NEWARK – Stepping up foreclosure prevention efforts in New Jersey, the Murphy Administration unveiled a new housing counseling initiative, which will work with and enhance New Jersey’s existing court mediation program, and is aimed at helping up to 2,000 threatened homeowners, Lt. Gov. Sheila Y. Oliver announced Aug. 14 in a release.
Mediation can save a home from foreclosure, yet too many homeowners enter the foreclosure process with their mortgage lender without an understanding of the type of relief that may be available to them.
Homeowners who have been served with a foreclosure notification will be immediately apprised of the availability of free U.S. Department of Housing and Urban Development (HUD)-certified counseling services.
The counselor will help the homeowner navigate the process by creating an action plan through a series of meetings, phone and email conversations. The counselor can also determine if their client requires further assistance and can provide other services, such as negotiating with the lender or providing post-mediation counseling and/or transition assistance.
“Foreclosures continue to threaten homeowners in New Jersey creating housing instability for thousands of people every year,” stated Oliver, Commissioner of the New Jersey Department of Community Affairs and Chair of the New Jersey Housing and Finance Agency (NJHMFA) board.
“By providing housing counselors who will work with homeowners in the court’s mediation program, we are hoping to provide many more residents, regardless of income, access to resources that may help save their home.”
NJHMFA is providing $1 million to fund the program, with at least two participating counseling agencies serving each county.
An analysis of the benefits of housing counseling found that the homeowners in their sample who participated in counseling were nearly three times as likely to receive a loan modification; 70 percent more likely to remain current on their mortgage after receiving the loan modification; and achieved on average a reduction of nearly $5,000 annually on their mortgage payment, according to the National Foreclosure Mitigation Counseling Program Evaluation Final Report, Rounds 3 Through 5, by the Urban Institute.
“Housing counselors serve a vital role in mediation and provide valuable assistance in guiding a homeowner facing foreclosure to explore all options,” stated NJHMFA Executive Director Charles A. Richman. “Preventing foreclosure not only helps stabilize the homeowner and their family, but the neighborhood as well.”
To qualify for mediation:
The property must be the subject of an active residential mortgage foreclosure action.
Mediation must be requested within 60 days after service of the foreclosure summons and complaint unless a court order is entered directing the parties to mediation.
The homeowner must be living in the property that is in foreclosure, and all borrowers listed on the note must agree to participate in mediation.
The homeowner will not qualify if they are in bankruptcy.
The new housing counseling program is the state’s latest effort targeted at providing sustainable housing initiatives in New Jersey.
For more information on the housing counseling program, visit www.njhousing.gov/foreclosure or call 1-800-NJHOUSE.
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