The Star-Ledger

New Jersey Missing Out On Bank Of America Settlement Riches: Opinion

The Star-Ledger — Friday, August 29, 2014

By Star-Ledger Guest Columnist
Phyllis Salowe-Kaye

Once again, Gov. Chris Christie has been asleep at the wheel and is leaving New Jersey's middle-class and working families on the side of the road as he whizzes by, crisscrossing the country. We've seen Christie leave millions on the table that could help New Jerseyans several times before — this time, he's left the state out of the running to receive hundreds of millions of dollars in relief for struggling homeowners facing foreclosure.

While six other states have been aggressively investigating banks involved in bad mortgage-lending practices by taking part in a $16.65 billion settlement with Bank Of America, New Jersey has stood on the sidelines. At Christie's direction, acting state Attorney General John Hoffman completely missed the boat to bring anywhere from $45 million to $300 million in foreclosure relief and prevention programs into New Jersey from a Bank of America settlement with the U.S. Department of Justice.

The most galling part is that Christie allowed this to transpire despite the fact that, while rates nationally have fallen to their lowest rates since 2008, New Jersey leads the nation with the highest percentage of mortgage loans in foreclosure.

It has been six years since the foreclosure crisis began sweeping through New Jersey, ruining lives and devastating entire neighborhoods. Yet, Christie has consistently been missing in action when it comes to fighting this completely man-made foreclosure disaster.

The governor vetoed multiple bipartisan bills designed to mitigate the fallout from the foreclosure crisis. In 2012, he even used more than $75 million in money meant for foreclosure prevention from another multi-bank settlement to plug the state's budget and give tax breaks to the super-rich. For nine months, the Christie administration withheld $300 million targeted for home-own-ers who lost their jobs in the financial crisis because of an inability to get the money out the door. Today, there is not one single dime in the state budget allocated to foreclosure assistance.

Thanks to the Christie administration's apparent disinterest in the foreclosure problem, New Jersey will lose out in significant relief to the home-own-ers who need it most. If Christie had prioritized investigations into faulty residential mortgage-backed securities it could have been a party to the largest bank settlement in history. If the state had aggressively pursued banks who harmed borrowers in our state, the administration could have received relief money to grant capacity-building funds to free HUD-certified counseling agencies that are overwhelmed by the sheer volume of clients for whom they're providing one-on-one counseling. It could also have provided funds for legal services greatly needed to help homeowners navigate the difficult and complicated path to keeping their homes. Settlement money could have been used to fund temporary but successful programs such as the New Jersey HMFA HomeKeeper Program, as well as long-term comprehensive programs such as Re-Start, spearheaded by New Jersey Community Capital and the New Jersey Foreclosure Prevention and Neighborhood Stabilization Revolving Trust Fund recently established in a bill passed by the state Senate.

Christie simply cannot continue to turn a blind eye to the devastation our state is experiencing due to foreclosures on his watch. If he somehow starts to immediately focus on the problem, there is still the possibility that some residents can benefit from a portion of the additional relief that Bank of America is required to provide through the settlement.

But only if he acts now. Relief could include principal reductions and loan modifications to correct underwater mortgages, new loans to credit-worthy borrowers, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing. With one of America's worst records for foreclosure prevention, the Christie administration has to wake up and do everything in its power to persuade BOA to bring extensive relief to New Jersey. Going forward, the administration needs to aggressively investigate all wrongdoing by banks and implement strong and effective foreclosure prevention policies.

We call on Christie to get off this road to nowhere and reverse course. It's time to stop turning his back on much-needed money and bring as much relief as possible to desperate homeowners — from this settlement, as well as all future settlements.

Phyllis Salowe-Kaye is executive director of New Jersey Citizen Action.

Top Top | NJCA in the News | NJCA Homepage