N.J. residents lose their homes at an alarming rate. New bill could help those facing foreclosure.

As New Jersey continues to struggle with one of the highest foreclosure rates in the country, lawmakers are advancing a bill aimed at of the Legislation aimed at helping families keep their homes.

The bill would let homeowners in foreclosure or their relatives buy back their homes at a sheriff’s sale at a reduced deposit rate from 20% to 3.5% and gives them extra time to pay what they owe. It also lets them to get financing for the reduced deposit instead of paying for it on the spot in cash.

The measure effectively tips the scale in favor of the family living there or a relative who wants to help them keep the home over cash-heavy investors in search of an opportunity to flip a foreclosed home for a profit, said Assemblywoman Britnee Timberlake, the bill’s prime sponsor.

“It creates equity in the process,” Timberlake, D-Essex, said, arguing the current model is “built for people who have large access to cash.” The legislation “levels the playing field,” she said.

But in exchange for a family staying in their home under these terms, they have to agree to live there for seven years or face up to $500,000 in fines if they move under the bill.

The legislation (A793), dubbed the Community Wealth Preservation Program, would also help nonprofit groups purchase foreclosed homes. According to the bill, if the homeowner or relative can’t come up with financing, they could request a nonprofit purchase it and, if possible, work out a lease with the group.

It passed the Democratic-controlled Assembly last week in a 46-30 with four legislators not voting. Even though it cleared the lower chamber mostly on party lines, two Republican lawmakers are co-sponsors of the legislation.

New Jersey has consistently ranked the highest in the nation for foreclosures. A 2018 report conducted by the state’s judiciary found New Jersey averaged 25,000 foreclosure filings in 2006 before shooting up to 65,000 per year in 2009.

Foreclosure rates have slowed in New Jersey and nationally more recently. But the Garden State was the fourth highest in the country last year, behind Illinois, Florida, and Delaware, according to an analysis from ATTOM Data Solutions. The study showed one in every 1,288 homes in the state had a foreclosure filing by the end of 2021.

The foreclosure rate is bleaker according to a more recent analysis by the real estate data company Attom, which said one in every 2,510 homes in the state has a foreclosure filing.

Timberlake referred to it as “a crisis” that disproportionally hurts people of color in urban areas.

Assemblywoman Beth Sawyer, a real estate agent of nearly three decades, cited the length of time people need to commit to staying in the home as a reason she voted against it.

“I love certain parts of this bill but there’s one part that I find very alarming,” Sawyer, D-Gloucester, said during the voting session.

“This bill is making a requirement that they have to stay in the home as their primary residence for seven years. Think what just happened over the last two years. People lost their lives, people lost their jobs, people moved away,” she said. “This is basically going to hold these people hostage to their home for seven years. If they can’t make the payments, what happens? We have another foreclosure problem.”

She said she likes aspects of the bill and its intention, but argued it sets people up for likely failure and more troubles down the road.

“I think she has good intentions,” she said.

But Timberlake argued there are exceptions to being slapped with big fines for not committing to the terms, they include the death of the bidder or their spouse, divorce, military deployment, or disability of the bidder or bidder’s spouse.

The legislation still needs to pass the state Senate before it would head to Gov. Phil Murphy’s desk.

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