Episode 13 FCRT NJ Payday Loan Divestment Discussion with NJCA’s Beverly Brown Ruggia

January 28th, 2016 by

The guest today on the podcast is Beverly Brown Ruggia who oversaw the payday loan divestment project for NJ Citizen Action. We are following up on a press release that appeared yesterday 1/27/16 : Victory for NJ Consumers and Pension Holders State Divests Pension Funds from Illegal Payday Lender (Note: Originally discussed this story on May 6, 2015 in the post “New Jersey Must Cut Links to Unscrupulous Payday Loan Company”. This piece was also published as an Op-Ed in NJ Spotlight on April 30, 2015, under the same title, “Op-Ed: New Jersey Must Cut links to Unscrupulous Payday Loan Company.“)

The news that the State of New Jersey is officially divesting its money from funds that own shares in payday loan firm Ace Cash Express Inc. is a big victory for the consumers and tax-payers of New Jersey. In April 30, 2015 NJ Spotlight published an Op-Ed in which I wrote about the need for the state to stop investing in a pay day lending company which is prohibited from doing business within the state.  It was remarkable that the state would even consider investing in illegal business.  The work of NJ Citizen Action in leading the campaign within the state legislature to divest money from an immoral and illegal operation must be applauded.  There is no question the taxpayers and consumers of New Jersey have cause to celebrate today.

In this podcast we discuss the divestment project with Beverly Brown Ruggia who oversaw the divestment project for NJ Citizen Action.

NJSIC Divests Pension Funds from Illegal Payday Lender

January 28th, 2016 by

Victory for NJ Consumers and Pension Holders

State Divests Pension Funds from Illegal Payday Lender

NJ Citizens Action

OR IMMEDIATE RELEASE:  Wednesday, January 27, 2016 (Trenton, NJ)– Today, New Jersey Citizen Action (NJCA)commended the New Jersey State Investment Council (NJSIC)on its announcement that it has formally divested New Jersey pension fund money from JLL

Partners, which used millions of pension funds to purchase the second largest predatory payday lender, ACE Cash Express.  ACE was fined $10 million in 2014 by the Consumer Financial Protection Bureau (CFPB) for its predatory lending and illegal debt collection practices.

Phyllis Salowe-Kaye, Executive Director of NJCA

“Today, we are sending a clear message to the heinous and illegal payday lending industry that they are STILL not welcome in New Jersey.  We cannot and will not allow them to enrich their morally reprehensible business practices on the backs of New Jerseyans,” said Phyllis Salowe-Kaye, Executive Director of NJCA.  “Chairman Tom Byrne and the entire State Investment Council did the right thing by keeping their word to divest from ACE.”

“We are pleased to have this resolved in a manner that is both in the

public interest and in the best interest of our beneficiaries,” said Tom Byrne, Chairman of the NJSIC.  “We welcome public comment, and are happy when we can act upon suggestions in a manner that comports with our fiduciary obligations.”

Rev. Dr. DeForest Soaries of the First Baptist Church

The NJ NAACP, First Baptist Church of Lincoln Gardens, and the Black Issues Conference joined NJCA in applauding the Investment Council’s decision.  “Predatory lending subjects borrowers to a lifetime of continual debt through exorbitant interest and fees.  The fact that our state, which outlaws payday lending, used New Jersey public pension dollars to endorse a predatory lending institution was shameful,” said Rev. Dr. DeForest “Buster” Soaries of the First Baptist Church. “I could not sit idly and allow my home state to support an industry that I have fought against most of my adult life. I congratulate Chairman Tom Byrne and the New Jersey State Investment Council for doing the right thing for the great people of New Jersey.”

Payday lending is illegal in New Jersey due to high annual interest rates which can be well over 1500%, as in the case of ACE and which greatly exceed the state’s 30% usury cap.  Twelve million American borrowers are lured into payday loans, spending more than $7 billion on payday loans each year.  Nearly a quarter of them get trapped into an endless cycle of debt.  Payday lenders, known to target minorities, military personnel and low income consumers are still able to market to New Jersey consumers via the internet.

The decision to divest from ACE in New Jersey has national implications, as advocates and prominent elected officials in other states are pushing for divestment, including Congresswoman Maxine Waters (D-CA) who has called on prominent endowments and retirement funds to divest from payday lenders

Charles Lowery, Interim Senior Director of the National NAACP Economic Department

The divestment in New Jersey is also a victory for national organizations seeking a strong payday lending rule from the Consumer Financial Protection Bureau.  “The decision of the New Jersey Pension Fund, it directors and its leadership, to fully divest its monies from ACE Cash Express sends a strong and powerful signal to the payday industry that it can no longer use the hard-earned savings and pension monies of New Jersey workers to cover up its predatory lending practices in the African-American community and communities of color,” stated Charles Lowery, Interim Senior Director of the National NAACP Economic Department.

“We are particularly grateful for the leadership of New Jersey NAACP State Conference President Richard Smith and New Jersey NAACP State Economic Chairman Bruce Davis for the commitment and support that they provided as allies throughout this successful campaign, which can now serve as a roadmap for coalitions across the country to help rid of the payday loan industry from pension and other funds.”

Bruce Davis, Economic Development Chair, NJ NAACP

Despite today’s victory for New Jersey pension holders, the divestment campaign organizers will continue to pressure the Council to make sure that investments are made in compliance with state law.  “Unfortunately, our publicly trusted funds were used to grow an industry that is illegal in New Jersey,” said Bruce Davis, Economic Development Chair, NJ NAACP.  “We cannot as good people leave the investment of public funds solely to those whose only purpose is to maximize the return on investment at the exclusion of what is right and just.  We must remain diligent so that no public agency that represents the people of New Jersey should ever again so callously ignore the moral conscious of the same.”

“We urge the Council to take the next appropriate step of strengthening its due diligence policy to make sure a situation like this does not happen again,” said Beverly Brown Ruggia, CRA Organizer for NJCA.  “The policy should be reformed to ensure that a company is in good standing with its regulators, and that funds are not invested in any company conducting business which is illegal in the state.  These reforms will maximize the integrity of the pension fund and prevent the state from investing in immoral and illegal businesses.”


New Jersey Citizen Action is a statewide progressive advocacy fighting for social and economic justice. We put progressive values into action.


Contact:         Phyllis Salowe-Kaye | [email protected] | (973) 220-3823

Veronica Lavarro | [email protected] | (201) 988-5260

Debt Collectors Beware: Judge’s Ruling Could Change the Game

January 24th, 2016 by

Debt Collectors Beware: Judge’s Ruling Could Change the Game


HAWTHORNE, N.J. — Jan 24, 2016, 11:11 AM ET

Ever had a debt collector on your back for money you knew you didn’t owe? Listen to the story of Steven Psaros and take heart.

The Great Recession forced Psaros into foreclosure on the house he had bought in this northern New Jerseytown in 1999.

Then, another blow. A debt collector demanded about $11,000 in homeowners’ insurance, money Psaros claimed he didn’t owe under terms of a mortgage refinance signed several years earlier.

He fought back in court and, in a ruling that could change how law firms handle debt collection, a federal judge held last month that the firm representing the debt collector could be liable for damages even if it didn’t know its client was relying on incorrect information.

Some experts see the ruling as a game-changer in foreclosure actions, which by their nature target people who are under emotional and financial stress.

“Think of the psychological state of people going through foreclosure,” said Seton Hall law school professor Charles Sullivan, who specializes in contracts and employment law. “They can’t pay their mortgage and they think they’re going to be in foreclosure. They’re not looking at the papers, and if they are, whether it’s $360,000 or $370,000, neither is a sum they can pay. They may not even seek an attorney. But attorneys in the past didn’t have the tools this this decision now gives them.”

The debt collection industry is a top source of complaints from consumers, according to the federal Consumer Financial Protection Bureau. Formed in 2011, the bureau began collecting complaints in its system in mid-2013; by the end of that year, it had received more than 30,000 complaints about debt collectors.

The most frequent complaints were about debt collectors attempting to gather money that wasn’t owed. And according to Psaros’ lawsuit, his case falls under that category.

Adam Deutsch, an attorney representing Psaros for the Westwood-based Denbeaux and Denbeaux law firm, said the ruling “sends a message to people on the collection side that you can’t just assume the information you’re being provided by your client is accurate.”

In an email, he said he suffered economic losses during the recession in 2009. According to his suit, BAC Home Loans Servicing, through the law firm Stern, Lavinthal and Frankenberg, filed a debt collection foreclosure action in September 2010. Servicing for the mortgage was later taken over by St. Paul, Minnesota-based Green Tree Servicing.

Through a deal he negotiated when he refinanced his mortgage in 2008, Psaros was paying property insurance and real estate taxes directly, rather than through an escrow account managed by the lender. Last April, however, Green Tree allegedly sent him a letter telling him he owed $10,974.37 for insurance premiums.

Psaros sued Green Tree and Stern Lavinthal in federal court last June, and in the fall the law firm asked U.S. District Judge Jose Linares to dismiss Psaros’ claim because it hadn’t demonstrated “any false or misleading representation by Stern Lavinthal that might give rise to liability” under the federal Fair Debt Collection Practices Act.

The judge disagreed, writing last month that the firm “cannot evade its responsibilities as a debt collector by blaming its client for providing it with factually inaccurate information used in the process of collecting a debt.”

Sullivan predicted the ruling will lead to fewer mistakes as law firms become more vigilant in checking their clients’ claims when seeking to collect debts.

Adam Deutsch, an attorney representing Psaros for the Westwood-based Denbeaux and Denbeaux law firm, said the ruling “sends a message to people on the collection side that you can’t just assume the information you’re being provided by your client is accurate.”

An attorney representing Stern Lavinthal declined to comment, and an attorney for Green Tree didn’t respond to a request for comment.

Freddie Mac Ends $1.3B Taylor Bean Suit Against Deloitte

January 20th, 2016 by

Freddie Mac Ends $1.3B Taylor Bean Suit Against Deloitte

Freddie Mac is dropping its $1.3 billion lawsuit against Deloitte & Touche LLP for the accounting firm’s alleged complacency in the fraud and eventual collapse of mortgage lender Taylor Bean & Whitaker Mortgage Corp., according to a brief filing in Florida federal court on Wednesday.

In two sentences, the parties agreed to dismiss the suit with prejudice, but didn’t provide any further details about the decision. Trial was set to begin on Feb. 22.


Law360, New York (March 10, 2015, 7:26 PM ET)

Freddie Mac Grows $1.3B Taylor Bean Suit Against Deloitte

Law360, New York (March 10, 2015, 7:26 PM ET) — Freddie Mac has expanded accusations that Deloitte & Touche LLP failed to flag the fraud that brought down Taylor Bean & Whitaker Mortgage Corp., according to a complaint unsealed Monday that demands punitive damages on top of the $1.3 billion Freddie Mac allegedly lost.
An unsealed complaint in Florida federal court revealed that Freddie Mac has brought an additional claim for punitive damages over Deloitte’s allegedly negligent auditing work for Taylor Bean, the mortgage lender felled by a massive employee fraud that sent several executives to prison.

The lawsuit, filed in Florida state court and subsequently removed to federal jurisdiction, claims that Deloitte bears responsibility for losses that Freddie Mac suffered in Taylor Bean’s 2009 bankruptcy.

Freddie Mac added a demand for punitive damages in an amended complaint that it filed under seal in February, according to court records. The lawsuit only surfaced publicly when U.S. District Judge Ursula Ungaro ordered its unsealing on Friday, finding no legitimate grounds to justify the continued secrecy.

Deloitte had raised concerns that posting the document would air confidential information that the firm produced during discovery, but it dropped its opposition to unsealing the complaint after Judge Ungaro’s decision.

“Plaintiff has not provided any reason as to why its amended complaint … should be filed under seal other than defendant’s designation that certain material quoted or paraphrased in the amended complaint is confidential,” the judge said. “This does not demonstrate good cause as to why the public’s right of access should be denied to such a central and important document in this case.”

The amended complaint says that Deloitte committed “gross negligence” by submitting clean audit reports for Taylor Bean even as senior officers at the mortgage lender offered “inconsistent, incomplete and often last-minute explanations” for certain transactions. Until the judge approves the amended complaint, the previous version controls.

Just after the complaint appeared on the docket, Deloitte filed papers asking for the suit to be dismissed, calling Freddie Mac’s punitive damages demand “both procedurally improper and substantively meritless.”

“To the extent that Freddie Mac takes issue with Deloitte’s conduct, the amended complaint alleges nothing more than Freddie Mac’s disagreement with Deloitte’s professional judgments,” the firm said.

Once the largest mortgage lender in the U.S. not owned by a deposit-taking bank, Taylor Bean sought bankruptcy protection in August 2009 after federal officers raided its headquarters in Ocala, Florida. Prosecutors discovered a fraud that led to several long prison sentences, including a 30-year term for former Chairman Lee Bentley Farkas. Taylor Bean allegedly overstated its assets and income and understated its liabilities after Farkas and other executives created fake, worthless mortgage assets and triple-sold other mortgage assets, which allowed them to profit off their sales and issue billions more in FHA-backed securities

In October, Deloitte settled three lawsuits seeking billions in damages for failing to detect the Taylor Bean fraud. The details of the deals were confidential.

The deals avert a consolidated trial in two of the suits, filed by Taylor Bean bankruptcy trustee Neal F. Luria and Deutsche Bank AG, that was set to start in Miami late last year. The third suit was filed by Taylor Bean subsidiary Ocala Funding LLC.

The three suits claimed that Deloitte certified the company’s annual financial statements while ignoring “obvious red flags” indicating fraud and allowed Taylor Bean to borrow billions of dollars that it could never repay.

Freddie Mac is represented by Pamela A. Chamberlin and Isaac J. Mitrani of Mitrani Rynor Adamsky & Toland PAand Paul D. Moak, Joshua Newcomer and Kyle A. Lonergan ofMcKool Smith PC.

Deloitte is represented by Peter Prieto, John Gravante III and Matthew Weinshall ofPodhurst Orseck PA and Miles N. Ruthberg and Peter A. Wald of Latham & Watkins LLP.

The case is Federal Home Loan Mortgage Corp. v. Deloitte & Touche LLP, case number1:14-cv-23713, in the U.S. District Court for the Southern District of Florida.

–Editing by Kelly Duncan.

Episode 12 NJ Attorney Sees Debtors Legal Rights Enforced with FDCPA

January 13th, 2016 by

NJ Attorney Sees Debtors Legal Rights Enforced with FDCPA

In April 2015 Adam Deutsch, Esq. of the law firm of Debnbeaux and Denbeaux and Ashleigh Lewis, had a piece published in the Rutgers Law Journal “Attorney Liability in Lien Enforcement: The Untapped Potential of the FDCPA“. In this work the authors discussed how prevalent FDCPA claims are, and how simple they are to enforce, and the potential for monetary damages to be awarded to debtors. Quoting from the conclusion of “Attorney Liability in Lien Enforcement: The Untapped Potential of the FDCPA

The Fair Debt Collection Practices Act is an underutilized and undervalued statute. One need only refer to a national newspaper to find, on any given day, at least one article relating to unjust activity within the collections industry. With consumer debt at an all-time high and the American public still climbing out of the great recession, there are an abundance of FDCPA violations that go unenforced with each passing day. This should be a great concern to anyone engaged in the collections industry. The juxtaposition is that debtors and consumer attorneys have been missing an opportunity to pursue the rights granted by Congress under the FDCPA.

In a recent decision from the United States District Court of New Jersey Case 2:15-cv-04277-JLL-JAD attorney Adam Deutsh, established the potency of the FDCPA for consumers who feel they might have been wronged by unjust activity within the collections industry.

Now, in this podcast Adam Deutsch discusses  the potential for consumers to make complaints against those trying to collect as well as the attorneys who represent them by virtue of this case. Quoting from the conclusion of “Attorney Liability in Lien Enforcement: The Untapped Potential of the FDCPA

The FDCPA continues to be a self-policing statute in the civil litigation context. Federal agencies with enforcement power have made clear that they will remain on the sidelines and allow the collections industry to remain operating in the shadows of the law. The potential threat for a call to arms among debtors is very real. When it happens, the collections industry will be changed forever as the monetary incentive to pursue collections activity is greatly reduced by the threat of strict liability monetary awards, including lofty counsel fees.

United States District Court Judge: Legal Counsel Is Liable Under FDCPA For False Representations of Their Clients in Court Filings

January 5th, 2016 by

United States District Court Judge:  Legal Counsel Is Liable Under FDCPA For False Representations of Their Clients in Court Filing

NJ firm Denbeaux & Denbeaux earns major victory using FDCPA for national consumers victimized by  false information presented by law counsels at the bidding of their clients.

Westwood, NJ, January 5, 2016:   No longer can legal counsel evade liability under the Fair Debt Collection Practices Act (FDCPA) by claiming false information provided to a court or debtor was supplied by their client.  This is the conclusion of a groundbreaking judicial opinion according to Westwood, NJ financial consumer rights law firm Denbeaux & Denbeaux.

U.S. District Court Judge Jose Linares denied a debt collection law firm’s motion to dismiss in Steven Psaros vs Green Tree Servicing, LLC.  According to Judge Linares’ 16-page opinion, Psaros successfully alleged that New Jersey law firm Stern Lavinthal & Frankenberg violated FDCPA laws by charging and attempting to collect improper fees of $10,974.37 for property insurance outlays to Psaros’ home mortgage debt.  The fees were improper because Psaros had paid all taxes/insurance, and his mortgage loan contained an escrow waiver.  In response Psaros sued both Green Tree Servicing, LLC and Stern Lavinthal & Frankenburg.   Stern Lavinthal & Frankenburg argued that they were not liable for the false representations of the debt owed by Psaros because the false information was generated by their client Green Tree

Servicing, LLC.  Justice Linares rejected their defense, ruling that “Stem Lavinthal cannot evade its responsibilities as a debt collector by blaming its client for providing it with factually inaccurate information used in the process of collecting a debt.” Green Tree Servicing, LLC did not move for dismissal of the claims.

Judge Linares’ December 21 opinion is significant for Mr. Psaros and will prove meaningful to scores of other consumers facingdebt collection litigation.  It is unfortunate how often lawyers choosing to make a living collecting debts do so based-upon false information provided by their clients.  Green Tree Servicing, LLC was notified by Mr. Psaros of the error, and they still directed Stern Lavinthal & Frankenberg, LLC to collect funds not owed.  Industry wide, there is evidence that debt collectors and their attorneys regularly engage in this conduct unchecked.

The Court’s words are perfectly concise: ‘A plain reading of the statute leads to the conclusion that a violation has occurred,’” said Denbeaux & Denbeaux Partner Joshua Denbeaux.  “Systematic flaws in the state judicial process have resulted in an increased level of arrogance and greed among debt collectors as evidenced in this case.  It was not enough for the debt collection law firm and loan servicer to seek recovery of the debt owed, instead they inflated the sum by thousands of dollars and assumed with confidence they would get away without anyone noticing.  Had Mr. Psaros not been diligent to seek the assistance of an attorney, the collectors would have successfully stolen this money.”

Click here to read the entirety of Judge Linares’ decision

The law firm of Denbeaux and Denbeaux is located at 366 Kinderkamack Road Westwood New Jersey 07675. Tel: 201-664-8855 or email pr(at)denbeauxlaw(dot)com.Denbeaux and Denbeaux is a family operated law firm with a tradition of excellence in consumer rights and family law. Formed in 1989, Denbeaux & Denbeaux is a law firm dedicated to providing top level legal representation to its clients. The partners, Marcia Denbeaux and Joshua Denbeaux, represent individuals and businesses in New Jersey State and Federal Trial and Appellate Courts. The firm primarily practices civil litigation, with a concentration in mortgage foreclosure, consumer fraud, commercial litigation, matrimonial law, business, insurance coverage litigation.

Their work has been featured in major media sources throughout the country including CNN, MSNBC, NPR, C-SPAN, CBS Evening News, the Associated Press, The Star Ledger, and The Record.

For media inquiries contact: Donald Tremblay |  Phone 718-664-3405 | [email protected]

Three Things to Know About NJ Foreclosure for 2016

January 4th, 2016 by

First, every foreclosure situation is as unique as every person who confronts foreclosure. Attorneys, Adam Deutsch and R. Jared Stepp discuss foreclosure from the homeowner’s point of view in Podcast # 11. Click here to listen to podcasts.

3 Things to Know About Foreclosure

Second, whatever your desired outcome is when facing foreclosure you’ll need to have a plan. Read this overview of why many homeowners delay in creating an effective strategic plan for their situation, and how federal consumer protection laws can impact a desired outcome. Click here to read more on how we fight foreclosure with federal laws. You can also download and learn about The Six Warning Signs of a Possible Consumer Protection Law Violation.

Third and finally, one might think that time is on the side of the homeowner in New Jersey.The bottom-line is that the sooner you get started with a foreclosure defense the better the chances of a positive outcome. You can download and read this timeline of the New_Jersey_Foreclosure_Process-Handbook to understand how much time is involved in a foreclosure when the bank and servicing company follow the rules.