Assemblyman GARY S. SCHAER
District 36 (Bergen, Essex and Passaic)
Assemblywoman L. GRACE SPENCER
District 29 (Essex and Union)
Assemblyman JOSEPH VAS
District 19 (Middlesex)
Assemblyman Chiusano, Assemblywoman Coyle and Assemblyman Coutinho
Constitutes Assembly Financial Institutions and Insurance Committee as special committee to investigate business practices of foreclosure consultants; grants committee subpoena power.
CURRENT VERSION OF TEXT
An Assembly Resolution constituting the Financial Institutions and Insurance Committee as a special committee of the General Assembly to investigate the business practices of foreclosure consultants and prescribing the committee’s powers and duties.
Whereas, Homeownership and the accumulation of equity in one’s home provide significant social and economic benefits to the State and its residents; and
Whereas, According to a report issued by the U.S. Government Accountability Office (GAO) in October, 2007, New Jersey experienced an increase in residential mortgage foreclosure start rates in excess of 50% over the prior two years and the GAO found that defaults and foreclosures on mortgages have a significant economic impact on homeowners, lenders, and neighborhoods; and
Whereas, Given the significant increase in foreclosure starts and the well reported economic problems that continue to be associated with the subprime mortgage market, New Jersey homeowners who are under financial distress will increasingly consider using the services of foreclosure consultants who offer foreclosure rescue services that purport to forestall foreclosures and allow homeowners to remain in their homes; and
Whereas, Homeowners are especially susceptible to deceptive or fraudulent practices in connection with foreclosure rescue services because they involve complex and confusing paperwork during a time of emotional and financial vulnerability due to an inherent danger that the homeowner may lose all of the equity built up in the home; and
Whereas, In response to numerous consumer complaints about foreclosure consultant practices, at least 11 states have enacted statutes to specifically regulate these practices, and the Commonwealth of Massachusetts has permanently banned foreclosure consultant practices; and
Whereas, Given the current lack of applicable statutory and regulatory standards or reporting requirements in New Jersey that are specifically applicable to foreclosure consultant practices, and the lack of specific information about the nature of these practices and the extent to which residents are losing their home equity or otherwise suffering financially; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey:
1. The Financial Institutions and Insurance Committee is constituted as a special committee of the General Assembly. The membership of the committee as previously constituted is reconstituted and continued.
2. The committee shall inquire into the businesses practices of foreclosure consultants, the impact that those practices have had on foreclosure rates and the ability of New Jersey residents who retain foreclosure consultants to preserve the benefit of the equity in their homes, and whether and to what extent foreclosure consultants have acted improperly or unethically in conducting foreclosure rescue practices in the State.
3. For the purposes of carrying out its charge under this resolution, the committee shall have all the powers conferred pursuant to chapter 13 of Title 52 of the Revised Statutes.
4. The committee shall be entitled to call to its assistance and avail itself of the services of the employees of the State of New Jersey, or any political subdivision of the State, or any agency thereof, as may be required and as may be available for that purpose, and to employ stenographic and clerical assistants and incur traveling and other miscellaneous expenses as may be deemed necessary, in order to perform the duties provided herein, and within the limit of funds appropriated or otherwise made available for that purpose.
5. The committee shall report its findings and recommendations, including any legislative proposals, to the General Assembly as soon as practicable upon completion of its work.
This Assembly Resolution constitutes the Financial Institutions and Insurance Committee as a special committee to investigate the business practices of foreclosure consultants, the impact that these practices have had on foreclosure rates, the ability of New Jersey residents who retain foreclosure consultants to preserve the benefit of the equity in their homes, and whether and to what extent foreclosure consultants have acted improperly or unethically in conducting foreclosure rescue practices in the State.
Upon passage of this resolution, the committee would have the power to subpoena witnesses and documents pursuant to Chapter 13 of Title 52 of the Revised Statutes.