A bill that could cut the time it takes to foreclose on an abandoned property by more than a year advanced out of a state Senate committee today.
The bill, S-2156, would allow lenders to bring actions to foreclose mortgages on vacant and abandoned residential property. Judges would be authorized to issue summary foreclosure judgments if they find the properties were abandoned.
Timothy J. Touhey, CEO and executive vice president of the New Jersey Builders Association, said it's important to act on abandoned properties quickly, as the state faces an overall increase in the number of foreclosure actions.
"It will be healthy for New Jersey economy," Touhey said, emphasizing that reducing the number of foreclosures will reduce the housing inventory and support demand for new housing.
Touhey praised bill sponsor Sen. Raymond J. Lesniak (D-Union) for separating the provisions in the bill from an earlier measure vetoed by Gov. Chris Christie.
"I'm glad the senator did not stop pressing the issue," Touhey said.
The rationale for the bill also won support from Dan Phillips, the legislative liaison for the state Administrative Office of the Courts. He noted that degrading property values harm the economy, can increase crime and affect property taxes.
Staci Berger, of the Housing and Community Development Network of New Jersey, said the bill would bring the housing supply and housing need into balance.
The Senate Economic Growth Committee also released a new version of Lesniak's broader bill addressing foreclosed properties, the Residential Foreclosure Transformation Act.
While this measure also was backed by business groups, it was opposed by members of the West Bergen Tea Party; Susan Winton, a member of the group, called it "another scheme to bail out lenders."
While the bill focusing on abandoned properties received bipartisan support, the broader foreclosure transformation bill advanced on party lines.
Lesniak expressed hope that Christie would change his mind since details of the bill have been changed. The bill would allow the state Housing Mortgage Finance Agency to finance the purchase of foreclosed properties, which would then be sold as affordable and market-rate housing.
Berger criticized the Christie administration for not announcing plans for $725 million it has received as part of a national settlement over the handling of mortgages, and for using another $75 million of the funds for the budget. "It feels like the administration is fiddling while homes and communities burn — in some cases, literally," she said.
Sen. Steven V. Oroho (R-Sparta) opposed the foreclosure transformation bill, saying it would turn the HMFA into a speculative investor of housing.