New Jersey Gov. Christie Criticized for Use of Foreclosure Funds

Affordable housing advocates in New Jersey are criticizing Gov. Chris Christie's plans to use $75 million in foreclosure settlement money to fill budget gaps rather than invest the funds in housing programs, several news outlets reported recently. The state received the funds as part of a nationwide settlement with several major mortgage lenders over the so-called "robo-signing" foreclosure scandal that erupted in 2010.

The funds in question are a portion of approximately $800 million that New Jersey received in the foreclosure settlement in early 2012, stemming from allegations that the lenders had processed foreclosures without verifying the necessary documentation. Housing advocates argue that the settlement money was intended to provide mortgage relief to struggling homeowners and should not be diverted to the state's general fund, NJ Spotlight reported.

New Jersey Ranks Second in US for Foreclosures

New Jersey's foreclosure rate is the second highest in the country, according to a report by the Mortgage Bankers Association - only Florida's is higher.

Worse still, experts predict the situation in New Jersey to worsen in the months ahead as the nation's biggest mortgage lenders begin working through a large backlog of unprocessed foreclosures that were delayed during the robo-signing investigations. New Jersey has a backlog of approximately 50,000 to 100,000 unprocessed foreclosures, according to NJ Spotlight, in addition to the new foreclosures that are still being filed.

Given the magnitude of the foreclosure crisis in New Jersey, Gov. Christie's decision to pool the funds with the general fund sparked an uproar among housing advocacy groups, who have characterized the move as "fiscally irresponsible" and "reckless," according to recent news reports. Gov. Christie has denied mishandling the funds, stating that the money will be used to address housing issues such as homelessness and affordable housing in New Jersey, reported.

Legal Help for Struggling Homeowners

For some homeowners facing the threat of foreclosure, bankruptcy may offer a way to keep their homes, eliminate debt and get a fresh start. To learn more about how bankruptcy can help stop or prevent foreclosure, and to discuss whether bankruptcy might be right for you, contact an experienced bankruptcy lawyer in your area.