Sponsored by:
Assemblywoman MILA M. JASEY
District 27 (Essex and Morris)
SYNOPSIS
Establishes New Jersey Foreclosure Prevention Act.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the mitigation of loss on distressed and foreclosed properties, supplementing and amending Title 55 of the Revised Statutes, and amending Title 2A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) This act shall be known and may be cited as the "New Jersey Foreclosure Prevention Act."
2. (New section) The Legislature finds and declares that:
a. New Jersey experienced heightened foreclosure rates during the Great Recession beginning in 2008 and continuing for the ensuing decade, only returning to pre-recession rates of foreclosure in 2019.
b. New Jersey is currently suffering through the COVID-19 pandemic, with more than 1.6 million New Jersey residents seeking unemployment benefits due to job loss, furlough, or hour reductions.
c. Homeowners in New Jersey have suffered enormous negative economic impacts due to the COVID-19 pandemic, resulting in increased housing insecurity. During each month from April 2020 through August 2020, the number of New Jersey households that deferred or did not pay their mortgages exceeded 160,000;
d. Given New Jersey s susceptibility to prolonged periods of elevated rates of foreclosure, as evidenced by the long-term impact of the Great Recession, the Legislature hereby determines and declares that there is a need to provide alternative foreclosure mitigation measures.
3. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
Agency means the New Jersey Housing and Mortgage Finance Agency established pursuant to section 4 of P.L.1983, c.530 (C.55:14K-4).
Community development corporation means a nonprofit community development corporation established pursuant to Title 15 or 15A of the Revised Statutes of New Jersey, or other law of this State, with a focus on producing and operating affordable housing or housing with on-site social services for individuals with special needs.
Community development
financial institution means an entity designated and certified by the United
States Department of the Treasury as a Community Development Financial
Institution
pursuant to 12 CFR Part 1805.
Contractor means a qualified community development financial institution that enters into a contract or loan with the agency pursuant to section 5 of P.L.1983, c.530 (C.55:14K-5).
Eligible property means any residential property or mortgage note that is owned by an institutional lender as the result of a mortgage foreclosure judgment or a deed in lieu of foreclosure, is by a municipality as the result of a tax foreclosure judgment or is subject to a nonperforming loan from an institutional lender.
Fund means the Foreclosure Intervention Fund, established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
Institutional lender or lender means any lawfully constituted mortgage lender, mortgage investor, or mortgage loan servicer that owns an eligible property, including, but not limited to, any agency or instrumentality of the United States or the State, including, but not limited to, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Housing Administration, the Small Business Administration, the Resolution Funding Corporation, and the Federal Deposit Insurance Corporation.
Intercreditor agreement means an agreement among creditors that sets forth the various lien positions and the rights and liabilities of each creditor and its impacts on the other creditors.
Program means the New Jersey Residential Foreclosure Prevention Program established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
Qualified community development financial institution means a community development financial institution that has a minimum of $50,000,000 in assets and a minimum of two years' experience in the financing and acquisition of real estate for affordable housing.
4. (New section) a. There is established in the agency the New Jersey Residential Foreclosure Prevention Program, which shall be subject to the powers of the agency, as designated pursuant to section 5 of P.L.1983, c.530 (C.55:14K-5). The goal of the program is to ensure that loss mitigation and foreclosure prevention measures are taken on eligible properties. Either directly, or through its contractors, the agency may purchase eligible properties and mortgage assets in furtherance of this goal, pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. The agency in furtherance of the program may enter into contracts with any person, corporation, or entity which the agency determines to be necessary or appropriate to carry out its responsibilities under P.L. , c. (C. ) (pending before the Legislature as this bill). Such contracts shall be subject to the procedures adopted pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill). All contracts entered into in furtherance of the program shall be governed by the laws of the State and shall provide for indemnification of the agency.
c. In carrying out the agency s duties under P.L. , c. (C. ) (pending before the Legislature as this bill), the agency may employ the consulting services of real estate and loan portfolio asset management firms, property management firms, auction marketing firms, brokerage services firms, appraisers, and such other consultants and employees required in the judgment of the agency, notwithstanding the provisions of Title 11A of the New Jersey Statutes.
d. Within 180 days following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the agency shall adopt a funding plan for the program utilizing the Foreclosure Intervention Fund established pursuant to section 6 of P.L. , c. (C. ) (pending before