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NEWARK
– A Superior Court Judge has determined
that a Camden County businessman committed
multiple violations of the state’s
Consumer Fraud Act (“CFA”) when
he misled homeowners in foreclosure into
believing that they needed his help in obtaining
surplus funds to which they were legally
entitled.
Surplus
funds are the monies remaining after the
foreclosure sale takes place and mortgage,
tax, and other legal obligations have been
paid. In August 2007, when the State Division
of Consumer Affairs filed its lawsuit, homeowners
in foreclosure could claim surplus funds
by filing a simple form available from the
Superior Court Trust Fund Unit and after
paying nominal fees totaling less than $100.
The process for obtaining surplus funds
has since changed and the current process
provides for a motion for release of surplus
funds to be filed by the party named in
the judgment of foreclosure with the Office
of Foreclosure.
Filed
in Gloucester County, the State’s
two-count civil complaint alleged that Samuel
E. Goodwin, III, 75, of Gloucester City,
charged homeowners up to 65% of the total
surplus funds remaining once the foreclosure
process was completed. In June 2010, the
State filed a Motion for Summary Judgment,
which the court granted in part, finding
that Goodwin violated the CFA by misrepresenting
to consumers that surplus funds could be
lost to the State. In March 2011, the State
renewed its Motion for Summary Judgment.
In
its Final Judgment and Order, the court
granted the State’s renewed Motion
for Summary Judgment:
- Finding
that Goodwin engaged in unconscionable
commercial practices in violation of the
CFA by imposing fees ranging from approximately
$5,300 to $56,540 for applying for surplus
funds on behalf of consumers;
- Permanently
enjoining Goodwin from advertising and
otherwise soliciting consumers to submit
surplus fund applications;
Permanently enjoining Goodwin from retaining
an attorney to file surplus fund applications
on behalf of consumers; and
- Permanently
enjoining Goodwin from receiving any monetary
payment derived from any application for
release of surplus funds.
“Goodwin
took advantage of homeowners going through
foreclosure, and attempted to enrich himself,
by misleading consumers in order to charge
outrageous fees,” Attorney General
Paula T. Dow said. “We remain vigilant,
and are ready to take action, against anyone
who attempts to take advantage of homeowners
facing foreclosure.”
In
addition to paying $329,198.08 in restitution
to 24 consumers, the court also ordered
Goodwin to pay $225,000 in civil penalties
to the State, plus $122,998 in reimbursement
for the State’s attorneys’ fees
and investigative costs.
The
Final Judgment and Order has been entered
as a statewide lien. The Division of Consumer
Affairs will continue its efforts to identify
any assets that Goodwin may have now, and
in the future, to be applied to satisfy
the Final Judgment and Order.
“This
defendant stole from the desperate and vulnerable
– people suffering from the anguish
of losing their homes,” said Thomas
R. Calcagni, Director of the State Division
of Consumer Affairs. “Our Financial
Fraud Unit continues its fight to protect
distressed homeowners from financial predation,
and we intend to pursue Goodwin and his
assets, so restitution is paid to those
who were deceived.”
To
learn more about spotting mortgage-related
scams, and how to find bona fide assistance,
review the information posted on the Division
of Consumer Affairs’ Web site, at
www.NJConsumerAffairs.gov/mortgage.
Deputy Attorney General Lorraine K. Rak,
Chief of the Consumer Fraud Prosecution
Section, handled this action for the State.
Supervising Investigator Jennifer Micco
and Investigator Jared O’Cone of the
Financial Fraud Unit within the Division
of Consumer Affairs conducted the investigation.
Consumers
who believe they have been cheated or scammed
by a business, or suspect any other form
of consumer abuse, can file a complaint
with the State Division of Consumer Affairs
by visiting its Web site, www.NJConsumerAffairs.gov,
or by calling 1-800-242-5846 (toll
free within New Jersey) or 973-504-6200.
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