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Edited by: TJVNews.com
In a move that highlights ongoing tensions between local authorities and state legislation, Ocean County will resume its sheriff’s sales on September 3 after a brief hiatus. According to a report in The Asbury Park Press, this decision comes amid contentious debates surrounding the Community Wealth Preservation Act (CWPA), a law designed to support homeowners in foreclosure but which has sparked controversy among investors and other stakeholders.
Enacted in January, the Community Wealth Preservation Act seeks to address two pressing issues in New Jersey’s housing market: the plight of homeowners facing foreclosure and the scarcity of affordable housing, as was reported in The Asbury Park Press. The legislation introduces several key provisions aimed at mitigating the effects of foreclosure:
Priority Purchasing Rights: Homeowners facing foreclosure, their next of kin, and tenants are given the first opportunity to purchase their homes at the “upset price”—the minimum price the lender is willing to accept. This provision is intended to allow residents to remain in their homes or keep properties within their families.
Second Chance for Non-Profits: If the primary parties do not bid on the property, non-profit community development corporations are given a second opportunity to purchase the home, bypassing private investors. This aspect aims to increase the availability of affordable housing through community-based organizations.
Favorable Terms for Certain Buyers: The law also provides these priority groups with lower down payment requirements and extended timelines to secure financing compared to private investors. This is designed to make homeownership more accessible and sustainable for those who might otherwise be excluded from the market.
Ocean County Sheriff Michael G. Mastronardy initially paused sheriff’s sales due to concerns over the implementation of the CWPA. As was indicated in the APP report, the sheriff’s office, responsible for conducting these sales, faced uncertainty about the law’s impact and the potential legal ramifications of continuing sales under the new framework.
Sheriff Mastronardy’s meeting with the law’s main sponsor led to the decision to resume sales, albeit with caution. His approach reflects a desire to comply with the new regulations while also addressing concerns about potential legal challenges or the constitutionality of sales under the CWPA. The report in the APP noted that the sheriff’s office aims to avoid complications that might arise from sales being contested after the fact, which could result in properties being reclaimed or sales being vacated.
Investors have voiced strong objections to the CWPA, arguing that it creates opportunities for fraud and undermines the foreclosure market. The APP report observed that they believe that the law disproportionately favors homeowners and non-profits, potentially sidelining investors who traditionally play a significant role in acquiring distressed properties and revitalizing them.
Critics argue that the law’s provisions could lead to several negative outcomes:
Increased Risk of Fraud: By prioritizing certain buyers with less stringent financial requirements, there are concerns that some may exploit loopholes in the system, leading to potential fraud or misuse of the law’s provisions.
Negative Impact on Families: While the CWPA is designed to assist families, some investors argue that the law’s structure could inadvertently harm the very individuals it aims to protect by creating a less competitive market and potentially increasing overall costs.
Market Disruption: The shift in priority from private investors to homeowners and non-profits could disrupt the foreclosure market, reducing the availability of properties for investment and potentially driving up prices for remaining inventory.
