Dozens of community, labor, and religious organizations are calling on Gov. Chris Christie to use New Jersey’s share of money from the national foreclosure settlement for housing programs rather than to plug holes in his proposed budget.

“We’re appealing to his heart,” said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, as she flourished a letter to the governor signed by representatives of groups such as the American Federation of State County and Municipal Employees, the Black Ministers Council of New Jersey, Habitat for Humanity, the NAACP, and Jewish Family Services.

The Mortgage Bankers Association reports that New Jersey now has the second-highest percentage of mortgages in foreclosure in the country, trailing only recession-devastated Florida. The situation could get worse soon, because the biggest mortgage lenders are resuming foreclosures here after moratoriums and a court review last year.

The $75 million is part of an estimated $26 billion to be paid by five major banks to settle cases of foreclosure fraud across the nation. “It should go where it was intended to go” under the settlement, “to help struggling families,” Salowe-Kaye said at the Statehouse.

She and her allies support two initiatives that are moving to votes in the Legislature. One would let towns use existing trust funds, established from developer contributions, toward turning foreclosed and bank-owned homes into affordable housing. Another attempts to police “scammers” who make extravagant promises of foreclosure relief.

State Sen. Raymond Lesniak (D-Union) is among several leading Democrats pushing the bill to allow municipalities and nonprofits to acquire homes in foreclosure to meet affordable housing requirements.

The legislation would create a temporary agency, the New Jersey Foreclosure Relief Corp., to work through the state Housing and Mortgage Finance Authority for five years, much like the Federal Resolution Trust cleaned up troubled assets of failed savings and loans during the 1980s.

Lesniak predicted the move will pass both houses of the Legislature, “but I don’t know where the Governor is” on the idea. “I hope to have his support,” he said.

The Governor’s Office did not respond to requests for comment today, but has previously said the federal funds could go toward the state’s existing housing programs.

But a main reason for launching the publicity campaign is that the Governor’s budget “is playing a shell game” with the money, said Staci Berger, director of policy and advocacy at the Housing and Community Development Network of New Jersey.

“Yes, the Treasurer is putting the foreclosure settlement funds into existing programs, but only to replace funds that he’s taking out of them to put into general revenue,” Berger said.

The situation gets worse, she said, because the Administration also plans to seize the municipal trust funds to paper holes in the budget, and is projecting them higher than they currently are. Even if that move survives legal challenges, “the Governor may be relying on money that isn’t there.”

Republican governors in Wisconsin and Indiana also have diverted foreclosure settlement money into their general revenues, a practice criticized by the housing advocates. But they said it would be even more “fiscally irresponsible” in New Jersey, given the size of the state’s foreclosure problem. Administration officials have estimated there is a 50,000 to 100,000 backlog of pending foreclosures, plus new cases being filed.

Given those figures, the housing advocates acknowledged $75 million is not a lot of money. But they said it could seed programs such as Lesniak’s bill and one to clarify and limit the types of fees charged in mortgages and modifications.

Assemblyman Gary Schaer (D-Passaic) said his bill would curb “scammers” who take advantage of people facing foreclosure, charging large amounts to promised modifications that may not materialize.

But he described that as more “after the fact” than steps to keep people in homes and counsel them when they receive foreclosure notices.

Increased support, as from the settlement funds, is vital, said Raymond Ocasio, executive director of La Casa de Don Pedro in Newark. He has “two-and-half” counselors to handle 300 current foreclosure cases, he said.

“There’s also a great opportunity to save” buildings and neighborhoods, by converting vacant structures and lots into affordable homes, Ocasio said. While pointing to successes, he said that without more attention from policymakers, the large number of New Jersey homes sitting unoccupied while in foreclosure “will be the vacant lots of the future.”

Continue reading on NJSpotlight.com

NJ Spotlight is an online news service providing insight and information on issues critical to New Jersey.

Article source: http://southbrunswick.patch.com/articles/advocates-urge-christie-foreclosure-funds-for-housing-not-budget-relief

Columbus International High School will move into the old North High School building on Arcadia
Avenue, the Columbus school district says.

The
International school, which opened in 2010, has been without a permanent home. It was housed
this school year in the former Clinton Middle School building on Karl Road. Before that, it was on
the Fort Hayes campus.

The former North High, which closed in 1979, was a temporary spot for Linden-McKinley STEM
Academy while its buidling was being renovated. It’s in new digs now and North is empty.

Over the years, the old North High has been used to house adult education, an alternative
program for at-risk students and more. It’s an old building — it first opened in 1924 — but it
was upgraded to accommodate Linden-McKinley students. Columbus spokesman Jeff Warner said the
district hasn’t decided what will become of the former Clinton Middle.

Article source: http://www.dispatch.com/content/stories/business/2012/06/03/commercial-real-estate-update.html

The process of publishing notices about foreclosure cases differs from county to county in Colorado, with few rules defining how the lucrative business gets divided.

As a result, there are no guarantees that the notices — intended to disclose foreclosures to interested parties including property owners and creditors — will reach a broad readership.

By law, the notices must be published in a newspaper in the county where a foreclosure occurs. But how publications are chosen is a ramshackle methodology left mostly to public trustees who oversee the system.

The notices — classified ads that en-masse are worth hundreds of thousands of dollars in annual revenue to a publisher — sometimes appear in newspapers chosen by the foreclosure lawyers because a 2007 law allows the practice.

Otherwise, methods vary greatly: public trustees rotate the business among various newspapers in some counties; a single newspaper is chosen arbitrarily in others; or bids from a few publications — though not all — are taken at inconsistent intervals.

The publications vary as well, from tiny 600-per-week subscription-only newspapers to the mega-circulation Wall Street Journal. Some trustees publish notices according to the ZIP code of the foreclosed property, while others place them in newspapers farther away.

“It’s troubling that a uniform legal process throughout the state is so disjointed and subject to whim,” University of Denver law professor Thomas Russell said. “The point of publication is to give notice to creditors of some kind of transaction that might affect their interest. The way it is now just allows it to go wherever someone wants, and that’s generally bad.”

Though a new law intending to make public trustees more accountable requires they use a procurement system for large contracts, it’s unclear whether the law applies to foreclosure notices. That’s because trustees aren’t spending their own funds. Lawyers representing the foreclosing lender pay the trustee, who in turn pays the publisher.

Notice of a foreclosure must be published once a week for five weeks — per-line costs can reach $13 — racking up hefty cash for the newspaper with the contract. Some small publishers admit they’d be out of business without them, and with the demise of classified advertising it’s become coveted work.

“If legals came out of newspapers, dozens of small-town papers would go belly up,” Grand Junction Sentinel publisher Jay Seaton said.

The Sentinel last year laid off workers when Mesa County Public Trustee Paul Brown moved notices to the much smaller Fruita Times and Palisade Tribune, a job the Sentinel had for 100 years.

No rhyme or reason

Most trustees, the officials tapped to oversee the foreclosure process impartially and fairly, agree the notices are intended to let interested parties know about a case. But the method of selection varies widely.

Some are in publications with circulations so small that locating a copy is difficult, or in periodicals far from where a foreclosure property is located.

Jefferson County publishes in community newspapers according to the ZIP code of the property; Arapahoe County notices have appeared in the same three papers for 15 years without bids; Boulder County publishes notices in the Longmont Times-Call because Public Trustee Rich Gebhardt said he prefers it.

In Denver, foreclosure notices can appear in The Denver Post, the Wall Street Journal, the Colorado Statesman, the Herald-Dispatch, or in papers with specialized readerships.

Some lawyers say where to publish in Denver — the only county where it occurs regularly. For those law firms that don’t choose, the trustee rotates the business, though not evenly.

The Colorado Statesman is not part of a six-paper rotation the trustee uses to share Denver notices not earmarked by a lawyer to a specific newspaper.

That’s because the Statesman is the publication of choice for Aronowitz and Mecklenburg, the Denver law firm with the second-highest number of foreclosure cases statewide.

Since 2010, Aronowitz has had 3,088 foreclosure notices published in Denver — all but 31 of them in the Statesman, according to figures provided by the public trustee’s office. That amounted to more than $577,000 in business.

“It’s because Aronowitz has so many cases, so we keep it fair and don’t include (the Statesman) in the rotation,” deputy trustee Sindee Wagner said.

Next highest was the Colorado Leader at $444,000 — the mandated publisher for attorney Michael Medved.

“If you’re in the foreclosure industry, you know us,” said Jayne Owston, managing editor of the 600-paper weekly Leader. “The notices are a very important chunk of revenue. And everyone got into the game after classified advertising dropped.”

Until a couple years ago, the Leader exclusively published notices for Castle Stawiarski, the statewide leader in foreclosure cases, she said.

Letting lawyers decide

Today, Castle’s work is spread around six publications — The Denver Post, Herald-Dispatch, Intermountain Jewish News, Law Week Colorado, and the Wall Street Journal — in the trustee’s rotation.

But that can end with a simple request by the lawyer — a decision that could be driven by economics, politics, favoritism or convenience.

“There’s nothing in the law that mandates where it has to be published, just a newspaper of general circulation in the county,” Wagner notes.

The Wall Street Journal has all the Denver foreclosure notices from the Janeway, Dale Decker, and Brown, Barardini Dunning law firms.

“We don’t have information on all 52 counties, so would not typically overrule (a trustee’s) decision by specifying a paper,” Lynn Janeway said in an e-mail. “Lower costs on the publications help both the borrowers … and lenders. We don’t get any personal benefit from any choice.”

The costs are passed on to a homeowner should they pay outstanding bills to stop the foreclosure, the bank if it wins the foreclosure auction, or an investor who outbids the bank.

“When you’re in foreclosure, the first thing to go is your subscription to the Wall Street Journal,” mused Russell. “The whole idea of public notice is theoretical, suggesting either debtors or creditors will read it. But just letting the creditor’s attorney choose where it appears mocks the whole process.”

It’s not in a bank’s interest to share the wealth, and that could play into the choice of publication, he said.

“Why would an attorney want other creditors to see the notice, the very ones who could compete for some of the value of the estate?” Russell asked.

In 2007, during hearings for a reworking of foreclosure laws drafted by the Colorado Public Trustee Association and foreclosure attorneys who were members of the Colorado Bar Association, the law allowing attorneys to choose slid through without mention about the change.

“No one has a … clue how that got in there,” Gebhardt said. “And every time I’ve asked for us to take it out, no one wants to take it on. I guess it’s put there for a reason.”

David Migoya: 303-954-1506 or dmigoya@denverpost.com

Publishing foreclosures

Foreclosure legal notices are required by law to be published in newspapers. Where they end up, though, is an inconsistent process from county to county. The business is lucrative for the newspaper that can get the contract. Here’s a look at where Denver publishes and the cost from 2010 to the present.

Publication, Paid

Colorado Statesman, $577,055

Colorado Leader, $444,276

Wall Street Journal, $267,794

Law Week, $248,376

Intermountain Jewish News, $232,266

Denver Post, $222,884

Herald Dispatch, $204,726

Total, $2,197,327

Source: Denver public trust

Article source: http://www.denverpost.com/business/ci_20765540/foreclosure-notices-intended-inform-public-may-go-unseen

WASHINGTON — In a decision that could have a significant effect on the fees that consumers pay in real estate transactions, the U.S. Supreme Court has ruled that “unearned” fees charged by lenders and other service providers do not violate federal law as long as they are not split with anyone else.

The court’s unanimous decision effectively reopens the door to controversial “administrative” fees levied by real estate brokers, and could encourage the practice of “marking up” fees by mortgage lenders, escrow officers and others that had been banned by federal regulators for the last decade.

The ruling also represents a defeat for the Justice Department and Department of Housing and Urban Development — both of which had argued that charging unearned fees is illegal — and may be a shot across the bow of the new Consumer Financial Protection Bureau, which inherited the task of policing mortgage and settlement abuses from HUD.

• Also

• Retirees may find they don’t qualify to refinance their mortgages

• FHA may loosen limits on condo mortgages

• 

  Energy audits may be beneficial for both home buyers and sellers

• 

  Celebrity sellers have little effect on home prices

The decision, handed down May 24, involved customers of Quicken Loans, the online mortgage company, who alleged that Quicken charged them “discount” fees but did not provide them lower interest rates on their mortgages, as is customary. Each loan discount fee, or “point,” is equal to 1% of the mortgage amount. The failure to provide a lower rate, the plaintiffs claimed, meant that Quicken pocketed their fees without providing anything commensurate in return, which is a violation of the federal Real Estate Settlement Procedures Act (RESPA).

Quicken denied the borrowers’ allegations and argued that in any event, the settlement procedures law, first enacted in 1974 to control widespread kickbacks paid by title insurance companies to realty agents and others, does not apply to situations where there is no split of the fees involved. Quicken’s borrowers maintained that the law does apply and cited a policy statement issued by HUD prohibiting imposition of fees where no actual work or service is provided to justify them.

Disputes over real estate and lending fees have led to a lengthy series of court battles in recent years, with some federal district and appellate courts siding with industry interpretations of the law and others siding with federal regulators and consumers. The Supreme Court accepted the Quicken case in part to resolve the differences among the judicial circuits so there would be a uniform legal standard on fees nationwide. The court’s ruling does not, however, affect state laws that prohibit certain fees or practices, including unearned settlement or mortgage charges.

Though the Quicken case centered on a lender’s fees, realty brokerage charges have also come under attack using HUD’s regulatory interpretation of the law. In a major federal case decided in Birmingham, Ala., in 2009, a court ruled that a realty firm’s add-on fees violated the law. In that case, a $149 extra fee was imposed by RealtySouth, a subsidiary of HomeServices of America, one of the largest brokerages in the country. Fees charged by other realty firms have been much higher — $250 or more in some cases.

Critics within the industry, such as Frank Llosa, a lawyer and broker in Northern Virginia, called such fees “bogus,” and “designed to confuse the customer and ultimately charge them more.” Defenders such as Laurie Janik, general counsel of the National Assn. of Realtors, said brokers “ought to be able to charge what they need to make a profit” in an environment of rising expenses and higher commission payouts to top agents.

After the RealtySouth ruling, Janik urged brokers to disclose the extra fees as integral parts of their compensation schedules — a percentage commission of, say 6%, plus a set fee, say $500. Janik also argued that federal law does not prohibit fees that are not split with other parties, and that RESPA was never intended to be a price-control statute — two views that were at the core of the Supreme Court’s decision in the Quicken case.

Where does this leave the issue? Will lenders, escrow firms and realty companies start tacking on extra fees for themselves, emboldened by the high court decision? Possibly. But legal experts warn that there could be pitfalls ahead for firms who tack on outrageous charges when no services are rendered.

Laurence Platt, a banking attorney with the Washington, D.C., office of KL Gates, cautions that the Consumer Financial Protection Bureau “has its own independent ability to declare practices unfair, deceptive or abusive,” and could still come after companies that, in the bureau’s view, are gouging the public.

kenharney@earthlink.net

Distributed by Washington Post Writers Group.

Article source: http://www.latimes.com/business/realestate/la-fi-harney-20120603,0,7456236.story