Consumers Should be Wary of Unauthorized Practices
According to the New Jersey Department of Banking and Insurance, consumers need to be careful when responding to advertisements or solicitations regarding loan modifications to avoid foreclosure. The state reports that a number of businesses have offered services to the public, and have frequently targeted attorneys, mortgage bankers and brokers to obtain referrals. They say that many of these companies may be operating without proper licensing from the state, and may take substantial up-front fees without providing any real benefit to the consumer.
The services can be marketed under a variety of terms, from “foreclosure prevention” to “loss mitigation consulting. The “loan modifications” offered by many of these companies are not second mortgages or loan refinances, but are considered under New Jersey law to be “debt adjustment.”
There are specific laws in New Jersey regarding what types of businesses can legally provide “debt adjustment” services through loan modification.” The lender or mortgage servicing company may legally do so, as may the owner of the loan. Any other party seeking to engage in debt adjustment through a loan modification must either be licensed by the Department of Banking and Insurance as a debt adjuster, or must be exempt under New Jersey’s Debt Adjuster Act. The following parties are generally exempt:
- A lawyer licensed in New Jersey
- An employee of the debtor whose duties include adjusting the employer’s debts
- Anyone acting pursuant to an order or judgment from a court of law
- A creditor of the debtor who makes debt adjustments without cost to the debtor
- Any person who makes a debt adjustment for the debtor at the debtor’s request and without cost to the debtor
Contact Attorney David J. Karbasian
Contact our office online or call us at 856-667-4666 / 856-600-HURT to schedule an appointment. Your first consultation is without cost or obligation. The sooner you call, the sooner you can move forward with your claim. We can accommodate evening or weekend meeting requests and will come to your home, if necessary.
