BUSINESS & ECONOMY

Bills to ease state’s foreclosure crisis clear committee

BY Brenda Flanagan, Senior Correspondent |

Senators told horror stories at a State House committee meeting about foreclosed apartment buildings that end up vacant and abandoned, leaving officials in Jersey City, Hoboken, and Union City with no one to even contact. Sen. Brian Stack claimed tenants get lured out by mortgage holders.

“They’ll send a realtor or somebody there called Cash for Keys, which I encourage every tenant not to participate in, because where do they go from there? And that’s been a major problem,” he said. “I can’t even get them out there to board properties most of the time. We send letters out, constantly. I was out there, we were boarding up properties, 10:30 last night I was on the scene with the police department, that the property’s not secure.”

Stack’s also mayor of Union City. He pushed the New Jersey Bankers Association.

“Why can’t the banks, when they foreclose on a property, send a letter to the police department, the chief executive of the municipality, the fire department,” Stack said. “To those main people and say, ‘listen, we’re in charge of the property. Here’s an emergency contact number, here’s the receiver’s number, and this is who you should be dealing with.'”

“When a bank forecloses now, under current law they have to send a letter to the municipality,” said Michael Affuso, executive vice president of the New Jersey Bankers Association. “I can promise you that most municipalities are not cataloging these letters. They don’t have any kind of database.”

“We never get letters on these. With contact information and everything? Never. Good luck, reaching Wells Fargo, good luck,” Stack said.

“The cities should know where the bank properties are, and then go after the banks and get cooperation, if not, fine them,” Sen. Ron Rice said.

New Jersey still ranks first in foreclosures with one in every 986 homes in some stage of foreclosure. That’s more than twice the national average of one in 2,526.

The lag prompted New Jersey’s Supreme Court chief justice to establish a Special Committee on Residential Foreclosures which issued a report last summer. Its recommendations formed the basis for a bipartisan package of 10 reform bills passed unanimously Thursday by the Senate Community and Urban Affairs Committee. The bills were designed to stabilize blighted neighborhoods, create a statewide database of foreclosed properties with contact information, quickly renovate usable housing stock, and, crucially, to ensure beleaguered homeowners threatened with foreclosure are legally entitled to free mediators.

“They don’t know where to turn. And so it’s really critical they have free mortgage counselors to be able to help walk them through a process, a mediation process where it’s demanded the lender have somebody there that can come to an agreement at the table, at that time, and an agreement can be made,” said Arnold Cohen, senior policy advisor at the Housing and Community Development Network of New Jersey.

The package of bills caps months of bipartisan effort. It’s now headed to the Senate for a vote.