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Menendez Hosts Hearing on Foreclosures

2-10-12

By David Cruz

On the day after the major foreclosure settlement, New Jersey Senator Bob Menendez was in Plainfield today, a city particularly hard hit by the foreclosure crisis. He was hosting a public hearing of his Senate Housing, Transportation and Community Development Subcommittee, to discuss the foreclosure crisis and to find ways to help homeowners on the brink.

Menendez said the settlement, in which five lenders agreed to pay close to $25 billion to close out an investigation into abusive foreclosure practices, was a good step, but not enough.

“When I realize that, nationwide, we’re looking at $700 million of families under water, $25 billion doesn’t seem to do more than just scratch the surface,” he said. “I’m happy for those who would be helped, but I’m also concerned that there are sectors that are not subject to the settlement like mortgages that are backed by Fannie and Freddie.”

Menendez announced that he’s introduced a bill to create so-called “Shared Appreciation Mortgages,” which would allow banks to reduce mortgage principals for homeowners underwater.

“In return for giving the lender interest in a future appreciation of the property so that the loan can be made more whole but the borrower can get some relief now,” he said.

According to today’s testimony, 125 homes in Plainfield are in foreclosure with another 500 on the borderline. Plainfield Mayor Sharon Robinson-Briggs says yesterday’s settlement was good news, but that, in general, banks need to work harder to make the loan modification process less difficult for mortgage holders in crisis.

“I would like to ask banking officials to … discuss the possibilities of forgiveness of back monies that are owed on loans, maybe up to three months,” she said, “or either put that on the tail end of a loan and allow people to be able to start over.”


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  • Eileen Ward

    Dear Senator Menendez;:
    Thank you for helping the people of New Jersey stay in their homes .The taxpayers have saved the banks ;now is the time for the banks to keep people in their homes..

  • Laraine

    I purchased a condo with my daughter in 2006 at the height of the market. The interest rate was very high and I tried desperately to refinance over the last 2 years. Because my mortgage was higher than the current value of the condo, the banks declined my requests. There was no suggestion of reducing my mortgage amount because property values went down. THat was my bad luck. We had no way of predicting that would happen. But the People who made poor decisions in purchasing homes with mortgages they couldnt afford is another story. I found a way to refinance my condo, but it doesnt change the fact that it is not worth what I have paid for it.
    I dont think it was right for the government to save the banks. That money should have been used to help those out of work and homeowners like me.The banks should pay back every penny they took from us, as the taxpayers had no say in that decision. If they chose to lower amount owed on mortgages, that should not be done at the taxpayers expense.
    I dont think forclosure is the answer. Those people need help and my idea would be to lower interest rates on those mortgages and extend the length of time for the mortgage to lower payments to the homeowners in trouble. The length of time should depend on what the homeowner could afford monthly.
    Unless the housing market turns back around, I will never get back the money I lost because of the purchase price of my condo. And, if the banks reduce mortgages arbitrarily, it would put people like me, who have fought to stay in our homes, at a definite disadvantage when it comes time to sell those properties.