Testimony of Phyllis Salowe- Kaye, Executive Director Before the Subcommittee on Housing, Transportation, and Community Development of the Senate Committee on Banking, Housing, and Urban Affairs

More than 13,000 low- and moderate-income homebuyers have purchased homes through our 9 offices since 1995. Unfortunately, since the first quarter of 2007, our business has changed and our loan counselors have been dealing almost exclusively with homeowners facing foreclosure due to loss of job, divorce, illness and/or as victims of predatory lending, toxic mortgages and fraud schemes. Each week we receive calls from between 89 and 120 new clients who are facing the loss of their homes for the following typical reasons: 1. Clients who have fallen behind on mortgage payments and other bills due to circumstances beyond their control (health, divorce, job loss, death) and needs assistance to “catch up” and continue paying their current mortgage or is eligible for a refinance. 2. Clients who received a loan that they had no possibility of ever repaying. 3. Clients who are currently in foreclosure or are in default who do not have income to support a work out, restructure or repayment plan.?4. Clients who are not late, have good credit and realize that they have mortgages with adjustable rates that they will not be able to pay in the future. 5. Clients who are being “rescued” by unscrupulous individuals or companies who are trying to steal their homes. For the last three years thousands of New Jerseyans have come through our doors for individual counseling and over ten thousand have attended community education presentations. Originally we saw folks with subprime, adjustable mortgages, and then came those with exploding toxic boutique mortgages, and now we see those with prime loans that are facing economic hardships. Some folks we can keep as clients and assist them in refinancing, modifications, short sales, deed-in-lieu of foreclosures and sales. Sadly, we can’t help approximately 53% of those who ask for our help and will eventually lose their homes to foreclosure. We also see the victims of the scam artists and their rescue scams. This new wave of fraud and fast dealing is ripping the homes right out from under homeowners who are in trouble. This represents the tail end of the efforts of a sub prime cycle gone wide when the consumers have thrown in the towel trying to pay off high cost loans. Here are a few of the scams we have seen: 1. Phantom Help- “Rescuer” charges outrageous fees for a few phone calls and a bit of paperwork that the homeowner could have done alone. They make big promises, deliver little and leave the homeowner without help to actually save the home, with little or no time left to seek real help. 2. Bailout scheme- Homeowners surrender title to the house in the belief that they are entering into a deal where they may stay in the house as a renter and buy the home back over the next few months or years. 3. Bait and Switch- The homeowner does not even realize that they have surrendered ownership in exchange for “rescue” and think that they have refinanced their home to a better rate to prevent foreclosure. In January of 2009, Governor Corrine signed the most comprehensive foreclosure legislation in the country putting New Jersey in front on this issue. Now we need your help. The battle for financial reform has just begun and NJCA has joined Americans for Financial Reform (AFR), a national coalition of more than 200 national, state and local consumer, employee, investor, community, civil rights organizations spearheading a campaign for real reform in our banking and financial system. Senator Menendez, we need you to support the President’s proposal for the creation of CFPA and become a leader in the Senate by getting your colleagues to strengthen and expand the President’s proposal to put jurisdiction of the Community Reinvestment Act (CRA) under this new agency. We need to tackle with these financial institutions that are “too big to fail,” and force them to keep struggling families in their homes. We must to ensure that the Federal Reserve, with its proposed new powers, is truly independent and accountable to the public. Up until now, efforts to gain a measure of democratic control over the financial sector have been scattered and localized, responding to different aspects of the bank-induced crisis. AFR was organized to provide a loud, unified voice needed to call for transparency and accountability in the financial bailout. To counter the immense power of the finance industry, AFR has been mobilizing on multiple levels, from Capitol Hill to neighborhoods decimated by factory shutdowns and home foreclosures. Right here in New Jersey we are mobilizing on behalf of AFR and our Board and Affiliates, as well as the thousands of low- and moderate-income individuals we serve through our empowerment programs. NJCA Action calls upon New Jersey lawmakers to take immediate action to pass H.R. 3126, the Consumer Financial Protection Agency Act. The establishment of a strong CFPA is so important because it would be a central body monitoring all financial products with the sole mission of protecting consumers. The creation of that agency should be the top priority for Congress. It's the key reform to protect consumers from financial abuse. Most reasonable people would have a hard time arguing against a consumer protection law that prevents kids’pajamas from being made with fabric that might spontaneously combust. So why are the toxic financial products and practices that caused our credit market to combust any different? The difference is big money Wall Street lobbyists that are spending millions of dollars to kill this legislation. The fact that the big banks and chamber of commerce oppose this proposal tells me that it will make a huge difference and will put a stop to business as usual.

WASHINGTON, D.C. (March 5) -- The U.S. Consumer Product Safety Commission today informed consumers that a small number of boys' and girls' pajamas made by S. Schwab Company, Inc., Upper Potomac Industrial Park, Cumberland, Maryland, failed to pass the flammability test for children's flame retarded sleepwear sizes 0 to 6X.

The pajamas were sold under the Schwab brand name, style "1170, Lot 953." Forty-two-and-a-half dozen pajamas were involved.

The pajamas were 50 percent nylon and 50 percent polyester and came in two colors: pink with white dots and white lace trim and turquoise with white dots and white lace trim. The sleepwear sold in sizes small, medium and large, designated 1, 2, and 3, individually boxed, with each box bearing this label: "Flame Retardant Complies with Federal Stan'd. DOC FF 3-71." The sleepwear was sold during the summer of 1973 primarily to small retail shops in the Eastern United States.

The Commission has provisionally accepted a consent agreement signed by S. Schwab Company. As part of the agreement, the Company has agreed to notify their retail purchasers and to conduct a recall of the non-complying garments.

Richard D. Schwab and Leonard C. Schwab, the firm's principal officers, also signed the agreement.

Consumers who bought this sleepwear should return it to the store where it was purchased or to the manufacturer.

A consent agreement is a legal document in which the company involved usually agrees to stop manufacturing or selling non-complying goods, notify known purchasers and initiate a recall. The action on the part of the company is voluntary, and the company does not admit guilt in agreeing to the terms.

The company also agrees not to violate flammability standards in the future.

A violation of a consent agreement could result in a civil penalty of up to $10,000 per violation.

The complaint and consent order will remain on the public record through May 5, 1975, during which time any interested person may submit comments to the Office of the Secretary, Consumer Product Safety Commission, 1750 K Street, N.W., Washington, D.C. 20207.

After considering any comments, the Commission may finally accept the agreement or withdraw its provisional acceptance.

It wasn't unusual last week to see NWS headquarters employees wandering the building wearing bedroom slippers or Boston Red Sox boxer shorts on the outside of their clothes. No, this was not a rash of late-summer fashion faux pas, but was a part of the Office of Service's "Celebration Week."

"The pace of our activities is draining and, at times, dispiriting. I wanted to try a little craziness to raise spirits and bring a little more fun into work," said Greg Mandt, Director of the Office of Climate, Water, and Weather Services. Employees Debbie Greeley and Mary Howell suggested the idea of "Celebration Week" where each day employees would wear a featured item of offbeat clothing. The week concluded with an office-wide picnic. The list of themes or required clothing for each day was as follows:

* Hat Day
* Pink Day
* Sports Fans Day
* Bedroom Slipper Day
* Beach Day