New Jersey continues to be the ‘Wild West’ of foreclosure consulting. Hair stylists are required to undergo more government scrutiny than foreclosure consultants.
– Asm Gary Schaer, Passaic
Gary Schaer says families faced with homelessness are turning to foreclosure consultants and ‘rescue firms’ in a last-ditch effort to hold onto their homes. Unfortunately, he says, some of them are nothing more than fronts for elaborate schemes to rob homeowners of their hard-bought equity. Schaer’s the sponsor of the Foreclosure Rescue Fraud Prevention Act (A-359), which passed both houses unanimously, and has been waiting for the Governor’s signature since June 29, when it got final legislative approval.
The bill requires foreclosure consultants and distressed property purchasers who contract with owners of residential properties in financial distress to adhere to certain practices in providing foreclosure prevention services to owners.
Among the bill’s provisions are some rules for short-sales. In short-sales, the generally accepted percentage banks try to recoup is 82% of the fair market value. Schaer’s legislation advocates parity; that vulnerable homeowners should get the same renumeration as the big banks. He calls this a necessary protection, given that many property owners have received just pennies on the dollar for their distressed property – and sometimes nothing at all.
In December, NJ Supreme Court Chief Justice Stuart Rabner ruled that 6 of the state’s biggest lenders had to demonstrate they were treating homeowners fairly during foreclosure proceedings. The order slowed filings in the first half of this year to a near halt. A ruling Monday in NJ Superior Court allows many of the state’s biggest mortgage providers to continue with foreclosure proceedings.
A lot of New Jersey families are living on the brink. It’s obviously in the best interest of the state to tighten up regulations that impact anything as serious as foreclosure. The bill’s been sitting on Christie’s desk for weeks. New Jersey Citizen Action and NJ Legal Services both back it. Support’s also come from the NJ Bankers Association, NJ Realtors Association, and NJ Land Title Association. The NJ Department of Banking and Insurance has urged legislators to sign it. Christie should either sign it, or come up with reasons why not.