The New Jersey state Senate narrowly passed a bill Monday giving the state the ability to buy vacant, previously foreclosed homes and resell or rent them out.
State Sen. Raymond Lesniak, D-Union, introduced the New Jersey Residential Foreclosure Termination Act in February.
The bill forms the New Jersey Foreclosure Relief Corp., a new state government body that would acquire, sell and rent the properties buy selling an uncapped amount of bonds. It will also issue an annual report about foreclosure activity in the state and produce financial statements of its own transactions.
If a city in New Jersey buys a foreclosed property and it sits vacant for at least 180 days, the N.J. Foreclosure Relief Corp. would take control of it.
State legislators removed a controversial section of the bill that some opponents said would have required cities to commit many of the properties to those with special needs, which included ex-convicts and recovering drug addicts.
Instead, it gives affordable housing credits to these cities based on the number of homes rented out or made available to low-income dwellers.
The corporation would also use money to pay contractors for maintenance and other costs.
Foreclosure filings dropped to 58,000 in 2010 from 66,000 the year before as major mortgage servicers froze the process to correct mishandled documentation. According to RealtyTrac, filings in May were up 85% from one year ago.
But there remains an inventory of roughly 100,000 foreclosure cases still pending in the judicial system, according to the bill.
A spokesman for Gov. Chris Christie did not immediately reply when asked if the governor intended to sign the bill.