NJ Bill Would Help Foreclosed Homeowners Compete With ‘Flippers’

ESSEX COUNTY, NJ — For many New Jersey residents, their home is the largest investment they’ll ever make. And when it comes to buying foreclosed houses at a sheriff’s sale, the original owner, nonprofits and people who want to live in the community should get first dibs – not “flippers” and corporations, advocates say.

Last week, Assemblywoman Britnee Timberlake (D-34), community leaders and members of the New Jersey Urban Mayors Association gathered to push for a proposed state law that has been dubbed the “Community Wealth Preservation Program” (watch the video below).

The bill has passed the state Assembly and Senate. It sits on the desk of Gov. Phil Murphy, whose team has shown signs that he may possibly conditionally veto it – which would be a serious setback, Timberlake said.

If it becomes law, A793 would reduce the amount of cash that people need to bring to the table in order to buy a foreclosed home and give them extra time to pay back the rest. Buyers would have to pay 3.5 percent down, with the rest of the money due in 90 days.

Currently, buyers need to pay 20 percent down – with a cash or money order as the only payment options. They have 30 days to pay the remaining balance, with interest accruing on the 11th day.

There would be several categories of eligible buyer: the original homeowner, a homeowner’s next-of-kin, nonprofit community development corporations, and people who will agree to live in the home for seven years – adding to the “fabric of the neighborhood.”

Timberlake, one of the bill’s sponsors, said it will help to narrow one of the widest racial wealth gaps in the nation – not to mention one of its highest foreclosure rates.

“What the bill will do is rectify the current foreclosure process, which has been in place for many years, and is made for people who have deep pockets of cash to only be able to participate in,” Timberlake said at a news conference in East Orange.

• See related article: NJ Has One Of America's Worst Racial Wealth Gaps, Study Says

Other primary sponsors in the Assembly include Cleopatra Tucker (D-28) and Verlina Reynolds-Jackson (D-15). Primary sponsors in the Senate include Nia Gill (D-34) and Shirley Turner (D-15).

According to Timberlake, the bill would have the added effect of cutting down on the number of homes owned by corporations, a mounting concern in cities such as Newark, where an estimated 50 percent of homes are corporate-owned – the highest rate in the nation, according to one study.

• See related article: Newark Fights Back Against Corporate Home Buying Spree

Timberlake, who supported Murphy's recent re-election bid, added that there is a “cleanup bill” available that would address the governor’s concerns, and which also contains provisions for renters who are left in the lurch when their landlord doesn’t pay the mortgage.

Several New Jersey mayors appeared at last week’s press conference in support of the bill, including Ras Baraka of Newark, Ted Green of East Orange, Dwayne Warren of Orange, Donald Shaw of Roselle and Adrian Mapp of Plainfield.

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