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New Jersey Mortgage Default Rate Is Country’s Third Highest, Report Says

August 25, 2011 1 comment

New Jersey Mortgage Default Rate Is Country’s Third Highest, Report Says

A new report by the Mortgage Bankers Association says New Jersey is third in the nation in the number of loans either in foreclosure or on the brink.

Mary Pat Gallagher

08-23-2011

A new report by the Mortgage Bankers Association says New Jersey is third in the nation in the number of loans either in foreclosure or on the brink.

More than one in 10 New Jersey mortgage loans are already in foreclosure or are 90 days or more in arrears, says the association’s National Delinquency Survey for the second quarter of 2011, which looked at almost 43.9 million mortgage loans across the country, including 1,252,958 in New Jersey.

The state’s 11.36 percent rate of “seriously delinquent” mortgages was third highest in the U.S. Florida topped the list with 18.68 percent, followed by Nevada, with 14.34 percent.

At the opposite end of the scale were North Dakota with a 1.76 percent rate, and Alaska with 2.24.

In addition to serious delinquencies, another 3.18 percent of New Jersey mortgages are 30 days late and an additional 1.24 percent are 60 days late, says the report, released Monday..

New Jersey’s ranking was driven by a high number of pending foreclosures, nearly 8 percent. Again, only Florida (14.39 percent) and Nevada (8.15 percent) have more.

The report does not state the number of loans in foreclosure, but Kevin Wolfe, assistant director for the Administrative Office of the Courts’ Civil Practice Division, says 107,464 residential foreclosure cases filed since 2009 remain open. He points out that the figure includes settled cases for which no stipulations of dismissal have been filed.

The glut of foreclosures is the product of a flood of filings that crested in 2009, at 66,717, including non residential foreclosures, and dropped to 58,445 for 2010.

Filings slowed to a trickle at the end of last year, after the judiciary froze uncontested residential foreclosures by the six biggest lenders so it could address robo-signing and other abuses that had come to light.

Wolfe estimates that those six — Bank of America, JPMorgan Chase, CitiBank, Ally Financial, OneWest Bank and Wells Fargo — file at least 70 percent and possibly more than 80 percent of uncontested residential foreclosures.

Their sizeable share of foreclosures has been evident in the precipitous plunge in filings since theirs were suspended last December. Only 6,090 foreclosures had been filed in 2011 as of the end of July, a drop of 90 percent from 2010.

Monthly filings fell from 4,358 last November, the month before the freeze, to 399 in January. They have inched back up since then, to 1,368 for July.

Filings are sure to rebound much faster now that the courts have resumed processing foreclosures for five of the big six foreclosers. All but Ally Financial, formerly known as GMAC Mortgage, got the go-ahead to resume foreclosures during the week of Aug. 15.

The five persuaded a court-appointed special master, retired judge Richard Williams, that they have stopped offensive practices — such as signing court documents that falsely stated personal knowledge of the facts of the mortgage; failing to review documents on which certifications or affidavits were based; and forging signatures — and have taken steps to prevent recurrence.

In her Dec. 20, 2010, order, Mercer County Presiding General Equity Judge Mary Jacobson said the court had “become increasingly concerned about the accuracy and reliability of documents submitted to the Office of Foreclosure” and was acting on an exigent basis “to protect the integrity of the judicial foreclosure process.”

In addition to requiring lenders to prove they have adopted and are following proper procedures, the Court has amended the rules governing foreclosure.

Among other changes to Rules 4:64-1 and 2 that took effect in June, lenders’ lawyers are now required to attach a Certification or Affidavit of Diligent Inquiry to foreclosure complaints and motions describing the lawyer’s communication with an employee of the lender or loan servicer who has personally reviewed the mortgage file and confirmed the accuracy of the information in court filings.

The courts are bracing for a spurt in new filings as well as “the large pent-up pool of cases to be moved,” by adding staff at the Office of Foreclosure and around the state, says Wolfe.

As of Tuesday, he had not yet seen the anticipated surge in filings but planned to talk with Williams about how to handle the monitoring of foreclosure filings to ensure that the new safeguards are being followed. The six lenders agreed to the monitoring in a stipulation in March.

The press release accompanying the Mortgage Bankers report suggested another cause for the New Jersey backlog. It called the existence of a judicial foreclosure system, which some states like California and Michigan do not have, the “single biggest factor” in why some states have big backlogs because it “lengthen[s] the foreclosure timeline and increase[s] the number of loans that sit in foreclosure, all other things being equal.”

New NJ State Supreme Court Ruling : State v. Cecilia X. Chen (A-69-08)(063177)

August 24, 2011 Leave a comment

In this appeal, the Court considers whether suggestive behavior by a private party, without any state action,
should be evaluated at a pretrial hearing to determine whether an eyewitness’ identification may be admitted at trial.

There are many DWI cases where the court must decide “was defendant really the driver?” Where the issue is at play it is crucial that defense attys review the process of identification. When the police initiate the process, the law has been clear that defendant is entitled to Wade hearing on whether the process was too suggestive. But what is there is no state action, I.e. it is a friend or relative of the victim who was too suggestive? The Supreme Court today,in State v Chen, the Court ruled that state action or not, the process of eyewitness ID is so fraught with prejudicial peril that the trial court must entertain the Wade type hearing regardless.
HELD: Even without any police action, when a defendant presents evidence that an identification was made under highly suggestive circumstances that could lead to a mistaken identification, trial judges should conduct a preliminary hearing, upon request, to determine the admissibility of the identification evidence.
1. This case is not about government conduct.  As a result, the Court is not concerned about deterring future conduct by law enforcement officers.  Nonetheless, the Court must consider the admission of eyewitness identifications tainted by private suggestive procedures in light of the rules of evidence and the trial courts’ gatekeeping function.  Courts have a gatekeeping role to ensure that unreliable, misleading evidence is not admitted. (pp. 12-15)
2. The Court notes that identification evidence has historically raised serious questions about reliability. Today’s decision in State v Henderson contains a broader examination of the extensive body of scientific evidence that has developed in the past thirty years.  Among other things, that evidence reveals the suggestive effect that private actors  can have on an eyewitness’ recollection of events.  In Henderson, the Court concluded that non-State actors like cowitnesses and other sources of information can affect the independent nature and reliability of identification evidence and inflate witness confidence. (pp. 15-26)
3. Because of the pivotal role identification evidence plays in criminal trials, and the risk of misidentification and wrongful conviction from suggestive behavior – whether by governmental or private actors – a private actor’s suggestive words or conduct will require a preliminary hearing under Rule 104 in certain cases to assess whether identification evidence is admissible.  Today in Henderson, the Court modified the traditional Manson/Madison test and held that defendants can obtain a pretrial hearing by showing some evidence of suggestiveness that could lead to a mistaken identification.  The Court makes a modification to Henderson in cases in which there is no police action, requiring a higher, initial threshold of suggestiveness to trigger a hearing, namely, some evidence of highly suggestive circumstances as opposed to simply suggestive conduct.  The Court holds that the following modified approach shall apply to assess the admissibility of identification evidence when there is suggestive behavior but no police action: (1) to obtain a pretrial hearing, a defendant must present evidence that the identification was made under highly suggestive circumstances that could lead to a mistaken identification, (2) the State must then offer proof to show that the proffered eyewitness identification is reliable, accounting for system and estimator variables, and (3) defendant has the burden of showing a very substantial likelihood of irreparable misidentification. (pp. 26-
30) 4. Applying the above framework to the facts of this case, the Court finds that JC’s words and actions were so highly suggestive that a pretrial hearing is warranted to assess the admissibility of Helen’s identification evidence.  The Court therefore remands the case to the trial court for a Rule 104 hearing. (pp. 30-32)

Ex-Spouse’s Angry, Repeated Texting Not Harassment

August 23, 2011 Leave a comment

Ex-Spouse’s Angry, Repeated Texting Not Harassment, Appeals Court Says A string of 18 text messages in three hours from one divorced parent to the other does not necessarily amount to harassment, a state appeals court says in reversing a final restraining order.

David Gialanella

08-22-2011

 

Excessive texting from one divorced parent to the other does not necessarily amount to harassment, a state appeals court said Monday in a published decision reversing a final restraining order. The husband’s sending of 18 angry messages in the space of three hours “shows only the convergence of modern technology and the foibles of human judgment,” the Appellate Division held in L.M.F. v. J.A.F., A-121-10. “Our ability to instantaneously and effortlessly send electronic messages has created a gateway unfettered by reflection and open to rash, emotionally driven decisions” and has “created a commensurate expectation of an equally instantaneous response from the recipient,” Judge Jose Fuentes wrote for the court. While texting is a good communication mode between estranged couples because of brevity and impersonality, it still is susceptible to “frustration and misuse” if parties do not cooperate, Fuentes said, calling the husband’s behavior “dysfunctional” but not done with the requisite intent to harass. The parties, who were divorced in 2006, conversed mostly by texting about parenting issues concerning their 19-year-old son and 17-year-old daughter, over whom they shared custody, though the children lived primarily with their mother. Husband J.A.F. had remarried and his current wife also joined in. In March 2010, the current wife complained that L.M.F. failed to notify them about a banquet for their daughter’s high school basketball team. The current wife then texted L.M.F. eight times between 7:32 a.m. and 8:19 a.m. on May 25, 2010, for not informing J.A.F. about a board of education meeting at which the basketball team was honored. The messages said J.A.F. and his wife “can go where ever we want TOGETHER” and tell L.M.F. to “Save ur breath for someone who gives a shit about what you think.” Then, on June 25, 2010, J.A.F. sent L.M.F. 18 text messages between 6:50 a.m. and 11:34 a.m. about their daughter’s SAT score, asking for an update and then accusing her of withholding information. “You are playing this game by not telling me t[h]ings about our kids,” he wrote, demanding that she keep him informed “so we both don’t look like ass hole parents that don’t talk.” L.M.F. testified that her lone response said she was not aware of the score and he should contact their daughter. On June 28, J.A.F. again texted about the SAT score, threatening to call his attorney and adding, “FYI, I pay you $2,800 a month more than what you make.” L.M.F. testified that when she called to ask him to stop, he became angry and called her “a fucking scorned woman.” J.A.F. sent two more texts that day, at around 5 p.m., inquiring about their daughter’s whereabouts. L.M.F. petitioned for a restraining order and, at trial, testified about an incident in December 2005, when, after J.A.F. moved out of their home, he returned and angrily asserted his right to come and go, yelling at her from a distance of about five feet. Hunterdon County Superior Court Judge Hany Mawla asked L.M.F. whether she was fearful, to which she responded, “yes.” She claimed J.A.F. intermittently barraged her with texts whenever the children were unresponsive to him. J.A.F., in turn, argued that L.M.F. withheld information about the children and provoked him with inflammatory e-mails. Mawla issued a final restraining order, finding that L.M.F.’s nonresponse to J.A.F.’s texts did not excuse his conduct, which amounted to the predicate act of harassment under N.J.S.A. 2C:33-4. Mawla cited J.A.F.’s use of offensive language in calling her a “fucking scorned woman,” his current wife’s use of profanity in one of her texts and the timing of his early-morning messages, which the judge said were likely to annoy her. But Fuentes, joined by Judges Victor Ashrafi and William Nugent, reversed, saying Mawla did not find J.A.F. sent the messages to harass his ex-wife. L.M.F. did not dispute that J.A.F.’s purpose was to inquire about their daughter, and the texts became an annoyance only after she ignored them, the panel said. When she did, “it was not unreasonable for defendant to assume he was being snubbed or ignored,” Fuentes wrote. “He manifested his frustration by resending the same message, over and over again, in a misguided attempt to provoke some kind of response from plaintiff,” though the subject was always legitimate concerns about their children, Fuentes wrote. Even if L.M.F. established the predicate harassment, Mawla did not find — as the Domestic Violence Act requires — that relief is necessary to prevent further abuse, the panel said, writing off the December 2005 incident as “not part of a pattern of verbal or physical abuse.” Also, L.M.F. offered evidence of her fearfulness only when prompted by Mawla, the court said, noting that judges “must take special care to craft questions in such a manner to avoid being perceived as an advocate for any side of a dispute.” As for his current wife’s communiques, there was no evidence J.A.F. directed her to send those messages and Mawla should not have considered them in ruling on the restraining order, the panel said. J.A.F.’s attorney, Michael Speck of Keith Burns’ firm in Iselin, did not return a call. L.M.F. was pro se on appeal.

Does Clicking ‘I Agree’ Create a Binding Contract?

August 21, 2011 Leave a comment

Does Clicking ‘I Agree’ Create a Binding Contract?

Refining the ‘fair and forthright’ standard for online consumer agreements
Refining the ‘fair and forthright’ standard for online consumer agreements

Elliot D. Ostrove andBrian W. Disler

08-17-2011

As consumers continue to buy more and more products over the Internet, courts are being presented with opportunities to examine the validity of online agreements.

For example, on May 13, the Appellate Division decided Hoffman v. Supplements Togo Mgmt., LLC, 419 N.J. Super. 596 (App. Div. 2011), holding that the forum-selection clause contained on the defendant’s website did not meet the “fair and forthright” standard, and was therefore presumptively unenforceable. The court in Hoffman foreshadowed the likelihood of growth of this area of the law, stating: “[C]onsumers are increasingly purchasing products and services over the Internet. As those Internet transactions have become more prevalent, so too have legal disputes proliferated over the contractual rights created in cyberspace between buyers and sellers.”

Prior to Hoffman, courts in several jurisdictions, including New Jersey, had decided cases involving the validity of online agreements. The New Jersey Appellate Division first dealt with this issue in Caspi v. Microsoft Network, 323 N.J. Super. 118 (App. Div. 1999). In Caspi, the plaintiffs, members of the defendant’s Internet service, filed suit claiming, among other things, consumer fraud. The defendant moved to dismiss the complaint for lack of jurisdiction, claiming that the suit could only be brought in the state of Washington, as per a forum-selection clause found in the membership agreement plaintiffs allegedly agreed to when they clicked through the website.

The court in Caspi looked at the circumstances under which the plaintiffs were presented the online agreement. Before becoming a member of the defendant’s service, a prospective subscriber was prompted to view a membership agreement containing the forum-selection clause. The membership agreement appeared on the webpage next to blocks providing the choices I Agree and I Don’t Agree . Registration could proceed only after the potential subscriber had assented to the membership agreement by clicking on I Agree .

In determining the enforceability of the forum-selection clause, the court in Caspi applied a “fair and forthright” standard. The court stated that, “[i]f a forum selection clause is clear in its purport and has been presented to the party to be bound in a fair and forthright fashion, no consumer fraud policies or principles have been violated.” (Emphasis added.) The court found that the contractual terms were presented in a fair and forthright manner as the plaintiffs “were free to scroll through the various computer screens that presented the terms of their contracts before clicking their agreement.” The court therefore upheld the enforceability of the online contractual terms, including the forum-selection clause.

The Second Circuit Court of Appeals dealt with a similar dispute in Specht v. Netscape Communs. Corp ., 306 F.3d 17 (2d Cir. N.Y. 2002). In Specht, the plaintiffs brought suit in the Southern District of New York against the defendant, a provider of computer software programs. The defendant moved to compel arbitration, arguing that the plaintiffs’ claims were subject to an arbitration provision contained in a contract the plaintiffs had allegedly accepted when they downloaded the program.

The court in Specht applied California law, which, similar to New Jersey law, required reasonable notice of the online contract as a prerequisite to its enforceability. Unlike the contractual provisions in Caspi, however, the provisions in Specht were located in a “submerged” portion of the webpage. The submerged portion could not be seen by the consumer unless he or she scrolled down the webpage, beyond the material that initially filled the screen. The court in Specht found that the submerging of the contract terms did not meet the standard of reasonable notice. The court stated, “a reference to the existence of license terms on a submerged screen is not sufficient to place consumers on inquiry or constructive notice of those terms.” The arbitration provision was therefore found unenforceable.

More recently, the Eastern District of Pennsylvania dealt with the enforceability of an online agreement in Feldman v. Google, Inc., 513 F. Supp. 2d 229 (E.D. Pa. 2007). In Feldman, the plaintiff sued Google regarding its AdWords service. This service allowed a customer, after signing up for an account, to advertise his or her business on Google. Google sought to transfer the case to California, citing a forum-selection clause in the online agreement they claimed the plaintiff agreed to when signing up for AdWords.

In determining whether the forum-selection clause was valid, the court looked at whether the plaintiff was given “reasonable notice” of the online contract. Unlike the defendant in Specht, Google had taken several steps to ensure that its online contract was prominently displayed. Toward the top of the page displaying the contract, a notice stated, “Carefully read the following terms and conditions. If you agree with these terms, indicate your assent below.” Additionally, a link to a printer-friendly version of the contract was offered at the top of the contract window. At the bottom of the webpage, viewable without scrolling down, was a box with the words: Yes, I agree to the above terms and conditions . If the customer did not click on that phrase, and instead tried to click the Continue button at the bottom of the webpage, the customer could not activate the account.

The court in Feldman found that the manner in which Google displayed its online contract was reasonable. The court distinguished Google’s online contract from the online contract in Specht, pointing specifically to the fact that Google’s customers had to take affirmative action when agreeing to the contract terms. The court stated:

Unlike the impermissible agreement in Specht the user here had to take affirmative action and click the “Yes, I agree to the above terms and conditions” button in order to proceed to the next step. . . If the user did not agree to all of the terms, he could not have activated his account, placed ads, or incurred charges.

The court therefore upheld the enforceability of the forum-selection clause.

It was to the above three cases — Caspi, Specht and Feldman — that the Appellate Division referred in recently deciding whether the online agreement in Hoffman was “fair and forthright.” In Hoffman, the plaintiff, a purchaser of product from defendant’s website, sued the defendant in New Jersey state court, claiming that the defendant had, among other things, violated the New Jersey Consumer Fraud Act. The defendant moved to dismiss the complaint claiming, inter alia, that the plaintiff was precluded from suing in New Jersey because of a forum-selection clause contained within a disclaimer on the defendant’s website. The trial court agreed with the defendant, dismissing the complaint, and the plaintiff appealed.

The Appellate Division overturned the trial court, holding that the placement of the disclaimer on defendant’s webpage failed to meet the Caspi “fair and forthright” standard and, as such, the forum-selection clause contained therein was presumptively invalid. The Appellate Division found that defendant’s “submerging” of the forum-selection clause — deemed impermissible in Specht — was likewise not “fair and forthright.” Specifically, the defendant placed the disclaimer in a position on the website where it was possible for the plaintiff to make his entire purchase without ever seeing the disclaimer if he did not scroll down the page. Furthermore, once the plaintiff added an item to his online “shopping cart,” the site would skip ahead to a new page that did not contain the disclaimer. The Appellate Division highlighted these points, stating that “the forum-selection clause was unreasonably masked from the view of the prospective purchasers because of its circuitous mode of presentation.” The court ruled that the forum-selection clause was presumptively invalid and reinstated the complaint.

In light of Hoffman and the line of cases preceding it, companies that sell products directly to consumers over the Internet should review and, where necessary, revise their website layouts, to ensure that they are conforming to the now further-defined “fair and forthright” standard. Even though the cases cited above all involve forum-selection clauses, the practical application of the decision is not necessarily so limited.

In order to ensure that their online agreements will be enforceable, companies can take some or all of the following steps:

Ensure that the contract provisions are not “submerged” (i.e., the online contract is visible without the customer having to scroll down the page).

If scrolling is necessary to see all of the terms and conditions, have customers take an affirmative step to show their assent to the agreement, such as clicking a button stating, “Yes, I agree to the above terms and conditions” (agreement button).

Only allow customers to make a purchase after they have clicked an agreement button, whether scrolling is necessary or not.

Require users to scroll down through the entire terms and conditions before being allowed to click on an agreement button.

Have users who click on anything other than the agreement button, directed back to the terms and conditions before being allowed to “check-out.”

Provide a link to a printer-friendly version of the contract.

Palisades Park student found guilty in cafeteria fight, but judge gives him a break

August 12, 2011 Leave a comment

Palisades Park student found guilty in cafeteria fight, but judge gives him a break

Thursday, August 11, 2011    Last updated: Friday August 12, 2011, 10:15 AM
BY KIBRET MARKOS
STAFF WRITER
The Record
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A Palisades Park High School student was found guilty Thursday of simple assault after a judge found that he punched another student in the school cafeteria last year.

High school student Dong Sung An, wearing a white shirt and tie, at a crowded Palisades Municipal Court.

MICHAEL KARAS / STAFF PHOTOGRAPHER
High school student Dong Sung An, wearing a white shirt and tie, at a crowded Palisades Municipal Court.

However, Judge Joseph Rotolo declined to sentence Dong Sung An to probation or to perform community service, saying those punishments were too harsh. Instead, he ordered An to pay a $256 fine, ­ a move that his supporters greeted with applause.

An’s trial assumed all the solemnity of a criminal proceeding, with a prosecutor and two defense attorneys who engaged in heated arguments as the trial went on for several hours into the night in Municipal Court.

Four police officers were on hand to keep order in the courtroom, which was filled to capacity with nearly 150 of An’s supporters, some of whom held up placards that read: “Criminal charge is nonsense!” and “An Dongsung is not a criminal!”

The case renewed a debate about how police decide whether to pursue charges against students resulting from school incidents or allow the schools to handle such incidents through their disciplinary procedures. Schools and police departments throughout the state are required to follow a memorandum of agreement to address school safety issues, including gang activity, bomb threats or incidents involving an “active shooter.”

Critics, however, say the push for school safety is leading to a national trend in which even minor school infractions are being criminalized.

The case generated widespread sympathy for An in the Korean-American community. The Korean Consulate in New York sent a letter to Palisades Park Mayor James Rotundo this week, asking him to review whether An was being fairly prosecuted.

An sat by his attorneys and followed the proceedings through a Korean interpreter. The boy he was accused of assaulting last year, when An was 18 and in his junior year at the school, sat on the other side of the courtroom with the prosecutors and his mother.

The boy later took the witness stand and described how he got in line at the school cafeteria, left the line to put down his backpack and returned to his spot in line, angering An who was behind him.

Punches were thrown after some words were exchanged, and the smaller boy testified that he was knocked down and suffered a cut to his lip that required six stitches. The school suspended both students for five days, and An was charged in a criminal complaint with aggravated assault for punching the boy twice in the face. The Bergen County Prosecutor’s Office later downgraded the charge to simple assault.

“We are in court because [the boy’s] mother sent him to a place where he was supposed to be safe, where he was supposed to be protected from incidents like this,” E. Carter Corriston Jr., the municipal prosecutor, said in his closing remarks.

One of the defense attorneys, Vincent Hughes, took a different tone in his closing statement, saying the dispute between the two students should never have ended up in court.

“Are we going to subject these two boys to this level of ridiculousness?” he said. “It says a lot about this community.”

The judge did not agree with him.

“The defense’s attempt to characterize this as something more than just an assault, a fight between two kids, is misplaced,” Rotolo said.

Andrew Kim, a former president of the Korean American Association of Fort Lee, said many people were upset with the prosecution.

“Is it really necessary for the criminal justice system to punish a student for a school fight?” he said.

An’s attorney, B.J. Kim, said he was glad that the judge did not impose probation, community service and other penalties that the prosecutor had requested, but said he was not happy that An was convicted of simple assault. He said the conviction could affect An’s application for American citizenship in the future.

He also called the prosecution “egregious.”

“We spent six hours prosecuting this ridiculous incident,” he said. “Why it has come to this juncture is beyond me.”

E-mail: markos@northjersey.com