The Daily Record

Assessments Of Foreclosure Program Vary

Daily Record — Tuesday, September 18, 2007

Gannett New Jersey

TRENTON — A state official told a state Senate committee yesterday that New Jersey may finally launch a $30 million rescue program for homeowners facing possible foreclosure, hut hours later a state spokesman said the program was not yet ready.

Jerry Keelen, an official at the New Jersey Housing and Mortgage Finance Agency, told the state Senate Community and Urban Affairs Committee the rescue program would move forward if the agency's hoard approves it at its monthly meeting Thursday.

However, a spokesman for the agency said in an e-mail statement late yesterday that the program would not he ready for board's agenda and officials were still looking to refine the program.

Keelen told the committee the program is expected to help 150 to 200 homeowners. However, Keelen said, some 1,600 residents have already contacted the state about signing up for the program, which was initially announced in May.

Keelen said the 30-year and 40-year loans will target homeowners with respectable, if damaged, credit ratings, typically called with 'A minus' borrowers.

Those would likely be borrowers with credit scores of 575 or higher and those who have not been late on more than two mortgage payments, Keelen said.

Keelen said the loans are to be sold to investors through bonds, and those investors, in the midst of a worldwide credit crunch, had insisted on borrowers with better credit. The program will be largely paid for by the borrowers as they pay hack the loans.

Consuimer advocates told the Senate committee the state should have a more expansive program for the large number of homeowners facing foreclosure. Foreclosures are rising because borrowers, many with poor credit, took on debt with adjustable rate loans that are now resetting at much higher rates.

Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, a Newark-based consumer watchdog group, said the state should tap the Wall Street firms that helped create the current foreclosure crisis by offering easy credit and complex loan programs to unsophisticated borrowers.

"We do not think this is the best the state has to offer," Salowe-Kaye said. "We think the state can do better."

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