Published: May 30, 2012

By Megan DeMarco

TRENTON — Affordable housing advocacy groups today said Gov. Chris Christie is misusing $75 million from a foreclosure settlement, calling his budget plan “reckless” and “a shell game.”

Christie is putting that money into the budget general fund, advocates said at a Statehouse press conference this morning, instead of specifically earmarking it to fund help for people who have been foreclosed on.

“We have heard a lot about the need for a tax cut for residents making as much as $400,000,” said Staci Berger, from the Community Development Network of New Jersey. “Yet we have heard nothing about helping families keep their homes or providing tools for towns to tackle their vacant foreclosed property problems.”

In February, New Jersey netted more than $800 million from a $25 billion multi-state settlement between 49 states and financial institutions such as Bank of America, Citigroup and Wells Fargo.

The majority of the payment will go to direct relief to homeowners in the form of loan modifications, refinancings or direct payments to those who lost their home. The $75.5 million went to the state to help it pay for state housing programs.

At a press conference this afternoon, Christie said there is $317 million earmarked in the budget for housing issues, including the $75 million from the lawsuit.

“They’re simply wrong about it,” Christie said, adding the money will “deal with housing problems, homeslessness issues and other affordable housing issues for the people of the state.”

But Berger said the money is put into the general fund, meaning Christie is just moving money around to balance his budget, not helping struggling homeowners.

“His plans for the budget are reckless,” Berger said. “A New Jersey comeback will be impossible if our streets are lined with vacant, foreclosed homes.”

The advocates today said the money should go to foreclosure counseling, addressing vacant homes and creating affordable housing.

Sen. Raymond Lesniak (D-Union) has sponsored a bill to allow towns to buy foreclosed homes and turn them into affordable housing units. He said the foreclosure crisis in New Jersey is “huge,” and called it a “serious problem.”

“Dealing with the foreclosure problem should be the governor’s priority,” Lesniak said. “He’s being short-sighted.”

More than 50 organizations signed a letter and delivered it to Christie’s office today, asking him to reconsider.

“The governor is taking money that should be used to support efforts to mitigate and reverse the economic damage caused by Wall Street,” said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action. “It’s a shell game that has no winners.”