NJ Battles Foreclosures With Controversial Planby Tim Manni
In an effort to quell foreclosures in New Jersey, the Garden State has adopted a plan to develop a multi-million dollar trust fund to help subprime homeowners avoid foreclosure. The New Jersey Homeownership Preservation Act was just one of seven bills designed to aid homeowners facing foreclosure advanced by Assembly committees on October 6.
Controversy has arisen in a stipulation that would require that any lender that forecloses on a property pay a $2,000 fee to the state. According to Steven M. Goldman, Commissioner of the New Jersey Department of Banking and Insurance, New Jersey is on track to reach 50,000 foreclosure filings this year alone. The trust fund is predicted to collect between $27 – $33 million, most of which would be used to hire foreclosure-prevention counselors, non-profits to “restore properties,” and a counseling service that would make “emergency foreclosure prevention assistance loans.”
The Homeownership Preservation Act is being cheered by some local government officials and non-profit organizations as essential to foreclosure prevention, but others have proposed that the act will do little to benefit eligible homeowners.
E. Robert Levy, Executive Director of the Mortgage Bankers Association of New Jersey, and Legal Services attorney Rebecca Shore, believe the measure could create an incentive for mortgage bankers to leave the state, and as Shore puts it, “a false sense of hope and no meaningful solution.”
Are these types of foreclosure prevention bills being enacted in your state or community? Let us know if you think these types of solutions are worthwhile.