New Jersey AG files complaint in foreclosure proceeds fraud allegations

[admin]

In the following press release the To view links in this forum your post count must be 10 or greater. Your post count is 0 momentarily. have filed suit against a Gloucester County businessman who allegedly collected tens of thousands of dollars in surplus funds that homeowners otherwise would have received for a small fee after their homes were sold in foreclosure.


The state’s two-count complaint against Samuel E. Goodwin, III is the first action filed under the state’s Consumer Fraud Act to address deceptive practices in the area of surplus funds recovery.
Goodwin allegedly charged homeowners 15% to 65% of the total surplus funds to which they were legally entitled by misleading the homeowners into believing that the process to recover the funds was complicated and could not be filed by the homeowners on their own. Surplus funds are the monies remaining after the foreclosure sale takes place and mortgage, tax and other legal obligations have been paid. Homeowners in foreclosure can claim surplus funds by filing a simple form available from the Superior Court Trust Fund Unit and after paying nominal fees totaling less than $100.
The state alleges that in one instance, Goodwin received approximately $79,000 in surplus funds for making the application for release of such funds.
“Because of the ongoing subprime mortgage crisis, an increasing number of homeowners are facing foreclosure. These individuals can be a ripe target for those who would exploit their misfortune for profit,” Attorney General Anne Milgram said. “Consumers who have lost their homes in foreclosure need and deserve all of the surplus funds to which they are entitled.”
“We continue to educate consumers about the surplus funds process and to alert them to deceptive practices,” said Acting Consumer Affairs Director Stephen B. Nolan. “The Division will vigorously pursue those who would take advantage of vulnerable consumers. Anyone going through the foreclosure process is urged to get all the facts about how the process works and to be suspicious if anyone unexpectedly offers to help with obtaining surplus funds.”
The state’s complaint, filed in State Superior Court in Gloucester County, alleges that Goodwin, who maintains business addresses in Gloucester City and Woodbury, violated the state’s Consumer Fraud Act by the following:

• Misleading consumers into believing that he is a practicing attorney;
• Leading consumers to believe that the surplus funds application is a complicated process that requires his “expertise” and assistance;
• Leading consumers to believe that they could not make a pro se application for surplus funds;
• Aggressively pursuing and pressuring consumers into retaining his services and executing documents;
• Orally representing a surplus funds allocation between himself and the consumer, and then preparing written documentation that increases his share of the surplus funds recovery;
• Charging consumers varying percentages for the recovery of surplus funds when the same application process applies to all consumers;
• Recovering amounts ranging from $8,900 to $79,000 as a result of making a surplus funds application on behalf of consumers; and
• Failing to disclose to consumers the actual charges incurred in connection with the filing of a surplus funds application.

In addition, the state seeks restitution for affected consumers, maximum civil penalties, reimbursement of its attorneys’ fees and costs and compliance with the Consumer Fraud Act. The Superior Court Trust Fund Unit has assisted the Division with its investigation.
Any consumer who believes that he or she may be a victim of a surplus funds scam should file a complaint with the Division of Consumer Affairs. Complaints forms are available online at To view links in this forum your post count must be 10 or greater. Your post count is 0 momentarily.. Complaints also may be filed by calling 800-242-5846 (within N.J.) or 973-504-6200 .

Deputy Attorney General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section, is handling this matter for the state.
Earlier this year, the Division issued a Consumer Brief concerning surplus funds which can be found at To view links in this forum your post count must be 10 or greater. Your post count is 0 momentarily.



To view links in this forum your post count must be 10 or greater. Your post count is 0 momentarily.