Tuesday, July 12, 2016

Foreclosures and Student Debt

An idea I had when running for NJ State Assembly was to help graduates carrying college debt and help them purchase a foreclosed home. It would help or eliminate the student loan, generate tax revenue, reduce the glut of foreclosures, and help stabilize the prices of existing homes.

There is a problem with foreclosures in New Jersey, and a problem with students who are struggling to pay them off and purchase a home. Perhaps there is a way to resolve both situations and turn it into a positive for New Jersey. I would look at this as a win-win for the graduates and the housing foreclosure market.

As an example, if a foreclosed home that was worth $450000 is now valued at $200,000 and a college graduate has a debt of $100,000, perhaps combining the two into a $300,000 mortgage. Most banks would look at the student debt as an obligation against qualifying for a mortgage loan.

However, the student could only qualify for a foreclosed home, not a new home or typical mortgage. This would possibly help eliminate empty homes in foreclosure, help stabilize home prices and give a graduate the opportunity to own a home. By using this method, they would be able to pay down both loans at the same time.

By the time many students pay off their loan and qualify for a home, their kids would be going to college.

If the student defaults on the mortgage, it would not eliminate their student debt. Perhaps it could be set up where a percentage of the mortgage goes toward the principle of the student’s debt. Another possible option would be able to pay off the $100,000 student loan and carry a $300,000 mortgage.

If the college graduate can show some kind of collateral or promise of a job in a certain field...such as a doctor, a lawyer, engineer, etc . . . . a certain income level, it would be much better to have a family in the house than for it to stay empty in the foreclosure process.

They would not be entitled to any discounts or incentives, and would still have to meet the same requirements that any other home buyer would qualify under. There would be no student loan debt forgiveness.

I have heard that some banks are thinking of selling their foreclosures to investors who would rent them out. That would hurt neighborhoods substantially, as the investors really do not care about the neighborhoods and are only looking to receive a monthly income. Perhaps an idea like this would help prevent that from happening.

Countless foreclosed homes are being stripped of their copper pipes etc. while they sit empty, or taken over by those that do not belong there. Numerous homes are bought in NJ by investors, who live out of the state and then rented out, and as long as the rent is paid they investors don’t really care who lives in them. Perhaps this could be a win-win for everyone. Many banks do not want to keep the growing list of foreclosures and are thinking of selling them off to investors who have no interest in the neighborhood other than monetary gain.This may not be a perfect plan, but I haven’t seen any other solutions or ideas. This could be a starting point to help resolve the foreclosure and student debt issue. Moreover, perhaps an even bigger plus it would keep graduates from leaving the state and losing another valuable asset.

A tax ratable for the state!

This is what I call innovative thinking and perhaps putting New Jersey back on the map.
I realize one is a Federal loan and the other is a state loan, but there must be a way this can be worked out to benefit all.

Instead of taxing people to no end, let’s start thinking outside the box on bringing revenue into the state coffers.

Thursday, June 23, 2016


State Democrats have advanced on a $35.3 billion state budget with two tax increases that would more than double the money for government workers' pensions next year . . . by raising income taxes on millionaires and corporation business taxes.
Since 1996, governors from both parties have been underfunding the system and using it to balance the budget.
In 2006, the sales tax increased from 6% to 7% and was to generate $1.2 billion in revenue. Under the Corporation Business Tax, a 4 percent surcharge had been placed on what businesses owe to help generate an additional $100 million for New Jersey.
New Jersey’s property taxes in 2010 had increased by more than 70 percent from the previous 10 years.
Between 2003 and 2010 there were 115 tax increases and that still didn’t generate enough revenue.
In 1997, the energy surcharge fee was created, was to have been phased out but was kept to generate $53.5 million for the state in 2006, and to this day, it is still in effect.
Did you know that as a New Jersey resident a portion of your utility bill pays for state facility utilities and energy costs at New Jersey Transit?
The New Jersey Office of Legislative Service projected that for typical residential customers, for each household that surcharge runs about $73 a year on their electricity bill and about $89 annually on their gas bill. New Jersey’s proposed budget for 2017 includes a reallocation of $112 million from the Clean Energy Fund to pay for several of New Jersey government’s utility bills . . . A portion of your utility bill goes towards balancing the state budget!
More often than not, NJ government mismanages our money and then pushes the consequences of their actions back onto the taxpayers. I didn’t bankrupt the pension fund, I didn’t bankrupt the state’s transportation fund . . . but all we hear is how we must tighten our belts and dig deeper to fix their errors.
Now, New Jersey Democrats want raise the gas tax to fund the Transportation Trust Fund, once again placing the burden on its citizens. Already we are being lied to. The gas tax was supposed to have been 'only' 23 cents and that is not the case. The public was not told of all the hidden add-ins built into the bill.
The states drivers will be paying close to 40 cents per gallon or more, it is not a fixed tax and will increase as gas prices escalate. Not one of our representatives have said it would be a dedicated fund to be used only for infrastructure costs.
Another tax that will escalate . . . if one refinery goes dark, that tax will rise faster than the morning sun.
We, as the people of this state already paid for the TTF . . . misused and mismanaged we are being asked to fund it a second time with no guarantees that it will not be used to balance another shortfall somewhere else.
Unless we hold our elected leaders responsible for their actions . . . leaders supposedly elected to look out for our interests, we will continue to roast ourselves over a self-perpetuating fire pit.
The more money government collects . . . it will find a way to spend it, creating more of the same mess it claims it is trying to fix. Any money they do collect goes towards paying off the bonds from the prior year. The shell game is in play; we are being hoodwinked and bamboozled at what cost?
I for one am tired of having my pockets siphoned to fill the states endless money grab at my expense while paying for their self-interests at the same time.