Published October 24, 2012
By Tom De Poto

The head of the department in charge of a federally funded program to help struggling homeowners avoid foreclosure said today the state-run program had turned itself around and was on track to make its goal of 250 loans a month.

Richard Constable, commissioner of the state Department of Community Affairs, told a joint Assembly committee hearing that the anemic pace of the New Jersey HomeKeeper program “was unacceptable” when he took office in January. He succeeded Lisa Grifa, who stepped down Jan. 2.

The program, part of the federal government’s Troubled Asset Relief Program, is designed to help homeowners who were hurt by the recession stave off foreclosure. New Jersey was declared one the 18 “hardest hit” states in 2010 and received $300 million in aid.

By July 2011, the program had had 1,300 applicants and no loans had been approved. At the end of the year, little more than 10 percent of the money had been distributed.

After taking office, Constable said, he reviewed the records and informed the governor of the poor numbers.

“The governor was not aware of the (program’s) failings,” Constable said. Christie then told him, “Get this done and get it right,” he added.

Staci Berger, director of the Housing and Community Development of New Jersey, however, told the committees it was “inexcusable for someone to sit here and say the governor was unaware” of how poorly the program was performing. At the time, New Jersey was second nationwide in the number of homes being foreclosed, and second from the bottom in distributing federal aid.

“It’s not just about the $300 million (HomeKeeper program),” she said. “There’s been a lack of coherent policy from this administration for 18 months.” She also cited $762 million New Jersey received in February as part of the National Mortgage Settlement agreement. The state has not yet said how the money would be used.

Earlier this month, Christie admitted the state had performed poorly in getting federal assistance to homeowners. Today, Constable remained contrite.

“The program was not run well,” he said. “We’re not walking away from that. We did a disservice.”

He told members of the Assembly Financial Institutions and Insurance Committee and the Housing and Local Government Committee that the DCA made expanded eligibility, streamlined the process and changed the management team. He said it now expects to meet its goal of spending down the money by 2014.

In 2011, 56 loans were closed, he said. In the first three quarters of this year, more than 1,100 loans had been approved.

“We closed more loans last week than we did all of last year,” he said.

“It took too long to get here,” he added, “but we’re in a way better place.”

Tom De Poto: [email protected]; 973-392-4270