New Program aids NJ homeowners facing foreclosure (Middlesex: short sale, foreclosures) - City-Data Forum

wileynj · 01-10-2009, 10:46 AM

New program aids N.J. homeowners facing foreclosure

by MaryAnn Spoto/The Star-Ledger Saturday January 10, 2009, 11:25 AM

With dire predictions that more than 60,000 New Jerseyans could face foreclosure this year, state officials rolled out a program Friday tapping counselors and mediators to help residents face the news and take steps to prevent losing their homes.
"It is an important step for the people of the state of New Jersey," Gov. Jon Corzine said at a news conference. "I think it will facilitate more people staying in their homes, make this process more responsible and balanced between the borrower and the lenders."
State officials said the program -- a first in the country -- could serve as a national model as foreclosures continue to flood the courts.

Mel Evans/The Associated Press
Attorney General Anne Milgram said subprime mortgages -- loans advanced to people who don't qualify for mainstream mortgages, usually because they have poor credit -- account for a disproportionate number of foreclosures.
In the third quarter of last year, only 9 percent of mortgages were subprime but they accounted for half the foreclosures, she said. State officials anticipate some 16,000 people will take advantage of the program by calling 1 (888) 989-5277. The hotline is staffed 8 a.m. to 6 p.m. weekdays.
"We urge all homeowners facing foreclosure to call, because the difference between calling and not calling could be the difference between keeping your home and losing it," Milgram said.
Piloted in Middlesex County and launched Monday, the free program links homeowners with certified housing counselors who can recommend mortgage workout options, including the waiving of fees and penalties or lowered interest rates. If no resolution is reached at the counseling phase, the case moves to mediation, at which time the homeowners may be eligible, based on income, for free legal representation.
Because only 5 percent of homeowners facing foreclosure ever ask for professional assistance, state officials plan to reach out, Milgram and Corzine said. Pamphlets explaining the program will be sent to homeowners three times during the foreclosure process: when the first complaint is filed; 60 days later, and again when the lender acts to seize the property. Homeowners are eligible to participate in the program until the time of a sheriff's sale.
Chief Justice Stuart Rabner said 500 of the 700 attorneys who volunteered their services since October have already been trained, and the remainder should be trained by the end of the month.
Some 40 counselors have signed up to work with homeowners in all of the state's 21 counties, said Marge Della Vecchia, head of the New Jersey Housing and Mortgage Finance Agency.
"One of the beauties of mediation is that it can produce creative, positive outcomes, the 'win-win' situations traditional litigation cannot always achieve," Public Advocate Ronald Chen said.
The initiative was praised by housing and citizens groups who said foreclosures threaten important gains they've made in helping more residents become homeowners.
"Many of our community development members had been making significant progress with neighborhood strategies that were taking off when this crisis hit," said Diane Sterner, executive director of the Housing & Community Development Network of N.J. "Now, they're engaged in a fight to keep what they've gained, as well as continue to move their strategies forward."
Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, said the program gives homeowners a time-out in the foreclosure proceeding.
"By focusing on people before they reach the end of the line and providing resources that put the court system at the disposal of a homeowner looking to renegotiate with lenders, this program has the potential to help thousands of folks facing foreclosure save their homes," she said.

MaverickDD · 01-10-2009, 01:01 PM

Nice post. If those "underwater" can be kept in their homes until the housing market has time to "reflate," it will help prevent the economy from collapsing even worse than it already has. Massive foreclosures won't only hurt the people losing their homes. They'll hurt everyone. Steps like these will help prevent the worst recession in 75 years from developing into a worldwide depression.

(But when will developers get the message? At least in the short run... STOP BUILDING MORE [unsold and unoccupied] HOMES!)

wileynj · 01-10-2009, 03:04 PM

Quote:

Originally Posted by MaverickDD

Nice post. If those "underwater" can be kept in their homes until the housing market has time to "reflate," it will help prevent the economy from collapsing even worse than it already has. Massive foreclosures won't only hurt the people losing their homes. They'll hurt everyone. Steps like these will help prevent the worst recession in 75 years from developing into a worldwide depression.

(But when will developers get the message? At least in the short run... STOP BUILDING MORE [unsold and unoccupied] HOMES!)

When the banks stop giving them construction loans

AnthonyB · 01-10-2009, 04:05 PM

Quote:

Originally Posted by MaverickDD

Nice post. If those "underwater" can be kept in their homes until the housing market has time to "reflate,"

A lot don't want to. They are sitting in and paying for a depreciating asset. Also, there are people who can afford to pay their mortgage, want to move and are underwater. Their options are to stop paying and force a short sale or write a big check at closing. Either option lowers house values.

I'm all for helping people in trouble, especially if they can afford their homes with budgetary assistance or a reasonable rate. Looking at it as a way to put a floor under prices (price fixing) is a losing proposition though. The prices wont stabilize until first time buyers (the systems basic feeders) can afford homes with regular financing.

theoakman · 01-11-2009, 04:39 PM

Quote:

Originally Posted by MaverickDD

Nice post. If those "underwater" can be kept in their homes until the housing market has time to "reflate," it will help prevent the economy from collapsing even worse than it already has. Massive foreclosures won't only hurt the people losing their homes. They'll hurt everyone. Steps like these will help prevent the worst recession in 75 years from developing into a worldwide depression.

(But when will developers get the message? At least in the short run... STOP BUILDING MORE [unsold and unoccupied] HOMES!)

This is complete nonsense. You aren't hurting everyone. And no, you can't prevent an economic collapse by keeping these people in their houses. If a home becomes available through foreclosure, it actually helps the people looking to buy houses. Furthermore, the only way you can keep them in their house is to have someone else bite the loss. If you do so, it's still a net loss for the economy, regardless of who it came from. If you could magically erase losses, like you claim we could, then we would have eliminated poverty a long long time ago.

I'm going to say this once...low prices are good for the country. People seem to fail to make a distinction when it concerns things they own rather than things they buy. Lower home prices are good for the same reason low gas prices are good...and vice versa. People who argue that keeping home prices elevated are good for the country completely ignore the people that haven't bought yet.

wileynj · 01-12-2009, 11:13 AM

Try not to forget that there are "people" attached to this mess..not just numbers..house prices...etc. I think the program is a great idea.

theoakman · 01-12-2009, 11:46 AM

Quote:

Originally Posted by wileynj

Try not to forget that there are "people" attached to this mess..not just numbers..house prices...etc. I think the program is a great idea.

try not to forget that you can only help those "people" at the expense other other, and possibly less fortunate "people". These people would be better off if they got rid of their house and became renters. They have no chance of paying off these mortgages in year 2, 3, 4 or year 30. A person who cannot make mortgage payments on their house would be much better off paying rent on a much smaller house. You can only help one person at the expense of another.

People who saved their money, people who currently rent, people who didn't buy homes, they all get screwed when you create programs like this. It's not good for everyone. It's good so for some, bad for others.

The intentions are good. But you are hurting other people in the process.

Side note: people who get foreclosed on are not kicked out onto the street. They are forced to move in with other people or into smaller homes.

deb8997 · 01-12-2009, 01:46 PM

you know i wonder how many more people are going to go into foreclosure when property taxes rise. that may be alot of problems to. people may be able to afford the mortgage they have but when the taxes go up 300-400 a month they just cant handle it. unfortunatly that may be my problem. right now im ok with my mortgage but here in aberdeen they are going to up my taxes at least another 350 a month. so that would be a total of 700 month for taxes. my mortgage is is only 700 P&I.im screwed if that happens. i will not be able to pay. and im pretty frugal..no new car,cable.very little credit card debt.-$500.00. oh i also am unemployed right now and have no health insurance. of course im looking for work but 11 years in the mortgage industry as a processor,there is not much work out there. im looking to get out of this business.

banger · 01-12-2009, 02:10 PM

Attorney General Anne Milgram said subprime mortgages -- loans advanced to people who don't qualify for mainstream mortgages, usually because they have poor credit -- account for a disproportionate number of foreclosures.[/quote]

A real shocker here.

Soooo, people who had no business getting the money got the loans.

Now they default, (like everyone knew would happen).....

So now it's my turn to pay for their loans, that they shouldn't have gotten. This is so they can continue to live in houses they can't afford.

Fuzzy logic.

Let me worry about myself and let them fend for themselves !!!

Edit, Actually what this proves is how accurate credit scores really are. They pointed out an elevated risk of default.....

And "days was right" !!!!!

How on Earth can anyone claim to be surprised.

CuCullin · 01-13-2009, 07:58 AM

Quote:

Originally Posted by wileynj

Try not to forget that there are "people" attached to this mess..not just numbers..house prices...etc. I think the program is a great idea.

Meh.

The people generally made their own mistakes, and should have known better. It doesn't matter how much they "loved" the house, or the "feeling" of the area, or the "satisfaction" of owning...

If the math doesn't work, you don't do it.

I would much rather see the money being used for this program put elsewhere. You know, so that people don't have to pay so much in taxes for these programs that more people need these programs.