In an attempt to reduce foreclosures and further assist New Jersey homeowners at risk of losing their homes, New Jersey Governor Jon Corzine has signed the Mortgage Stabilization and Relief Act into law.
It also imposes additional requirements on lenders foreclosing on mortgages. The New Jersey Housing and Mortgage Finance Agency (HMFA) will be responsible for the administration of the two new programs.
Through the Mortgage Stabilization Program, HMFA will promote modifying or refinancing of first mortgage loans in imminent danger of foreclosure to qualified homeowners by offering non-amortizing (no monthly payment) second mortgage loans.
The State will provide a mortgage stabilization loan of up to $25,000 to match the lender’s contribution. This is an attempt to bring the mortgage payments down to an amount that the borrower can afford. Both the State’s and lender’s assistance loans will be repaid by the homeowner upon sale of the property.
To qualify for assistance, a home owner’s household income may not exceed 120 percent of the area median household income or the HMFA’s Mortgage Program income limits, which vary by County. In Ocean County, a homeowners income limit is $114,660.
The lender must agree to write the mortgage down to the current value of the home. And homeowners who accept program assistance are required to participate in agency approved household budget counseling sessions.
The Governor’s original proposal would have funded this through an assessment against every bank filing a foreclosure action against a New jersey home owner. Now the funding comes from money set aside to pay down the state’s indebtedness.
A second program, the Housing Assistance and Recovery Program (HARP), will help homeowners who face imminent foreclosure stay in their home while paying affordable rent until the homeowner is able to buy back the property.
This program is also funded through money set aside to pay down the state debt.
This action follows separate legislation, signed last month by the Governor, that called on the Administrative Office of the Courts to provide mediation services between the homeowner and the creditors to assist the parties by negotiating an agreement that allows the borrower to remain in the home with an affordable monthly mortgage payment.
The new laws also protect neighborhoods, according to Governor Corzine, by requiring creditors who initiate foreclosure proceedings to notify municipalities where the foreclosed property is located. As a result, municipalities will now have recourse against those creditors who fail to comply.
If you’re facing problems meeting your mortgage commitment, and own a home in Waretown, Barnegat, Manahawkin, Long Beach Island, Little Egg Harbor, Tuckerton or in northern Atlantic County, contact me for more information on these programs and others that can help you!
Foreclosure information and assistance for New Jersey homeowners is available if you click here. That link will take you to the Legal Services of NJ web page. Assistance is also available by calling 1-888-989-5277.
Atlantic Shore
Laura Giannotta
609-384-6121
www.JerseyShoreViews.com
Tags: New Jersey Real Estate, foreclosure, housing, mortgage
