Drawing on Treasury Department data from its financial crimes unit, the Sunlight Foundation says suspected mortgage fraud is up 31 percent nationwide from this time last year. Pennsylvania is ranked 16th on the list while New Jersey is seventh.
Marshall McKnight, a spokesman for New Jersey’s Department of Banking and Insurance, says the department has seen an increase in illegal mortgage adjusters. These businesses, which are not licensed by New Jersey and do not follow the state’s debt adjuster law, advertise relief to borrowers who are under water.
“Often they promise to adjust the debt and to eliminate their debt issues in exchange for upfront fees,” says McKnight. “Those upfront fees are accepted and then nothing happens. There’s no debt-adjustment activity.”
McKnight says these upfront fees are a red flag. He encourages consumers to confirm their debt adjuster is a licensed provider with the state.
The New Jersey Attorney General’s office has recovered more than $2 million this year in restitution for victims of the predatory scams.