New Jersey’s foreclosure situation isn’t the acute crisis it once was, though its rate remains the highest in United States.
With that backdrop, state lawmakers are beginning to consider a 10-bill package addressing the issue, resulting from a 2017 report by a special committee convened by Supreme Court Chief Justice Stuart Rabner.
In addition to making permanent a mediation program the courts began in 2008, the proposals seek to shorten the foreclosure schedule and create an interactive database of foreclosed properties, among other changes. It’s welcomed by both housing advocates and community bankers.
“If these bills become law, I’m sure New Jersey will join the rest of this nation in seeing the foreclosure crisis become a part of our history,” said Arnold Cohen, senior policy advisor for the Housing & Community Development Network of New Jersey.
“In my 15 years of working here in various capacities, this is really the first time that I’ve really seen all of the branches of government come together and actually execute on something and produce something that is very worthwhile,” said Michael Affuso, senior vice president and director of government relations for the New Jersey Bankers Association.
New Jersey is still the state with the nation’s highest foreclosure rate, as it has been since 2015, according to ATTOM Data Solutions. The Atlantic City and Trenton metropolitan areas have the highest foreclosure rates among the nation’s 319 metro areas with at least 200,000 residents.
However, the number of foreclosures started last year was down 12 percent, with 18,801 foreclosures begun in 2018.
“The statistics are pretty much well-known, but thankfully through the work of the executive, judicial and legislative branches, we are starting to bend that curve and put a break on that,” said Sen. Troy Singleton, D-Burlington.
State Sen. Steve Oroho, R-Sussex, said the bills include essential consumer protections: “Ensuring there’s a level playing field of accountability for out-of-state mortgage companies and to help create a more efficient system of getting these properties back into productive use.”
The bills in the package would:
- Require that a notice, with the intention to foreclose, would not be sent more than 180 days in advance of taking that action. Currently, a notice must be sent at least 30 days in advance of initiating a foreclosure, with no outer limit on when that legal action must be commenced. (S3411)
- Require the Department of Community Affairs to create a database with an interactive map which would detail the extent of foreclosed properties in New Jersey. The database would be developed, maintained and updated daily, funded through a new $30 fee on all deeds filed. (S3412)
- Make changes to the summary action foreclosure process under the “Fair Foreclosure Act” by clarifying the method by which foreclosed properties can be sold on an expedited timeline. (S3413)
- Permit all common interest community associations to record a lien for unpaid assessments, and to provide limited priority over prior recorded mortgages and other liens for nine months-worth of unpaid customary assessments. (S3414)
- Require the filing of certain contact information of creditors with a residential mortgage foreclosure complaint and pending legal action. Among the information that would have to submitted to the county: Names and contact information for creditors and their in-state agents responsible for receiving complaints about property maintenance. (S3415)
- Clarify that the “New Jersey Residential Mortgage Lending Act” applies to out-of-state persons and entities involved in residential mortgage lending in the state. Debtors would be provided with a notice that the lender is licensed. (S3416)
- Require any person acting as a mortgage servicer to obtain a license from the state Department of Banking and Insurance for each main office and each branch office where business is conducted. (S3417)
- Revise the statute of limitations in residential mortgage foreclosure actions from 20 years to six years from the date on which the debtor defaulted, in situations in which the date of default is used as the method to determine when the statute of limitations has expired. (S3418)
- Revise certain procedures under the “Fair Foreclosure Act” to expedite residential mortgage foreclosure proceedings, such as require the sheriff to conduct a foreclosure sale within 120 days of the sheriff's receipt of a writ of execution. (S3464)
- Codify the state judiciary’s Foreclosure Mediation Program and dedicate $25 from a new $75 foreclosure filing fee, as well as proceeds from fines, to reimburse the trained foreclosure prevention and default mitigation counselors. (S1244)
The bill package was endorsed by the Senate Community and Urban Affairs Committee. A few of the bills were referred to the Senate budget committee, but most of them now await votes by the full Senate.