N.J. Examining Whether Companies
Committed Fraud in Foreclosure Filings
NEWARK – The Office of the Attorney General, through the Division of Consumer Affairs, is assessing whether the state’s Consumer Fraud Act has been violated by companies that have admitted to not properly reviewing, factually verifying and signing foreclosure filings submitted to the courts.
New Jersey has asked mortgage companies to provide documentation on how they have performed foreclosure filings. The state also has contacted the National Association of Attorneys General to discuss collaborative efforts.
“I’m concerned that what some are calling ‘shortcuts’ in the filing process may in fact be a systemic pattern of fraud committed in our state court system,” Attorney General Paula T. Dow said. “These companies have a legal obligation to follow procedures before they attest to the facts.”
Ally Financial, formerly known as GMAC Mortgage, announced two weeks ago that it was imposing a moratorium on foreclosures in 23 states, including New Jersey, after disclosing that its employees routinely signed off on foreclosure affidavits without properly reviewing them or verifying their accuracy. JP Mortgage Chase and Bank of America have since announced similar halts to foreclosure proceedings.
“I’m asking all mortgage holders who are in the foreclosure process to pause, review their procedures, and ensure that all statements that they attest to are, in fact, properly reviewed and confirmed as being accurate,” Attorney General Dow said. “New Jersey homeowners who are facing the trauma of foreclosure and eviction are entitled to no less.”
In New Jersey, foreclosure actions must be supported by an Affidavit of Amount Due, which establishes the identity of the mortgage/note holder and information concerning the default.
“We want to know what past practice has been, and if we find the Consumer Fraud Act has been violated, we expect the companies to reform their business practices and to help any affected homeowners,” said Thomas R. Calcagni, Acting Consumer Affairs Director. “The large number of mortgage defaults and foreclosure procedures that have occurred is no excuse for denying borrowers due process.”
The Division of Law is working with the Division of Consumer Affairs on this matter.