Economic Stimulus in New Jersey?
The New Jersey Senate has given final approval to a package of bills, touted as an economic stimulus package for New Jersey and its struggling businesses. The proposals were called for in Governor Corzine's recent economic address to the Legislature. The Governor is expected to sign those bills quickly.
Two bills, amended in Senate Committee and approved yesterday, now head to the Assembly for approval.
The $25 million Mortgage Stabilization Program and the $15 million NJ Housing Assistance and Recovery Program will now be considered by the state Assembly.
The Mortgage Stabilization program will bring lenders and the state together to modify mortgages so they’re more affordable. It will also make available loans of up t $25,000 that would require repayment. According to the NJ Housing and Mortgage Finance Agency (HMFA), that will help between 1,500 and 2,500 homeowners on a first come, first served basis.
Under the NJ Housing Assistance and Recovery Program, certified community organizations will receive state funds to enter into lease-purchase agreements with struggling homeowners. The organizations will purchase the property and rent it back to the current homeowner at an affordable rate for up to three years. The property would then be sold back to the homeowners when they are financially ready.
These bills were to be financed by a $2,000 foreclosure charge. Initially the Governor wanted banks to pay a fee for each foreclosure. Instead, the legislation now calls for funding from a $650 million account that was set aside to pay down some of the state’s debt.
While, I’ll be the first to admit New Jersey’s got problems I’m not convinced we’re headed in the right direction.
Of particular concern is a delay in paying down the state debt. We already have the third highest debt to income ratio in the country.
Will these measures help New Jersey’s struggling homeowners? Only time will tell, but I’m not banking on it.
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