Published June 22, 2015
By Erin O'Neill

As the recovery from Hurricane Sandy drags on for the thousands of residents still not yet back in their homes, a bill cleared a state Assembly panel on Monday afternoon that supporters said would offer storm victims "breathing room" while rebuilding their homes.

But an opponent of the measure, which proposes a three-year stay on foreclosure proceedings for certain Sandy-damaged properties, said the bill shifts a burden created by "a failure of the government" onto banks.

The Assembly Housing and Community Development committee on Monday approved the legislation, which would prevent lenders from foreclosing on homeowners waiting for funds through state-run rebuilding grant programs for three years. The bill would also allow homeowners waiting for grant money to qualify for a three-year forbearance period, during which time they would not have to make mortgage payments.  

The committee on Monday cleared a substitute version of the bill (A4139) that was first introduced in February. A state Senate panel approved a similar bill in December.

Staci Berger, president of the Housing and Community Development Network of New Jersey, said residents are struggling to cover mortgage and rent payments as they wait for funds to rebuild.

"We want to make sure that people have the resources but also that they have the time," she said. "What folks really need is some breathing room."

The bill applies to homeowners eligible for money through the Reconstruction, Rehabilitation, Elevation and Mitigation, or RREM, grant program and the Low-to-Moderate Income Homeowners Rebuilding grant program. Homowners have been critical of the RREM program since it launched, complaining of lost paperwork and long delays.

Tammori Petty, a spokeswoman for the state Department of Community Affairs, noted that the state launched a rental assistance program for residents within those two programs in March.

"While there is nothing we can say to relieve the anxiety and hardship borne by those displaced from their homes, the above demonstrates that we are investing the time, energy and resources necessary to overcome all challenges in our Sandy recovery effort and we are focused on the tasks ahead," Petty said in a statement.

Nearly 1,200 homes have been completed through the RREM program to date, Petty said. The program is expected to help roughly 8,300 homeowners.

Nancy Wirtz, a single mother of two from Ocean County, told the Assembly panel on Monday that she's been displaced from her Forked River home since Sandy. She said she eventually qualified for the RREM program but construction has been stalled because of problems with a contractor. Now she said her mortgage company is threatening foreclosure.

"All we're asking for is a chance to rebuild and start over," she said. "I don't want to lose my home."

Michael Affuso, director of government relations for the New Jersey Bankers Association, told the panel that "what has happened to some people is a tragedy."

But, he said, "that is a failure of the government. It is not a failure of banks. And yet in this case the banks are getting forced to carry the burden the government has failed to do themselves."

Erin O'Neill may be reached at [email protected]. Follow her on Twitter @LedgerErin. Find NJ.com on Facebook.