News and Updates

New Jersey Community Capital to Help Hundreds of Homeowners Avoid Foreclosure

FOR IMMEDIATE RELEASE

New Jersey Community Capital to Help Hundreds of Homeowners Avoid Foreclosure
Nonprofit Selected by HUD as Part of Largest-Ever Federal Auction of Distressed Properties

 

NJCC Leverages Private Capital from Prudential and MetLife, Launches Unprecedented ReStart Program to Stabilize Communities in Newark, New Jersey and Tampa, Florida

(New Brunswick, NJ) December 4, 2012 – New Jersey Community Capital (NJCC) today announced its selection by the U.S. Department of Housing and Urban Development (HUD) to purchase 399 troubled mortgages as part of a national, 9,000-unit auction of properties facing foreclosure, the largest auction of distressed Federal Housing Administration-insured single-family home loans in this nation’s history.

 

The purchase allows NJCC to help preserve the homes of up to 150 mortgage holders in Essex County, New Jersey, and another 249 in the Tampa Bay metropolitan area in Florida. Through this effort, NJCC will implement ReStart, a home preservation program designed to address the mortgage delinquency problem of homeowners. Because many of the mortgages are for properties of two or more units, ReStart will have the potential to save the homes of more than 600 families.

NJCC will administer this program under its newly created National Community Capital (NCC) subsidiary.

The purchase is part of HUD’s Neighborhood Stabilization Outcome (NSO) component of the Distressed Asset Stabilization Program. The auction included loan pools in the Newark, Tampa, Phoenix and Chicago regions, and is intended to serve as a model for other anti-foreclosure efforts across the country. NJCC, a 25-year-old community development financial institution with a social mission, was the only nonprofit organization to win two, targeted NSO pools of loans.

“The ReStart program is a new model for solving the foreclosure crisis. This program is about financially helping families and communities facing distress. It is about changing the approach to solving the foreclosure problem that so many other families and communities face across the country,” said Wayne T. Meyer, President of NJCC. “Communities such as these often are left behind, even during the economic recovery, if we do not develop practical, effective, nonsubsidized solutions like ReStart to keep people in their homes and provide them with stable, long-term financial situations.”

The acquisition was made possible through NJCC’s partnerships with Prudential Financial, Inc., MetLife, and Newport Capital Bancorp, which provided financial resources to fund the purchase of these home loans with a total value of almost $78 million. This effort required the partnership and support of the New Jersey Housing and Mortgage Finance Agency, the City of Newark, the Housing and Community Development Network of New Jersey, NeighborWorks America, JPMorgan Chase, and the Florida Housing Finance Corporation.

ReStart is designed to show that this new approach can work in two different real estate markets, both struggling with high numbers of foreclosures. The model relies on locally based organizations to determine how best to help these homeowners and stabilize their communities, while bringing in private capital to create impact at a larger scale.

Research shows that stopping the property abandonment cycle in a neighborhood can stabilize the value of surrounding homes, prevent further neighborhood decline, and strengthen the life chances of the residents and their children.

NJCC will work with each homeowner to develop individualized mortgage repayment plans, with the goal of maintaining ownership for as many people as possible. NJCC-trained ReStart Specialists, employed by local nonprofit organizations, will guide eligible homeowners in how they can remain in their homes. NJCC will offer homeowners the opportunity to receive a permanently modified, affordable, fixed-rate mortgage. In cases where this is not feasible, NJCC will help families transition to other stable living arrangements.

“NJCC has been a national trailblazer on practical large-scale foreclosure solutions ever since the mortgage crisis began,” said Dudley Benoit, Chairman of NJCC’s Board of Directors and Senior Vice President and Regional Sales Manager on JPMorgan Chase’s Commercial Term Lending team. “ReStart is a giant leap forward to helping families and communities that have suffered most, and my hope is that this approach can be replicated across the country to lift additional families from the brink of foreclosure.”

NJCC, through its ReStart program, hopes to create a model approach that can be replicated in other cities, bringing together the private, nonprofit and public sectors to work hand in hand to prevent foreclosures, thus keeping families in their homes and strengthening neighborhoods.

“NJCC’s ReStart program is an innovative way to directly tackle the heart of the foreclosure and mortgage crisis,” said Lata Reddy, Vice President of Corporate Social Responsibility at Prudential. “If ReStart proves successful, it will be a deeply impactful model that can be exported to other distressed communities across the country.”

“MetLife is pleased to support this innovative program to help address a critical issue facing families and communities in the U.S.,” said Dennis White, Vice President, Corporate Contributions and Social Investments at MetLife. “ReStart will minimize the impact these troubled mortgages have on both homeowners and the surrounding communities. MetLife’s social investment program is committed to helping stabilize low- and moderate-income communities.”

“We are proud to participate in NJCC’s ReStart initiative. This program fits well with Newport Capital’s vision to assist minority neighborhoods and other hard-hit states by employing investment capital to affect positive change,” said John Vasquez, Chairman of Newport Capital. “Our experience handling distressed homes places Newport in a unique position to help existing homeowners maximize their ability to maintain their homes. Newport’s ongoing commitment to invest its capital in this initiative will truly benefit both individuals and communities.”

The Newark purchase consists of 150 mortgages with an unpaid principal balance of almost $47 million. The Tampa Bay metropolitan purchase consists of 249 mortgages with an unpaid principal balance of almost $31 million.

According to RealtyTrac’s latest U.S. Foreclosure Market Report, one in every 706 housing units in the country had a foreclosure filing during October. New Jersey was among the three states with the biggest annual increases in foreclosure activity in October, with a 140 percent increase.

Meanwhile, Florida had the nation’s highest state foreclosure rate for the second month in a row; one in every 312 Florida housing units had a foreclosure filing in October, more than twice the national average, according to RealtyTrac.

About New Jersey Community Capital and National Community Capital
New Jersey Community Capital is a nonprofit community development financial institution (CDFI) that provides innovative financing and technical assistance to support the preservation and development of affordable housing and sustainable community development ventures that increase jobs, improve education, and strengthen neighborhoods. Founded in 1987, NJCC has invested over $346 million in 783 projects resulting in the creation or preservation of over 9,000 housing units, 4,750 early care spaces, 7,300 education slots, and 5,000 jobs.

National Community Capital (NCC), a wholly-owned subsidiary of New Jersey Community Capital, is designed to reduce foreclosures and stabilize underserved housing markets at a national scale. NCC purchases pools of nonperforming mortgages in target markets and reduces the outstanding principal mortgage loan amounts to make the borrower’ housing payments affordable. NCC’s strategies help borrowers avoid foreclosure, stabilize families and neighborhoods, and prevent properties from being a strain on communities.

About Prudential Financial, Inc.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $1.005 trillion of assets under management as of September 30, 2012, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com.

About MetLife
MetLife, Inc. is a leading provider of insurance, annuities and employee benefit programs, serving 90 million customers. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.

About Newport Capital
Newport Capital is a minority-owned company formed for the purpose of recapitalizing community banks that have been devastated by the real estate market downturn and maximizing the value that can be delivered in dealing with the distressed assets of these banks, HUD and other governmental entities. By super capitalizing these community banks Newport optimizes their ability to work with local resolution specialists and nonprofits and provides a backbone of support for the recovery of these community-lending institutions. By reducing the losses from non-performing assets, Newport further benefits the consumer, banks and all involved in the recovery process. Having successfully managed and led investment into neighborhood stabilization projects for thousands of home owners, Newport Capital stands ready to help communities find their way back to a brighter tomorrow through its lending platforms and stewardship of consumer financial literacy.

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