Attorneys, Law Students From Seton Hall Pro Bono Program Intervene On Behalf Of Elderly Couple In Equity Stripping, Foreclosure Rescue Scam

In Newark, New Jersey, lawyers and law students from the Center for Social Justice (CSJ) at Seton Hall University School of Law have successfully vacated a foreclosure judgment against an elderly couple who were allegdly victims of a foreclosure rescue, equity stripping scam that resulted in a loss of approximately $400,000.00 in equity in their home, which ended up in foreclosure. CSJ believes the scam has been perpetrated on numerous other distressed homeowners in the area. The homeowners will now, along with CSJ, defend against the foreclosure.(1)

For the CSJ press release, see CSJ Stays Foreclosure, Charges Mortgage Scam.

(1) According to the press release, the Counterclaim filed on behalf of the elderly homeowners by CSJ against Third-Party defendants (a disbarred lawyer, a subprime lender, and others) includes, in part, a petition for relief for multiple violations of:

• New Jersey Consumer Fraud Act ( N.J.S.A. § 56:8-1, et seq.),
• New Jersey Civil Racketeer Influenced and Corrupt Organizations Act ( N.J.S.A. § 2C:41-2( c ) ),
• New Jersey Fair Foreclosure Act ( N.J.S.A. § 2A:50-56, et seq. ), and,
• Federal Truth in Lending Act ( 15 U.S.C. § 1601, et seq. ).

Reportedly also included in the countersuit are a number of common law claims. The pleading also charges that the foreclosing entity, assignee U.S. Bank:

• Lacks standing to enforce the Note securing the Property because U.S. Bank is not a proper assignee and holder of the Note pursuant to N.J.S.A. § 12A:3-201 and Article 3 of the Uniform Commercial Code ( “UCC” );
• Is not a “holder in due course” and therefore is vicariously liable for the elderly couple's claims and defenses against the originators of the mortgage, Credit Suisse Financial Corporation and its agent, ANM Funding, LLC;
• Lacks standing to seek foreclosure because the mortgage was not assigned to it until after about four months after the foreclosure action was filed. N.J.S.A. § 46:9-9 requires mortgage assignments to be in writing.