UNION COUNTY, NJ — With New Jersey having the one of the highest rate of foreclosures in the nation in 2015, legislation codifying the state’s Foreclosure Mediation Program into law comes at a pivotal time. The bill, sponsored by Assembly Democrats Mila Jasey, Jerry Green, Jamel Holley and Elizabeth Muoio will help reduce the staggering number of foreclosures in the state and help homeowners keep their homes, according to the Assembly Housing and Community Development Committee.
In 2015, New Jersey had the second-highest rate of foreclosed homes in the country, while Union County had the seventh-highest rate of foreclosed homes out of all 21 counties in the state.
The program was established in 2009 by the state’s Judiciary in response to an alarming increase in residential foreclosures. “Foreclosures not only affect homeowners, but neighborhoods and the state as a whole,” said Jasey in a statement. “Last year we led the country in foreclosures. The mediation services provided by this program can help homeowners avoid foreclosure and reinvigorate our housing market by reducing our dismal foreclosure rates. It is essential that we keep these services going.”
The bill would require that at the time the homeowner-borrower receives notice of intention to foreclose, the homeowner-borrower must receive written notice of the option to participate in the Foreclosure Mediation Program. Upon filing of a mortgage foreclosure complaint against an eligible property, the homeowner-borrower must again receive written notice of the option to participate in the program. The written notice must be available in both English and Spanish.
The bill would also authorize eligible homeowners to submit a mediation request, thereby initiating the process of scheduling a mediation session with their lender.
Along with the mediation request, the homeowner may need to submit additional information necessary for creating a loan modification or other agreement, but will not have to pay any fees to participate in the program.
Union County Sheriff Joseph Cryan said that foreclosures are at a crisis level in the county. “Foreclosures have literally tripled over the past six or seven years,” said Cryan. “It’s significant. People come in to ask for adjournment and you know they’re going to lose their homes. They come in with their kids and it’s just heartbreaking.”
Cryan said that although the county earned $2 million from foreclosure fees in 2015 alone, taking part in the process is one of the most painful parts of his job. “It’s difficult to watch,” said Cryan. “It’s the hard part of the job. It’s a very human experience.”
The bill would also create a dedicated, non-lapsing fund within the General Fund known as the “Foreclosure Mediation Fund.” The fund would be comprised of receipts equaling $50 from every foreclosure complaint filing fee, along with all fines imposed on lenders for noncompliance with obligations of the mediation program under the bill.
Pursuant to the Rules of Court, foreclosure complaint filing fees have recently increased from $200 to $250. Instead of establishing those fees at $250, this bill would allow the judicial branch to maintain the role of determining foreclosure complaint filing fee levels, so long as $50 of each fee is contributed to the fund.