Consumer Fraud Act In Bergen County: Fraudulent Foreclosure Relief Scheme

Prior to the economic meltdown, a number of unscrupulous mortgage companies prayed on the vulnerabilities of people who could barely afford a mortgage with sub-prime lending packages and adjustable rate mortgages. With the advent of these dark financial times, a new breed of predators are making false promises to the consumer by offering help to avoid foreclosure.

A few weeks ago, New Jersey’s Attorney General’s Office filed a Consumer Fraud Act complaint against a number of these companies and instituted a advertising campaign to advise struggling mortgagors to be weary of so-called "foreclosure rescue" companies.

One company’s scheme was to offer to payoff the mortgage and to allow the owner to lease back the property at a monthly rental until a buyer was found. Shortly thereafter, however, the tenant and former owner, received an eviction notice and was dispossessed from the property. Records indicate that the defendant company later sold the property for twice the mortgage payoff.