New Jersey 101.5 FM Radio

New Jersey Joins Probe Of Mortgage Companies

New Jersey 101.5 FM Radio — Thursday, October 14, 2010

By Martin Di Caro

New Jersey is among 49 states, Alabama is the lone exception, launching a joint investigation of mortgage companies that are accused of illegally foreclosing on hundreds of thousands of homes. Bank employees processed thousands of foreclosure forms without reading the documents, authorities said, among other questionable practices.

On its website, the office of the state Attorney General said it had asked mortgage companies to provide documentation on how they performed foreclosure filings in an attempt to determine if fraud occurred.

"This is fraud. This is illegal," said Phyllis Salowe-Kaye, the executive director of New Jersey Citizen Action, a consumer watchdog group that applauded the state's decision to join the nationwide probe.

Several large banks have said they stopped the shady foreclosure practices after evidence of wrongdoing emerged, but some lenders maintain they have done nothing wrong.

"We've had instances where our clients would get into court and we would discover that the entity that was foreclosing on the property actually didn't have title to the property," Salowe-Kaye said. "One person from one financial institution has publicly stated he signed 8,000 documents a day without ever reading it. We also wonder if foreclosures are actually stopping even by the entities that have agreed to stop, and we don't know if that means if new foreclosures are not being filed."

Salowe-Kaye said the state Attorney General should not stop with large banks. Smaller lenders should also be scrutinized, she said. "We need an aggressive Attorney General to make sure that all foreclosures, all sales, and all new filings are held off so this can be properly investigated."

"For too long financial institutions have been unregulated, allowed to run roughshod."

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