FindLaw KnowledgeBasePublished: 2012-03-14
Although there are signs of improvement, the aftershocks of the housing crisis will be felt deeply by many homeowners for years to come. Across the state of New Jersey, nearly 150,000 homes are currently embroiled in some stage of the foreclosure process.
One state lawmaker, however, has introduced a cunning proposal to blunt the effects of the housing bust. From New Jersey mortgage foreclosure attorneys to builders and housing advocates, experts are abuzz about the new legislation, with just one questions ringing collectively above the fray: will it work?
Innovative Strategy: Flip Foreclosed Properties for Affordable Use by Ousted Families
Where curious children once peered out at the passing world, moldering boards crisscross a vacant opening. Inviting in the elements, a door swings wide, the lock shattered by impulsive vandals or copper-hungry scavengers. Thousands of foreclosed properties, now empty and alone, dot the urban landscape of New Jersey, dragging down surrounding property values and drawing the unwanted attentions of those looking for trouble.
But not for long, at least if Senator Raymond Lesniak’s new bill has its intended effect. Conceived by Senator Lesniak and introduced in the New Jersey legislature on February 9, the New Jersey Residential Foreclosure Transformation Act seeks to convert foreclosed properties from neglected neighborhood blights into clean, affordable housing units.
The bill would create a state run corporation dedicated to buying and rehabilitating foreclosed homes. Then, the homes would be sold or rented at an affordable rate to low-income families. The impact of the Residential Foreclosure Transformation Act is meant to be twofold: offer a lifeline to those displaced by the housing crisis, and restore faith in foreclosure-distressed communities.
The state’s affordable housing trust fund, a nicely-feathered nest containing nearly $300 million accumulated from private developer fees, would be tapped to support the project. Additional funding would come from federal contributions and New Jersey’s expected cut of the mass settlement recently reached with banks over foreclosure abuse issues.
While Senator Lesniak has admirable intentions, the Residential Foreclosure Transformation Act is not without its critics. Some homeowners are worried that by deed-restricting properties purchased under the legislation for low-income residents, local tax bases will be eroded in the long term.
Await Possible Legislative Relief, or Ask an Attorney for Immediate Assistance
The Residential Foreclosure Transformation Act is being considered before the Economic Growth Committee, and is expected to head to the full Senate floor soon. Only time will tell if the bill will live up to the hype and ultimately help New Jersey residents escape the depths of the housing crisis. In the meantime, if you have questions about the new legislation or cannot afford to wait for foreclosure relief, a New Jersey bankruptcy attorney may be your best resource.