TRENTON, N.J. -- The Christie administration believes it has made it easier for New Jersey homeowners facing foreclosure to qualify for federal aid, but those on the front lines say problems remain.
The New Jersey HomeKeeper Program had closed 56 loans and distributed only a fraction of the $300 million in available aid through January. But Community Affairs Commissioner Richard Constable told Assembly members Wednesday that the program has been overhauled to fix application processing waits of six months or longer and ease qualification rules that caused 68 percent of initial applicants to be turned away.
The program provides zero-interest, deferred payment mortgage loans of up to $48,000 to homeowners who have a track record of making their mortgage payments but are struggling because of unemployment or underemployment.
Constable acknowledged during 90 minutes of testimony before two Assembly panels that the administration had made mistakes while ramping up the program starting early in 2011, but has beefed up staff, revised the qualifications three times and improved program management. He also shielded Gov. Chris Christie from blame, saying the governor was not directly aware of the program's early failings.
New Jersey's 7.7 percent foreclosure rate is the second highest in the country.
Constable's synopsis of recent progress _ "we closed more loans last week than we closed last year" and are on pace to disperse all available funds next year _ echoed the critique Christie offered on Tuesday.
"Let's face it, we're not going to do everything perfectly in this administration, that's just the way it is," the governor said in response to a question about the hearing while in New Brunswick. "When we identify a shortcoming, we fix it."
Christie acknowledged the money was slow to be dispensed at first but said that was due to inadequate staffing and a Supreme Court moratorium on foreclosures, which made the problem less immediate. Plus, he said, the administration wanted to guard against fraud.
"I assume what you'll hear from these Assembly panels if they're going to play it straight is, `great job by the administration for getting this thing going and getting help out to people especially now that the moratorium has been lifted,'" Christie said.
Some $59 million of the funds has now been distributed, and the denial rate has dropped to 48 percent, in part because some who apply aren't eligible.
Democratic Assemblyman Jerry Green, who chaired the hearing, said it's clear the administration dropped the ball under the previous DCA commissioner. And, he said toward the end of the hearing, he's still concerned.
"It's obvious it's not moving so smoothly as I was led to believe early this morning," he said.
The panel also heard from anguished homeowners who were denied aid and given no other alternatives, and told by good government groups of other homeowners who qualified for the program when they applied but owed too much to still qualify by the time their application was reviewed.
Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, a homeowner loan counseling agency, said remaining program funds should be spread out, with some being allocated to other anti-foreclosure initiatives such as a revolving loan fund.
"We urge the Legislature and the governor to establish a complete menu of options to help hard-working New Jerseyans stay in their homes, including expanded funding for counseling and principal reductions, which would require banks to renegotiate mortgages for underwater homeowners at current market values, assuming the homeowners were able to pay," she said.
The Assembly housing committee then advanced three bills meant to help ease the foreclosure problem, including one requiring the state's foreclosure mediation program to continue and another requiring the state to buy foreclosed properties for use as affordable housing.
The Senate is scheduled to take up two foreclosure bills Thursday, one to require the administration to expand the HomeKeeper program and another to force the state's hand on turning foreclosed properties into affordable housing.