Two Essex County lawmakers want New Jersey residents to have a better shot at buying back their homes from foreclosures or purchasing a foreclosed home, which they say will stave off outside investors looking to snap up these properties.
Assembly Bill 4412, sponsored by Assemblywomen Cleopatra Tucker, D-28th District, and Britnee Timberlake, D-34th District, would revise the procedures for sheriff’s sales before and after residential foreclosures.
A4412 proposes lowering a buyer’s required deposit from 20 percent to 3.5 percent, in line with down-payment standards laid out by the Federal Housing Administration.
Bidders would need to have preapproval for a loan from a lender approved by the New Jersey Housing and Mortgage and Finance Agency, and demonstrate that they intend to use the property as their primary residence.
Timberlake said the bill would protect the homes from “investors with deep pockets of cash at foreclosure auctions.”
“With this foreclosure sales bill, those who want to actually live in the community as owner-occupants can now fairly compete,” Timberlake said in a prepared statement. “This bill levels the playing field for those seeking to live in the property by setting realistic down-payment and full-payment time frames.”
Buyers who use the lower down payments and financing time options to flip a property or use it for something other than owner occupancy would face “steep fines,” A4412 proposes.