With the continuing prevalence of mortgage foreclosure problems, legislation putting common sense safeguards in place to protect homeowners was passed out of the Assembly Financial Institutions and Insurance Committee Thursday.
Assemblyman Erik Peterson (R—Hunterdon) sponsored legislation that will provide homeowners with a remedy should a bank fail to follow the simple procedural homeowner protections in New Jersey’s Fair Foreclosure Act (FFA). The bill (A4369) cleared the Financial Institutions and Insurance Committee by a 10-0 vote.
“Banks need to be held accountable when they flaunt our laws,” said Peterson. “Like everyone else, they should follow the law and be held accountable for the damages they cause when they do not.”
Peterson’s bill revises the FFA notification requirements when a Bank intends to foreclose. Under the bill, the mortgage companies must provide accurate and timely notice of a potential foreclosure so that a homeowner has a reasonable opportunity to fix the issue before they are subject to foreclosure.
“This common-sense change provides extra protections without placing an additional burden on the banks,” said Peterson. “The intent of the Fair Foreclosure Act was to provide homeowners with the opportunity to rectify their delinquency and prevent foreclosure.”
When banks disregard the requirements of the FFA they illegally take away a homeowner’s ability to save their home.
Peterson’s bill also allows borrowers to take legal action if a lender violates any portion of the Fair Foreclosure Act. Homeowners can file an action in Superior Court to recover damages, attorney fees, and other costs which they are currently denied.
“The Fair Foreclosure Act was originally designed to prevent abusive foreclosure practices, however, as currently written it has no enforcement mechanism,” concluded Peterson. “Without any recourse, some banks will continue their abusive foreclosure practices unabated.”