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Caputo, Prieto, Tucker, Eustace & Wimberly Bill to Ward-Off Blight on Foreclosed Homes Clears Senate Panel

Measure Would Require Mortgage Lenders to Maintain Foreclosed Homes

(TRENTON) – Legislation Assembly Democrats Ralph Caputo, Vincent Prieto, Cleopatra Tucker, Tim Eustace and Benjie Wimberly sponsored to allow municipalities to require mortgage lenders to maintain vacant homes during foreclosure proceedings advanced in the Senate on Monday.

The bill would help municipalities prevent residential properties that have gone through foreclosure from deteriorating and promoting neighborhood blight.

“The ongoing foreclosure crisis has caused vacant residential properties to crop-up in communities across the state,” said Caputo (D-Essex). “Homes have been abandoned everywhere from urban to rural and suburban communities across New Jersey. We must do all we can to ensure New Jersey neighborhoods continue to be vibrant and thriving communities as we work our way through this crisis.”

This bill (A-347) allows a municipality to require a creditor who initiates a foreclosure proceeding against a residential property located in the municipality to maintain the property in accordance with state and local housing codes if the property becomes vacant during the foreclosure proceeding.

“We have a responsibility to help our communities that have been crippled by the mortgage crisis by requiring mortgage companies to be responsible and support the quality of life our residents deserve,” said Prieto (D-Hudson/Bergen).

“The foreclosure crisis has hit many communities hard, but we must make sure the problem isn’t exacerbated by vacant homes that begin to deteriorate and drag down entire neighborhoods,” said Tucker (D-Essex).

“The foreclose crisis is real and it’s hit our homeowners hard, but also our neighborhoods, so requiring mortgage lenders to do the right thing and maintain these properties is common sense and good for everyone,” said Eustace (D-Bergen/Passaic).

“A vacant home that is unkempt is an eyesore to the entire neighborhood, but if mortgage lenders are controlling a property then clearly they should be held responsible for maintaining it for the betterment of everyone,” said Wimberly (D-Passaic/Bergen).

The bill requires a creditor that serves a notice of intention to foreclose on a mortgage on residential property in this state to serve the public officer or municipal clerk of the municipality in which the property is located, with a copy of the notice at the same time that the creditor serves the notice on the owner of the property. The creditor shall include the full name and contact information of a person located within the State who is authorized to accept service on behalf of the creditor with the copy of the notice served on the public officer or municipal clerk.

The bill also provides that if the residential property becomes vacant at any time after the creditor files the notice of intention to foreclose, but prior to vesting of title in any third party, and the municipality determines that the property is in violation of any applicable state or local housing code, the municipality may provide the creditor with notice of the violation, and may require the creditor to correct the violation.

Further, the bill requires municipalities to include a description of the conditions that gave rise to the violation with the notice of violation and shall provide a period of not less than 30 days from the creditor’s receipt of the notice for the creditor to remedy the violation. If the creditor fails to remedy the violation within that time period, the municipality may impose penalties allowed for the violation of municipal ordinances.

The bill was released by the Senate Community and Urban Affairs Committee.