News Column

NJ Bill Would Force Banks to Maintain Foreclosed Homes

Nov. 16, 2012

Michael Linhorst

Towns would have a new tool for forcing banks to keep up the maintenance on vacant, foreclosed houses under a bill that passed a New Jersey state Senate committee Thursday.

If the legislation becomes law, banks could be required to fix code violations in vacant houses they have foreclosed on. They would have 30 days to complete the work.

"This is telling the lenders that, look, I'm not going to keep calling Texas or California and talking to some 800 number, and meanwhile you destroy my neighborhood," said state Sen. Ronald Rice, D-Essex, one of the bill's sponsors.

The bill passed the Senate's Community and Urban Affairs committee unanimously. It will now head to a vote in the full Senate.

The upkeep of empty homes has caused problems for New Jersey since the foreclosure crisis began in 2008.

Foreclosed houses can drive down property values and present health hazards for their neighborhoods, Rice said.

According to the 2010 U.S. census, there were 16,658 vacant properties in Bergen County and 9,181 in Passaic, although not all were vacant because of foreclosures.

Currently, banks can sometimes avoid responsibility for maintaining vacant houses if the homeowner has received a notice of foreclosure and moved out, but the bank has not yet received title to the property.

Boost to existing law

Rice's bill would strengthen the state's Foreclosure Fairness Act, which already requires lenders to address building code violations.

Under the new legislation, if a bank fails to fix a code violation within 30 days, the municipality could impose the same fines that it can on regular homeowners who violate building codes, regardless of whether the bank has already taken the property's title.

"Lenders need to take a little responsibility for the homes they foreclose on, and, particularly in cases of out-of-state lenders, they need to care a little bit more about what happens in New Jersey as a result of the home they foreclosed on," Rice said in a statement.

Source: (C) 2012 The Record, Bergen County, NJ. via ProQuest Information and Learning Company; All Rights Reserved

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters