Predatory Lending Warnings for Foreclosure Victims
According to the Asbury Park Press, shady real estate players have given bad deals to unsophisticated Ocean County residents trapped in foreclosure proceedings. Steve Mecka, an investigator with the Ocean County Prosecutor's office, warned that such real estate players will be prosecuted if they are out of line. The Prosecutor's Office has been working with the Sheriff's Department and other county offices to alert foreclosure victims about predatory lending practices.
Mecka and Undersheriff Wayne R. Rupert describe the scams as a victim facing foreclosure being contacted by self-proclaimed real estate investors who tell him that they will bid on his house in a foreclosure sale, and offer the victim $3,500 to sign an agreement to transfer the property to them. The victim then contacts the Sheriff's department, who administers foreclosure sales, and is told that there was extra money available to him left from the sale, after the mortgage lender's debt was satisfied. The surplus was $43,000, which the victim was able to get back through the Superior Court Trust Fund Division, with the help of a lawyer who got him out of the $3,500 contract he had signed during the three-day reconsideration period.
Since January 2006, county officials have been using a two-step warning system to help homeowners going through foreclosure to know their rights. Such warning notices are mailed at the time the property is posted for sale, and immediately after the sale, which specifies that homeowners can get a surplus as described above.
Although some third party bids to pay off foreclosures are legitimate, such as a new lender or family member stepping in to help a homeowner reorganize finances, there are other predators waiting to take advantage of ill or uneducated property owners.
Currently, only Ocean County is utilizing the warning notice effort. However, according to county officials, state Assemblyman, James W. Holzapfel, is sponsoring legislation that would require all 21 New Jersey counties to adopt the system.