From the Asbury Park Press:
Homeowners facing foreclosure will get no help soon from a $30 million state rescue program because officials have suspended the effort before it even started.
The decision comes as foreclosure lawsuits in New Jersey are on pace to rise to their highest level in at least 12 years.
The state’s Housing and Mortgage Finance Agency has stopped the foreclosure rescue program after meeting with activists, who said the standards were so high that few homeowners in fiscal trouble would be able to qualify.
The delay will affect people like Stephanie L. Cannizzaro and her family in Manchester, who now face foreclosure because they cannot make payments on a high interest rate loan, commonly called a subprime loan.
Cannizzaro, 34, said she was told by state workers early this month to apply for a loan under the program. But when she did, she could not meet the stringent credit requirements.
“They’re rescuing people who are rich and had one late payment,” Cannizzaro said. “They’re contradicting themselves. They say their program is for homeowners who are suffering from predatory lending and adjustable-rate loans.”
The executive director of a nonprofit community activist group said state officials told her they had intended to start the program at the beginning of this month.
State officials said they reconsidered offering the program after meeting with the group and a state senator.
Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, a Newark-based nonprofit that provides credit counseling and also helps find financing for homeowners in trouble, said the state program’s requirementswere so tough that it would help only people who would be able to refinance in the open market.
Homeowners, like Cannizzaro and her husband, Paul, who have missed multiple
mortgage payments, have already seen their credit ratings drop precipitously, Salowe-Kaye said. Most lenders won’t touch them, she said.
Yet even if the state’s requirements were lowered, the $30 million program would provide refinancing for only about 160 homeowners, Salowe-Kaye added.
“What are they going to do with the rest of the people in danger of losing their homes?” Salowe-Kaye asked. “This should not be the only thing out there today to help people. This program doesn’t deal with the most vulnerable.”