Following is the April 29th press release from the Governor’s office regarding his signing of 9 foreclosure related pieces of legislation.

Governor Murphy Signs Legislative Package to Address New Jersey’s Foreclosure Crisis

ATLANTIC CITY – Governor Phil Murphy today signed a bipartisan legislative package into law that will help New Jerseyans struggling with the state’s highest-in-the-nation foreclosure rate. The new laws will assist homeowners facing the prospect of foreclosure and pave the way for community revival by addressing blight. Many of the measures were recommended in a September 2018 report by the Special Committee on Residential Foreclosures, which was created by Chief Justice Stuart Rabner.

“The foreclosure crisis has hurt our economy and jeopardized economic security of too many New Jersey families,” said Governor Murphy. “Our communities cannot succeed while vacant or foreclosed homes sit empty or while families live in limbo. I am proud to sign these bills into law today and get New Jersey closer to ending the foreclosure crisis.”

Among the bills, Governor Murphy signed A664, which codifies the Judiciary’s Foreclosure Mediation Program into law, creating a long-term, permanent program that will not only increase the number of people entering mediation, but also ensure that homeowners receive housing counseling assistance to help provide them with the best possible outcomes in the foreclosure process.

“The foreclosure crisis hit the families of Atlantic County harder than almost any county in the nation. These bills offer a better path for the region and hope for families in despair,” said Special Counsel Jim Johnson. “It’s a vital and important step forward.”

“Foreclosure can take an emotional and financial toll on homeowners and their families. These bills bolster our efforts to help keep families in their homes and neighborhoods intact,” said New Jersey Housing and Mortgage Finance Agency (NJHMFA) Executive Director Charles A. Richman. “We know housing counseling works. Counseled homeowners are nearly three times as likely to have their loans modified, and 70 percent more likely to remain current after modification. That why we have heavily invested our efforts on working to get families the counseling help they need.”

The Governor signed the following nine bills into law:

“Foreclosures are tragic situations for New Jersey families that can also create public safety as well as quality of life issues for surrounding communities,” said Senator Steve Oroho, sponsor of the bill package. “Doing our part to reduce the foreclosure rate statewide will protect families, make neighborhoods safer, and provide children the stability they need both at home and at school. I am proud Governor Murphy signed our bipartisan bill package into law. Stable homes will lead to happier households and better neighborhoods throughout our state.”

“We are all aware that the surge in foreclosed properties is a significant factor that hinders more sustained economic growth in our state,” said Senator Troy Singleton. “Solving the foreclosure issue by preventing homeowners from initially falling into this process will help to increase property values and stabilize our communities, while improving our state’s overall economic outlook. This issue is not new. However, the comprehensive approach outlined in these bipartisan laws is unprecedented in our state. They will build upon the continued reduction in pending foreclosure cases and shorten the timeline to adjudicate these cases. This is a reflection of the work undertaken by every branch of our state government.”

“Sadly, for too long our state has led the nation in foreclosures, with 70,000 properties going through the process in 2017 alone. Recognizing this problem, Chief Justice Rabner impaneled a blue ribbon committee encompassing the public, private and non-profit sectors to craft solutions, both legislative and regulatory, that were both fair and responsible to our state’s residents and housing economy. I was privileged to serve and be a part of the solution,” said Assembly Speaker Craig Coughlin. “The nine bills signed into law today are the first of many steps we’ll take to address foreclosure process concerns in the state. More efficiency and ensuring fairness in the current system protects the interests of our homeowners, our neighborhoods and communities.”

“These new laws will help us take a comprehensive approach in dealing with foreclosed homes in New Jersey,” said Assemblyman Benjie Wimberly. “Foreclosed properties that sit in neighborhoods for years without being maintained are also a major problem, because these homes become eyesores to the community and drive property values down. As chair of the Assembly Housing and Community Development Committee, I will continue to work with Speaker Coughlin and our caucus to help solve the foreclosure crisis in New Jersey.”

Advocates also expressed support for the measures.

“We thank Governor Murphy and the Legislature for providing valuable tools to address our state’s relentless foreclosure crisis,” said Staci Berger, President and Chief Executive Officer of the Housing and Community Development Network of NJ. “Residents and neighborhoods have suffered needlessly because the prior Administration failed to take important steps like these. During that time, residents and communities of color were disproportionately impacted by the crisis, losing so much of their housing equity. As NJ’s largest HUD housing counseling intermediary, the Network is thrilled that New Jersey’s leaders are now working with us and our members to keep people in their homes and helping to protect the single largest investment working families can make.”

“Thanks to the leadership of both Governor Murphy and the legislators who sponsored this bill package, New Jersey is one step close to putting the foreclosure crisis behind us,” said Winn Khuong, Executive Director of Action Together New Jersey. “Governor Murphy’s action today puts New Jersey on a path to renewing our communities, something that will change the lives of so many. We are pleased to see New Jersey’s leaders moving the state in the right direction.”

“We applaud Governor Murphy and all of the legislators on the passage of this package of bills,” said Renee Koubiadis, Executive Director of the Anti-Poverty Network of New Jersey. “Taken together, these bills will allow for a more transparent and fairer process for people facing default and will help alleviate New Jersey’s persistent foreclosure crisis. Particularly, the codification and funding of the Foreclosure Mediation Program will allow families receive to counseling and mediation to find a resolution to be able to stay in their homes.”

“A decade after the financial crisis, New Jersey continues to lead the nation in foreclosures,” said Kevin Walsh, Executive Director of Fair Share Housing Center. “This legislative package will provide needed relief by increasing protections for homeowners and holding lenders accountable. We’d like to thank Governor Murphy and legislative leaders, including Senator Singleton, for pushing through proposals designed to protect working families.”

A recent article in discusses the hiring of a “codes advocate” to be the go-between between the code department and residents in Kansas City, MO. The article has an intriguing quote, “The idea is it will save the city time and money in the long run by having this advocate handle smaller nuisance issues and letting enforcers handle bigger problems.“

This is the crux of the MuniReg solution. Allowing the trained staff to focus on the more difficult issues, all at no out of pocket expense.

For additional information, please click on the following link.

New hire to help property owners resolve nuisance violations in south Kansas City

 

So I came across an interesting article, the headline, and in fact the article itself, was very matter of fact. The headline read “Code violators owe Estero more than $2M in fines. The Village Council is asking for tougher enforcement.”

The Village of Estero FL, has approximately 19,000 people. $2,000,000+ in outstanding fines is a significant number for a community this size (any community really), but as I looked into this further, I believe it underscores several greater issues. Fixable issues!

Some quotes from the recently passed resolution referenced and linked in the article.

“Code enforcement liens are not super-priority liens co-equal with taxes, but are instead inferior to existing liens of record.” So that bears the question, if a municipality is actively taking the approach of fining for code violations, how many times were liens on additional properties, extinguished at sheriff sale, where the bank (mortgage is the priority lien) acquires the property? What was the cost (time & effort) for the village that was never recouped?

In a case where the homeowner, as the resolution states “have abandoned their properties or are so underwater to other lienholders that additional liens alone will not suffice” Were there open lines of communication between the bank and the village, or did municipality struggle to identify the lienholder or get no response from whoever they believed to be the lienholder, like numerous other communities? This is fixable.

Many municipalities across the country are looking to make these liens co-equal with taxes. That would be one solution.

Here are two more quotes “Excessively high lien amounts that exceed the market value of a parcel will never be paid in full.” “Similarly, as the recent financial crisis revealed, lenders may also be unwilling to foreclose in order to avoid inheriting a troubled property and the hard costs of remediation.”

The article itself discusses two properties (Sherrill Lane and Mockingbird Lane) where the fines exceeded the appraised value of the properties!

In a vacuum, these policies are warranted and have merit, but there are other factors that need to be incorporated.

Is there a mortgage? Who is the lienholder? Is there active litigation regarding the property? Is the homeowner in bankruptcy? Is it an investment property with no mortgage? Is it in probate? What is the neighborhood condition? These are all factors that can determine what action a homeowner or any interested party will take or will not take regarding the upkeep of the property.

It seems what we have here, is a very reactive approach. Fine, mitigate and hope to recoup as much as possible – rinse and repeat.

This is not meant as a reproach to Estero. Their issues along with those of Tulsa OK, seem miniscule, compared to another recent article. As the Estero article says, the village has one code officer, I have no doubt he/she has more than their hands full. It is also clear that this is a prime focus of the village leadership, for which they should be commended.

It’s another example of the “need to get off the hamster wheel”. I have encountered many exact scenarios over the past 17 years.

My goal is to use that experience and passion to assist communities like Estero to prosper.

 

In a recent article from WJAC, discussing the Governor’s new initiative, DCED Deputy Secretary of Community Affairs Rick Vilello has a very profound quote.
“Vilello says blight often begins with small blemishes. First it starts with a broken window, or grass that’s not cut, or snow that’s not shoveled and suddenly the neighbor says I want to move,” says Vilello.
The article continues “But he believes blight can be reversed when a community gets the right resources.”
Many communities in Pennsylvania have adopted a vacant property registration ordinance to not only address current blighted properties, but perhaps more importantly, mitigate the chance of additional properties becoming blighted.

To view the article, please click here.

To view the Governor’s Press Release, please click here.

I have been blessed many times in my life, and in many different aspects. One area I do not take for granted was the opportunity to witness first-hand how my late father-in-law, an Ernst & Young Entrepreneur of the Year Award winner, built his business, Safeguard Properties, into the largest mortgage field service company in the nation. He employed very effective, non-traditional methods.

Many tried to emulate my late father-in-law but never enjoyed the same success. So, what was the “secret sauce”?  I will not disclose all of his secrets that I have incorporated into MuniReg, but I will share one key secret – do the right thing, even if it may take away revenue opportunities.

I witnessed a discussion he had with HUD officials when he was advocating for pre-approval to board all broken windows, regardless of location.  At that time there were only a handful of “pre-approved boarding areas” in specific cities.  He encouraged HUD officials to adopt the policy to avoid repeated vandalism and numerous window replacement costs while properties sat vacant during the lengthy foreclosure process, despite his company profiting each time a window was re-vandalized.   Why?  Because it was the right thing to do for the community at that time.

He was the fiercest and original advocate for fast-tracking foreclosures for vacant and abandoned properties. First, gathering a consensus of all stakeholders from banks to consumer advocates and then taking the message to the Statehouses. He would often say the only one he was hurting was himself. The shorter time a vacant property remains in the foreclosure process meant less inspections and maintenance would be needed by his company. Why?  Because it was the right thing to do for the community at that time.

In reflection of my late father-in-law I often ask, how can I replicate his strategies within MuniReg?

There is a small percentage of communities that require registration of a property based on mortgage “default” by the homeowner, which is a misguided and dangerous approach.  By complying with the ordinance one can argue the registering party (bank/mortgage company or their agents) is disclosing confidential information – a borrower’s delinquency. I am not a lawyer, and don’t play one on TV, but am a consumer advocate and know the difference between right and wrong.  And disclosing a homeowner’s delinquency is wrong.

The right thing to do is require registration only at the earlier of 1) vacancy and 2) filing of Notice of Default/Lis Pendens, a public document. This clarification is important not only because of privacy protection for homeowners, but also because default does not cause blight – vacancy and abandonment causes blight.

Some municipalities,  just by utilizing the term “default”, though intending to the filing of the notice of default/lis pendens leave it open to misinterpretation.**
If the intention truly is for default, that is even more egregious. There is nothing that can be done with the information. One can not approach the homeowner offering assistance because you are shining the spotlight on the fact that his/her privacy has been violated.

Do banks realize when they comply with these types of registries the impact it could have on their Gramm-Leach-Bliley Act compliance? If they are not compliant, what is the exposure to liability for the community requiring this type of registration?

In 2019, with privacy concerns so prominent, a risk like this is just not worth taking.

So, if for whatever reason a municipality wants to require registration based on delinquent mortgage payments, thereby assuming unnecessary risks, MuniReg will be unable to provide services and assistance.

However, MuniReg will continue to advocate for the privacy of the homeowner, because it’s the right thing to do.

**The issue/concern is requiring registration upon “default” of mortgagor. Requiring an inspection of the property and then registration only upon discovering property is vacant/abandoned, I believe should not be of concern

“Zombie Foreclosures” a thing of the past? Not if you read this article! Great recommendations, especially geared towards avoiding foreclosure but as it pertains to blight, recommending transferring a property “as-is” is scary. Vacant property registration programs are a valuable tool to allow communities to rise to the challenge.

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