There may be some good news for Garden State residents on the verge of losing their homes. A bill to establish a three-year "Mortgage Assistance Pilot Program" has been approved by the Assembly Appropriations Committee.

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"New Jersey has the fourth highest foreclosure rate with about one in every 553 housing units having foreclosure filings," said bill co-sponsor Assemblyman Troy Singleton (D-Mount Laurel).

New Jersey is also one of the few states in the nation where the foreclosure percentage rose over the past year. Under the bill, homeowners in default on a mortgage owned by the New Jersey Housing and Mortgage Finance Agency (HMFA) could lower their monthly payments by transferring a portion of the equity in their home to the agency.

"The state of New Jersey, in order to help folks reduce their payments, is basically going to become investors in their home. By becoming investors in their home the state will lower a mortgage rate for someone and allow them to stay in their home," Singleton explained.

The transferred equity wouldn't have to be paid until the home is resold or over a 10-year period starting after the restructured mortgage is paid off. A homeowner who qualifies would have to remain the owner of the property for at least five years but, if an owner sells the property in less than five years, an additional five percent of the sales price would be forfeited to the HMFA.

"What we want to see is families staying in homes, stabilizing neighborhoods so they can sort of move through this rough patch," Singleton said.

The bill now awaits a vote in the full Assembly.