TRENTON, NJ – As part of an on-going legislative effort to combat the state’s foreclosure crisis, two bills, one designed to strengthen communities through home homeownership and another created to prevent homelessness, cleared the Assembly Housing and Community Development Committee Monday.
One measure, bill (A-4412), designated as the “Community Wealth Preservation Program,” would revise sheriff’s procedures for selling residential properties by reducing the required deposit for these properties, currently 20 percent, to 3.5 percent. It is sponsored by Assembly Democrats Britnee Timberlake, Cleopatra Tucker and Verlina Reynolds-Jackson.
“Many people still cannot realize the joy and pride of homeownership. Some processes can make owning a home seem like a dream that is extremely difficult, if not impossible, to obtain,” said Timberlake (D-Essex, Passaic). “This measure aims to help make such dreams become within reach.”
“Another benefit of this bill is that it promotes homeownership which helps cities and towns become stronger, more vibrant and progressive,” said Tucker (D-Essex). “Community engagement increases when residents have a stake in their neighborhood.” “New Jersey continues to lead the country in the number of residential foreclosures,” said Reynolds-Jackson (D-Hunterdon, Mercer). “This isn’t a title of which we are proud and is our caucus’ rationale for working so feverishly to develop solutions to this crisis.”
Under the bill, the successful bidder on a residential property in a sheriff’s sale would have up to 90 business days to complete the sale, with no interest accruing on the balance of the sale for 60 business days following the transaction. The bill mandates disclosure of whether the property is vacant, tenant-occupied, or owner-occupied prior to the sale.
It also stipulates that a bidder may purchase property in a sheriff’s sale through financing if documentation of pre-approval by an appropriate financial institution can be provided. A bidder may only use the financing option if the property will be the bidder’s primary residence. If a successful bidder finances the property and does not use the property as a primary residence, the bidder would be subject to a fine of up to $100,000. There are exceptions to the penalties if the bidder vacates the property due to death, military deployment, or foreclosure.
The bill further stipulates, as provided by the New Jersey Housing and Mortgage Finance Agency, that each sheriff’s office maintain information, written in laymen’s terms, regarding financing residential property in a foreclosure sale on its website. Each sheriff’s office would also be required to conspicuously display information about the program directly in its office.
A sheriff’s office in a county where 10 percent or more of the residents speak a primary language other than English must provide that information in the language, or languages, in addition to English. The alternate language would be determined based on information from the latest federal decennial census.
The bill was introduced on September 13, 2018 and would become effective immediately.
The other measure, (A-4414), is sponsored by Assemblywomen Britnee Timberlake, Verlina Reynolds-Jackson and Shavonda Sumter. It would require developers of all new residential developments of 30 or more units to reserve at least 25 percent of the units for low or moderate income housing for at least 98 years. A developer could choose to develop the required affordable housing either onsite or offsite.
The measure also states that a municipality authorized to impose affordable housing development fees or payments in lieu of constructing affordable housing could allow a developer to pay a fee or donate an amount equal to 30 percent of the cost of the proposed development instead of constructing low or moderate income housing. In this instance, the municipality would be required to spend the amount collected on activities approved to develop affordable rental and for sale housing throughout the municipality.
The bill also directs the Housing and Mortgage Finance Agency to revise their requirements and controls for affordable to low and moderate income households to be consistent with the bill’s requirements.
“There just isn’t sufficient affordable housing in our state,” said Timberlake (D-Essex, Passaic). “Consequently, many people are just one paycheck away from being homeless should they have an emergency. This bill looks to provide a solution to such a disturbing trend.”
“We can leave no stone unturned when looking at ways to provide affordable housing in New Jersey,” said Reynolds-Jackson (D-Hunterdon, Mercer). “We must look at every conceivable option to make sure that all families in New Jersey have a place to call home.
“A lack of affordable housing continues to be one of the most critical economic problems facing New Jersey,” said Sumter (D-Bergen, Passaic). “This measure aims to help deal with this issue by establishing sufficient, affordable housing for families and individuals in our state.
”The bill would become effective four months after enactment. It was also introduced on September 13, 2018.
Both measures now await further review by the Assembly.