New Jersey Appoints a Foreclosure Overseer

Last week, a New Jersey judge created a special position for an individual to oversee foreclosure proceedings. Superior Court Judge Richard Williams has been appointed “Foreclosure Overseer,” meaning that he will oversee foreclosure matters in the state and “safeguard the foreclosure process.” The move follows state Supreme Court Chief Justice Stuart Rabner’s December order in which he demanded that major lenders in the state demonstrate why their foreclosure activity in the state should not be suspended in light of “irregular activities” and alleged robo-signing incidents.

The lenders in question – OneWest Bank, BAC Home Loan Servicing, JP Morgan Chase (Chase Home Finance), Wells Fargo Financial New Jersey and CitiResidential Living – all objected to the order. They insisted that they had already reviewed procedures and made improvements before Rabner made his demands. The role of the foreclosure overseer will not be to examine individual cases, but rather to supervise the process itself, looking “at the source of the document creation and ensure that these documents were created by a process that conforms to the law.”

As with every governmental attempt to fix a problem that the private sector is better equipped to handle, some feel that this measure does not go far enough while others believe that it is more governmental intrusion into the private business sector.

Own Your Home and make No More Mortgage Payments??

Sounds ludicrous?? It absolutely is not as an Iowa couple recently discovered. In many states there is a homestead exemption for primary residences. Essentially, it means that you are declaring that you are going to stay in the home and utilize it as a primary residence. Various states have restrictions on what may qualify as a homestead property.

In most homestead states, there is a requirement that both spouses sign the mortgage documents. In many instances, only one spouse executed the documents (typically due to challenging credit of one of the spouses). In such cases, the Note can be legally voided and perhaps the mortgage or Deed of trust as well. The Iowa couple made on payment and then invoked the homestead provision to assert that the wife had never executed the loan documents with CitiMortgage (Citibank). The Court agreed.

Similar laws as the one utilized in Iowa also exist in Alaska, Arizona, Arkansas, California, Colorado, Georgia, Hawaii, and Illinois, among others. States where it doesn't apply: Delaware, New Jersey, Pennsylvania and Rhode Island.