Protecting homeowners in foreclosure from an excessively low intervening offer that undermines the true value of their homes, legislation sponsored by Assembly members Benjie Wimberly (D- Bergen, Passaic), Mila Jasey (D-Essex) and Jamel Holley (D-Union) cleared the full Assembly on Thursday, 71-1.
The bill (A-5142) amends State foreclosure law to prohibit a person who has acquired an interest in a parcel of real property for less than the fair market value of that property, after the filing of the foreclosure complaint, from being admitted as a party to the foreclosure action and also from exercising the right of redemption. This bill would take effect immediately.
Under current law, an individual is prohibited from exercising the right of redemption if they’ve acquired an interest in a parcel of real property for less than a nominal value.
Assembly members Wimberly, Jasey and Holley issued the following statement on the bill:
“We are seeing a predatory practice today with the same severe implications to homeownership throughout the state, mostly in predominately minority communities, as redlining in the ‘60s.
“Homeowners who are in the process of foreclosure are being approached and convinced that their property value has dropped significantly and is worth much less than they know. They are being told the best option is to get what they can get for their home now before the value declines anymore. Some of these elaborate schemes weave in false appraisals and lawyers backing up the buyers’ deception.
“For the many who believe these so-called real estate investors or ‘title raiders’ that you may find through 1-800 number posters, flyers, or online ads on Craigslist, they watch their homes being re-sold for more than they were offered for it.
“New Jersey has some of the highest foreclosure rates in the nation. Homeownership and equity equate to wealth for many families in the state. To know they are being deceived out of their homes in the middle of a fight against foreclosure is unacceptable. This legislation marks the beginning of an ongoing effort to address the concerns homeowners have with the foreclosure process, lending and predatory practices that are taking homes away from families.”
The bill will now go to the Assembly Speaker for further review.