Houghtaling, Downey Bill to Protect Sandy Victims from Costly Bureaucratic Setbacks Signed into Law

Legislation sponsored by Assemblyman Eric Houghtaling and Assemblywoman Joann Downey to ensure the fairness of project deadlines, enhance transparency, and create foreclosure protections for Superstorm Sandy victims was signed into law on Friday.

Under the new law (A-333), the Department of Community Affairs (DCA) will have to extend the completion deadline for projects funded through the Rehabilitation, Reconstruction, Elevation and Mitigation (RREM) or Low to Moderate Income Homeowners Rebuilding (LMI) grant, for applicants who can demonstrate the delay was the fault of their builder or due to delays by the DCA in approving the builder doing the project. If an application for aid under the Tenant-Based Rental Assistance Program (TBRA), LMI, or RREM program is denied, the DCA would have to provide the applicant with an explanation for the denial, and an explanation for ways to remedy the application.

“As if having your life disrupted by Mother Nature was not enough, these homeowners were failed by the very entities tasked with their recovery,” Houghtaling (D-Monmouth). “These provisions can help cut the red-tape they’ve been dealing with and finally get them back on track.”

“Four years later you still have residents out of their homes, at no fault of their own. It simply has to stop,” said Downey (D-Monmouth), “The idea that Sandy victims are facing foreclosure because of bureaucratic delays out of their control is unacceptable, and this law will help remedy that."

The law also offers temporary protections against foreclosure to certain Sandy victims. Under the law, homeowners who have either been approved for assistance through the RREM or LMI program, or have received rental assistance from FEMA as a result of damage to their primary residence could apply to the DCA for a certificate of eligibility for mortgage forbearance.

The forbearance period would conclude when whichever of these scenarios happens first: a year after a certificate of occupancy for recovery and rebuilding program work has been issued; July 1, 2019; or regarding a property in foreclosure proceedings, 10 days after a sheriff’s sale.

Under the law, DCA would have to publicly report the reason for each application denial, wait-list placement, and withdrawal from the RREM, TBRA, and LMI programs since the start of the recovery effort, and to report the reasons for new denials, wait-list placements, and withdrawals on a quarterly basis through 2018. Concerning withdrawn applications, the public reporting requirements would apply only after DCA has conducted a reasonable effort to contact the withdrawn applicant.

The law also requires DCA to publicly report where all funding associated with application denials, wait-list placements, and withdrawals has instead been allocated. The law applies this requirement to all application denials, wait-list placements, and withdrawals since the start of the recovery effort, and would require ongoing reporting on a quarterly basis through 2018.

The law also requires DCA to maintain a RREM appeals process for at least six months. The appeals process would have to be open to any applicant to the RREM program who submitted an initial application by the deadline of August 1, 2013, regardless of the reason the applicant had been denied or removed from the application process.