Prevent foreclosure from the Mortgage Stabilization Program.

This program was signed into law in January 2009 by the governor to help prevent foreclosures across the state. The Mortgage Stabilization Program allows the The New Jersey Housing and Mortgage Finance Agency, better known as HMFA, the ability to promote refinancing or modifying the homeowners first mortgage loan that may be in immediate danger of foreclosure.

The solution they offer is they will provide qualified homeowners a non-amortizing loan (which is no monthly payment) second mortgage. The State of New Jersey will then provide a mortgage stabilization loan up to a maximum of $25,000 to match the bank or lender's contribution. This is in effect a partnership with the lender that will try to bring the mortgage payment down to an amount that the borrower can afford to pay on a monthly basis. There is no downside to the state or the bank/lender as both the state's loan and any assistance loans that are provided by the lender will be repaid by the homeowner upon sale of the home.

There are some conditions to be eligible for foreclosure prevention services from the New Jersey Mortgage Stabilization Program. To qualify for this assistance and a modification, a homeowner's total household income needs to be less than 120 percent of the immediate areas median household income. Or, as another option, the total income can be less than HMFA's Mortgage Program income limits, which will vary by each county across the state. The income levels can be very high though, as in some areas the maximum income allowed for the Mortgage Stabilization Program is as high as $135,380. In addition, the lender needs to agree to write the total value of the mortgage down to the current appraised value of the home. In addition, homeowners who apply for and accept help from the program are required to participate in agency approved household budget counseling sessions, which can provide them with budgeting skills, debt counseling, and more. The program has limited funds, as funding for the Mortgage Stabilization Program is currently capped at $25 million, and the money came from the Long Term Obligation and Capital Expenditure Fund.

To apply or learn more about the New Jersey Mortgage Stabilization Program contact a NJ HUD approved counseling agency. Or Dial 1-800-NJ-HOUSE.

Other benefits of the program is that it will keep families in their homes and keep the number of foreclosures homes in neighborhoods at a low level, which would help property values and reduce blight. The Mortgage Stabilization Program can help maintain some form of stability for the residents of New Jersey. With thousands of homes being foreclosed on per year, the state has a responsibility to create plans and resources will help provide stability in the local housing industry.




By Jon McNamara

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