TRENTON – Saying that “New Jersey needs to better help protect consumers from scammers preying on the financially vulnerable,” Senator Shirley K. Turner welcomed today’s Senate Commerce Committee approval of her bill to license and regulate “foreclosure consultants.”
“With the collapse of the sub-prime mortgage market, there are plenty of so-called ‘foreclosure consultants’ looking to take advantage of people desperate to keep their homes,” said Senator Turner, D-Mercer. “These hucksters promise their clients a quick fix, but more often than not just help dig a deeper hole.”
Senator Turner pointed out that these fraudulent “foreclosure consultants” are rogue operators who promise to “save your home” or “bail you out.” Many advertise their services through signs on telephone polls and highway dividers, she said.
Under the bill, S-2699, “foreclosure consultants” would be defined as debt adjustors who offer to prevent or postpone the foreclosure or loss of a debtor’s distressed property. All foreclosure consultants would be required to be licensed in the same manner as debt adjustors with the Department of Banking and Insurance (DOBI).
“Our goal here is to make sure that sure that legitimate foreclosure consultants are allowed to help people keep their homes and repair their credit while con artists are shown the door,” explained Senator Turner.
Senator Turner also said that the bill empowers those taken advantage of to sue for actual damages, punitive damages, attorney’s fees and the cost of suit.
“Often these scams will require families to sign over the deed to their home or pay a large sum of money up front. Legitimate debt adjustors will never ask for these things and we need to make sure that people who have been defrauded can recover damages from these criminals,” added Senator Turner.
The bill also would strengthen the licensing requirements for debt adjustors by allowing DOBI to require criminal or other background checks as part of the process. Additionally, the Department would be allowed to establish license eligibility criteria based on good moral character.
“The bottom line is that if you find that you are in default on a loan or facing foreclosure, make sure that any help you seek comes from licensed debt adjustors. If they are not licensed, don’t even bother to listen to their scam,” said Senator Turner.
The bill passed the Committee by a vote of 5-0. It now goes to the full Senate for their approval.