State Agencies, Financial Institutions Announce Partnership, Refinance Program to Address Mortgage Crisis

Foreclosure prevention is goal for New Jersey HOPE alliance

TRENTON, NJ – October 31, 2007 – The Commissioners of the New Jersey Departments of Banking and Insurance (DOBI) and the Department of Community Affairs (DCA) today stood with Senator Ron Rice and representatives of financial services institutions and their trade associations to announce a public-private alliance designed to both educate and assist New Jersey homeowners.

Assistance includes programs from various financial institutions representing more than $433 million in available mortgage refinancing, highlighted by the New Jersey Housing and Mortgage Finance Agency’s (HMFA) Homeownership Preservation Refinance Program, a $30 million pilot program serving families earning up to 140 percent of the state’s median income. Additional services will also be offered, as well as the establishment of a Task Force to continue to monitor this issue and, in conjunction with the legislature, develop solutions.

The New Jersey Home Ownership Preservation Effort (NJHOPE) is a voluntary alliance that also includes U. S. Department of Housing and Urban Development (HUD), NeighborWorks America, the New Jersey Bankers Association, the New Jersey Credit Union League, the New Jersey League of Community Bankers, the New Jersey Mortgage Bankers Association, the Department of Banking and Insurance, the Department of Community Affairs, and the New Jersey Housing and Mortgage Finance Agency (HMFA).

“I commend both departments on their efforts to start moving in the right direction on this issue,” said Senator Rice. “This is not a cure and much work still needs to be done, however, I look forward to working with Commissioners Doria and Goldman in the upcoming legislative session as we push forward to aide and assist homeowners in New Jersey through counseling and financial assistance”.

The goal of the alliance as set forth in a document signed by the major partners is to enhance home ownership preservation by raising consumer awareness of available mortgage products and funding, providing increased access to credit and loan counseling for those who need it and providing temporary assistance to consumers who are in immediate danger of foreclosure.

DOBI Commissioner Steven M. Goldman described today’s efforts as “a strong first step in an ongoing effort to address the current instability of the residential mortgage market and mitigate its impact here in New Jersey.” Goldman said that the alliance resulted from Governor Jon Corzine’s desire to understand what products and resources might be available to homeowners, and the need for disseminating that information to the public.

“Quite often, homeowners don’t know there is help available and avoid calling their lender because they don’t understand they have options,” Goldman said. “I want to commend all of the members of NJ HOPE for their willingness to address this issue and work on its resolution.”

The alliance members cooperatively announced participation in establishing a “clearinghouse” of information regarding borrower assistance programs with funds allocated for foreclosure prevention for eligible customers including, in some instances, below market interest rate products, assistance on closing costs, waiving of private mortgage insurance requirements, relaxation of loan-to-value criteria, and counseling on credit problems.

Trade association members intend to serve as a conduit for information between their members and the public, and will facilitate their members’ promptly making assistance programs available to qualified homeowners. The focus will be on providing relief for homeowners facing interest rate adjustments on home mortgages, or whose interest rates have already been reset to a higher level.

HMFA’s Homeownership Preservation Refinance Program will offer fixed-rate loans, closing cost assistance, credit counseling and other services.

“This program begins to address what we hope will be a long and successful partnership on this issue,” Doria said. “We know there is no easy fix, but that should not stop us from working together and doing our collective bests to address this problem.”

DCA and HFMA, along with other partners, will make available up to $1 million to train additional New Jersey credit and loan counselors in an effort to increase availability and accessibility of counseling services to consumers.

NJHOPE members will continue to participate in the current DOBI public information program, which will include the creation and distribution of printed material, citizen forums, assistance via a toll-free telephone hotline, public service announcements, and educational workshops. Alliance members, including HMFA and DOBI, have already conducted community forums in Paterson, Bayville, Edison, Vineland, East Orange and Trenton, where counseling and information resources were offered to area residents. Additional forums will be scheduled in conjunction with the NJHOPE alliance.

For more information, homeowners can call the DOBI Consumer Hotline, toll-free, at (800) 446-7467, or visit the NJHOPE Web site at www.njhope.nj.gov.