TRENTON – The Senate Commerce Committee approved legislation today sponsored by Senator Shirley K. Turner that would regulate so-called “foreclosure consultants.”
“The United States’ recent foreclosure crisis has led to a jump in the number of people looking to make a quick buck as ‘foreclosure consultants,’” said Senator Turner, D-Mercer. “Too many families struggling to keep a roof over their heads and get by are getting taken advantage of, and there’s a clear need to weed out the con artists from those who can legitimately help families keep their homes.”
Senator Turner offered a piece of advice, “If you see someone advertising on telephone polls, do your research first and make sure that person is properly licensed and credentialed before hiring them.”
The Senator’s bill, S-1264, would define “foreclosure consultants” as a debt adjustor who directly or indirectly makes a solicitation, offer or representation to prevent or postpone the foreclosure or loss of the debtor’s distressed property. Additionally, the foreclosure consultant would need to be licensed with the Department of Banking and Insurance (DOBI) as a debt adjustor.
As part of the licensing process, the bill would allow DOBI to conduct criminal and other background checks. Licensing could be denied to those individuals found to not have good moral character.
“There are many legitimate non-profits that help countless people save their homes, pay off their debts and restore their credit. The new licensing requirement would help differentiate between them and those who look to profit from the financial problems of others,” explained Senator Turner.
The bill would also allow any debtor financially harmed by an unlicensed foreclosure consultant to sue to recover actual damages as well as punitive damages, attorney’s fees and the cost of the suit.
“There have been many cases reported by those facing foreclosure that illegitimate consultants have made empty promises while taking their homes and equity and further damaging their credit. People need to be able to seek damages against these people who are literally stealing the rug from under them,” added Senator Turner.
The bill passed by a vote of 3-0 and now goes to the full Senate for consideration.