East Orange Calls for Changes to Foreclosure Practices

By Brenda Flanagan

“It’s sad to know that you can’t enjoy something you worked so hard for.”

Martha Nelson bought her East Orange home in 2004 — a rambling three-story on Oraton Parkway.

When the Great Recession hit, she lost her job, property values tanked and she now owes the bank twice what her dream home’s worth. And she can’t get an affordable mortgage refinance, even though it’s an FHA — Federal Housing Administration-backed loan.

“If it’s a private loan, they can do much more for me. But with the loan that I have, there’s nothing much than can be done,” Nelson said.

“In East Orange we have many examples, many examples of hard-working families fighting to preserve and maintain their homes,” said East Orange Mayor Lester Taylor.

At a news conference, Taylor talked about blighted neighborhoods like Nelson’s where two houses down the street are in foreclosure and a couple others look completely disheveled and abandoned. He blames corporate greed and lax government.

“For too long, Wall Street speculators are becoming major landlords, in communities of color in particular, like East Orange. Government agencies such as Fannie Mae, HUD, Freddie Mac have allowed private interests to trump the interests of working class families in our communities,” Taylor said.

“As I fight my own fight to save my home from foreclosure, I am heartbroken to see all the vacant and abandoned homes in my community that once housed families — families like me,” said homeowner Lorian Smith.

Critics say the feds care more about Wall Street than Main Street. Even Essex County Freeholder President Britnee Timberlake faced foreclosure.

“I understand the experience first hand of having a bank not work with you. My property was appraised to be about 80 percent underwater. It was worth $10,000 to $15,000. Some people were driving cars worth more than my property,” she said.

But freeholders wield some clout. The board passed legislation last October that requires any bank handling county money to testify how they’re helping homeowners with troubled mortgages. And the East Orange City Council will soon consider a resolution requiring federal housing agencies to consult with the city before they auction off homes in foreclosure.

“And that is what we are calling on Fannie and Freddie to do and HUD to do. In short, the message today is to stop selling our communities to Wall Street,” said New Jersey Communities United Executive Director Trina Scordo.

“Since 2012, an average of 93% of delinquent FHA loans in New Jersey were resolved without the need for a foreclosure,” and that last April, “… HUD made significant changes … to strengthen the neighborhood stabilization measures required of purchasers … and HUD will continue to work with both homeowners and lender towards a full recovery,” said HUD.

Nelson says she’ll keep making the mortgage payments here as long as she can and then, she’ll walk away. But advocates say they’re determined to keep owners like Nelson in the homes that they worked so hard to buy.