By KIMBERLEY HAAS
State officials in New Jersey will use $10 million in federal funding to purchase mortgage notes of homes on the verge of foreclosure to stem the loss of single-family houses to rental property investment firms.
When Governor Phil Murphy made the announcement, officials said his administration anticipates using the funding from the American Rescue Plan Act of 2021 to purchase non-performing mortgage notes from the FHA prior to foreclosure proceedings.
If the homeowner still lives at the property, efforts will be made to assist them.
If the property has been abandoned, steps will be taken to obtain the title. The property will be rehabilitated and put back on the market, according to a press release.
New Jersey’s single-family home market was decimated following the financial crisis of 2008 and Covid has led to a similar, if not greater, loss of homes, officials said.
State Senator Troy Singleton, who championed New Jersey’s sweeping foreclosure reform laws in 2019, applauded Murphy for utilizing available federal dollars to fund the Foreclosure Prevention Act, which will be administered by the state’s housing and mortgage finance agency.
“We have made great strides to address the previous foreclosure crisis in New Jersey and we do not want history to repeat itself,” Singleton said in a statement. “This will keep as many families as possible in their existing homes, which will prevent a tidal wave of new foreclosures and even homelessness.”
Assemblywoman Mila Jasey, the lead sponsor of the law creating the program, commended Murphy for his understanding that all people need a safe, affordable place to call home.
“The threat of imminent foreclosure is one of the most daunting financial challenges a family will ever face. The upheaval and disruption can cause irreversible damage,” Jasey said in a statement.
Jasey added this will also help to stabilize neighborhoods by preventing the eyesore of vacant and abandoned buildings that depreciate home values.
This seed funding will help the New Jersey Housing and Mortgage Finance Agency play a key role in stabilizing the affordable single-family home market for the state’s homeowners and homebuyers, according to Executive Director Melanie Walter.
Murphy said the $10 million will permit the program to launch at scale and continue to grow.
“The Foreclosure Prevention Act was more than a decade in the making. My administration is proud to have signed this landmark legislation adding to our state’s capacity to address the concerns of current New Jersey homeowners and future homebuyers,” Murphy said in a statement.
According to the U.S. Census Bureau, there were an estimated 9,267,130 people living in the state in July of 2021.
Officials announced earlier this month that the New Jersey Housing and Mortgage Finance Agency has opened an application portal for the Emergency Rescue Mortgage Assistance program. Eligible homeowners can receive up to $35,000 to help protect themselves against foreclosures.
According to a recent Credit Karma study, New Jersey was one of the most expensive places in the United States in 2021.
Researchers used a methodology that included home value, average rent, overall cost of living, taxes, and a few other specific cost-of-living indexes.
New Jersey ranked 5th overall on the list.
The Zillow Home Value Index indicates that home values in the state have gone up 16% in the past year.
The typical home value is now at $435,668.
The most expensive luxury homes in New Jersey are on the market for $25 million.
The first is on Rio Vista Drive in Alpine and is a new construction with seven bedrooms and 12 bathrooms.
Amenities include a 15-seat theater, billiards, two bars, a wine cellar, two indoor plunge pools, a sauna, a steam room, and a conservatory.
Located on a waterfront property, the second is on Indian Trail Drive in Franklin Lakes. It has five bedrooms and 10 bathrooms.
This residence has indoor and outdoor saltwater pools, a state-of-the-art pool house, and a basketball court, according to the listing.
No matter where you live in the country, there may be help if you are facing foreclosure.
Officials at the U.S. Department of Housing and Urban Development have a website to guide people who are going through the foreclosure process.
The website says although the path to foreclosure is determined by state law, homeowners are protected under federal consumer protection laws and may have options for avoiding foreclosure depending on the mortgage lender.
Email story ideas to Editor Kimberley Haas: [email protected]