Legal Issues Slow Foreclosures
In a small Bergen County courtroom one recent Friday, a sheriff’s officer auctioned off two foreclosed properties in a matter of minutes, as a handful of investors kept their eyes open for bargains.
It was a far cry from the typical sheriff’s auction of mid-2010, when 15 or more properties were auctioned weekly and up to 100 investors crowded the courthouse’s large jury room.
Sheriff’s auctions are among the most visible symbols of the housing crisis, which left many homeowners saddled with mortgages they couldn’t afford. But foreclosure auctions have slowed dramatically since questions arose more than a year ago about “robo-signing” — that is, sloppy paperwork by mortgage lenders and servicers.
Though lenders were given the go-ahead in August to start foreclosing again in New Jersey after showing a judge they were following the rules, they have been slow to resume activity.
The reason: an August appellate court decision, Bank of New York v. Laks, according to Kevin Wolfe, head of the state’s Office of Foreclosure. In that case, the court dismissed a foreclosure, finding the lender violated the state Fair Foreclosure Act because it didn’t properly identify itself in a notice sent to the troubled homeowners.