NEWARK, NJ - A new state program will offer mediation counseling services to New Jersey residents facing foreclosure, giving them at least a fighting chance when going up against lenders during the legal process.

The New Jersey Housing and Mortgage Finance Agency is using $1 million to fund the program to help up to 2,000 homeowners facing foreclosure. Lt. Gov. Sheila Oliver announced the new program on Aug. 14, inside the Hahne Building alongside state and local officials.

“When people who have had their homes foreclosed or they get notification, they are out-flanked at the bargaining table,” said Oliver, who also heads the state Department of Community Affairs and chairs the NJHMFA board. “You will find financial institutions with cadres of attorneys and financial analysts, and our homeowners come to the table without representation."

Sign Up for E-News

When homeowners are served with a foreclosure notification, they’ll also receive information about where they can access free U.S. Department of Housing and Urban Development-certified counseling agencies. At least five agencies operate in Essex County.

New Jersey was hit hard by foreclosures ever since the 2008 real estate bubble and has struggled to recover. The Garden State in 2017 ranked the highest in foreclosures throughout the nation.

One out of every 72 houses in Essex County reportedly faced foreclosures last year, and local ministers have taken up the issue recently.

Rev. Ronald Slaughter of the St. James AME Church in Newark and other clergy members met in June with Essex County freeholders to discuss foreclosures in the area. Rev. Slaugther also met with Wells Fargo representatives, who he said agreed to audit 133 local homes facing foreclosures.

Essex County Executive Joseph N. DiVincenzo, Jr. earlier this month also divested $3.8 million in Wells Fargo accounts for the bank’s “aggressive” foreclosure practices.

Rev. Slaughter told reporters today that the more he becomes involved in the foreclosure issue, the more he realizes the complexities of lending practices. Having a counselor in mediation will help homeowners navigate the system.

"The foreclosure (crisis) never left the urban community,” Rev. Slaughter said during the press conference. “It always has resided in the urban community. When the banks got the bailout, the people in the urban community got nothing for it, absolutely nothing. So we are seeing the fallout continue because now it's back in the suburban areas."

Mayor Ras Baraka said Newark has about 800 foreclosures on average each year. State programs like the one unveiled today help to support local programs provided to homeowners after the housing market crash about a decade ago.

“African-Americans communities lost 50 percent of their wealth during that time,” Baraka said to reporters. “We are still recovering from that and trying to keep people in their homes who still have their homes at the same time.”

The HUD-certified counselors will work with homeowners in mediation, helping to negotiate with lenders. People who take advantage of counselors are more likely to receive loan modifications that allow them to stay in their home, said NJHMFA Director Charles Richman.

A homeowner facing foreclosure must request mediation within 60 days after they receive a summons and complaint. The homeowner must also be living in the property that is in foreclosure and all borrowers involved have to agree to mediation in order to qualify.

Homeowners who are in bankruptcy will not qualify for mediation.

“Today, thanks to the leadership of Lt. Gov. Sheila Oliver and our partners at (NJHMFA), we're able to have another tool in our tool chest,” said NJ Citizen Action Executive Director Phyllis Salowe-Kaye. Her organization is one of several which will provide counseling services to homeowners.  

Here is a list of HUD-Certified housing counseling agencies that operate in Essex County. For more information, visit www.njhousing.gov/foreclosure.

Consumer Credit and Budget Counseling

Phone: (609) 390-9652 or (888) 738-8233

Faith Fellowship CDC

Phone: (732) 727-9500

La Casa de Don Pedro

Phone: (973) 485-0701, ext. 4602

NJ Citizen Action

Phone: (800) 656-9637 or (973) 643-8800

Tri-City Peoples Corporation

Phone: (973) 676-5506

Download the TAPinto mobile app for Android or iOS.