Lawmakers, advocates want $75M foreclosure settlement to go toward housing, not general fund

TRENTON – Lawmakers joined New Jersey Citizen Action and Community Development Network of New Jersey today in calling on Gov. Chris Christie to use the $75 million in federal foreclosure settlement funds it received to help people from losing their homes, and not toward plugging budget holes and funding an income tax refund.

New Jersey Citizen Action Executive Director Phyllis Salowe-Kaye described the decision as “reckless.” She had a list of more than 50 organizations that are calling on Christie to rededicate those funds toward stabilizing neighborhoods that have been hit hard by the foreclosure crisis.

“He’s foreclosing on New Jersey,” said Salowe-Kaye about the administration’s decision to deposit the settlement funds into the general fund.

She, along with other officials such as Staci Berger of the Housing and Community Development Network of New Jersey, accused the governor of playing a “shell game” with the state budget.

The money should instead be going toward various education, counseling and outreach programs that would help reduce the number of foreclosure and prevent future ones, the advocates said.

“This is not time for the governor to steal from Peter to pay Paul,” Berger said.

Sen. Ray Lesniak, (D-28), of Elizabeth, was also at a press conference the advocates held. He, along with Sen. Barbara Buono, (D-18), of Metuchen, have put forward a bill that would dedicate the same amount of money to municipalities to buy up foreclosed properties and convert them to affordable housing.

He said that as long as there’s a “foreclosure overhang,” the “Jersey Comeback” will be slow in coming to fruition. Lesniak said Christie was being “shortsighted” in addressing the foreclosure crisis adequately.

The longtime senator added that leaving foreclosed homes boarded up presents an “invitation to vandalism.”

Assemblyman Gary Schaer, (D-36), of Passaic, who has worked on legislation to combat mortgage scammers, also called for the $75 million to be used toward programs targeting the foreclosure crisis.

“It’s a refund that should be going to the people,” he said.

According to the Office of Legislative Services, the $75 million direct payment to New Jersey is “anticipated as an interfund transfer into the General Fund.”

OLS also points out that “most of New Jersey’s share of the settlement proceeds, approximately $762.1 million, will be used to modify existing home loans, provide cash payment to homeowners who lost their home to foreclosure and assist homeowners with existing home loan refinances.”

Previous coverage:

DCA unsure how $75M in foreclosure settlement will be spent 

Chiesa: N.J. joins $25B settlement


Lawmakers, advocates want $75M foreclosure settlement to go toward housing, not general fund