Bills To Fight Foreclosure Approved By Assembly Committee

The Record ( — Friday, October 12, 2012

The Record

Three bills that would step up New Jersey's efforts to fight foreclosure were approved by the state Assembly's housing committee Wednesday, after a hearing in which housing advocates and Democratic legislators called on Governor Christie to do more to help struggling homeowners.

During the hearing, an administration official, Richard Constable, defended his efforts to improve the state's main foreclosure-prevention program. Critics say the federally funded program, NJ HomeKeeper, offered little help to homeowners after it was launched in May 2011 with about half a dozen employees. HomeKeeper, which offers interest-free loans to under- or unemployed homeowners, had used only $22.5 million of the $300 million available to the state as of this past August, according to the U.S. Treasury.

Constable acknowledged that HomeKeeper's early record was "indefensible," but said that since he took over as commissioner of the state Department of Community Affairs in January, he has expanded the program's staff to 51 people, opened up the program to more homeowners and sped up the response time. He also said the program is doing more to reach households hit hard by unemployment, and invited previously rejected applicants to try again under the new, looser rules.

As a result, Constable testified, "we closed more loans last week than we did all of last year." He said the program has set a goal of making an average of 250 loans per month, which he said would use up the entire $300 million by July 2014.

Assemblyman Gary Schaer, D-Passaic, chairman of the Assembly Financial Institutions and Insurance Committee, said that families needlessly lost their homes as a result of HomeKeeper's shortcomings.

"It's well and good that the administration claims now to have fixed the program, but that's too late for many of our neighbors and communities," Schaer said in a statement after Wednesday's hearing, which his committee sponsored, along with the housing committee

Housing advocates testified that the state needs to do more to help homeowners in financial distress. While she acknowledged the Christie administration's steps to improve HomeKeeper, Phyllis Salowe-Kaye, head of NJ Citizen Action, called on the state to increase funding for agencies, like hers, that provide housing counseling. Homeowners applying for help through HomeKeeper are required to work with housing counselors.

Staci Berger, director of policy and advocacy at the Housing and Community Development Network of New Jersey, criticized Christie for using $75 million from a settlement with mortgage servicers to balance the state's budget, rather than to fight foreclosures directly.

"Where are the Christie administration's policies and programs that address the foreclosure crisis?" she asked. "The sad truth is this issue is just not a priority for our governor."

Christie defended his administration by pointing to the progress made to improve HomeKeeper.

"I've authorized [Constable] to do what he needs to do to make sure that money gets distributed to people who need it to stay in their homes," Christie said.

One of the bills approved by the housing committee Wednesday would require HomeKeeper to use all its federal funds by the end of 2017, and to add other approaches to prevent foreclosure, such as principal reductions by lenders. Another bill would ensure the continuation of the state's foreclosure mediation program, established in 2009. The third bill would create a temporary program that would allow the state to purchase foreclosed properties for use as affordable housing.

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