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Senate committee hears lenders’ concerns over Community Wealth Preservation bill (Senate Bill 44 70)
Summary
Senate Community and Urban Affairs Committee heard extensive testimony on Senate Bill 44 70, which would revise oversight of the Community Wealth Preservation Program; bankers warned it could harm HELOC lenders and borrowers, while the sponsor said amendments return administration to DCA and add nonprofit eligibility safeguards.
The Senate Community and Urban Affairs Committee on Monday took testimony on Senate Bill 44 70, a proposal to revise oversight of the Community Wealth Preservation Program and tighten requirements for nonprofit community development corporations.
Michael Lefuso, representing the New Jersey Bankers Association, said the bill as written could harm home equity lines of credit and reduce borrowers’ ability to borrow. “We are concerned that if this bill continues as it is without any type of concession on home equity lines of credit, that it will negatively affect the ability of folks to borrow,” Lefuso said, urging clearer notice and a lender role in foreclosure-related processes.
Britney Wheeler, a colleague of Lefuso’s, told the committee HELOC lenders historically had an opportunity to bid and be listed as subordinate creditors; she said those procedural protections are not clearly preserved in the current draft and asked for a “seat at the table throughout the process.”
Ken Murphy of the Azita Group, speaking on behalf of Auction.com, said two problems remain: the risk that debtors could lose equity in their property, triggering potential litigation such as a “Tyler v Hennepin” challenge, and the lack of a mechanism to handle multiple nonprofit bidders. “When you have multiple nonprofits competing, there’s not a section dealing with that issue,” Murphy said.
Housing advocates voiced support. Matthew Hirsch of the Housing and Community Development Network of New Jersey said the bill is important but urged clearer implementation guidance for county sheriffs and local officials, recommending stronger enforcement oversight and a handbook for implementers.
Senator Timberlake, the bill’s sponsor, said the measure has evolved over seven years and that recent amendments return administrative responsibility to the Department of Community Affairs (DCA) or the New Jersey Housing and Mortgage Finance Agency (HMFA) rather than leaving it with county sheriffs. Timberlake said the bill also narrows nonprofit eligibility to organizations with demonstrated affordable-housing experience and adds bid-opening rules to protect homeowner equity. “This bill was written to help homeowners be able to save their wealth,” she said.
Supporters at the hearing — including Fair Share Housing Center — argued the program should keep property in community hands rather than allow private investors to purchase affordable properties. Opponents and technical commenters asked the sponsor to work with lenders, auction platforms and title insurers to resolve concerns about chains of title, notice procedures and the potential for exceptions on title insurance that could delay transactions.
The bill was taken up as a “discussion only” item with the sponsor present; committee members and witnesses said they expect continued negotiations before the measure returns for final action.
