Measure Targets Firms Offering Services to Stop a Foreclosure Auction

Firms offering services meant to stop a foreclosure auction, or those businesses that are providing foreclosure rescue services to troubled homeowners in Trenton, New Jersey, are the topic of a current measure that was recently approved by the Legislation Assembly. The legislative bill was meant to protect borrowers from fraudulent actions committed by foreclosure rescue firms.

According to the sponsors of the bill, the legislation will provide more protection to homeowners seeking help to prevent their properties from getting foreclosed on or getting sold at Trenton foreclosure auctions. Under the measure, foreclosure rescue firms and foreclosure consultants, along with buyers of distressed homes, will be required to follow certain rules that will ensure distressed homeowners' protection.

Officials have revealed that the bill was formulated following a legal action initiated in 2008 by the Office of the Attorney General, which targeted foreclosure rescue firms and other industry professionals who have been deemed in violation of laws meant to protect homeowners who are facing potential loss of properties to New Jersey foreclosure auctions. In the lawsuit, defendants were reportedly found to have violated RICO and Consumer Fraud rules. The current measure has put in place several provisions that will make sure that such violations will not happen again.

For consultants and private firms offering services to stop a foreclosure auction, they will be required to post a Department of Banking and Insurance bond before they can conduct their operations in New Jersey. For the part of homeowners, the measure will provide them with contract rights, including having the right to demand a written contract from the consultants, which will include notice requirements and certain disclosures.

Furthermore, owners of properties up for foreclosure home auctions will have the right to terminate the consultation contract at any given time until the full service agreed upon has been delivered by the consulting or rescue firm. Consultants are also prohibited from collecting fees before the completion of the services specified in the contract and collecting an amount that exceeds what was specified in the legislation. Buyers of distressed properties are also covered in the bill, including a provision that requires them to verify the owner's ability to pay subsequent title conveyance.

According to the supporters of the bill, the measure will provide ample protection to homeowners who find it necessary to seek the help of consultants that provide services to stop a foreclosure auction. It will also prevent further fraudulent actions by rescue firms committed during the height of the foreclosure crisis.

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