Judge to mortgage lenders: no double-dipping on Sandy foreclosures

TOMS RIVER — A mortgage lender has to disclose before a property is sold through foreclosure whether it has insurance money to repair any damages, otherwise there’s the potential for double-dipping, a Superior Court judge has said.

The ruling by Judge Francis Hodgson Jr. in Ocean County attempts to make the foreclosure process – particularly of properties damaged by Hurricane Sandy – a more open and fair one to bidders and the property owner, attorneys for the property owner said.

“By permitting the lender to hold the insurance proceeds secretly through the sale suppresses the fair market value, discourages bidders and allows the lender to potentially retain excess collateral, thereby prejudicing the borrower,” Hodgson said in his decision.

Read on.

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