2nd Ward councilman Mohammed Akhtaruzzaman’s two homes in Paterson and Totowa are going through foreclosure, according to public records.
Akhtaruzzaman said the properties were overvalued and underwater leading to the foreclosures of his home on Carlisle Avenue in Paterson and Jefferson Place in Totowa.
“I’m in the modification process,” said the councilman last Friday when asked about his two properties. He said his Paterson home was purchased for $322,000 in January 2005. The property was assessed at $179,900 by the city in its latest property revaluation, according to municipal records.
Akhtaruzzaman indicated the property is underwater to such extent that he will not be able to salvage even $250,000 out of the property.
Similarly, he purchased his home in Totowa for $465,000 in October of 2006, according to records from the borough. He said the property in today’s market is worth less than half of what he purchased it for nearly a decade ago.
“Right now it’s a lot of money,” said Akhtaruzzaman suggesting his homes are severely underwater. Both homes were purchased at the peak of the American housing market.
Akhtaruzzaman does not owe any taxes on the Paterson property, according to city officials. He does have an outstanding lien on the property, according to the tax office. His mortgage company is responsible for paying taxes on the Carlisle Avenue home.
Akhtaruzzaman does owe $488 in sewer fees, according to the city. “It’s not a large sum to be alarmed about,” said Eddie Gonzalez, who is running against the councilman in the May municipal elections.
The councilman said he overlooked the sewer bill and will pay the outstanding balance.
Gonzalez sympathized with the councilman. He said the foreclosure problem has plagued his own neighborhood – the Hillcrest section in the 2nd Ward. He said many of his neighbors have yet to recover from the housing bust.
“I don’t think he’s actually in foreclosure,” said Gonzalez. He said an individual has to miss payments and fall behind in their mortgage in order to even be considered for a principal modification from their lender.
Akhtaruzzaman said the mortgage companies were not budging when the payments were being made on a timely basis. “They were not going to give me modification,” he said. “I didn’t have any other options.”
Shahin Khalique, another man who is attempting to take over Akhtaruzzaman’s council seat, could not be reached for comments on Friday morning.
Akhtaruzzaman on Friday afternoon said he received modification papers from the bank for his Paterson home. He said the process was completed.
The councilman is not alone in struggling with underwater homes. There are 1,935 properties in some stage of foreclosure in the city, according to RealtyTrac, a real estate trend tracking website.
A groundbreaking foreclosure relief program opened last October to assist city homeowners who have underwater mortgages. The Stabilizing Urban Neighborhoods (SUN) Initiative run by Massachusetts-based nonprofit Boston Community Capital works with a homeowner’s mortgage company to purchase the home and then convey it back to the homeowner.
The homeowner receives a 30-year fixed mortgage at 6.3-percent interest rate. The nonprofit says the principal and monthly payment are reduced by 40-percent or more. The organization is targeting city homeowners who are struggling to make payments on their underwater mortgages.
The program is available to all New Jersey residents.
Homeowners interested in learning more about the SUN Initiative in New Jersey can dial toll-free at 855-604-HOME (4663), via email at [email protected], or on the web at http://www.bostoncommunitycapital.org/foreclosure-relief.