The leading candidate in New Jersey’s gubernatorial race proposed having Wall Street banks pay for the conversion of foreclosed homes into affordable housing with millions of dollars in federal mortgage settlement funds Wednesday. Former Goldman Sachs executive and one-time U.S. Ambassador to Germany Phil Murphy said “Wall Street created the foreclosure crisis, they need to be held responsible for fixing it.”
The move could be an attempt to head off criticisms of his own Wall Street background, which has drawn harsh criticism from primary rival and progressive assemblyman John Wisniewski and unfavorable comparisons to former governor Jon Corzine in some New Jersey political circles.
“Making Wall Street pay with the billions they gave up for causing the housing crash would not only ensure fairness for New Jersey’s families, but be a measure of justice for their role in creating this crisis that has left our state pockmarked with empty homes,” Murphy said, adding that he is “mystified that Governor Christie had failed to fight for New Jersey’s share of the funds.”
According to CoreLogic’s March 2016 National Foreclosure Report, New Jersey’s foreclosure rate is lagging behind other states as the homeowners across the country rebound from the financial crisis brought on by high-rise subprime mortgages. It is the highest in the country, with 4 percent of homes in foreclosure.
Wall Street banks are required to provide $7.4 billion for consumer relief under mortgage claim settlements made with the US Department of Justice, with New Jersey standing to receive $670 million.
The announcement comes after Wisniewski again attacked Murphy for his rapid rise within the party, accusing him of effectively buying the nomination with contributions to all-important county chairs. Those relationships allowed him to pull ahead of predicted favorites Senate President Steve Sweeney and Jersey City mayor Steve Fulop last year.
“Phil Murphy should drop his spineless defense and call this what it really is: An attempt to buy the nomination,” Wisniewski said. “When you give a county party chair $100,000 and the county chair then endorses you, it is very hard to tell us what it is not.”
According to a recent Quinnipac poll, Murphy holds a sizable lead against Wisniewski.