From the Record:
The state’s main foreclosure prevention effort – the HomeKeeper program – has used less than 10 percent of its federal funding since it was started in May 2011, drawing criticism that it is doing too little to help struggling homeowners.
A state official acknowledged the shortcomings, and said he has taken steps to improve HomeKeeper by adding staff and expanding homeowners’ eligibility.
The HomeKeeper program, which is funded with $300 million in federal money, makes zero-interest loans to help unemployed homeowners pay their mortgages. The program’s most recent quarterly report says it assisted 498 homeowners and rejected almost 2,000 requests for help from May 2011 through June 2012.
U.S. Sens. Frank Lautenberg and Robert Menendez, both Democrats, say that record needs to improve. In a letter sent Wednesday to the state Housing and Mortgage Finance Agency, they cited U.S. Treasury figures showing that the HomeKeeper program had used only $22.5 million of its funding as of Aug. 31.
“It is unconscionable that approximately $270 million in federal funds has been sitting unspent for two years,” said the letter.
A letter to the HMFA from the U.S. Treasury in May also criticized HomeKeeper, saying the program was taking more than six months to process applications.
“New Jersey consistently lags well behind other states on key measures,” the Treasury said, calling on the state to “take immediate action to improve its performance.”
A spokeswoman for the DCA did not dispute the Treasury’s figures on how much funding has been used by HomeKeeper. But she said that the loans are paid over time, and that HomeKeeper has already committed $46 million to homeowners who have been approved for loans. That’s the amount that would be paid if all the approved homeowners use the maximum loan amount of $48,000.
Two state assemblymen also raised questions about HomeKeeper’s performance this week and said they plan to hold hearings on the program.
“The list is long – and growing – of people in desperate need of assistance,” said Assemblyman Gary Schaer, D-Passaic. “Something is just not working the way it should be.”
The question of whether the state has done enough to help troubled homeowners erupted into a testy exchange earlier this week between Governor Christie and a television reporter who asked him about HomeKeeper. Christie told the reporter that the program had been delayed because of a legal moratorium that held up most foreclosure activity in the state throughout 2011, after reports of documentation abuses by mortgage servicers. When the reporter tried to ask follow-up questions, Christie cut him off and told him to “get your facts correct.”
However, there does not appear to be any connection between the moratorium and problems with HomeKeeper. The Housing and Mortgage Finance Agency has never cited the moratorium as a reason for HomeKeeper delays when the agency answered earlier questions from Menendez and Lautenberg. The governor’s office did not respond to a request for comment Wednesday.
And many struggling homeowners sought help from the HomeKeeper program and were turned away, during the foreclosure moratorium, said Arnold Cohen of the Housing and Community Development Network, a group of organizations that promote affordable housing.