Menendez, Lautenberg Call State Failure To Help Homeowners Avoid Foreclosure Unconscionable

News Report Underscored Concerns that After Two Years, NJ Ranks Dead Last in Implementing Foreclosure Prevention Program

WASHINGTON, DC – September 26, 2012 – (RealEstateRama) — U.S. Senators Robert Menendez and Frank R. Lautenberg, who fought for the more than $300 million in federal funding awarded to help New Jersey homeowners who lost their jobs avoid foreclosure, today called the continued failure by the State to effectively implement the HomeKeeper program “unconscionable.”   In a third letter to the Director of the NJHMFA regarding their poor performance on behalf of homeowners, the Senators noted again that after two years – and increasing foreclosures — the State is dead last in the nation in implementation and called for a series of immediate measures to improve results.

“We are disappointed that despite the fact that you have had two years to implement this program and we have sent multiple letters requesting quick action, New Jersey is still dead last in the nation in implementing this program,” the Senators wrote.  “In a recent study, New Jersey was found to have the second highest percentage of foreclosure inventory in the United States at 5.7%, behind only Florida.  Given that fact, it is unconscionable that approximately $270 million in federal funds has been sitting unspent for two years and that New Jersey is last in the nation among the states in distributing that money.”

Menendez and Lautenberg called for the State to immediately take three specific actions:

• Speed up hiring and action on applications or give the federal funds to non-profit organizations that have the ability deliver the urgent help that New Jersey homeowners need.
• Make immediately available on their website the new criteria for temporary payment help.  The State finally agreed to relax criteria, which, according to an ABC news report, have been so restrictive that nearly 2 out of 3 applications were rejected.  Although the new criteria would enable more homeowners to be accepted, the State has not made that available to the public on the program website.
• Review all rejected applicants against new eligibility criteria and immediately accept those into the program who would now meet those criteria.

ABC News recently reported on the failures of the program. Click here to watch their report.

Click Here to download the letter from March 31, 2011 and Click Here to download the letter from November 3, 2011.

Full text of letter:

September 25, 2012

Dear Director Marchetta:

We have already written to the New Jersey Housing and Mortgage Finance Agency twice (on March 31, 2011 and November 3, 2011) regarding the significant delays and problems with the federally-funded but state-run NJ HomeKeeper program that is supposed to provide temporary mortgage assistance to New Jersey homeowners who lost their jobs.  We are disappointed that, despite the fact that you have had two years to implement this program and we have sent multiple letters requesting quick action, New Jersey is still dead last in the nation in implementing this program.

We fought for New Jersey to be awarded more than $300 million in federal aid for this program in two installments in August and October 2010, but are extremely disappointed that NJHMFA has only drawn $22.5 million as of August 31, 2012.  As a result of this bad record, New Jersey was one of only three states (along with Arizona and Georgia) to receive a formal request from the Treasury Department in May 2012 seeking an improvement plan for 2012.

We write to urge you to consider:

• Speeding up the hiring and implementation of this program so that New Jersey is first in the nation in helping unemployed homeowners, not last.  In a recent study[1], New Jersey was found to have the second highest percentage of foreclosure inventory in the United States at 5.7%, behind only Florida.  Given that fact, it is unconscionable that approximately $270 million in federal funds has been sitting unspent for two years and that New Jersey is last in the nation among the states in distributing that money. We respectfully request that if the NJHMFA is not capable of dramatically ramping up this program immediately, that the federal funds be disbursed to non-profit organizations that have the ability deliver the urgent help that New Jersey homeowners need.
• Immediately making NJHMFA’s new criteria for homeowners to qualify for the NJ HomeKeeper program publicly available on your website since the criteria currently listed there are outdated and incorrect.  NJHMFA broadened the criteria this month so that not as many people will be rejected from the program, but the old criteria are still on your website, so people may not even bother to apply because they won’t realize they qualify.
• Retroactively reviewing all the previous applicants who were rejected to determine whether they would be eligible under the new broader criteria that NJHMFA just implemented.  Homeowners also should not be penalized for the state’s delay in getting this program implemented, so we encourage you to take these delays into account when determining eligibility now.

This program is critical to stabilizing our neighborhoods, housing market, and broader economy.  Every time a foreclosure occurs, property values of neighboring homes go down and everyone in the community is hurt.  This program could prevent tens of thousands of foreclosures in New Jersey if fully implemented.

We appreciate your prompt attention to this matter.  We look forward to your response and to continuing our work together to assist struggling New Jersey homeowners.

Sincerely,

Robert Menendez                                              Frank R. Lautenberg
United States Senator                                      United States Senator

cc:  The Honorable Governor Christopher J. Christie

Press Contact

Menendez Press Office: (202) 224-4744
Lautenberg Press Office: (202) 224-3224