments from being required immediately in a lump sum and to prevent mass evictions and foreclosures, the bill stipulates mortgage payments would be added on to the end of the mortgage, while landlords would have to enter into an affordable rental repayment agreement with their renters.
The bill also requires landlords to distribute a statement of tenant and landlord rights/responsibilities, as published by the Department of Community Affairs, to each impacted tenant. Landlords would also have to calculate all missed payments during the emergency period and provide written notice to the tenant of that amount within 10 days of the emergency period’s conclusion, using the department’s template for the form.
The legislation expands on the Governor’s existing executive orders by suspending the initiation of foreclosure and eviction proceedings for impacted homeowners and tenants during the emergency while mandating uniform repayment plans for residents receiving mortgage and rental relief.
Upon the bill’s passage, Assembly members Timberlake (D-Essex, Passaic), Wimberly (D-Bergen, Passaic), McKnight (D-Hudson) and Speight (D-Essex) issued the following joint statement:
“Residents throughout our state continue to experience severe financial hardship as a result of COVID-19 and the steps New Jersey had to take to slow the spread of this deadly virus. We must understand these exceptional circumstances and ensure no New Jerseyan loses their home because of a situation that was entirely out of their control.
“People must stop looking at this housing crisis as landlords vs. tenants, as both are important to the housing ecosystem. If homeowners do not succeed, renters will be displaced; if renters do not succeed, homeowners will foreclose. It’s critically important for both to receive an equal opportunity to keep a roof over their heads.
“Thank you to the many organizations who have participated in the drafting of this legislation to make sure it is fair and responsible for the people of New Jersey. The input from so many groups is what truly makes this ‘The People’s Bill.’
“This legislation will add on to the work the Governor’s office and Legislature has already done to protect residents by making sure mass evictions and foreclosures do not take place once the current public health crisis ends. We have a responsibility to all those in our state to make sure they are cared for not only during an emergency, but in the wake of its devastation as well.”