ASSEMBLY HOUSING AND COMMUNITY DEVELOPMENT COMMITTEE
ASSEMBLY, No. 1029
with committee amendments
STATE OF NEW JERSEY
DATED: MAY 12, 2016
The Assembly Housing and Community Development Committee reports favorably and with committee amendments Assembly Bill No. 1029.
As amended by the committee, this bill codifies into State law New Jersey’s Foreclosure Mediation Program, established in 2009 by the New Jersey Judiciary in response to an alarming increase in residential foreclosures. This bill also strengthens the program to more effectively protect home ownership in New Jersey.
The bill requires that, at the time the homeowner-borrower receives a notice of intention to foreclose pursuant to section 4 of P.L.1995, c.244 (C.2A:50-56), a homeowner-borrower must receive written notice of the option to participate in the Foreclosure Mediation Program. Upon the filing of a mortgage foreclosure complaint against an eligible property, the homeowner-borrower must again receive written notice of the option to participate in the Foreclosure Mediation Program. The written notice must be available in both English and Spanish.
The bill authorizes eligible homeowners to submit a mediation request, thereby initiating the process of scheduling a mediation session with their lender. Along with the mediation request, the homeowner may be required to submit additional information that may be necessary for creating a loan modification, or other agreement, but will not have to pay any fees to participate in the program. The bill requires lenders to have a representative attend the mediation session, either in person or by telephone, who has authority to reach a mutually acceptable loan modification, loan workout, refinancing agreement, or other resolution. If either party fails to attend a mediation session or make a good faith effort to mediate, courts will have the authority to penalize the party through a fine of up to $1,000, through allowing the other party to recover reasonable attorney’s fees and litigation expenses, or through any other sanction the court deems appropriate.
The bill also creates a dedicated, non-lapsing fund within the General Fund to be known as the “Foreclosure Mediation Fund.” This fund would be comprised of receipts equaling $50 from every foreclosure complaint filing fee, along with all fines imposed on lenders for noncompliance with obligations of the mediation program found in subsection b. of section 5 of the bill. Pursuant to R.1:43 of the Rules of Court, foreclosure complaint filing fees have recently been increased from $200 to $250. Instead of establishing those fees at $250, this bill permits the judicial branch to maintain the role of determining foreclosure complaint filing fee levels, so long as $50 of each fee is contributed to the fund.
This bill was pre-filed for introduction in the 2016-2017 session pending technical review. As reported, the bill includes the changes required by technical review, which has been performed.
The amendments remove the requirement for the use of a "trained foreclosure prevention and default mitigation counselor" to act as mediator in any controversy submitted to the mediation program. In the bill as introduced, a "trained foreclosure prevention and default mitigation counselor" had been defined as a housing counselor employed by a housing counseling agency certified by the United States Department of Housing and Urban Development, who has successfully completed a foreclosure prevention and default mitigation training course provided by a nationally recognized homeownership education and counseling organization, such as course HO345b-rq "Foreclosure Intervention and Default Counseling Certification Part I" provided by the NeighborWorks America Center for Homeownership Education and Counseling. As a result of this amendment, the courts will continue to determine the qualifications necessary for a person to serve as a mediator.