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Refinancing Aid for New Jersey Homeowners Facing Foreclosure
By jason | December 23, 2008
Lawmakers on the New Jersey Senate and Assembly have approved the Mortgage Stabilization and Relief Act, a law that would provide help to owners of distressed properties to refinance their homes or remain in their houses as tenants.
New Jersey Governor Jon S. Corzine is expected to sign the bill into law.
The legislation has allocated $25 million to the mortgage stabilization initiative. Under the law, loans for as much as $25,000 will be provided to lenders and homeowners who are willing to refinance first mortgages that are at risk of foreclosure.
A $15 million program designed to stabilize the housing market has also been created under the law. The program will help nonprofit organizations purchase houses from owners who have difficulty paying their monthly mortgages. The organizations will then lease the properties back to owners for a period of seven years until such time that they have recovered financially.
A primary component of the law is the burden given on creditors to take responsibility of any code violations if homeowners decide to abandon the property. Also, lenders are required to suspend foreclosure for at least six months if the homeowner requested more time to find short sale or refinancing.
The rate of New Jersey foreclosures has been increasing as a result of the economic crisis and the escalating job losses. Last October, over 5,000 foreclosure filings were recorded in New Jersey.
Meanwhile, Corzine signed a law allotting a legal aid of $9.5 million for homeowners facing the threat of losing their homes, debt collection and bankruptcy. Under the law, mediation is required in all disputed foreclosure cases.
The New Jersey mortgage aid bill has created a Housing Mortgage and Finance Agency support fund which is intended to provide relief to homeowners facing the threat of losing their homes and stabilize the neighborhood and housing market.
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Topics: Foreclosures by State | Comments Off
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