One of Plainfield's many already-foreclosed properties.
My interest was piqued a week ago when Plainfield's Assemblyman Jerry Green posted a notice on his blog (see here) that he intended to conduct a hearing on New Jersey's mortgage and foreclosure crisis on Monday, October 6. Green chairs the Assembly's Housing and Local Government Committee.
As regular readers will know, I have been keeping an eye on the foreclosure issue for eons (since a Plainfield Realtor® remarked in 2005 they were closing on a no-downpayment, no-doc, no-income verficition loan -- later to become famous as 'liar loans'), and am quite worried that the financial meltdown will further impair Plainfield's fragile housing market and drive up the number of impending foreclosures even further. (Enter 'foreclosure' in the search box for details.)
Now that the sky is TRULY FALLING, what are our Assemblyman and the Legislature doing?
Turns out, according to reports in today's papers (see links at end), the bill sponsored by Assemblyman Green and majority leader Bonnie Watson Coleman was the most contentious item yesterday, though it has been reported out of committee and will soon come to a vote on the floor.
The absolutely most amazing thing is that this bill (A2517) was proposed SEVEN MONTHS AGO, March 13th to be exact, and was only flushed out of committee by the whole financial world collapsing in a heap at the feet of our esteemed elected leaders.
Maybe we should put 'leaders' in quotation marks.
The protestations by the mortgage bankers ring empty to me -- the bill is not talking about FUTURE lending, it is talking about mortgages ALREADY MADE, and proposing to charge the banks a $2,000 fee for each it moves to foreclose on. If they're not going to make loans, it won't be because of this bill.
The bill does seem to suffer, however, from having cross-purposes that might cancel each other out.
On the one hand, legislators say they want the fees channeled into a revolving fund for housing nonprofits to counsel homeowners who are in trouble with their mortgages, make emergency loans, and hopefully help them avoid that final solution. Laudable.
On the other hand, if banks elect NOT to foreclose (and fork over the $2,000 fee), and the homeowners increasingly view themselves as 'under water' in a no-win situation, the legislation could have the unintended consequence of INCREASING the already mounting tide of vacant and abandoned housing as owners simply 'drop the keys in the mailbox' and leave.
And I'm not even going near the question which drives the majority of homeowners, those who never got in over their heads, crazy: 'Why should we bail out the unqualified, the foolish, the greedy and the speculators?'
Question for you: If the crisis the Legislators want to address is so important today, why wasn't it so important last March 13th?
At a rate of about a thousand foreclosures a week, that means 25,000 or more homeowners went under while waiting for our speedy Assemblyman and his legislative sidekicks.
- The Bill --
- A-2517: "The New Jersey Homeownership Preservation Act"
- Ledger: "In Trenton, 10 meetings, 1focus: Jersey's recovery during downturn"
- Gannett: "Lawmakers push business tax changes, mortgage rescue fund"
- AP: "NJ Assembly advances emergency foreclosure aid"
- Foreclosures: "NJ on course for 50,000 home foreclosures this year"
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1 comments:
The $2,000 fee to be collected from banks which foreclose on property is nothing more than a "feel good do nothing" bill that will not help anyone who may be in precarious position of losing their home. It undermines the bank's contract between it, as the lender, and the mortgagor.
There is also another bill that Green & Watson Coleman sponsored (A-500) which bill modifies previous COAH regulations. That particular bill does EXACTLY what Fannie Mae and Freddie Mac did, which was to make loans available to those who otherwise would not qualify for a loan. The new bill targets "very low income" earners who cannot afford these loans and rightly so. Not everyone can or should be a homeowner. Where's the shame in that? Another financial housing mess in the making by our legistlators.
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