Topics:
Financial Planning
Legal Research
Legislation
Credit Cards
Debt Collection
"The Federal Trade Commission this week released its latest findings in a ten-year study on the accuracy of credit reports. This report is another reminder of how important it is to review your credit report for inaccuracies.
WHAT DOES THIS MEAN TO YOU?
You can check your three credit reports for free once every 12 months at annualcreditreport.com. Dispute any errors, and contact the company that reported the incorrect information to correct it." ...more...
Topics:
Student Loans
Financial Planning
Debt Collection
"College graduates who began their careers during the Great Recession faced several long-term economic obstacles. These included lower earnings, higher unemployment rates and greater career instability — all of which made it more difficult to buy homes and save for retirement. It also made it harder to pay off student loans.
The Obama administration had this group in mind when it created the Pay As You Earn Repayment Plan for federal student loans, which allows recent student borrowers to arrange affordable payments and qualify for loan forgiveness. The program, which went into effect late last month, needs to be broadly advertised if it is to reach the people who need it most." ...more...
Topics:
Student Loans
Financial Planning
Debt Collection
"Those breathing a sigh of relief that their student loan payments are now in line with their income may want to re-examine the rules that set the payment in the first place. There could be a tax time bomb looming, slowly ticking away. And defusing it is not a big part of the policy discussion in Washington at the moment.
This potential tax bill is a byproduct of federal efforts, including the newly expanded income-based repayment program, that allow you to limit the monthly payments on most federal loans to what you can afford to pay. There’s a formula that uses your income to determine your payment. Then, the federal government forgives any remaining balance, usually after 10 to 25 years.
" ...more...
Topics:
Foreclosure
Financial Planning
Debt Collection
"Backlogs in foreclosure processing are causing delays in home-price improvement and could wind up affecting the cost of a mortgage." ...more...
Topics:
Foreclosure
Financial Planning
Financial Crisis
Legislation
Debt Collection
"The national bank settlement over robo signing takes effect Wednesday. And the California monitor for the settlement says the most notable complaint her office gets is for "dual-tracking." That's when homeowners are on track to be foreclosed on while trying to get a mortgage modification." ...more...
Topics:
Debt Collection
Foreclosure
Legislation
Bankruptcy
Financial Crisis
Election 2008
"“We are canceling the remaining amount you owe Chase!” says a letter that JPMorgan Chase sent recently to thousands of home loan borrowers. “You are approved for a full principal forgiveness of your Home Equity Account,” says another, from Bank of America.
Jackie Esposito, of Guilford, Conn., got a letter like that. But she wasn’t elated — because she doesn’t owe the money anymore. She and her husband filed for bankruptcy three years ago. The roughly $64,000 they owed Chase has been legally wiped out.
" ...more...
Topics:
Student Loans
Debt Collection
Legislation
"As the number of people taking out government-backed student loans has exploded, so has the number who have fallen at least 12 months behind in making payments — about 5.9 million people nationwide, up about a third in the last five years.
In all, nearly one in every six borrowers with a loan balance is in default. The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public two- and four-year colleges and universities, according to a survey of state education officials." ...more...
Topics:
Student Loans
Legislation
Debt Collection
"According to government data, compiled by the Treasury Department at the request of SmartMoney.com, the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees' Social Security checks on those grounds. That's nearly double the pace of the department's enforcement in 2011; it's up from around 60,000 cases in all of 2007 and just 6 cases in 2000." ...more...
Topics:
Foreclosure
Financial Planning
Financial Crisis
Legislation
Debt Collection
"In a move that brings two federal agencies as close to warfare as possible within the confines of bureaucratic memos, the Treasury Department called out housing regulator Edward DeMarco on Tuesday for his continued refusal to offer a key piece of housing assistance to underwater borrowers struggling to save their homes from foreclosure.
" ...more...
Topics:
Legislation
Credit Cards
Debt Collection
Financial Planning
"The Consumer Financial Protection Bureau (CFPB) Tuesday announced its first public enforcement action with an order requiring Capital One Bank (U.S.A.), N.A. to refund approximately $140 million to two million customers and pay an additional $25 million penalty. " ...more...
Topics:
Debt Collection
Bankruptcy
Financial Planning
Student Loans
"Some 36 percent of young adults aged 19-25 have had problems paying medical bills or are carrying medical debt, according to a new survey released Friday." ...more...
Topics:
Credit Cards
Debt Collection
Student Loans
Legislation
"In prepared remarks, Cordray talked about the bureau’s “know before you owe” campaign, which aims to simplify the fine print in financial disclosures." ...more...
Topics:
Foreclosure
Financial Crisis
Debt Collection
Bankruptcy
"Although debtors' prisons are illegal across the country, it's becoming increasingly common for people to serve jail time as a result of their debt.
Collection agencies are resorting to some unusually harsh tactics to force people to pay their unpaid debt, some of whom aren't aware that lawsuits have been filed against them by creditors.
" ...more...
Topics:
Credit Cards
Debt Collection
Financial Crisis
Financial Planning
Legislation
"The Internet banking services that have been sold to customers as conveniences, like online bill paying, also serve as powerful tethers that keep customers from jumping to another institution." ...more...
Topics:
Bankruptcy
Credit Cards
Financial Crisis
Debt Collection
"The Federal Reserve released data late Friday showing that its member banks reported a 3.4 percent annualized decline in card balances in August. Total revolving credit outstanding was $790 billion in the month, down from a peak of $972 billion in September 2008." ...more...
Topics:
Debt Collection
Legislation
"Maryland’s court system is the latest to require that collection agencies and debt buyers who sue consumers provide more documents to support their case.
On September 8, the Maryland Court of Appeals issued new rules for lawsuits filed in district court. The new rules now require debt buyers to present a bill, document signed by the debtor, or copy of an account statement from the original creditor showing purchases before the debt buyer can sue a consumer. Debt buyers also must present a complete chain of title as evidence of their ownership of the debt. The new rules take effect January 1, 2012." ...more...
Topics:
Bankruptcy
Financial Planning
Financial Crisis
Debt Collection
Credit Cards
Legislation
Foreclosure
"Did America's record-high level of economic inequality in 2007 help cause the financial crisis of 2008? With Americans' borrowing back on the rise and signs that economic inequality is growing, could there be another financial crisis in the near future? Paul Solman continues his series of reports on U.S. economic inequality." ...more...
Topics:
Debt Collection
Financial Planning
Financial Crisis
Foreclosure
Bankruptcy
"A looming issue relates to the potential liability stemming from the Mortgage Electronic Registry Systems, or MERS. This company, owned by the major banks, was set up in the mid-1990s by the Mortgage Bankers Association, Fannie Mae and Freddie Mac. Its goal was to expedite the home loan process.
By eliminating the need to record changes in property ownership in local land records, MERS ramped up profits for lenders. In 2007, MERS calculated that it had saved the industry $1 billion over 10 years. An estimated 60 percent of all home loans were registered to MERS.
But the MERS machine started to sputter during the foreclosure crisis. Lawyers challenged MERS’s ability to bring foreclosure proceedings because the system does not technically own the security or note underlying properties, as required. While some courts have not objected to MERS’s foreclosing in place of banks, others have." ...more...
Topics:
Credit Cards
Financial Planning
Financial Crisis
Legislation
Debt Collection
"The new federal Consumer Financial Protection Bureau is officially open for business … and is taking your complaints about credit cards.
The bureau’s Web site offers an easy-to-navigate feature to file your complaints. To do so, you enter your name and contact information and describe the problem, both in your own words and by using simple pull-down menus. The menus, for instance, help you explain the nature of your complaint — late fees, billing disputes, interest rate, etc. — and what, if anything, you’ve done so far to resolve it." ...more...
Topics:
Debt Collection
Foreclosure
Financial Crisis
Financial Planning
"Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk." ...more...
Topics:
Debt Collection
Bankruptcy
"In the latest podcast on ARM industry blog The Debt Collection Drill, Moss & Barnett attorneys John Rossman and Mike Poncin examine the legality of using Facebook and text messages to collect debts and also discuss obtaining consumer consent before using email to communicate with a consumer." ...more...
Topics:
Financial Crisis
Financial Planning
Foreclosure
Debt Collection
Legislation
"After a year of undercover investigation into the loan modification industry, the National Fair Housing Alliance – or NFHA - has released a report that identifies what they describe as “an industry rife with corrupt practices.” The investigation looked at 80 companies and found many were using deceptive and illegal practices to tempt home owners facing foreclosure to use their services. The NFHA says with one in nine homeowners behind on their mortgage payments companies are seizing mortgage modification as a way to profit. For more spoke with Shanna Smith, president of the National Fair Housing Alliance. For information on mortgage issues, she recommends going to the Department of Housing website: www.hud.gov and in the search section look up the phone number of their local HUD approved housing counselor. HUD also runs a hotline: 888-995-HOPE." ...more...
Topics:
Debt Collection
Credit Cards
Financial Crisis
Foreclosure
Legislation
Election 2008
"NOSTALGIA is running high on Wall Street for the days when junk mortgage underwriting and opaque derivatives trading juiced bank profits. As regulators continue to devise the machinery of the Dodd-Frank regulatory reform law, major financial institutions are working overtime in Washington to bring the good times back again." ...more...
Topics:
Foreclosure
Debt Collection
Financial Crisis
"Mr. Engle’s is a tale worth telling for a number of reasons, not the least of which is its punch line. Was Mr. Engle convicted of running a crooked subprime company? Was he a mortgage broker who trafficked in predatory loans? A Wall Street huckster who sold toxic assets?
No. Charlie Engle wasn’t a seller of bad mortgages. He was a borrower. And the “mortgage fraud” for which he was prosecuted was something that literally millions of Americans did during the subprime bubble. Supposedly, he lied on two liar loans.
“The Department of Justice has made prosecuting financial crimes, including mortgage fraud, a high priority,” said Neil H. MacBride, the United States attorney for the Eastern District of Virginia, in a statement. (Mr. MacBride, whose office prosecuted Mr. Engle, declined to be interviewed.)
Apparently, though, it’s only a high priority if the target is a borrower. Mr. Mozilo’s company made billions in profit, some of it on liar loans that he acknowledged at the time were likely to be fraudulent and which did untold damage to the economy. And he personally was paid hundreds of millions of dollars. Though he agreed last year to a $67.5 million fine to settle fraud charges brought by the Securities and Exchange Commission, it was a small fraction of what he earned. Otherwise, he walked. Thus does the Justice Department display its priorities in the aftermath of the crisis." ...more...
Topics:
Debt Collection
Legislation
"The U.S. Court of Appeals for the Seventh Circuit last week ruled 2-1 that the statute which governs the debt collection industry’s behavior does not extend to courts and is specifically limited to protecting consumers and those with special relationships with the consumer.
The court, however, did note that its ruling contradicts opinions issued by the Sixth and Ninth Circuit courts. In McCollough v. Johnson, Rodenburg & Lauinger, LLC and Guerrero v. RJM Acquisitions, LLC the courts essentially said FDCPA trumps litigation efforts.
David Cherner, ACA International’s corporate counsel and director of state government affairs, said the Seventh Circuit court’s ruling in O’Rourke vs. Pallisades Acquisition and Pallisades Collections provides an important alternative perspective to what the other two appellate courts have ruled." ...more...
Topics:
Debt Collection
Legislation
Credit Cards
"lthough not specifically enumerated in the report released Tuesday, the FTC said the most complaints against collectors were:
Debt collector calls repeatedly or continuously;
Falsely represents the amount or status of debt;
Fails to send written notice of debt;
Falsely threatens suit
The FTC said that complaints about credit card companies fell 26 percent in 2010, most likely due to new rules in restrictions passed recently by Congress and the Federal Reserve." ...more...
Topics:
Debt Collection
Credit Cards
Financial Crisis
Financial Planning
"After radically scaling back auto lending during the financial crisis, banks and the lending arms of the automakers have started to issue loans more aggressively. Borrowers of all types are now finding it much easier to obtain a loan compared with a few months ago." ...more...
Topics:
Debt Collection
Financial Crisis
Legislation
Credit Cards
"Although the FTC has not recently penalized any single data furnisher with a significant FCRA or FACT Act related fine, FCRA experts within the FTC warn that “lenders should be more concerned with the consumer’s right to private legal action with regards to FCRA and FACTA violations than regulatory fines.” Specifically, legal actions related to technical violations of the regulations such as inaccurate reporting of consumer account information to the credit bureaus.
What makes litigation a bigger risk now than in the past? In a recent decision in Bateman v. American Multi-Cinema, Inc., the Ninth Circuit Court opened the door for more class actions seeking exorbitant amounts in statutory damages for technical violations of the FCRA and FACTA with its decision that an FCRA or FACTA class action could not be denied based on the enormity or disproportion between actual and statutory damages, and there was no evidence that lawmakers held the intent to preclude class actions under either of these regulations." ...more...
Topics:
Financial Planning
Financial Crisis
Debt Collection
Credit Cards
Foreclosure
Means Test
Bankruptcy
Student Loans
"Welcome to the online home of the Consumer Financial Protection Bureau (CFPB). This new bureau is in the construction phase, but we’re already hard at work on plans to make consumer financial products and services clearer for Americans." ...more...
Topics:
Debt Collection
Legislation
"Collection violation penalties should be “at least $5,000,” collectors should include a copy of a consumer’s original credit agreement signature in their communications, and debt should have a “sell-by date,” according to a new report released by two consumer groups.
The report, “PAST DUE: Why Debt Collection Practices and the Debt Buying Industry Need Reform Now,” was issued in January by Consumers Union and East Bay Community Law Center. Consumers Union is best-known for publishing the popular magazine Consumer Reports." ...more...
Topics:
Debt Collection
Financial Planning
Financial Crisis
Legislation
"During these difficult economic times, legal services providers have experienced a dramatic influx of requests from clients [] who seek assistance in defending improper lawsuits brought by debt collectors. In addition, consumers [] continue to be hounded years after they settle their debt by unfamiliar collection agencies with little information about the debt. These experiences illustrate problems inherent in the current debt collection system. There is a massive industry buying and selling large portfolios of debt for pennies on the dollar, and a court system in which debt collectors are able to get court judgments without proof that they own the debt or even that the consumer owes any debt." ...more...
Topics:
Bankruptcy
Foreclosure
Debt Collection
Financial Crisis
"In numerous opinions, judges have accused lawyers of processing shoddy or even fabricated paperwork in foreclosure actions when representing the banks.
Judge Arthur M. Schack of New York State Supreme Court in Brooklyn has taken aim at an upstate lawyer, Steven J. Baum, referring to one filing as “incredible, outrageous, ludicrous and disingenuous.”
But New York judges are also trying to take the lead in fixing the mortgage mess by leaning on the lawyers. In November, a judge ordered Mr. Baum’s firm to pay nearly $20,000 in fines and costs related to papers that he said contained numerous “falsities.” The judge, Scott Fairgrieve of Nassau County District Court, wrote that “swearing to false statements reflects poorly on the profession as a whole.”" ...more...
Topics:
Debt Collection
Legislation
Financial Planning
"Holly Petraeus, whose husband is the U.S. commander in Afghanistan, is helping to create the new Consumer Financial Protection Bureau, setting up the Office of Service Member Affairs.
At a news conference, Petraeus said she has been dealing with the financial pitfalls facing military families for many years. Professionally, she has worked for the Better Business Bureau, protecting members of the military from predatory lending and other abusive practices.
But she said that as a young Army couple, she and her husband, Gen. David Petraeus, made some of the "rookie financial mistakes that I counsel people against today — buying the expensive sports car, signing an apartment rental contract sight unseen based on a slick brochure, putting money into a questionable investment without doing research simply because it promised great returns."
She said they were lucky that it was harder to get into big trouble in those days.
Today, members of the military are often aggressively targeted by those offering high interest rate payday loans and too-good-to-be-true deals on cars. The new office she is helping to create will try to detect such traps and stop them." ...more...
Topics:
Bankruptcy
Debt Collection
Foreclosure
"But lawyers who defend consumers in debt-collection cases say the banks did not invent the headless, assembly-line approach to financial paperwork. Debt buyers, they say, have been doing it for years.
“The difference is that in the case of debt buyers, the abuses are much worse,” says Richard Rubin, a consumer lawyer in Santa Fe, N.M.
“At least when it comes to mortgages, the banks have the right address, everyone agrees about the interest rate. But with debt buyers, the debt has been passed through so many hands, often over so many years, that a lot of time, these companies are pursuing the wrong person, or the charges have no lawful basis.”
The debt in these cases — typically from credit cards, auto loans, utility bills and so on — is sold by finance companies and banks in a vast secondary market, bundled in huge portfolios, for pennies on the dollar. Debt buyers often hire collectors to commence a campaign of insistent letters and regular phone calls. Or, in a tactic that is becoming increasingly popular, they sue." ...more...
Topics:
Bankruptcy
Debt Collection
Financial Crisis
Financial Planning
"While the credit check has long been a routine part of the job application process, experts are wondering whether it's still a fair screening tool in the wake of a recession that has left 15 million Americans unemployed and unable to keep up with their bills.
In a meeting of the Equal Opportunity Employment Commission last week to discuss the use of credit history as a discriminatory barrier to employment, a panel of legal experts and social scientists explained how the screening practice may be harmful and unfair to American workers.
"A simple reason to oppose the use of credit history for job applications is the sheer, profound absurdity of the practice," said Chi Chi Wu, a staff attorney at the National Consumer Law Center. "Using credit history creates a grotesque conundrum. Simply put, a worker who loses her job is likely to fall behind on paying her bills due to lack of income. With the increasing use of credit reports, this worker now finds herself shut out of the job market because she's behind on her bills. This phenomenon has created concerns that the unemployed and debt-ridden could form a luckless class."" ...more...
Topics:
Bankruptcy
Debt Collection
Foreclosure
Legal Research
"The case, Simmons v. Roundup Funding, LLC, No. 09-4984, was filed by Lamont and Melissa Simmons after a debt buyer, Roundup Funding, filed a proof of claim during the Simmons’ bankruptcy proceedings. Roundup claimed the couple owed $2039.21, but the bankruptcy judge in the case agreed with the Simmon’s and found that Roundup’s claim was too high, reducing it to $1,100. The Simmons’ then sued Roundup for violating the FDCPA by misrepresenting the amount of debt." ...more...
Topics:
Debt Collection
Financial Planning
"But if payday lenders are strictly business -- fast cash, no questions asked -- West End wants to get personal.
Applicants have to sit down with a counselor to go over their family budget. Here's Barbara Reed, the director of the program, again.
REED: We want to look at your income, we want to look at your expenses. We want to help you see why you're in this financial crisis. What are some things you could do differently to prevent this financial crisis?
MARILYN ROMAN: They sit down and they show it to you in black and white." ...more...
Topics:
Bankruptcy
Credit Cards
Legislation
Financial Planning
Debt Collection
Student Loans
"Elizabeth Warren answers your questions on the Consumer Financial Protection Bureau, a watchdog for the American consumer, charged with enforcing the toughest financial protections in history" ...more...
Topics:
Bankruptcy
Debt Collection
Financial Planning
"Indeed Internal Revenue Code (“IRC”) § 61(a)(12) does include in gross income subject to income tax “[i]ncome from discharge of indebtedness.” IRC § 108 posits several exceptions to discharge of indebtedness income. One exception is IRC § 108(a)(1)(B), which excludes discharged debt from gross income to the extent the debtor-taxpayer was insolvent immediately before the discharge of indebtedness." ...more...
Topics:
Bankruptcy
Financial Crisis
Debt Collection
Credit Cards
"For the past several years, the flagging economy has propelled a steady increase in personal bankruptcies. And while filings remain elevated, compared with previous years, they aren’t increasing as fast as they once were.
But that doesn’t necessarily signal an improvement in the economy (despite reports that the recession is technically over). In fact, bankruptcies are more sensitive to factors like the amount of outstanding consumer credit. In general, shortly after lenders tighten the credit spigot, filings tend to jump because strapped consumers can no longer rely on credit cards or other loans to pull them through a rough patch. But over time, if fewer new loans are being made, filings tend to drop." ...more...
Topics:
Financial Crisis
Foreclosure
Bankruptcy
Debt Collection
"Tens of thousands of home foreclosures have been thrown into question because paperwork may not have been reviewed properly at GMAC Mortgage.
The mortgage company, owned by Ally Financial, has halted evictions in 23 states while it goes back to check and, in some cases, correct certain court documents." ...more...
Topics:
Bankruptcy
Legislation
Election 2008
Debt Collection
Credit Cards
Financial Crisis
"In selecting Ms. Warren, administration officials picked an outspoken critic of many credit-card and mortgage-lending practices who has called for an overhaul of the way banks treat consumers. Consumer advocates are hoping she plays a central role setting the agency's direction.
"It is our expectation that she will have a critical role in forming the agency," said Lauren Saunders, a managing attorney at the National Consumer Law Center in Washington." ...more...
Topics:
Bankruptcy
Credit Cards
Debt Collection
Financial Planning
Financial Crisis
Legislation
Election 2008
"The bureau will consolidate employees and responsibilities from a host of other regulatory bodies, including the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation and even the Department of Housing and Urban Development. It is expected to have hundreds of employees and a budget of up to $500 million.
The bureau will nominally be part of the Fed, which is obligated to finance its budget, but the central bank may not influence its personnel or rules.
The bureau will have the authority to write and enforce new standards for mortgages, credit cards, payday loans and a wide array of other financial products. A consequence of the arrangement is that Ms. Warren will be working closely with Mr. Geithner, with whom she has occasionally clashed." ...more...
Topics:
Debt Collection
Legislation
Financial Crisis
Bankruptcy
"WASHINGTON — Elizabeth Warren, who conceived of the Consumer Financial Protection Bureau, will oversee its establishment as an assistant to President Obama, an official briefed on the decision said Wednesday evening." ...more...
Topics:
Debt Collection
"Complaints about debt collectors failing to identify themselves has grown the quickest of all complaint types since 2007. In 2009, complaints about this behavior totaled 21,012 -- up from 1,227 in 2007 -- an increase of 1,612.5 percent." ...more...
Topics:
Bankruptcy
Credit Cards
Debt Collection
Financial Crisis
Financial Planning
Foreclosure
"We talk with Gary Rivlin, author of "Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business." Rivlin is a former reporter for the New York Times, Industry Standard and East Bay Express." ...more...
Topics:
Bankruptcy
Debt Collection
"Tax resolution firms are a misnomer. They exact high fees from unassuming consumers and seldom resolve anything. These firms are a relatively recent development, and they are becoming a serious problem for consumers in our country.
Tax resolution scams advertise heavily, offering to settle Federal tax obligations for a fraction of the amount owed, even for “pennies on the dollar.” I have heard ads announcing a “special IRS program” to compromise tax balances, available for only a “limited time.” One firm claims to have saved “tens of thousands of taxpayers tens of millions of dollars.”
These ads are, of course, false. The IRS rarely accepts an offer in compromise. There are much better ways of securing relief from a threatened or actual levy (seizure) of a taxpayer’s wages or bank account. But the unsophisticated people targeted by the ads do not know this." ...more...
Topics:
Foreclosure
Financial Crisis
Debt Collection
"A report released Wednesday found foreclosures have not only economic consequences, but create health problems for the people and families involved - and those effects can ripple throughout a community.
In a survey of nearly 400 residents in two Oakland neighborhoods particularly hard hit by the foreclosure crisis, the Alameda County Public Health Department and Causa Justa/Just Cause, a housing rights group, teamed up to look at how people undergoing foreclosure experience higher levels of stress and increased medical problems. Tenants living in buildings in foreclosure have similar problems." ...more...
Topics:
Credit Cards
Debt Collection
Financial Crisis
Foreclosure
Legislation
Bankruptcy
Financial Planning
"Credit card charge-offs hit a new record high in the second quarter, according to the Fed. Meanwhile, card delinquencies dropped significantly while late payments on real estate loans broke records." ...more...
Topics:
Debt Collection
Credit Cards
Legislation
Financial Planning
"Rules that take effect Sunday will prohibit banks from charging certain overdraft fees without a customer's permission, but the rules will not prevent banks from posting a customer's daily checking account transactions in a way that maximizes overdraft fees.
Whether banks abandon this fairly common ordering practice in the wake of this week's court ruling against Wells Fargo remains to be seen." ...more...
Topics:
Debt Collection
Credit Cards
Financial Crisis
Financial Planning
"A San Francisco judge's scathing ruling ordering Wells Fargo to pay its customers $203 million for manipulating debit transactions to maximize overdraft fees might be just the start of troubles for the bank.
U.S. District Judge William Alsup's 90-page opinion Tuesday described Wells Fargo's motive as profiteering and said the San Francisco-based bank's goal was to "maximize the number of overdrafts and squeeze as much as possible" out of customers." ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
Debt Collection
Bankruptcy
Legislation
"The delinquency rate on home equity loans is higher than all other types of consumer loans, including auto loans, boat loans, personal loans and even bank cards like Visa and MasterCard, according to the American Bankers Association.
Lenders say they are trying to recover some of that money but their success has been limited, in part because so many borrowers threaten bankruptcy and because the value of the homes, the collateral backing the loans, has often disappeared.
...
Lenders wrote off as uncollectible $11.1 billion in home equity loans and $19.9 billion in home equity lines of credit in 2009, more than they wrote off on primary mortgages, government data shows. So far this year, the trend is the same, with combined write-offs of $7.88 billion in the first quarter." ...more...
Topics:
Debt Collection
Financial Crisis
Financial Planning
"So here we go again, three years later, and G.M. is buying a subprime company to finance cars for people who may not be able to afford them, and given high unemployment levels, may not even have jobs to start saving for one. And yes, we, the taxpayers, still own 61 percent of the automaker.
“After G.M.’s experience with GMAC, which left G.M. seeking a taxpayer bailout, you have to think the company and, in turn, the taxpayers would be better off if G.M. focused on making cars that people want to buy and stayed clear of repeating its effort to make high-risk car loans,” Senator Charles E. Grassley, the Iowa Republican, said in a statement." ...more...
Topics:
Debt Collection
Financial Crisis
Financial Planning
Legislation
"What we want is for President Obama to gut it up and appoint a real consumer advocate to serve as director of the new Consumer Financial Protection Bureau. Created by the Wall Street reform bill that Obama recently signed into law, the CFPB can be an independent, aggressive force to battle banker scams and rip-offs on behalf of ordinary Americans. However, it will only be that if an extraordinarily knowledgeable, feisty fighter who is unafraid to confront the banksters is put in charge.
That description fits Warren perfectly. The first thing you need to know about her is that Treasury Secretary Timothy Geithner, the tail-wagging puppy of Wall Street, is trying to block her because America's banking barons both despise and fear Warren. I don't know about you, but I find that wonderfully refreshing! What finer testimonial could a consumer protector have than to be vehemently opposed by the special interests she would regulate?" ...more...
Topics:
Credit Cards
Debt Collection
Financial Crisis
Legislation
"Many Democrats and liberal interest groups have launched an all-out campaign to have Elizabeth Warren nominated as the first consumer financial-affairs regulator. Many bankers and Republicans are hell bent on stopping her.
Few are paying attention to who is waiting in the wings.
The White House's other top candidate, Treasury Department Assistant Secretary Michael Barr, has, like Ms. Warren, spent years calling for stricter curbs on the banking industry. While little known to the public, he has left behind a more-detailed paper trail than Ms. Warren, offering clues to how he might run the agency." ...more...
Topics:
Bankruptcy
Legislation
Financial Planning
Debt Collection
Credit Cards
Financial Crisis
"Stephen Colbert interviews Barney Frank wants Elizabeth Warren to head the consumer protection agency because she's an extraordinarily zealous pragmatist. (video 07:39)" ...more...
Topics:
Debt Collection
Financial Crisis
Legislation
"Whether Elizabeth Warren heads the nascent Bureau of Consumer Financial Protection has become the first pitched battle in how the recently passed financial reform laws are put into practice. If the episode so far is any indicator, the battle between interests and reformers is far from over." ...more...
Topics:
Debt Collection
Legislation
Financial Crisis
Financial Planning
Bankruptcy
"Starting on October 27, 2010, for-profit companies that sell debt relief services over the telephone may no longer charge a fee before they settle or reduce a customer’s credit card or other unsecured debt." ...more...
Topics:
Debt Collection
Financial Crisis
Financial Planning
Legislation
Bankruptcy
"Collecting old consumer debts has become a labyrinthine industry involving buyers of secondhand debt, muddled statutes of limitation, lawsuits and, sometimes, abusive tactics." ...more...
Topics:
Bankruptcy
Debt Collection
Financial Crisis
Financial Planning
Legislation
"Major credit issuing banks reported last week that charge-offs and delinquencies in their credit card portfolios eased in June, almost across the board." ...more...
Topics:
Bankruptcy
Credit Cards
Financial Planning
Financial Crisis
Means Test
Foreclosure
Legislation
Debt Collection
"Ms. Warren’s supporters want President Obama to nominate her as the first head of a new consumer financial protection bureau created by the legislation he signed into law last week. They say that Ms. Warren, who conceived the idea and helped shepherd its passage into law, is the only acceptable choice to finish the project." ...more...
Topics:
Debt Collection
Financial Planning
"Last week CNN Money published a slideshow of ten ex-debt collection workers’ experiences in the industry centered on “in their own words” accounts of why they left the profession.
The absence of any overt editorial framing by CNN appears on the surface of things to present these former debt collectors in a disinterested manner. But calculated editorial decisions were in fact made to draw readers into the content through understated sensationalism and, once hooked, color their perceptions of the accounts receivable management industry in the same worn-out coat of paint as so many previous accounts of third party debt collectors." ...more...
Topics:
Debt Collection
Credit Cards
Financial Crisis
Legislation
Foreclosure
Financial Planning
"The signature achievement — a response to the 2008 financial crisis that fundamentally alters the relationship between Wall Street and the federal officials charged with regulating it — is a culmination of two years of fierce lobbying and intense debate over how to deal with the financial excesses that tipped the nation into the worst recession since the Great Depression." ...more...
Topics:
Credit Cards
Debt Collection
Financial Crisis
Financial Planning
Foreclosure
"Here are 10 ways the new law will help consumers like you:" ...more...
Topics:
Legislation
Financial Crisis
Debt Collection
Credit Cards
Financial Planning
"The vote by the Senate was 60 to 39, with three Republicans from the Northeast joining with the Democrats in voting to advance the legislation.
One Democrat, Senator Russ Feingold of Wisconsin, voted against the bill, saying it was still not strong enough to prevent future crises. And the seat held by Senator Robert C. Byrd, Democrat of West Virginia, who died last month, is vacant." ...more...
Topics:
Debt Collection
Financial Crisis
"These people share their experiences in the collections industry -- and why they left.
(robust discussion follows article. - See related post from InsideArm 7/ed.)" ...more...
Topics:
Bankruptcy
Debt Collection
Financial Crisis
"Collection law firms are able to handle such large volumes of cases because computer software automates much of their work. Typically, a debt buyer sends a law firm an electronic database that contains various data about consumers, including name, home address, the outstanding balance, the date of default and whether interest is still accruing on the account.
Once the data is obtained by a law firm, software like Collection-Master from a company called Commercial Legal Software can “take a file and run it through the entire legal system automatically,” including sending out collection letters, summonses and lawsuits, said Nicholas D. Arcaro, vice president for sales and marketing at the company.
No group has definitive statistics on debt collection lawsuits, but federal regulators, collection lawyers and judges say the numbers have increased and are straining the court system.
Most consumers fail to show up in court, and those who do rarely have a lawyer. A court judgment gives debt buyers the ability to collect on the debt through actions like wage or property garnishment." ...more...
Topics:
Credit Cards
Financial Crisis
Foreclosure
Debt Collection
"Retail sales are up, and credit card debt is down. Why is that bad news?" ...more...
Topics:
Debt Collection
"Collection agencies, like everyone else, are now using social networking sites to track down or keep tabs on people they're interested in." ...more...
Topics:
Debt Collection
"One reader pitched in with her own story, about her 11-year-old son answering a phone call from a debt collector. The person on the phone proceeded to inform the child that his mother hadn’t made a student loan payment in seven years." ...more...
Topics:
Bankruptcy
Legislation
Credit Cards
Financial Crisis
Debt Collection
"Democratic leaders in Congress say their top pick for the post is Elizabeth Warren, the high-profile Harvard law professor and an outspoken critic of what she sees as a too-cozy relationship between government and bankers." ...more...
Topics:
Debt Collection
Foreclosure
Financial Crisis
Legislation
"For years, a house in California was a machine for building wealth, and few were the families that could resist temptation. They refinanced their loans to pay for vacations, operations, tuition or, frequently, investments in more houses. Many of these households ended up struggling after the crash.
The lenders were often aggressive in making loans and frequently were predatory. The extent to which this absolves the borrowers of responsibility is at the center of the current debate.
The original legislation said borrowers who took cash out of their houses would be shielded as long as they used the money for home improvements. In its current form, the proposed law is not quite so forgiving.
The bill that passed the Senate by a lopsided vote of 30 to 4 would protect former homeowners up to the amount of their original loan. For instance, a family that took out a $500,000 mortgage to buy a house and then refinanced and took cash out, swelling their loan to $600,000, would be released from claims on the original sum but remain vulnerable on the $100,000." ...more...
Topics:
Bankruptcy
Debt Collection
Credit Cards
Financial Planning
Financial Crisis
Foreclosure
Means Test
Legislation
"The long recession has delivered an abundance of customers — debt-saturated Americans, suffering lost jobs and income, sliding toward bankruptcy. The settlement companies typically harvest fees reaching 15 to 20 percent of the credit card balances carried by their customers, and they tend to collect upfront, regardless of whether a customer’s debt is actually reduced.
State attorneys general from New York to California and consumer watchdogs like the Better Business Bureau say the industry’s proceeds come at the direct expense of financially troubled Americans who are being fleeced of their last dollars with dubious promises.
Consumers rarely emerge from debt settlement programs with their credit card balances eliminated, these critics say, and many wind up worse off, with severely damaged credit, ceaseless threats from collection agents and lawsuits from creditors." ...more...
Topics:
Chapter 13
Bankruptcy
Debt Collection
Credit Cards
Financial Crisis
Financial Planning
Foreclosure
Legislation
"Debt settlement companies offer help to individuals in financial turmoil. Peter S. Goodman reports on the growing criticism the industry has inspired." ...more...
Topics:
Bankruptcy
Chapter 13
Debt Collection
Foreclosure
Legislation
Financial Crisis
"Countrywide, now a unit of Bank of America, was once led by Angelo Mozilo and was the nation’s largest mortgage lender in the glorious, pre-crisis days of the housing boom. But it was also a predatory institution, and the F.T.C., citing Countrywide’s serial abuse of troubled borrowers, extracted a $108 million fine from Bank of America last week.
That money will go back to some 200,000 customers whom Countrywide forced to pay outsized fees for foreclosure services. These included billing a borrower $300 to have a property’s lawn mowed and levying $2,500 in trustees’ fees on another borrower, when the going rate for that service was about $600.
Though Countrywide’s mortgage contracts specifically barred such practices, they served the company well by generating income during downturns when it was harder to keep making money off new mortgages. This “counter-cyclical diversification strategy,” as Countrywide called it, was designed to “extract the last dollar out of the pockets of the most desperate consumers,” said Jon Leibowitz, the F.T.C. chairman." ...more...
Topics:
Bankruptcy
Debt Collection
Financial Crisis
Legislation
"You committed no crime, but an officer is knocking on your door. More Minnesotans are surprised to find themselves being locked up over debts." ...more...
Topics:
Credit Cards
Debt Collection
Legislation
Legal Research
Financial Crisis
Bankruptcy
"Lawsuits filed by consumers against debt collection agencies are on pace to hit another record this year, according to the latest stats from a firm tracking the legal actions." ...more...
Topics:
Bankruptcy
Financial Crisis
Foreclosure
Debt Collection
"“Not many a day passes without my receiving an emergency ex parte motion seeking to stop a foreclosure or eviction, and they’re increasing every week,” notes Los Angeles’ Dukes. “Once a trickle, they’re now rapidly flowing, and we’re prepared for a flood.” His colleague, Judge Mary Thornton House, says almost all civil litigants claim indigence and ask for a waiver of court fees. “Although the applicants are genuinely needy, granting a fee waiver takes water out of a well that cannot be replenished.”" ...more...
Topics:
Bankruptcy
Debt Collection
Foreclosure
Financial Crisis
Financial Planning
"A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.
This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads." ...more...
Topics:
Debt Collection
Legislation
"Debt buying companies – a fast-growing segment of the debt collection industry – engage in systematic debt collection abuses that particularly target low-income New Yorkers and people of color, according to a report issued today by The Legal Aid Society, MFY Legal Services, Inc., NEDAP, and Urban Justice Center." ...more...
Topics:
Debt Collection
Legislation
"The BBB serving Central California is warning businesses to avoid Fresno-based collection agency Maxwell, Turner & Associates, Inc. The agency has an F-rating for 32 unanswered complaints within the last 10 months." ...more...
Topics:
Legislation
Financial Crisis
Credit Cards
Debt Collection
Foreclosure
Financial Planning
"The vote was 59 to 39, with four Republicans joining the Democratic majority in favor of the bill. Two Democrats opposed the measure, saying it was still not tough enough." ...more...
Topics:
Legislation
Financial Planning
Financial Crisis
Credit Cards
Debt Collection
Foreclosure
"Consumer Protection: Creates a federal regulator to write and enforce rules protecting consumers of financial products like checking accounts, mortgages and payday loans. Increases the authority of state regulators to enforce protections." ...more...
Topics:
Financial Crisis
Credit Cards
Debt Collection
Financial Planning
Legislation
"The holdouts, Senators Maria Cantwell of Washington and Russ Feingold of Wisconsin, joined with 39 Republicans to block an effort by the majority leader, Harry Reid of Nevada, to wrap up debate on the bill." ...more...
Topics:
Credit Cards
Financial Planning
Debt Collection
"Apparently, when you publish your Social Security number prominently on your website and billboards, people take it as an invitation to steal your identity.
LifeLock CEO Todd Davis, whose number is displayed in the company’s ubiquitous advertisements, has by now learned that lesson. He’s been a victim of identity theft at least 13 times, according to the Phoenix New Times.
That’s 12 more times than has previously been known." ...more...
Topics:
Legislation
Financial Crisis
Credit Cards
Debt Collection
Foreclosure
"The Senate is currently debating legislation that would call for the farthest reaching overhaul of financial regulation since the Great Depression. The House, mainly along party lines, passed a similar overhaul bill in December. The New York Times has highlighted some of the bill's 378 amendments below." ...more...
Topics:
Debt Collection
Financial Crisis
Legislation
"Dale Mingilton is with the BBB and says more people are calling them and saying these crooks are calling them, claiming to be from a collection agency and simply harassing them to get their money. Mingilton says the number of complaints on these phony collection agencies has gone up 131 percent from last year." ...more...
Topics:
Debt Collection
Credit Cards
Financial Planning
Financial Crisis
"A small but growing number of lawyers and consumers are fighting back against bill collectors and violations of the Fair Debt Collection Practices Act." ...more...
Topics:
Means Test
Credit Cards
Foreclosure
Legislation
Debt Collection
"With straightforward majority reasoning of "ignorance of the law is no excuse" and a dissent that included fears of plaintiffs' attorneys run amok, the ruling has something for everyone. But an ARM legal expert notes that the impact will be immediate and burdensome for collection lawyers." ...more...
Topics:
Foreclosure
Bankruptcy
Financial Planning
Debt Collection
"Margot Saunders, an attorney with the National Consumer Law Center, said bankruptcy may be the best option for some people to wipe out liability for their second loans.
"People with a second mortgage who are facing foreclosure should go to bankruptcy to get rid of the unsecured second-mortgage note," she said. "They should do it as soon as they're foreclosed upon, because that's when they're at rock-bottom, not when they've started to rebuild (their finances)."" ...more...
Topics:
Debt Collection
Legislation
Financial Planning
"According to the FTC’s complaint, the operators do business as Ecash and GeteCash, offering loans of up to $1,000 to be repaid from a borrower’s upcoming paycheck. They require online loan applicants to check a box indicating their agreement with loan terms. These terms include an inconspicuous statement consumers often don’t see, which states that their wages will be garnished to cover delinquent loan payments. The statement allegedly attempts to circumvent federal requirements, including a debtor’s right to revoke a garnishment agreement." ...more...
Topics:
Credit Cards
Debt Collection
Legislation
Financial Planning
"FreeCreditReport.com, of course, is not free. To use the service, you must enroll in "Triple Advantage," a credit monitoring service that you can get for the not-so-low price of $14.95/month. The Federal Trade Commission (FTC) had recently taken action to prevent these sorts of abusive practices. Under rules that just went into effect, any web site that purported to offer a "free" credit report had to include prominent text and a link at the top of the page directing consumers to AnnualCreditReport.com, which is the legitimate site offering consumers to request a free credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.
In what appears to be a transparent attempt to evade this new regulation, FreeCreditReport.com's owner, Experian, has begun charging $1 for FreeCreditReport.com and says it will donate the $1 to charity. Under Experian's reasoning, FreeCreditReport.com is no longer "free," and hence it doesn't have to comply with the new FTC rule." ...more...
Topics:
Bankruptcy
Credit Cards
Debt Collection
Financial Crisis
"Consumer loan delinquencies fell in most loan categories in the fourth quarter of 2009, marking the second quarter in a row of broad-based improvement, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin." ...more...
Topics:
Debt Collection
Credit Cards
Bankruptcy
Financial Planning
Financial Crisis
"One of the worst economic downturns of modern history has produced a big increase in the number of delinquent borrowers, and creditors are suing them by the millions. Concern is mounting in government and among consumer advocates that the debtors are not always getting a fair shake in these cases.
Most consumers never offer a defense, and creditors win their lawsuits without having to offer proof of the debts, much less justify to a judge the huge interest charges and penalties they often tack on." ...more...
Topics:
Debt Collection
Legislation
Financial Crisis
"Civil lawsuits brought by consumers against debt collectors, debt purchasers and other credit reporting agencies increased 52.5 percent in Fiscal Year 2009, according to data released Tuesday by the Administrative Office of the U.S. Courts." ...more...
Topics:
Financial Crisis
Legislation
Debt Collection
"Senator Bob Corker, the Tennessee Republican who is playing a crucial role in bipartisan negotiations over financial regulation, pressed to remove a provision from draft legislation that would have empowered federal authorities to crack down on payday lenders, people involved in the talks said. The industry is politically influential in his home state and a significant contributor to his campaigns, records show." ...more...
Topics:
Legislation
Debt Collection
Bankruptcy
Chapter 13
Legal Research
Means Test
Financial Planning
"This part is bad for the attorneys:
“Attorneys who provide bankruptcy assistance to assisted persons are debt relief agencies under the BAPCPA. By definition, “bankruptcy assistance” includes several services commonly performed by attorneys, e.g., providing “advice, counsel, [or] document preparation,” §101(4A). Moreover, in enumerating specific exceptions to the debt-relief-agency definition, Congress indicated no intent to exclude attorneys. See §§101(12A)(A)–(E). Milavetz relies on the fact that §101(12A) does not expressly include attorneys in advocating a narrower understanding.”
And this part is bad for the debtors:
“Section 526(a)(4) prohibits a debt relief agency only from advising a debtor to incur more debt because the debtor is filing for bankruptcy, rather than for a valid purpose. The statute’s language, together with its purpose, makes a narrow reading of §526(a)(4) the natural one. Conrad, Rubin & Lesser v. Pender, 289 U. S. 472, supports this conclusion. The Court in that case read now-repealed §96(d), which authorized reexamination of a debtor’s attorney’s fees payment “in contemplation of the filing of a petition,” to require that the portended bankruptcy have “induce[d]” the transfer at issue, id., at 477, understanding inducement to engender suspicion of abuse. The Court identified the “controlling question” as “whether the thought of bankruptcy was the impelling cause of the transaction,” ibid. Given the substantial similarities between §§96(d) and 526(a)(4), the controlling question under the latter is likewise whether the impelling reason for “advis[ing] an assisted person . . . to incur more debt” was the prospect of filing for bankruptcy. In prac- tice, advice impelled by the prospect of filing will generally consist of advice to “load up” on debt with the expectation of obtaining its discharge. The statutory context supports the conclusion that §526(a)(4)’s prohibition primarily targets this type of conduct.”" ...more...
Topics:
Credit Cards
Financial Planning
Financial Crisis
Debt Collection
"There's nothing free about FreeCreditReport.com's credit-monitoring service, which carries a $14.95-per-month charge. Erica Possin went to the site to check her credit before buying a new car. She says she entered her credit card information and received her report, but she didn't realize she would be automatically enrolled in the monitoring service.
.....
The only authorized site from which to get a truly free report is AnnualCreditReport.com, which is run by the FTC. Most people are legally entitled to a no-cost report once a year from each of the credit agencies: Equifax, Experian and TransUnion" ...more...
Topics:
Debt Collection
Financial Crisis
"If I were a debt collector, I would be pretty unhappy about an AP article that came out yesterday. It portrays the career as one for felons and bullies. And indeed, there are some collectors who do use unlawful tactics. But there are also bad eggs in other industries who sometimes break the law. There are dirty doctors, lawyers, cops and hedge fund managers, to name a few. I don't think the article fairly singles out the collections industry." ...more...
Topics:
Financial Crisis
Debt Collection
"As the sour economy leaves people less and less able to pay their debts, the collection abuses have become so flagrant and numerous that state and federal authorities have moved to shut down several Buffalo-area agencies where the most heartless and bullying telephone calls originated. At least 20 people have been sued or arrested on criminal charges.
The regional Better Business Bureau said that in the past three years, it has gotten 4,562 complaints about debt collection agencies in western New York. Of 213 agencies it has graded in the region, 104 were given an "F." And of all the complaints about debt collection received by the Better Business Bureau nationwide last year, about 1 in 10 involved a company in western New York." ...more...
Topics:
Debt Collection
Legislation
Financial Crisis
"Members of the accounts receivable management industry are increasingly finding themselves under attack from state attorneys general and civil lawsuits brought by consumers alleging violations of the Fair Debt Collections Practices Act (FDCPA). ARM leaders have always been well-advised to understand the legal and regulatory environments applicable to the industry, but that need is even more important today." ...more...
Topics:
Legislation
Financial Crisis
Debt Collection
"The measure, called The Wall Street Reform and Consumer Protection Act (H.R. 4173), passed the full House on a 223-202 vote. No Republicans voted for the bill, while some moderate Democrats voted against it as well. The Senate could have similar divisions, according to Peterman. The Senate has not yet marked up the proposals for consideration, and is unlikely to do so in 2009." ...more...
Topics:
Debt Collection
"In Jerman, the defendant law firm filed a complaint seeking foreclosure of real property owned by the consumer plaintiff. The complaint included a validation notice that provided the debt would be assumed valid unless the consumer disputed the debt in writing within 30 days. The plaintiff filed a complaint alleging the defendant violated the FDCPA because it compelled consumers to dispute the debt in writing when the FDCPA imposes no such requirement." ...more...
Topics:
Credit Cards
Financial Planning
Financial Crisis
Legislation
Debt Collection
"Consumer lawsuits against debt collectors claiming violations of the Fair Debt Collection Practices Act (FDCPA) are on the rise.
With SearchReceivables.com, you can quickly search hundreds of ARM sites for the latest news on FDCPA lawsuits. (see a search on "FDCPA lawsuits"). Although this a site for creditors, it follows both creditor-focused and consumer-focused websites and blogs." ...more...
Topics:
Financial Crisis
Debt Collection
Credit Cards
Foreclosure
Legislation
"The total number of lawsuits filed by consumers against accounts receivable management firms claiming violations of the Fair Debt Collection Practices Act (FDCPA) increased nearly 30 percent from May to June this year." ...more...
Topics:
Legislation
Financial Crisis
Debt Collection
"A bill introduced recently in the New Jersey General Assembly would require debt collection agencies operating in the state to provide debtors with additional information about their accounts, a copy of the Fair Debt Collection Practices Act (FDCPA), and would increase fines per violation to at least $10,000.
The proposal, A3839, was introduced by Democrat Assemblyman Paul Moriarty of Gloucester. Moriarty said of the bill, "Debt collectors may have a responsibility to get consumers to make good on what they owe, but they also have an obligation to treat consumers with respect and within the rule of law."" ...more...