TRENTON – A bill to help protect homeowners from foreclosure “rescue’’ schemes has been signed into law.
A359, whose sponsors include Assembly Democrats Gary S. Schaer, John J. Burzichelli, Bonnie Watson Coleman and Wayne P. DeAngelo, requires foreclosure consultants and purchasers of distressed properties to abide by regulations designed to protect the homeowner.
Among other things, the law requires a foreclosure consultant to post a bond with the Department of Banking and Insurance before conducting any business in the state.
In addition, the law provides contract rights for owners of a financially distressed residential property who contract with foreclosure consultants, including requirements that:
The contract for foreclosure consulting services must be in writing and must contain certain disclosures and notice requirements in 14-point boldface type;
And the owner has a right to cancel the foreclosure consulting contract at any time until after the foreclosure consultant has fully performed every service and secured the relief the consultant contracted to perform.
The measure stems from 2008 legal action initiated by the Attorney General against numerous foreclosure rescue companies and mortgage loan providers for violating the state’s Consumer Fraud and RICO acts. The action led to a temporary moratorium on foreclosures by some of the state’s biggest lenders until an August Superior Court ruling allowed many of them to resume.
The measure was supported by the New Jersey Bankers Association, the New Jersey Realtors Association, the New Jersey Land Title Association, as well as consumer watchdog groups such as New Jersey Citizen Action and New Jersey Legal Services.
“A person’s home is the single biggest purchase they will make and the single biggest investment they have,” Watson Coleman said in a release. “These scam artists know that and are intent on dangling false hope to homeowners teetering on the brink of financial collapse while taking them for literally everything they’re worth.”