New Jersey passed a law this year guaranteeing mortgage assistance to some Sandy-impacted homeowners. But a Kane In Your Corner investigation finds banks and mortgage companies are often unwilling to comply, and the law lacks a mechanism to punish them.

Five years after Sandy, Angel Eguaras, of Ventnor, doesn’t know when he will be back home. His contractor is accused of fraud and his house has failed inspection nine times. So Eguaras thought he’d finally caught a break when he was state-certified for a mortgage forbearance. Under the law, he qualified for no payments until July 2019, with no additional interest, fees or balloon payments.  The loan would simply be frozen and extended.

But his bank, Chase, wouldn’t comply.  Eguaras says when he called his relationship manager, “She says she doesn't know of any state program, and ‘I don't care about a state program.’” 

Instead, Chase would only offer Eguaras a six-month forbearance, followed by a balloon payment to bring the account current.   

“I’d save $1,800 a month, but at the end, I’d have to pay over $10,000?” Eguaras asks incredulously. “Does that makes sense?” 

He turned the offer down.

Kane In Your Corner found Eguaras is not alone.

To understand how long Jim and Carol Ferraioli, of Middletown, have had to make payments on a home in which they can’t live, you need only look at Jim’s son, Anthony, who started high school the month before Sandy. He’s now 19. Standing outside the empty shell of his former home, Anthony Ferraioli says, “I still come here certain days. I just drive past it. It's hard to look at each time.”

For the past 2 ½ years, the family’s house has literally been up in the air. A contractor began a house-lifting project, then abandoned it, leaving the house suspended on blocks. Over time, the joists have begun to bow and splinter.  

Jim Ferraioli is also state-certified for forbearance, which he says would “make a world of difference.” He says the savings might even allow him to restore his house.  

But Ferraioli’s mortgage company, Mr. Cooper, a division of Nationstar, has not committed to granting the forbearance the law requires. Instead, it’s begun foreclosing on the property, something the law specifically forbids.

Some who work with Sandy homeowners say uncooperative lenders are a chronic problem. “Since the rollout of this legislation, there hasn't been a week that's passed where we haven't gotten three or more calls from people who are struggling to get their banks to follow the law,” says Amanda Devecka-Rinear, executive director of the New Jersey Organizing Project.

Part of the problem may be the wording of the law itself. While it clearly spells out homeowners’ rights and lender responsibilities, it contains no specific penalties for noncompliance. To Jim Ferraioli, “If there’s no penalty, then it means they don’t really have to do it.”

There is good news for Angel Eguaras. Since Kane In Your Corner began questioning Chase, the bank has agreed to place him in a forbearance program in accordance with the conditions of state law. Mr. Cooper declined to comment on the Ferraiolis’ situation, but pledged to speak to the family directly.  

But Devecka-Rinear says homeowners should not have to enlist the help of investigative journalists to get what they legally deserve. “It’s the law,” she says. “And I have to follow the law, and you have to follow the law, so the banks should follow the law.”