Bill Text: NJ ACR204 | 2014-2015 | Regular Session | Introduced
Bill Title: Urges Congress to pass federal "Preserving American Homeownership Act of 2014."
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2014-10-27 - Introduced, Referred to Assembly Housing and Community Development Committee [ACR204 Detail]
Download: New_Jersey-2014-ACR204-Introduced.html
ASSEMBLY CONCURRENT RESOLUTION No. 204
STATE OF NEW JERSEY
216th LEGISLATURE
INTRODUCED OCTOBER 27, 2014
Sponsored by:
Assemblyman CARMELO G. GARCIA
District 33 (Hudson)
SYNOPSIS
Urges Congress to pass federal "Preserving American Homeownership Act of 2014."
CURRENT VERSION OF TEXT
As introduced.
A Concurrent Resolution urging Congress to pass the federal "Preserving American Homeownership Act of 2014."
Whereas, Senator Robert Menendez (D-NJ), Chairman of the United States Senate Subcommittee on Housing, Transportation and Community Development, introduced the "Preserving American Homeownership Act of 2014" to help families stay in their homes despite their mortgage being worth more than their home; and
Whereas, New Jersey has the highest rate in the nation of homes currently in foreclosure; and
Whereas, Even with home prices rebounding since the financial crisis, millions of homeowners remain underwater on their mortgages because of the broad national decline in home values that has occurred since 2006; and
Whereas, Homeowners may be at risk of foreclosure, unable to sell their home and move, or forced to walk away from the home at great cost, further hurting the still-fragile housing market, and banks are reluctant to reduce the amount owed to them ("principal") because they are concerned about losing income; and
Whereas, Under the proposed legislation, the principal balance of a loan would be reduced to 100% or less of the re-assessed value of the home, provided the homeowner is able to make reduced payments; the principal balance would be reduced in one-third increments per year; and
Whereas, Under the proposed legislation, home values would be determined by independent third-party appraisers and homeowners would be eligible for a mortgage modification no matter how far underwater they are. Homeowners who are in default or foreclosure are eligible, but they must make timely payments on the modified mortgage going forward or they will not receive any principal reduction; and
Whereas, The proposed legislation seeks to help both homeowners and lenders by creating a program in which banks reduce the mortgage principal for eligible homeowners. In exchange, banks would be entitled to a portion of any increase in the value of the home down the road. The program is a win-win for everyone: underwater homeowners receive relief on their mortgage debt, while banks agree to take a short-term reduction for a long-term gain as the housing market recovers; and
Whereas, In a similar program tested by a private mortgage servicer, almost 80% of homeowners who were offered the opportunity to participate chose to do so and had a re-default rate of only 2.6%; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey (the Senate concurring):
1. The United States Congress is respectfully urged to pass the federal "Preserving American Homeownership Act of 2014."
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the Assembly or the Secretary of the Senate to the Majority and Minority Leader of the United States Senate, the Speaker and Minority Leaders of the United States House of Representatives, and to every member of Congress elected from this State.
STATEMENT
This concurrent resolution urges Congress to pass the "Preserving American Homeownership Act of 2014." Senator Robert Menendez (D-NJ), Chairman of the Senate Subcommittee on Housing, Transportation and Community Development introduced the "Preserving American Homeownership Act of 2014" to help families stay in their homes despite their mortgage being worth more than their home. Even with home prices rebounding since the financial crisis, millions of homeowners are still underwater on their mortgages because of the broad national decline in home values that has occurred since 2006.
Under the proposed legislation, the principal balance of a loan would be reduced to 100% or less of the re-assessed value of the home, provided the homeowner is able to make reduced payments; the principal balance would be reduced in one-third increments per year. The proposed legislation seeks to help both homeowners and lenders by creating a program in which banks reduce the mortgage principal for eligible homeowners. In exchange, banks would be entitled to a portion of any increase in the value of the home down the road. The program is a win-win for everyone: underwater homeowners receive relief on their mortgages, while banks agree to take a short-term reduction for a long-term gain as the housing market recovers.
