Foreclosed properties THH_0068.jpg

Gutters are falling off a foreclosed home last year. A new New Jersey law allows municipalities to punish creditors who don't fix code violations.

(South Jersey Times File Photo)

Foreclosed homes with 10-inch-high grass and peeling paint are a nuisance to neighbors and a hassle for officials to get cleaned up.

That's why mayors in Warren County say they're receptive to a new state law that permits municipalities to punish creditors who don't fix code violations within 30 days of getting notice. New Jersey Gov. Chris Christie signed the bill into law last month. It earned nearly unanimous support in both chambers of the Legislature.

Assemblymen

and

, both Republicans whose 23rd District covers parts of Warren and Hunterdon counties, were the only two lawmakers to vote against the bill's passage.

While the measure was well-intended, Peterson said, he believes it has the potential to create new problems and was a reaction to the mortgage crisis that created a spike in foreclosures.

"We've really taken a sledgehammer to a problem that didn't really need a sledgehammer," he said. "It could have been done another way."

The law mandates that creditors have an obligation to maintain abandoned properties, Peterson said, but does not give banks the legal right to come onto a property. A bank has no legal right to a home simply by filing a foreclosure notice, he said.

"We're doing it without the offer of immunity from what essentially becomes trespassing," Peterson said.

The state has already given municipalities the authority to maintain or secure properties and collect a charge for the work once it's sold, Peterson said. Local officials are capable of handling the work and are far more familiar with the condition of properties in their own municipalities, he said.

"The lender doesn't even know the property is abandoned until it's notified of a foreclosure," Peterson said.

The law also creates a financial liability that lenders never would have accounted for in a mortgage, Peterson said. He fears the prospect of having to maintain an abandoned property could increase the cost of borrowing in the state.

"Maybe banks charge a quarter point more in New Jersey because of the risk," Peterson said.

Hackettstown Mayor Maria DiGiovanni said officials changed their ordinance about a year ago to give property owners 10 days instead of 30 to fix an issue. She said she knows banks or mortgages don't like getting a home back, because then they have to maintain it. The town's attorney will need to review the new law addressing homes that have been "let go," she said.

"It's helpful, because someone has to be responsible for that property," DiGiovanni said. "No town wants to see that, because it does demean the neighborhood and the town. ... You have to respect the people around you."

DiGiovanni said she's noticed neighbors are diligent about picking up the errant weekly newspaper, but the problems can escalate. Mosquitoes lay eggs in rainwater that gathers in swimming pools, and rodents make their home behind the bushes.

Phillipsburg Councilman Randy Piazza Sr. said he saw the problem firsthand at no fewer than 10 properties when he campaigned in November in the Delaware Heights section of town. The upkeep issues gave away that the homes were clearly vacant, he said. He said he would need to check with the town attorney before weighing in on the new law.

Residents who see a property in "dire need of attention" can call the inspections department to have an inspector examine the property and notify the owner, he said. Overgrown grass is the issue at foreclosed houses, he said, and the unsightly properties seem to be a big issue with a lot of residents.

"We need to get a grasp on that situation," he said.

Greenwich Township Mayor Joseph Tauriello said foreclosures have concerned him for the past three years. That's why he advocated a change to the local ordinance to no longer require a nurse or doctor on the township's board of health. Instead, the municipal engineer can undertake inspections and start the condemnation process on homes that have been abandoned for so long banks don't want to buy them.

Tauriello said he welcomes any state law that will help municipalities deal with foreclosed properties that aren't maintained. If lending institutions claim ownership of a property, they should take on the owner's responsibility of maintaining it, he said.

"That is a practical approach to at least addressing cosmetic maintenance," he said. "It's not really fair to the surrounding residents, who are maintaining their properties to keep their values up."

New Jersey editor Edward Sieger contributed to this report.