The "Foreclosure Rescue Fraud Prevention Act" received final passage by both houses of the State Legislature on June 29. Designed to protect home owners who are vulnerable to unscrupulous scam artists who offer foreclosure relief, the bill (A-350 in the Assembly and S-1651 in the Senate) was initially sponsored by Assemblyman Gary Schaer (D-36), who saw many homeowners in distress become victims to would-be “foreclosure consultants.” Inevitably, the homeowners would lose the few dollars and the little assets that they had left.
Now, nearly two months after the passage of the bill, Schaer is still waiting for Governor Christie to sign it. The Assemblyman has now asked the Governor to sign the bill without delay in order to protect the beleaguered homeowners, especially now that the Supreme Court (in the Aug. 15 ruling) has given the green-light for banks to continue with foreclosure proceedings. Foreclosures had been held up, temporarily, until the courts could review predatory lending practices and confusing mortgage agreements by the banks.
Until now, the so-called “foreclosure consultants” would give the homeowners only a fraction of the value of their home, and then turn around and sell the home for a huge profit. Schaer’s bill stipulates that homeowners will receive at least 82 percent of the home’s fair market value.
According to Schaer, “We need to do everything in our power to ensure that families who can afford to stay in their homes are given a fighting chance, absent any questionable or predatory practices. It is in everyone's best interest for the Governor to sign this measure into law as quickly as possible."
The "Foreclosure Rescue Fraud Prevention Act" initially received support from Christie’s Department of Banking and Insurance. In addition, the bill was endorsed by the New Jersey Bankers Association, the New Jersey Realtors Association, the New Jersey Land Title Association, New Jersey Citizen Action, and New Jersey Legal Services.
Schaer also suggests that "New Jersey continues to be the “'Wild West' of foreclosure consulting. Hair stylists are required to undergo more government scrutiny than foreclosure consultants." In addition, Schaer points out that, “Faced with the prospect of becoming homeless, many New Jersey families are turning to foreclosure consultants and foreclosure rescue firms in a last-ditch effort to stay in their homes. Unfortunately, some of the firms are nothing more than fronts for elaborate schemes to rob troubled homeowners of their hard-bought equity."