Jim Johnson Slams Phil Murphy’s Foreclosure Plan As An Out-Of-Touch Wall Street Scheme

Notes That It Does Nothing to Keep NJ Families in Their Homes and Rewards Banks that Caused the Crisis

NEWARK — Today, Democratic gubernatorial candidate Jim Johnson slammed former Goldman Sachs executive Phil Murphy’s plan to fix New Jersey’s foreclosure crisis as an out-of-touch Wall Street scheme. As Governor, Murphy would use federal mortgage settlement funds to purchase foreclosed homes and “repurpose” them as affordable housing. This isn’t a serious plan — it’s another Wall Street gimmick.

In his plan, Murphy would take the money that Wall Street paid as a penalty for causing the housing market crash and give it right back to them by buying New Jersey’s foreclosed homes. Instead of using settlement funds to keep families in their homes, Murphy would take homes away from New Jersey foreclosure victims. This plan not only hurts New Jersey homeowners, but also doesn’t provide support for underwater homeowners, reform our foreclosure system, or encourage developers to build more affordable housing. This plan solely benefits the banks that created the crisis.

“Just like his days at Goldman Sachs, Phil Murphy is betting against American families. Murphy’s ‘plan’ to solve our highest-in-the-nation foreclosure rate is to take homes away from foreclosure victims, while rewarding the banks that put us in this disaster in the first place,” said Johnson. “This ‘plan’ is the epitome of a Wall Street solution to a Main Street problem. It puts a band-aid on our foreclosure crisis, while exacerbating the plight of the thousands of New Jerseyans who worked hard to buy a home, only to have them ripped away by big banks and special interests.”

“Phil Murphy’s affordable housing plan doesn’t build a single unit of affordable housing. Instead, it preys upon those who fell victim to Wall Street that crashed the housing market.  Robbing Peter to pay Paul might be standard operating procedure at Goldman Sachs, but it’s not a solution to the foreclosure crisis in New Jersey,” continued Johnson.

Goldman Sachs started betting against families keeping their homes in 2003, during Phil Murphy’s tenure as senior executive. Not only did Goldman Sachs help create the housing market crash, but it made billions off of it by selling back the subprime mortgage-backed market. Goldman Sachs and Phil Murphy profited off of American families losing their homes.

“When I was twelve, I came home to a foreclosure notice on my parent’s door. I will never forget the feelings of shame and fear that I felt on that day. My parents worked hard to buy that home — the same home that my mother still lives in. For my parents, buying a home, and then saving that home, was an integral part of achieving the American Dream. This gimmick shows that Phil Murphy is out of touch with the needs and desires of everyday New Jerseyans.”

Johnson has developed a five-part foreclosure crisis plan for those families that have had similar experiences to his own. His plan includes creating a Mortgage Assistance Program and a Foreclosure Mediation Program to help homeowners negotiate down their debt. Johnson has also called for a Community Housing Counseling Program that works with nonprofits and other state agencies to give families the best possible opportunity to stay in their homes. Additionally, as Governor, Johnson will reform “Arm’s Length” real estate laws, expand legal assistance to foreclosure victims, and offer rebates for maintenance costs on homes undergoing foreclosure.

Read Johnson’s full housing plan here.