I have devoted my career to protecting consumers since 2008, right at the start of the Great Recession.
New Jersey went from less than 20,000 foreclosures to more than 70,000 foreclosure complaints filed each year during that period.
Currently, Governor Murphy has placed a moratorium on evictions and foreclosures in New Jersey. I think once the courts reopen, we are headed now for an even worse situation. At some point, lenders are going to start filing foreclosure complaints en masse again, and I expect foreclosure complaints to hit 100,000 per year through about 2023.
It is going to get rough.
It is not hopeless, but it is a concerning time. People that educate themselves are better able to prepare and to take advantage of the situations that present.
Every person who reaches out to me asks or says the same thing: “I want to modify my loan. Can you help me do that?”
So that’s why I want to talk about loan modification today. Because it is the wrong question.
Yes! I can help you modify your loan … but we also need to address the question: Should you?
Don’t let yourself be rushed into modifying your loan. Loan modification is a powerful tool to resolve a very stressful situation and an entire industry has sprung up around that stress to take advantage of you.
Fraudulent modification companies are a multi-million dollar profitable industry.
Fraudulent modification companies are preying upon New Jersey consumers right now.
In the last 60 days, I have filed two complaints with the New Jersey Division of Consumer Affairs about these predatory companies, and I am preparing four more complaints as I type this.
I filed a complaint against Financial Services for America, Neal Vanderpoel, IV, Eileen Vanderpoel and Ryan Vanderpoel. You can read the document here if you would like to dive into this on your own.
I also filed a complaint against Summit Defense Foreclosure Legal Group. You can read this whole document here. I could not find the names of the owners of that ‘company’ or I would have named them individually as well. Incidentally, since I filed this Complaint, Summit Defense changed its name. Never a good sign.
There is far more information in these Complaints than you can readily absorb, but I am providing you access so that you can see the effort that we have invested in protecting the public from these predators.
If you are going to read one of them, read the first complaint against Financial Services for America, and their ownership. You should ‘enjoy’ seeing that their corporate name used to be Mortgage Help for America and that that Company was shut down for fraud by the Connecticut Attorney General.
We are dealing here with true predators.
But these two are just a drop in the ocean, and I am hard at work identifying the predators acting in New Jersey and shutting them down.
What should you do if you’ve been in contact with one of these companies?
If you received a mailer or an email from a company offering – or pushing – modification it would be a public service if you would send it to me. I will dive into the company and take appropriate action.
If you paid a company for modification or mortgage help, getting me a copy of the contract you signed would be of massive help to many people, including you. If they have taken your money, you almost certainly have a valid suit against the modification company.
I take those cases on a contingency, meaning you pay nothing out of pocket and I only get paid at the conclusion of the litigation by the bad actors.
And you will likely get your money back, and often more besides.
And you get to be part of the process of shutting that company down and keeping them from harming other homeowners.
It’s a bit like hitting the trifecta.
Laws that govern loan modification companies
As I said before, and will again, one way to identify these predators is that they push immediate modification of your mortgage loan. And that, as I have said and will say again and again, is usually the wrong option for you.
It is a federal regulation – it is federal law – issued by the FTC that forbids any company from taking money to modify a New Jersey mortgage loan that 1) is not a New Jersey law firm and 2) takes ANY MONEY in advance of services rendered.
Which means it’s really easy for you to spot these predators…
Two easy ways to identify predatory loan modification companies:
- If you are offered the opportunity to pay a company to modify your loan, and that company takes money in advance of the modification, you are being scammed.
- If any non-attorney reaches out to you to modify your loan for money, they are trying to steal from you. That means that if any attorney from out of state tries to convince you to hire them to modify your mortgage, they have THEIR interests at heart … not yours.
If this has happened to you… CONTACT ME! I can help.
How to Avoid being Scammed
There are three very simple rules to follow here:
First, only do business with a licensed New Jersey attorney with an office in New Jersey,
Second, do business with an attorney who is actually going to file an Answer and defend your rights when you are sued in a foreclosure case, and is capable of filing counterclaims against the bank, loan servicer and their attorneys for violations.
Third, do business with an attorney who only gets paid after successfully doing what he or she promised they could do. Attorneys can take money into a trust account for modification of mortgage loans, but they cannot actually accept payment for services rendered until they actually modify your loan.
Fourth, the last thing to keep an eye out for: Does the person you are talking to about your modification urge you to MODIFY NOW!!!!!!?
What’s wrong with Modifying Now?
That is actually a very nuanced and tricky question. Modifying NOW!!!! is the hallmark for a fraudulent modification entity.
Let me point something out that will be obvious once I say it: Once you modify, you have to start making monthly mortgage payments.
Breaching a modification agreement makes any future litigation or negotiation with your mortgage servicer more difficult. (Note that I did not say impossible; just more difficult.)
So… Should I Modify?
Let’s assume a couple of facts, which might not apply to you but are a very common situation for many, many people today:
- You are in default of your mortgage loan because Covid wrecked your income;
- You would like to stay in your home;
- The foreclosure Courts are more or less closed, for the moment, because the servicers are filing very few foreclosure complaints right now (I can explain why, but that is for another article);
- You expect to be making better money when the economy reopens.
And now that you have absorbed those facts, let me ask this imaginary potential client another question:
Why would you modify NOW and put yourself in the position of having to make monthly mortgage payments when money is tight? You know your monthly income is going to improve and that banks are not going to be able to efficiently prosecute foreclosure cases for quite some time.
And, of course, you should not modify now. It makes no sense … to you.
It makes plenty of sense to the fraudulent, predatory modification companies because THEY. DO. NOT. CARE. ABOUT. YOU.
And I do.
These companies make money by taking money from you to submit a poorly prepared modification application to your mortgage servicer. Their sales pitch is based on your fear and anxiety. Everyone in financial trouble with the mortgage payments is in desperate fear that the bank is going to take the home right away, and that you – the homeowner – must modify now.
And this is just not true, especially if you start researching reality and educating yourself as to how the system works and how to exercise your rights. I created a foreclosure infographic that lays out every step of the foreclosure process. Take a few moments to look at it. The time shown in the infographic is pre-pandemic. Virtually every time schedule set in that infographic is wrong … because it is too short.
Bottom line: Foreclosure in New Jersey – if you defend yourself and you should – takes a very, very long time.
Sit down and think. This is, essentially, a business decision. “When is the best time for me to start thinking about making payments on my mortgage again?”
Is it right now?
Likely not.
Talk to someone if you’re not sure!
You don’t have to make this decision alone. Maybe your situation doesn’t quite fit with the example above and you’re not sure how you should proceed. There are many competent attorneys in New Jersey who Answer foreclosure complaints, put banks to their proofs and properly advise people when is appropriate to submit a modification application, file for bankruptcy or enter into a Consent Order in exchange for time.
There are much fewer attorneys – I know of three, including me – who actively sue mortgage servicers and banks for their errors, bad faith actions and outright fraud.
But for the purposes of a modification, and finding out when you should apply, there are plenty of resources out there.
Talk to a New Jersey attorney with an office in New Jersey … make certain that the attorney does Answer foreclosure complaints and litigates against banks … ask if he or she has experience suing mortgage companies in State and Federal Court …
If you do those things, you will protect yourself from the predatory loan modification fraud companies.
And of course, as always, you can contact me.
