Foreclosures Soar Across N.J., but This Woman Beat the Odds

Lillian Shupe | Hunterdon County Democrat

January 21, 2015 at 1:45 PM, updated January 21, 2015 at 1:46 PM

LEBANON TWP. — Foreclosures in N.J. are up nearly 63 percent over a year ago, according to RealtyTrac, with more than 85,000 properties in some stage of foreclosure across the state.

But Jeanne Lang Boyer fought foreclosure on her home here and won the battle. That means she'll be staying in her Musconetcong River Road home.

Boyer's foreclosure headaches began when she missed property tax payments. When that happens, under state rules, the municipality where the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction.

That's what happened to Boyer, whose lien was purchased by Crusader Servicing Corp. It purchased the tax lien at the highest interest allowed by law — 18 percent. The debt quickly ballooned.

In October 2008, Crusader started foreclosure proceedings in Superior Court against Boyer.

But Robert W. Stein, who was president of Crusader Servicing and several other companies, was charged along with several other individuals with conspiring to rig tax lien auctions throughout the state.

Boyer joined with other homeowners in the same situation and filed a class-action suit in early 2012. The case was then transferred to federal court.

Stein pleaded guilty in February 2012. Crusader pleaded guilty on Sept. 26, 2012, to participating in the conspiracy. By May 2014 a total of 15 individuals or companies had pleaded guilty to federal charges of violating the Sherman Act.

According to the Department of Justice, Crusader Servicing Corp. of Jenkintown, Pa. and the others participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The department said that Crusader submitted bids in accordance with its agreements and purchased tax liens at collusive and non-competitive interest rates.

“The conspirators agreed to not compete with one another at these tax lien auctions, depriving struggling homeowners of a competitive interest rate,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.

The Department of Justice said that the conspiracy limited competition in public auctions for municipal tax liens so the liens could be purchased at higher interest rates, many at the maximum 18 percent rate.

State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent.

A violation of the Sherman Act carries a maximum penalty of $100 million criminal fine for corporations. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum.

A trial in Boyer's foreclosure case was scheduled for Jan. 12. Instead, a settlement was reached and the suit has been dismissed. The details of the settlement were not available. While the foreclosure case proceeded, another suit was filed in Superior Court in Flemington disputing the amount of taxes that Boyer owes. In that suit, filed in September 2014, Boyer claims she was misled by the former township tax collector and wrongfully denied the senior citizen’s tax freeze.

That suit is still currently active.

Meanwhile, the federal class action suit also appears to be nearing an end. Settlements have been reached with all but one individual defendant according to a Jan. 16 letter to the court from attorney Bruce Greenberg. A mediator is working with that individual and an agreement is expected soon, according to the letter. The court issued an order that an update should be provided by Feb. 20.