New Jersey AG Files Lawsuit against 37 for Foreclosure Fraud

Such is the case of 37 industry employees, mortgage providers and other individuals who engaged in predatory foreclosure rescue operations. They were charged by New Jersey’s Office of the Attorney General with civil racketeering and consumer fraud.

According to the lawsuit, which was filed last October 15 in the Superior Court of Bergen County, New Jersey, the defendants have stolen homeowner equity amounting to around $3 million and obtained fraudulent loans amounting to $13.5 billion.

They were also charged with exploitation since they basically convinced distressed homeowners to sign over their homes to straw buyers under a “sale/leaseback” plan. Most of the homeowners were forced to give their consent out of fear of foreclosure and financial hardship.

The distressed homeowners were told that they could continue to stay on as tenants. Unfortunately, the mortgage dues remained unpaid even if the rent money was religiously collected. To make matters worse, whatever equity left on the property was stripped since none of the renewed homeownership promise was fulfilled.

For the AG, the actions of these defendants can be considered as unconscionable since they basically preyed on desperate homeowners. These troubled borrowers did not realize that by putting their trust and hope in these unscrupulous individuals, they ended up in worse shape.

Weeding out these fraud practices and exposing them to the public is vital in the protection of consumers so that they will be able to avoid becoming victims of such scams.

Nationwide, government officials and housing advocates have warned homeowners facing foreclosure against the dangers of these fake foreclosure rescue operations.

By Cassiano Travareli