Clawbacks, Contractor Fraud and Foreclosures:  Winning Together in 2018


We’re not known for giving up – and that’s because we don’t.

On his last day of office, Governor Christie pocket vetoed the clawback legislation we’ve been working on together on since October 2016.  That guy.  The gift that keeps on giving.  Anyway, great news!  The Senate reintroduced the clawback legislation this week (beginning of February)! Come to an Action Kickoff near you to keep working together for solutions and catch up below.

There are three sections in this post – solution, problem, and stories.  It mostly covers clawbacks, but includes some information about contractor fraud and the foreclosure prevention.  Scroll down to read some stories of how folks have been trying to fight their clawbacks on an individual level.  Their experiences might be helpful.

Solutions we are working on together:

  • We deserve a real appeals process for clawbacks – one where we can actually understand the calculation, and why we’re being asked to pay the state back.
  • We deserve to have the clawbacks eliminated or reduced significantly.  Even if the calculations “make sense” they still don’t – we signed every document, followed every rule and used every dollar to rebuild our homes AND we may still be paying off Small Business Administration disaster loans, or other loans we took out to get home or hang on until we could.
  • Stop requiring a charging document to move forward with grant adjustments after contractor fraud.  It’s been 1926 days since Sandy as of 2/6/18, and contractor fraud shouldn’t still be keeping families out of their homes.  Many families have engineering reports or other sufficient evidence of fraud.  Lets get additional funds out the door and get people home.
  • All families that need assistance under the Sandy foreclosure legislation should get it.  Banks must be made to respect the law, and there are likely families who could still benefit from a forbearance who may not have initially applied.  We need to continue to stop foreclosure on Sandy families.

How do we get our solutions?  By working together!

Our new Governor Murphy and DCA Commissioner Oliver can simply implement them.  We could also pass legislation, or some combination of both.  We are reaching out to our state legislators and Governor Murphy and Commissioner Oliver.  Thank you to all our legislators who have worked with us and voted unanimously to support the clawback legislation.

Problem (I mean, maybe we had you at solution.  But in case you want to learn a little more…):

As it currently stands, families receive letters, or sometimes a verbal warning, from RREM that they owe some part of their grant funds back.  Say that out loud slowly, right?  Grant…funds… back.  Anyway, it often isn’t clear from the initial letter provided why the DCA thinks the funds are owed. While in some cases these debts are likely linked to the DCA’s interpretation of duplication of benefits under the Stafford Act (federal law), there is no way to appeal or adjust the amount based on ability to pay other than to submit additional receipts. Families are then given 3 years or 36 months to repay and simply told to send a cashiers check made out to, “Treasurer, State of New Jersey.”

According to the report, The Long Road Home, released on the fifth anniversary of Superstorm Sandy by the New Jersey Resource Project, twenty percent of the families surveyed in the RREM or LMI program were told that they owe money back to the grant programs. More than a third of this group were informed verbally and never provided with written notice. Just over half reported that they wanted to appeal but did not know how to do so. Of the homeowners who reported a clawback amount, the average amount they were told to repay was $30,643, and nearly 90 percent reported that they could not afford to pay the money back.  Part of the problem is that New Jersey’s RREM program only gave people up to $150,000 – where New York City for example gave up to $300,000.  Many families needed additional funding from other sources covered under the Stafford Act and that wasn’t a great start.  The other part of the problem is largely the inconsistent, confusing way the RREM program was administered.

Waiting for a charging document from a law enforcement agency has slowed down SO many families.  Other documentation should be considered sufficient and families facing contractor fraud should be able to move forward.

Some people easily were able to get their banks to comply with the foreclosure legislation.  Others, not so much.  We need our new administration to lead and stop banks from harassing Sandy survivors who are following the law while they aren’t.  And, since this program is working – how can we expand it to help more people?


In October of 2016, NJOP members and awesome advocates testified at an Assembly Oversight Hearing about being asked for thousands of dollars back after they thought they had completed the state’s recovery programs in accordance with all guidelines they’d been provided. The oversight committee committed to introduce legislation to address clawbacks and that legislation passed unanimously and with bi-partisan co-sponsorship in the Senate and Assembly in January.  You are the heroes – everyone who has testified, who attended meeting with their local legislators up and down the shore, who has shared their stories with media, who joined us on the Sandy anniversary in 2017 in Ventnor, Brick, or Port Monmouth and spoke with now Governor Murphy.  When we fight, we win, and we’re ramping up the fight now.

While we work together for those solutions, there are some things that you can do on your own that might help.  Many people also ask us how to avoid a clawback – to be honest, and we’ve seen lots of clawback letters that people have sent us.  In our experience, you can drive yourself a tad batty trying to figure out how, why, how to avoid etc.  We think it’s not so much how to avoid them but what you do if you get one.  I mean, I’ve seen clawback letters that were entirely mistakes on the DCA’s part.  How do you avoid that?  But – we know we can fight together to address clawbacks, and there are some steps you can take in the meantime.  Also, remember everyone’s experience is different (which is part of the problem) and so these are offered as lessons and examples.

Here’s Stacey’s experience from January 2018

Happy New Year! I see you are still fighting the good fight (<- Thanks Stacey!). That’s good because I just this minute had a call from RREM. Even though I submitted my close-out paperwork in April 2016, they are just getting to me now. They want $31k (and change) back. Thanks to you, they have indeed instituted a secondary review process. He is sending me forms to fill out and wants additional invoices and then he will reconsider. It came with a threat that if I choose to have them reconsider instead of just paying, they will of course be forced to re-analyze every single document and who’s to say how high up in DCA that review will go, I “could even be audited by HUD.” I will obviously be filling out whatever forms he sends and submitting whatever documentation he wants. This note is just to give you an update on their procedure, which he claims is new.

He sent me the form and then, about 2 weeks later and before I could even send him his form back, he called and said they had a new “homeowner friendly” form, which he sent me last week. It looks very similar to the first form and I have not filled it out. I will, I just need to gather my strength.

They disallowed a bunch of stuff I had submitted, for no reason. For example, they did not allow any architectural or engineering. When I asked why he said it was because I had not submitted receipts/marked paid. When I said that I had submitted them he said, “oh sorry, not everything that you submitted made it over here. We use a different computer system than the program managers.” So I let it go and will resubmit pretty much everything.

Here’s Julie’s experience from Summer 2016 through today


Nearly two years ago, my family received a clawback letter from the RREM program that asked for $51,000 back in three years even though the Department of Community Affairs noted our annual income is $57,000 per year.  We discovered pretty quickly that the DCA had counted funds I received from reopening my FEMA claim as part of that clawback. Given that they had agreed not to do that, they did adjust the clawback amount and I worked to find every receipt and invoice I could and send it to them.  Eventually we heard back that our clawback is now $24,000.  I pay $1,209.58 every month ten months a year to pay back my SBA loan and pension loan.  We don’t have $24,000 any more than we had $51,000.  That’s why I’ve been fighting to pass clawback forgiveness and relief legislation.

Here’s Denise’s experience from Feb 2017 – August 2017


Denise got a clawback from the RREM program last year for $14,000 and change.  It wasn’t great timing, she’d just lost her job and she’d been fighting a FEMA clawback.  Her letter didn’t make sense to us at all, so we sent her over to the Ocean County Long Term Recovery Group.  Working with a disaster case manager there – Denise had her whole clawback eliminated because…the DCA reviewed again and found they had made an error.  So again, don’t panic.  Denise is still working to help everyone else though and she still is fighting her FEMA clawback.

Here’s Fran’s experience from 2017 to today


I used all the money I received to rebuild. I’m a senior citizen on a fixed income. How am I going to pay back $35,000 in three years? Or even ten years for that matter? If I take all my retirement funds what would I live on? That’s why I’ve been working so hard and coming to Trenton to testify about this legislation.  I did work with some one at the DCA to provided more of my receipts.  After that, they said they could reduce the clawback to $19,000 something, but I didn’t want to sign the paper saying I could pay the $19,000 something.  Because I could pay something, but not that.  And after I didn’t sign, my clawback is still $35,000 because the man that was helping me left, and he didn’t file the paperwork to reduce it.

3 Comments Add yours

  1. 1 jeffrey A terrence says:

    june 2022 i have dca telling me i owe 58,000 they say i should’nt have been awarded what cbi people awarded .how is that my fault?

    1. 1 stephen mcdonald says:

      hi Jeffery: I got one in may 2022, says I owe $68,000, that contractor did not have a lead removal license. I sent a copy to them, have not heard back.

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