NJ must make it easier for nonprofits to help struggling families at home
By Mel Fabrikant Tuesday, October 14, 2008, 03:30 PM EDT
Assemblywoman Bonnie Watson Coleman
Assembly Majority Leader Bonnie Watson Coleman today said the state – as it looks to help residents emerge strong from the global economic crisis - must make it easier for nonprofits to rescue homeowners facing foreclosure.
“An increasing number of foreclosures nationwide continue to rip apart our communities, and New Jersey is no exception,” Watson Coleman said. “We need to remove any obstacle that stands in the way of keeping families in their homes and letting them fulfill that American dream.”
Watson Coleman urged support for her legislation (A-3293) that would exempt sales of homes to nonprofit housing assistance programs from realty transfer fees.
Under the programs, a nonprofit such as a church organization partners with a bank to help homeowners facing foreclosure or eviction. The nonprofit works with the mortgage holder to buy the property, then leases it back to the original homeowner at an affordable cost.
Ultimately, the goal is to resell the property back to the original homeowner within 7 years.
Watson Coleman said exempting nonprofits from realty transfer fees – which must be paid when property is sold – would help keep families in their homes and give them time to strengthen their finances and resolve mortgage problems.
“Many nonprofits have stepped up in these tough times to fill the pressing need to help thousands of New Jersey families who in jeopardy of losing the roof over their heads,” Watson Coleman said. “These nonprofits are helping New Jersey homeowners keep their heads barely above water. They’re a life raft families can grab at their most difficult moment. Clearly, New Jersey must do all it can to promote helping working families stay in their homes.”
The measure has been released by the Assembly Financial Institutions and Insurance Committee as part of the Assembly’s focus on helping the state weather worldwide economic woes.
That effort featured a series of Oct. 6 Assembly committee meetings focused solely on the economy that resulted in 19 bills being advanced.
According to data from the real-estate-tracking service RealtyTrac, statewide foreclosure filings spiked 49 percent in August compared to last year – almost twice the national rate.
New Jersey reported one foreclosure filing for every 576 households, amounting to 6,475 filings.
RealtyTrac rated Mercer, Sussex and Union counties as among the hardest-hit.
Watson Coleman (D-Mercer) has pushed several measures to help prevent home foreclosures and crackdown on unscrupulous lending,.
She said her latest measure is common sense.
“Since the purpose of the sale to the nonprofit is to stop foreclosures and evictions, it doesn’t make sense to charge a realty transfer fee in such cases,” Watson Coleman said.
She said the law is aimed at initiatives such as the Housing Assistance Recovery Program, which helps at-risk homeowners.
The program was started by the Rev. DeForest “Buster” Soaries Jr., pastor at First Baptist Church of Lincoln Gardens in Somerset. The effort now includes several organizations dedicated to helping homeowners regain their financial footing and keep their homes.
To discourage fraud, Watson Coleman’s bill includes a tough provision - the realty transfer fee would be doubled If the property is sold to anyone other than the original seller or a person residing with the seller.
“We cannot stand idly by as more and more families go through the foreclosure process and homes become property of the banks,” said Watson Coleman. “Every time a foreclosure happens and another family is dislocated, we take the hit as a society. We can do more.”
