Tuesday, October 21, 2008

Prosecuting NJ Foreclosure Schemes

There were numerous mortgage scams that occurred during the Great Housing Bubble. Now that we have entered a massive foreclosure phase there are scams in this part as well. Right now prosecutors are trying to prevent a rise of foreclosures due to scams. People think they are getting help in trying to save their homes instead find themselves broke and out on the streets. It is even sadder when it happens to some of societies most vulnerable - one victim was both sick and elderly. At least the people who perpetrated some of the crimes are being prosecuted for their crimes. In today's Star Ledger there is an article titled State accuses firms of running predatory 'foreclosure rescue' schemes. Lets take a look -

Forty-eight New Jersey property owners have lost more than $3 million in home equity through "foreclosure rescue" schemes operated by Vest Financial and JP Global Property Management Inc., according to civil lawsuits filed by the state Attorney General's office.

The lawsuits accuse the two companies, as well as 37 mortgage loan providers, mortgage industry employees, lawyers and others of violating the state's Consumer Fraud Act and the Racketeer Influenced and Corrupt Organizations Act. The state is seeking restitution for the property owners, penalties and permanent bans to keep them offering similar schemes to others.

A second victim was a senior citizen who, following her husband's death, missed several payments on the Bergen County home where she had lived for 25 years. She went in December 2006 to Vest Financial, which told the woman she could enter into an agreement that would guarantee her the same payments each month as well as $30,000 for outstanding medical bills.

What the company never told her was that it was going to sell the property to a third party in a deal that stripped $87,000 in equity from the home -- leaving her with only $12,000 for the medical bills, according to the lawsuit. It pulled off the scheme by providing an attorney for the woman who never explained the property sale to her.

"The distressed homeowners are left in a far worse position than they were in before," the lawsuit states. "Not only must they leave their home, but they cannot even sell their homes and benefit from the equity that had accrued in their property over time."

The story sounds awful - taking advantage of a sick, recently widowed senior citizen. Could this group find a more sympathetic victim? Hopefully there will be some kind of intervention so this woman can keep her property. The housing crisis is already hard enough - adding a new level of victimization will make it even harder. Hopefully an aggressive prosecution will prevent foreclosure fraud from becoming epidemic.

1 comment:

Bobby said...


Awesome foreclosure information, thanks a lot for sharing the resource...