In 2020, New Jersey had one of the highest foreclosure rates in the country, according to a real estate data tracking company. The devastating economic effects of the COVID-19 pandemic is expected to add to the state’s mounting foreclosure crisis.
Legislation, sponsored by Assemblywoman Mila Jasey (D-Essex, Morris), aiming to reduce foreclosures and help municipalities rehabilitate vacant homes cleared its first legislative hurdle on Thursday with approval from the Assembly Appropriations Committee.
This bill (A-5130), known as the “New Jersey Foreclosure Prevention Act,” would establish the “New Jersey Residential Foreclosure Prevention Program,” within the New Jersey Housing and Mortgage Finance Agency (“HMFA”).
The program would aim to ensure that loss mitigation and foreclosure prevention measures are taken on eligible properties. Either directly, or through its contractors, the bill would authorize the agency to purchase “eligible properties” and mortgage assets to further this goal.
Assemblywoman Jasey issued the following statement on the bill:
“New Jersey is in a housing crisis and has been for many years. There are many foreclosed vacant residential properties throughout the state that are undermining the health, safety, and economic vitality of neighborhoods. They depress neighboring property values, reducing revenues for municipalities.
“More foreclosures may be imminent as the pandemic continues to affect our economy and communities. We need a strategy in place to help both families facing foreclosure and municipalities dealing with existing vacant properties.
“The New Jersey Residential Foreclosure Prevention Program will assist struggling homeowners facing foreclosure and also help with the redevelopment of currently vacant properties due to foreclosures.”
Under the bill, “eligible property” is defined as a residential property or mortgage note owned by an institutional lender as a result of a mortgage foreclosure judgment or a foreclosure, owned by a municipality as the result of a tax foreclosure judgment, or that is subject to a nonperforming loan from an institutional lender.
The bill will now go to the Assembly Speaker for further consideration.