New Jersey’s Looming Foreclosure Crisis

As long as NJ allows major lenders to file documents using a private electronic system, there’s no way of achieving a transparent review process

“I’m not surprised [investigators] would find a high percentage of irregularities, even fraud,” said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, which counsels people fighting foreclosure.

But E. Robert Levy, executive director of the Mortgage Bankers Association of New Jersey, cautions against overreacting. He warns that the clerks and others need to be careful not to confuse irregularities in the handling of documents with fraudulent loan practices.

Salowe-Kaye’s clients often question foreclosure measures, but have limited financial resources to challenge them, she said. As a result, it is possible for a lender to take a home through foreclosure although it may not properly hold title to the property, she said.

“I’m not at all surprised that’s what they’re finding,” said Union County Clerk Joanne Rajoppi. “That’s what they found in Massachusetts and other places where they’ve looked at it.”

In December, Massachusetts Attorney General Martha Coakley sued the five largest mortgage lenders, Ally Financial (GMAC), Bank of America, Citibank, JP Morgan, Chase and Wells Fargo, alleging that they have failed to comply with her state’s property registration laws.

The difference in New Jersey is that no government agency has undertaken a similar audit, said Salowe-Kaye. San Francisco authorities “are to be commended for their seriousness in performing their own study” instead of accepting certifications from the banks, she said.

Full report here…

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4closureFraud.org