Assembly committees hear of bureaucracy, understaffing in foreclosure assistance process

TRENTON – While the state brags it has allocated more resources, the people at the “frontlines” of the foreclosure loan application process said they need more help.

While the Department of Community Affairs has hired more than 40 people to handle the loan application process, the first stretch of the often-long bureaucratic road is handled by various foreclosure counseling groups that help applicants navigate through administrative matters.  

But the various housing groups that came before the Joint Assembly Housing and Financial Institutions Committees today said they have been left out of the picture.

Donna Turner of Affordable Homes of Millville, one of the largest foreclosure assistance agencies in the state, said the agency was previously able to help seven South Jersey counties. Today, she testified, “no counties are now being helped.”

Five counselors in the unit had have been laid off.

“I no longer have any counselors,” she testified before the committee. “Our agency will close in four months.”

After homeowners file an application through a state website, the Housing Mortgage and Finance Agency selects certain applicants for the various housing counseling agencies it contracts with to review those applications.  Once the housing counseling groups review the applications, they are sent back to HMFA for underwriting.

The agency has to approve the applications before it sends money down to the agencies, which helps pay for the counselors.  But that process can often take a very long time, as much as 18 months, according to Phyllis Salowe-Kaye, executive director of Citizen Action.

Turner said she had asked the HMFA for $225,000 to stay afloat, but was denied.

However, that hasn’t stopped the state from still referring prospective clients to the agency. But with nobody on board, Turners said there’s not much she can do.

“All I can say is it’s a damn shame.”

The agency had been working with some 1,427 families. Assembly committees hear of bureaucracy, understaffing in foreclosure assistance process