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:
Credit Cards
Bankruptcy
Financial Planning
Financial Crisis
"A large and growing share of American workers are tapping their retirement savings accounts for non-retirement needs, raising broad questions about the effectiveness of one of the most important savings vehicles for old age.
More than one in four American workers with 401(k) and other retirement savings accounts use them to pay current expenses, new data show. The withdrawals, cash-outs and loans drain nearly a quarter of the $293 billion that workers and employers deposit into the accounts each year, undermining already shaky retirement security for millions of Americans." ...more...
Topics:
Foreclosure
Legislation
Financial Crisis
Financial Planning
"The Consumer Financial Protection Bureau is releasing Thursday much anticipated new mortgage rules, which will restrict the kind of subprime lending practices that caused both the financial and housing sectors to crash five years ago." ...more...
Topics:
Financial Crisis
Foreclosure
Legislation
Financial Planning
"WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) issued final rules to strengthen consumer protections for high-cost mortgages and to provide consumers with information about homeownership counseling. The Bureau also finalized a rule that requires escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans." ...more...
Topics:
Foreclosure
Legislation
Financial Crisis
Financial Planning
"Bank of America agreed on Monday to pay more than $10 billion to Fannie Mae to settle claims over troubled mortgages that soured during the housing crash, mostly loans issued by the bank’s Countrywide Financial subsidiary.
Under the terms of the pact, Bank of America will pay Fannie Mae $3.6 billion, and will also spend $6.75 billion to buy back mortgages from the housing finance giant at a discount to their original value." ...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:
Foreclosure
Financial Planning
Financial Crisis
Legislation
"The California Homeowner Bill of Rights takes effect on January 1, 2013 to ensure fair lending and borrowing practices for California homeowners.
The laws are designed to guarantee basic fairness and transparency for homeowners in the foreclosure process. Key provisions include:" ...more...
Topics:
Legislation
Financial Planning
Legal Research
"01/01/13
The American Taxpayer Relief Act [211.6 KB]
01/01/13
Revenue Estimates of the American Taxpayer Relief Act [123.6 KB]
01/01/13
Summary of American Taxpayer Relief Act Provisions [798.3 KB]" ...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:
Credit Cards
Financial Planning
"A year ago, Bank of America tried to charge customers $5 a month just for using a debit card. Consumer backlash made B of A back off pretty fast. Now, the Wall Street Journal says the bank is shelving a plan to charge fees for new checking accounts, at least until late next year. Problem is, many of those accounts actually cost the bank money. So it's latest gambit shows the battle between profits and public relations.
" ...more...
Topics:
Foreclosure
Financial Planning
"s the foreclosure process a long one in your state? Check out RealtyTrac’s state-by-state statistics on the number of days it took for a foreclosure to be completed in the third quarter." ...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:
Financial Crisis
Financial Planning
Legislation
"... the productivity of the American work force from World War II to the mid-'70s grew almost double, 97 percent. The wage and salaries of average Americans, not just assembly line workers, but plumbers, carpenters, small business people, and so forth, they rose 95 percent, so just about the same increase in wages and salaries as in productivity.
The wealth, the growth, the economy, the prosperity was shared.
Since then, however, those wedge economics came in. And what you have seen is productivity has continued to grow, about 80 percent since 1973. But the average hourly compensation of an average worker has grown only 10 percent." ...more...
Topics:
Bankruptcy
Foreclosure
Financial Planning
"Mortgages guaranteed by the Federal Housing Administration are permitted one year after a consumer exits a Chapter 13 bankruptcy reorganization, which requires a repayment plan that is often a fraction of what is owed, and two years after the more common Chapter 7 liquidation, which discharges most or all debts. Conventional mortgage guidelines from Fannie Mae and Freddie Mac, meanwhile, call for a wait of two to four years.
" ...more...
Topics:
Legal Research
Bankruptcy
Legislation
Financial Planning
Foreclosure
Credit Cards
"Last year, MetLife said elderly victims of financial scams lost at least $2.9 billion in 2010, up from $2.6 billion in 2008. And 20% of Americans over the age of 65 have been victims of financial swindles, a 2010 IPT report said. "This is a major problem, and we know there is significant under-reporting," says Mark Lachs, director of geriatrics at New York-Presbyterian Healthcare System.
Some older Americans are too embarrassed to disclose financial abuse. Some lack the tools to find a good financial adviser and may not have the knowledge to understand investment advice. Others may be susceptible to fraud because of diminished mental capacity." ...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:
Bankruptcy
Financial Planning
"Have Americans already forgotten the lessons learned in the financial crisis? The number of people with no money saved for emergencies has risen to 28 percent, up from 24 percent a year ago, according to Bankrate's Financial Security Index." ...more...
Topics:
Financial Crisis
Legislation
Legal Research
Financial Planning
Election 2008
"On this week’s Moyers & Company, Rolling Stone editor Matt Taibbi and Yves Smith, creator of the finance and economics blog Naked Capitalism, join Bill to discuss the folly and corruption of both banks and government, and how that tag-team leaves deep wounds in our democracy. Taibbi’s latest piece is “The Scam Wall Street Learned from the Mafia.” Smith is the author of ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism." ...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
Legislation
Election 2008
Financial Planning
"The Consumer Financial Protection Bureau today has unveiled its online database of consumer complaints against credit card companies — and the financial industry is taking it about as well as you’d expect." ...more...
Topics:
Student Loans
Legislation
Financial Crisis
Financial Planning
"Clearly, saving for retirement is largely a factor of consistent work — currently a more elusive achievement for Gen Yers than the other generations, according to the Bureau of Labor Statistics.
" ...more...
Topics:
Financial Planning
Financial Crisis
"Baby Boomers, with their inheritances, homes, and old-fashioned pensions, may appear to be on track for a solid retirement — but some experts say the forecast for the generation born from 1946 through 1964 isn't necessarily so rosy.
" ...more...
Topics:
Student Loans
Bankruptcy
Financial Planning
Financial Crisis
"The average education debt for law grads at private schools last year was nearly $125,000, while the average for grads of public law schools was more than $75,700, according to new figures released by the ABA.
The debt load increased 17.6 percent from the prior year for private law grads and 10 percent for public law grads, the Daily Journal (sub req.) reports. In 2001-02, the average debt was only about $46,500 for public law school grads and about $70,000 for private law school grads." ...more...
Topics:
Bankruptcy
Student Loans
Financial Planning
Financial Crisis
"The unemployment rate for recent college grads – those under 25 — has been stuck at more than nine percent for three years running. But among older college grads, the unemployment rate has been under five percent during that whole time. So the question is this: at a time of high unemployment and relentlessly rising tuition, is a college education worth the expense? And if you decide it is, what do you need to know to get a better, safer loan?" ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
"After months of painstaking talks, government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses." ...more...
Topics:
Bankruptcy
Credit Cards
Financial Crisis
Financial Planning
"Lending institutions in the United States reported a 16 percent increase in their credit card chargeoff rates in the third quarter of 2011, according to data released last week by the Federal Reserve." ...more...
Topics:
Financial Planning
Financial Crisis
Legislation
"Outsourcing, usually intended to ease strained public budgets, tends to most directly affect people like Ms. Townsend and her co-workers. But there can be other drawbacks. The quality of services provided by contract workers, for example, may not be as consistent as that of experienced government employees. And taxpayers can end up paying for the cuts in more indirect ways.
What governments save in salaries and benefits often “ends up on the government books through all sorts of programs,” said Paul C. Light, a professor at the Wagner School of Public Service at New York University, referring to unemployment insurance, Medicaid and other public assistance for workers earning low incomes." ...more...
Topics:
Financial Crisis
Financial Planning
Legislation
Student Loans
"The typical U.S. household headed by a person age 65 or older has a net worth 47 times greater than a household headed by someone under 35, according to an analysis of census data released Monday.
While people typically accumulate assets as they age, this wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation." ...more...
Topics:
Financial Crisis
Financial Planning
Legislation
Election 2008
"Her larger appeal...comes from her ability to shred Republican arguments that rebalancing the tax burden constitutes class warfare." ...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:
Financial Planning
Financial Crisis
"In a grim sign of the enduring nature of the economic slump, household income declined more in the two years after the recession ended than it did during the recession itself, new research has found.
Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials. During the recession — from December 2007 to June 2009 — household income fell 3.2 percent." ...more...
Topics:
Credit Cards
Financial Planning
Financial Crisis
Legislation
"At this point, there are still plenty of options for people who want to stick with banks like Bank of America or Wells. They could simply switch over to using a credit card instead of a debit card. The problem is some people are no longer eligible to get a credit card. Then there's people who really like the budgeting capability that a debit card gives them and they want to keep using it, and they don't want to pay for the privilege. And there are still plenty of community banks, plenty of online-only banks and plenty of credit unions that do not have minimum balances for checking accounts in order to maintain their free status, and they don't charge people monthly fees to use their debit cards." ...more...
Topics:
Bankruptcy
Financial Crisis
Financial Planning
"Last year about one in four adults under 65 reported having medical debt, an all-time high for the country. That's because health care costs continue to rise at the same time people are losing their jobs and health coverage. Kelley Weiss with the California HealthCare Foundation Center for Health Reporting has the story of one San Francisco man struggling to pay off his medical bills." ...more...
Topics:
Financial Planning
Financial Crisis
"The concern is that a country full of increasingly pessimistic consumers will stop spending and undermine the recovery.
But the relationship between consumer confidence and spending habits isn't at all straightforward." ...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:
Financial Planning
Financial Crisis
Legislation
"Thomas M. Hoenig, the soon-to-be former president of the Federal Reserve Bank of Kansas City. Mr. Hoenig, at the helm of the Kansas City Fed for the last 20 years, has thought long and seriously about the problems facing the central bank, and he spoke with me about them last week after attending his final meeting of the policy-making Federal Open Market Committee. He will turn 65 next month, the mandatory retirement age for a Fed bank president.
Mr. Hoenig has been pretty much alone among Fed presidents in publicly calling to break up large banks that are too big to succeed." ...more...
Topics:
Bankruptcy
Credit Cards
Financial Planning
Financial Crisis
Student Loans
"Credit card debt, called revolving debt by the Fed’s monthly Consumer Credit report (G.19), increased at an annual rate of 7.9 percent in June, the sharpest increase in nearly four years. Consumer credit card balances grew by $5.2 billion in June to $798.3 billion.
June marked the second month in a row that credit card debt outstanding expanded after nearly three years of declines. A combination of soaring charge-off rates at large consumer banks, tightening of lending policies in the wake of the financial crisis, and consumers paying down outstanding credit card balances led to steady and significant drop in total card debt over the course of the past three years. Peaking at $973.6 billion in August 2008, credit card debt bottomed out at $789.7 billion in April of this year, a 23.3 percent decline over the period.
Non-revolving debt – like that found in auto, student, and personal loans – grew at a 7.7 percent annualized rate in June. Banks added $10.3 billion in non-revolving debt in the month to stand at $1.648 trillion at the end of June" ...more...
Topics:
Financial Crisis
Financial Planning
Legislation
"America has a long history of raising the debt limit to accommodate spending. A look at some of the issues in the debate over the nation’s debt." ...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:
Financial Crisis
Legislation
Financial Planning
Credit Cards
Foreclosure
"President Obama said Sunday that he would nominate Richard Cordray, the former attorney general of Ohio, to lead the new Consumer Financial Protection Bureau, passing over Elizabeth Warren, the Harvard Law professor who was the driving force behind the bureau’s creation." ...more...
Topics:
Financial Crisis
Financial Planning
Legislation
Credit Cards
"Both Republicans and Democrats promised more civil discourse in Thursday’s hearing. But the political sniping sometimes overwhelmed testimony as the hearing devolved into what one committee member called “a partisan food fight.” Democrats apologized to Ms. Warren for her treatment by Republicans whom they accused of “sabotaging” the agency to protect Wall Street." ...more...
Topics:
Financial Crisis
Financial Planning
Foreclosure
Bankruptcy
"or the second consecutive month, employers added scarcely any jobs in June, startling evidence that the economic recovery is stumbling.
...
Economists were stunned. They had been expecting job growth to strengthen in June as oil prices eased and supply disruptions caused by the Japanese tsunami and earthquake receded. Instead, the government’s monthly snapshot of the labor market showed that several industries, including construction, finance and temporary services, shrank. At the same time, leading indicators like wages and the length of the average workweek, which tend to grow before employers begin adding more jobs, actually contracted." ...more...
Topics:
Financial Planning
Financial Crisis
Foreclosure
"The Obama administration on Thursday announced a beefed-up program that will allow eligible homeowners to skip part or all of their monthly payments for 12 months or more while they search for a new job. Certain homeowners have been eligible to skip payments for three or four months, far shorter than most unemployed people need to get back on their feet." ...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:
Financial Crisis
Means Test
Financial Planning
Legislation
"The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent." ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
"In New York State, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure, according to calculations by LPS Applied Analytics, a prominent real estate data firm.
Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.
In the 27 states where the courts play no role in foreclosures, the pace is much more brisk — three years in California, two years in Nevada and Colorado — but the dynamic is the same: the foreclosure system is bogged down by the volume of cases, borrowers are fighting to keep their houses and many lenders seem to be in no hurry to add repossessed houses to their books." ...more...
Topics:
Credit Cards
Student Loans
Financial Crisis
Financial Planning
"Debt has become a way of life for American college students. The average student loan debt among graduating college seniors was more than $23,000 in 2008, according to FinAid.org. In addition, the student lender Sallie Mae says the average graduating senior with at least one credit card had $4,138 in debt on the card." ...more...
Topics:
Student Loans
Financial Crisis
Financial Planning
"“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans.
Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges." ...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:
Financial Planning
Financial Crisis
Bankruptcy
Legislation
"The study’s lead author, Dr. David Himmelstein, said, “Massachusetts’ health reform, like the national law modeled after it, takes many of the uninsured and makes them underinsured, typically giving them a skimpy, defective private policy that’s like an umbrella that melts in the rain: the protection’s not there when you need it.”" ...more...
Topics:
Financial Crisis
Financial Planning
"“We need to come up with a budget that involves shared sacrifice.” Like the Democratic state senators who left the state to prevent a quorum vote on the governor’s proposed legislation, the demonstrators acknowledge the need for budget cuts.
“Budget fix, tax the rich.” Part of that shared sacrifice, they argue, should include increased taxes at the high end. Some pointed to a recent proposal by Gov. Mark Dayton, a Democrat, of Minnesota to do exactly that. Other signs point out that Governor Walker handed out $140 million in new corporate tax breaks before pointing to a budget shortfall of about the same amount (Forbes and others reported on those tax cuts in more detail)." ...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:
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
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:
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
Financial Planning
Financial Crisis
Foreclosure
Means Test
"The Census Bureau recently reported that the poverty rate in the United States rose to 14.3 percent last year, the highest level in more than 50 years.
Texas and Florida saw the most people fall below the line. In Florida alone, 323,000 people became newly poor last year, bringing the state's poverty total to 2.7 million." ...more...
Topics:
Bankruptcy
Financial Planning
"On November 16, 2010, the Sacramento County Superior Court broadly enjoined the business practices of Roni Lynn Deutch and her corporation, Roni Deutch A Professional Tax Corporation (collectively, “Deutch”). Deutch advertised heavily in California and on national television offering to resolve taxpayer’s balances owing to the IRS for less than the amount owed." ...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
Financial Crisis
Foreclosure
Financial Planning
"The third installment of our Making Sen$e foreclosure series on Wednesday's NewsHour. The focus: Boston Community Capital, a privately and publicly funded "community development finance institution."
In this web video exclusive, we talk to Elyse Cherry, CEO of Boston Community Capital, about how and when BCC could be a reasonable alternative for homeowners who are in foreclosure trouble." ...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:
Foreclosure
Financial Crisis
Financial Planning
Legislation
"Homeowners like Michelle Puzdrowski, 48, of Chesterfield Township aren't surprised about mishandled paperwork. After her temporary loan modification through Bank of America ended in June, she received three sets of documents from three Bank of America affiliates telling her she owed three vastly different amounts to come current. They varied from $15,000 to $25,000.
"They took over my loan from Countrywide and I don't think they have the original documents or know what the terms were," said Puzdrowski. "It makes me ... angry, mad, sick, depressed. I feel for so many people who are in my situation. It's disheartening."" ...more...
Topics:
Bankruptcy
Student Loans
Legislation
Financial Crisis
Financial Planning
"After years of fighting off debt, James Reach has lost the battle -- along with his house. Not unlike many consumed with debt, Reach desperately wants to file for bankruptcy.
But even if he did, he would still be drowning in debt. That's because his debt largely consists of private student loans -- which, by law, cannot be discharged in bankruptcy -- unlike virtually every other type of private loan.
But a subcommittee of the U.S. House passed the Private Student Loan Bankruptcy Fairness Act of 2010 late last month. The bill, co-sponsored by U.S. Rep. Danny Davis, would make it far easier for those who lose a job or otherwise can't pay the loans to get a fresh start.
...
Fifteen percent of all student loans are now private, the College Board says. Unlike student loans from the government, there is no cap on interest rates -- loans can have rates of up to 20 percent -- no flexible payment options and no cancellation rights. This means those who cannot pay are essentially trapped in debt.
....
"For the first time in history, Americans owe more on their student loans than on their credit cards," Sen. Richard Durbin said.
But under the proposed legislation, a version of which Durbin plans to introduce in the Senate, borrowers of private loans would not only be able to discharge the debts through bankruptcy but would also receive protections on interest rates and payment options.
Edie Irons, president of the Institute for College Access and Success, is hopeful that the bill will come before the full Congress before the November elections.
In the meantime, people like Reach struggle to make payments on debt that seems to grow exponentially. He says he's not even sure how much in loans his family owes.
"One of my child's original debts was $37,000. The last invoice we received was for $108,000," he said." ...more...
Topics:
Financial Crisis
Financial Planning
Credit Cards
Legislation
"The fees were constant: $28 to cash a paycheck. $1.50 for a money order. A dollar or more every time I swiped the prepaid cash card I bought at the drug store.
In all, I racked up $93 in fees in a monthlong experiment of living without a bank and making a go of it on the economic fringe. That works out to $1,100 a year just to spend my own money.
It may be hard to fathom why anyone would live this way, but a federal study last year found that about one in four U.S. households skirts banks and relies on services such as check-cashing and payday loans. Many of these households bring in less than $30,000 a year." ...more...
Topics:
Financial Crisis
Financial Planning
Legislation
"At the heart of the debate is the fact that, like most Western countries, the United States has a progressive tax code that levies higher rates on people with higher incomes. But the concept of class and the issue of taxes are both so politically charged that discussions about how to calibrate those rates and how much income qualifies someone as rich in the contemporary United States are incendiary.
During the presidential campaign in 2008, the Republican nominee, Senator John McCain of Arizona, set off a fury when he was asked the dividing line between middle class and rich and replied that it was $5 million, a statement he said was intended as a joke. Mr. Obama’s response was $150,000, a figure that is three times the median family income." ...more...
Topics:
Credit Cards
Financial Planning
Financial Crisis
Legislation
Election 2008
"...I could not have worked on the agency for months and months, possibly over a year. ... So the question was, would the president nominate me [as director] and sort of put me in a pumpkin shell for a while, or could I get started to work immediately? And my own enthusiasm was, I'd really like to get to work right now." ...more...
Topics:
Financial Crisis
Financial Planning
Election 2008
Legislation
"Law professor Todd Henderson's now-infamous blog entry about the mindset of the rich has incited such an uproar that he felt he needed to delete it.
An "electronic lynch mob," he wrote yesterday, "caused untold damage to me personally." But despite the apparent hate-mail, the original post, which University of California, Berkeley, economics professor Bradford DeLong re-posted for the sake of the "conversation," has also inspired a legitimate debate about an idea that typically makes people either furious or embarrassed. In short, the rich don't feel "rich."" ...more...
Topics:
Bankruptcy
Financial Planning
Financial Crisis
"Since the economic collapse, there are not enough jobs being created for the population as a whole, much less for those in the twilight of their careers.
Of the 14.9 million unemployed, more than 2.2 million are 55 or older. Nearly half of them have been unemployed six months or longer, according to the Labor Department. The unemployment rate in the group — 7.3 percent — is at a record, more than double what it was at the beginning of the latest recession." ...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:
Financial Crisis
Financial Planning
"It's not entirely clear why household income should have remained stagnant during all those years when the U.S. economy was growing and top earners were seeing their incomes rise.
Earlier this summer, the FT laid out three of the leading theories:" ...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
Chapter 13
Financial Crisis
Financial Planning
Foreclosure
"As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.
When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve." ...more...
Topics:
Student Loans
Financial Planning
Financial Crisis
"At a time when even people with no graduate degree ... often end up six figures in the hole and people getting married for the second time have loads of debt from their earlier lives, it should come as no surprise that debt can bust up engagements. Even when couples disclose their debt in detail, it poses a series of challenges.
When, exactly, are you supposed to reveal a debt of this size during the courtship? Earlier than you’d disclose, say, a chronic illness?" ...more...
Topics:
Student Loans
Financial Planning
Financial Crisis
"Mark Kantrowitz, publisher of finaid.org, one of the best sites for college financial aid information, has posted a Student Loan Debt Clock, www.finaid.org/studentdebtclock, that keeps a running tally of the outstanding federal and private student loans.
The last time I checked, the total was more than $848 billion. I watched in awe as the last five digits kept changing, pushing the debt load to a level that is, frankly, hard to fathom." ...more...
Topics:
Financial Crisis
Financial Planning
Student Loans
Bankruptcy
"For years, long before the recession began, job growth had become increasingly polarized in this country, with high-paid occupations that demand significant amounts of education and training growing rapidly, alongside low-wage, entry-level, service-type jobs that do not require much schooling or special skills, according to David Autor, a labor economist at the Massachusetts Institute of Technology.
The growth of these low-wage jobs began in the 1980s, accelerated in the 1990s and began to really take off in the 2000s. Losing out in the shuffle, according to Dr. Autor, are jobs that he describes as “middle-skill, middle-wage” — entry-level white-collar positions, like office and administrative support work, as well as certain blue-collar jobs, like assembly line workers and machine operators.
The recession appears to have magnified that trend, according to Dr. Autor in a recent paper, released jointly by the Center for American Progress, a left-leaning policy group, and the Hamilton Project, which has a more centrist reputation. From 2007 to 2009, the paper found, there was relatively little net change in total employment for both high-skill and low-skill occupations, while employment plummeted in so-called middle-skill occupations." ...more...
Topics:
Foreclosure
Financial Planning
"With unemployment high and jobs scarce, work is hard enough to find. But in today's economy, there's an even bigger barrier for some: their home.
Many people can't afford to sell their homes; as many as one-third of homeowners owe more than their home is now worth, and there are few buyers. Americans who once expected mobility now find themselves grounded, with their careers and lives fixed in place. They can't move to better job markets without taking a huge financial hit." ...more...
Topics:
Student Loans
Financial Crisis
Financial Planning
"students aren't taught about money. "Most of them are pretty clueless when they first start college, unless their parents have really done a great job of educating them about finance all along. We just don't get much financial education in high school, and then parents send their kids off to college kind of like pushing them out of the nest."
Kristof, who wrote the book Taming the Tuition Tiger, says the biggest mistake students make is getting into too much debt, especially by taking out private student loans. She says the loans are easy to confuse with federal loans. But they have much higher interest rates." ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
Bankruptcy
"Mortgage rates are the lowest in modern memory while affordability, because of price declines of 30 percent in many areas, is the highest in at least a decade. The government is allowing buyers to put only a token amount down, guarantees lenders against default and regularly issues proclamations that the worst is over.
Apparently, all of that is not enough to put a floor under housing. With unemployment steady for month upon month at more than 9 percent, and with millions heavily in debt or simply skittish, many potential buyers are lost to the market." ...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:
Financial Crisis
Financial Planning
Bankruptcy
Student Loans
Foreclosure
"The first of a Fed series to be published quarterly on household debt and credit, the 38-page report shows just how tapped out the consumer remains three years after the borrowing bubble burst.
To be sure, the data indicates that consumers are doing what they can to kick their debt habits. But the process is slow.
For example, total consumer debt stood at $11.7 trillion on June 30, down just 6.5 percent from its peak in the third quarter of 2008. The number of open credit card accounts was down considerably — 23.2 percent — from the highs reached during the second quarter of 2008, while mortgage obligations have fallen 6.4 percent from the peak that was seen almost two years ago." ...more...
Topics:
Legislation
Financial Planning
Financial Crisis
Foreclosure
"The two companies have long been the biggest players in the mortgage market, making them natural scapegoats when the market soured — especially among Republicans already suspicious of government involvement in financial affairs. Never mind that publisher Guy Cecala of Inside Mortgage Finance says Fannie and Freddie were not the biggest offenders in backing risky, subprime loans.
"Clearly there was a lot more going on than just Fannie Mae and Freddie Mac purchasing a few bad loans," he says. "In fact, the bulk of the bad loans weren't purchased by Fannie Mae and Freddie Mac.
"Yet, Fannie and Freddie carry the government guarantee; they're supposed to do good things for the housing market. And to some extent, everybody feels they let us down."" ...more...
Topics:
Financial Planning
Foreclosure
Legislation
"Congress has not ignored renters. Last year, it passed a law that lets tenants stay in a home that has been foreclosed upon for 90 days or, in most cases, until the lease runs out.
The stimulus act, passed in February 2009, provided $4 billion to public housing agencies for capital and management activities such as rehabilitating vacant rental units. It also included $2 billion to provide Section 8 housing assistance payments to owners of multifamily rental housing units, which also supports housing for low-income renters.
It also provided $1.5 billion over three years to create a new program for renters called the Homeless Prevention and Rapid Re-Housing Program." ...more...
Topics:
Financial Crisis
Foreclosure
Financial Planning
Legislation
Bankruptcy
"Congress has not ignored renters. Last year, it passed a law that lets tenants stay in a home that has been foreclosed upon for 90 days or, in most cases, until the lease runs out.
The stimulus act, passed in February 2009, provided $4 billion to public housing agencies for capital and management activities such as rehabilitating vacant rental units. It also included $2 billion to provide Section 8 housing assistance payments to owners of multifamily rental housing units, which also supports housing for low-income renters.
It also provided $1.5 billion over three years to create a new program for renters called the Homeless Prevention and Rapid Re-Housing Program." ...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:
Bankruptcy
Financial Planning
Financial Crisis
Foreclosure
Chapter 13
Exemptions
"Lenders wrote off as uncollectible $11.1 billion in home equity loans and $19.9 billion in lines of credit in 2009." ...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:
Foreclosure
Financial Planning
Financial Crisis
"“Most people, if they have the means to do it, would like to make sure they have someplace to live before they let a house go into foreclosure,” Goldman said. “They know they’re going to kill their credit score, so they make sure to get a home they won’t mind staying in.”
Freddie Mac and larger rival Fannie Mae cracked down on buy and bail in 2008 by banning in most cases the use of rental income from an existing home to qualify for a new mortgage unless the first property has at least 30 percent equity.
“There were a number of policies put in place to squelch this type of activity, but people who are savvy can always find a way to circumvent policies,” said Burns of the Federal Housing Finance Agency, which regulates Fannie Mae, Freddie Mac and the 12 federal home loan banks.
In addition to the rental restrictions, the mortgage giants now usually require reserves equal to six months of loan payments for both homes. The measures have been sufficient to block most applicants who attempt to buy and bail, said Pete Bakel, a spokesman for Washington-based Fannie Mae." ...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:
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
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:
Credit Cards
Legislation
Financial Planning
"Just months after historic legislation banned certain billing practices, card issuers have dreamed up new ones designed to trip up consumers." ...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:
Financial Planning
Financial Crisis
Foreclosure
Legislation
"For all the focus on the historic federal rescue of the banking industry, it is the government’s decision to seize Fannie Mae and Freddie Mac in September 2008 that is likely to cost taxpayers the most money. So far the tab stands at $145.9 billion, and it grows with every foreclosure of a three-bedroom home with a two-car garage one hour from Phoenix. The Congressional Budget Office predicts that the final bill could reach $389 billion." ...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
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:
Credit Cards
Legislation
Financial Planning
"As measures take effect this year to overhaul credit card and overdraft practices, "What you're essentially doing is squeezing the balloon, (so fees) are going to pop up somewhere else," says Bart Narter, senior vice president at Celent, a bank research and consulting firm. Yet, ongoing regulatory scrutiny means that new fees rolled out by the industry will generally be "more fair," and unlike overdraft charges, won't disproportionately affect the poorest consumers, Narter says." ...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
Financial Crisis
"New credit card and overdraft restrictions will save U.S. consumers from being charged at least $5 billion in fees this year alone at the largest U.S. retail banks and credit card companies, a USA TODAY analysis reveals." ...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:
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:
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:
Legislation
Financial Crisis
Financial Planning
Credit Cards
"Under the new so-called Card Act, credit card companies will have a harder time raising or imposing fees. But some consumer advocates worry the law will have unintended side effects. John Ulzheimer, a credit expert with Credit.com, talks with Michele Norris about these concerns." ...more...
Topics:
Legislation
Financial Crisis
Financial Planning
"Through polling and focus groups, Luntz sculpts what he calls "words that work." He instructed Senate Republicans in talking about health care, and now a leaked 17-page memo he wrote in January tells the GOP which words to use in the financial regulation debate." ...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:
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:
Student Loans
Legislation
Financial Planning
"President Obama will sign a bill today that ends a 45-year-old program under which banks and other private-sector lenders such as Sallie Mae receive a federal subsidy for making government-guaranteed college loans.
...
The bill also makes changes to the new income-based repayment program, which helps borrowers who have large debts relative to their income.
Under this program, loan payments are limited to 15 percent of discretionary income and any balance remaining after 25 years is forgiven. The new bill will limit payments to 10 percent of discretionary income and forgive balances after 20 years. But these changes only apply to loans taken out by new borrowers on or after July 1, 2014. They are not retroactive.
Public-service workers on the income-based repayment plan can have their remaining balances forgiven after 10 years. That does not change under the new law." ...more...
Topics:
Foreclosure
Bankruptcy
Financial Planning
Legislation
Financial Crisis
Chapter 13
"The Obama administration on Friday announced broad initiatives to provide more assistance to homeowners who are behind on their mortgage or owe more than their house is worth." ...more...
Topics:
Legislation
Foreclosure
Financial Planning
Chapter 13
"The adjustments announced today are tailored to accomplish these goals by helping a targeted group of borrowers.
Eligible homeowners for modifications under HAMP must, for example: live in an owner occupied principal residence, have a mortgage balance less than $729,750, owe monthly mortgage payments that are not affordable (greater than 31 percent of their income) and demonstrate a financial hardship. The new flexibilities for the modification initiative announced today continue to target this group of homeowners.
The FHA refinance options being announced today will provide more opportunities for lenders to restructure loans for some families who owe more than their home is worth. This is a voluntary program for lenders and homeowners. The population eligible for a FHA refinance must be current on their mortgage. This rewards responsible homeowners and creates stabilizing incentives in the housing market." ...more...
Topics:
Student Loans
Financial Planning
Legislation
Bankruptcy
"The legislation will make it easier to pay back student loans, by reducing the share of income that a graduate must devote to loan payments and by accelerating loan forgiveness — but not right away. Those who take out new loans after July 1, 2014, will have to devote 10 percent of their income to payments, down from the current 15 percent, and those who keep up their payments will have their loans forgiven after 20 years, reduced from the current 25.
“Income-based repayment is a fantastic addition to the Senate bill that will allow over a million students to avoid being crushed by unmanageable levels of debt,” said Rich Williams, a higher-education advocate at the U.S. Public Interest Research Group.
With the new legislation, students will have to take out their loans through their college’s financial aid office, instead of using a private bank." ...more...
Topics:
Bankruptcy
Foreclosure
Financial Crisis
Financial Planning
Chapter 13
"Bank of America said on Wednesday that it would begin forgiving some mortgage debt in an effort to keep distressed borrowers from losing their homes." ...more...
Topics:
Bankruptcy
Financial Planning
Financial Crisis
Legislation
"Regardless of the outcome of the movements to amend and modify the new bankruptcy law, parties with a particular interest in consumer bankruptcy should expect higher levels of filing in 2010 and 2011, with Chapter 7 filings accounting for an outsized proportion of consumer filings." ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
"Back when rates ran at 7 or 8 percent, making extra payments offered what amounted to a guaranteed return on your money. When you’re ridding yourself of debt that costs you much less, however, it’s easier to imagine a future when you could more easily earn a higher return by investing those potential extra mortgage payments someplace else." ...more...
Topics:
Financial Crisis
Legislation
Credit Cards
Financial Planning
"President Obama and Congressional leaders have vowed to enact the farthest reaching overhaul of financial regulation since the Depression. On Dec. 11, the House voted 223 to 202 for an overhaul bill shepherded through by Representative Barney Frank, chairman of the Financial Services Committee. After several months of negotiations with Republicans, the chairman of the Senate Banking Committee, Christopher J. Dodd of Connecticut, introduced a Democratic bill on March 15. The committee approved the bill, 13-10, on March 22 with technical amendments and sent it to the Senate floor. Here is a look at how the bills compare:" ...more...
Topics:
Bankruptcy
Financial Planning
Student Loans
Financial Crisis
"One fast-growing American industry has become a conspicuous beneficiary of the recession: for-profit colleges and trade schools.
At institutions that train students for careers in areas like health care, computers and food service, enrollments are soaring as people anxious about weak job prospects borrow aggressively to pay tuition that can exceed $30,000 a year.
But the profits have come at substantial taxpayer expense while often delivering dubious benefits to students, according to academics and advocates for greater oversight of financial aid." ...more...
Topics:
Bankruptcy
Chapter 13
Legislation
Financial Planning
Financial Crisis
Foreclosure
"Under a sensible bankruptcy system, households in severe financial distress ought to be able to discharge their debts if they are willing to do two simple things: turn over all assets and make payments out of future income, to the extent that either exceeds a low and nationally uniform threshold. If debtors wanted to keep assets against which they have borrowed, they should have to pay the fair value of the assets, but nothing more.
A rational bankruptcy system would also scrap the separate chapters altogether, along with the complicated paperwork now required to document and justify the chapter choice in each particular case. There would be simple, separate tracks automatically determined by each family’s financial position. Families with no substantial income or assets — the great majority of bankrupt households — should face a process as simple as filing a 1040EZ tax form." ...more...
Topics:
Bankruptcy
Foreclosure
Legal Research
Exemptions
Financial Planning
"Bankruptcy lawyers sometimes forget: not everyone worried about debt actually needs to file bankruptcy. The anxiety that brings someone to your office may not be grounded in a real understanding of the rights of their creditors." ...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 Crisis
Financial Planning
"The Federal Reserve reported Friday that consumer borrowing rose by $4.96 billion in January, surprising economists who were looking for borrowing to decline by $4.5 billion. It was the first gain after a record 11 straight declines and the largest increase since July 2008.
In percentage terms, the overall increase was an advance of 2.43% and followed a revised 2.23% drop in December.
The strength in January came from a $6.62 billion increase in borrowing for auto loans and other types of nonrevolving debt. That represented a 5.01% gain and followed a 3.69% rise in the auto loan category in December.
Credit cards and other types of revolving credit fell $1.66 billion or 2.3%. Even with the decline, it was a much smaller drop than the 12.9% plunge in December. Credit card borrowing has now fallen for a record 16 straight months, although the January decline was the smallest since July." ...more...
Topics:
Credit Cards
Legislation
Financial Planning
"As the government cracks down on the way banks charge fees for overspending on debit cards, the industry is mounting an aggressive campaign aimed at keeping billions of dollars in penalty income flowing into its coffers. Chase and other banks are preparing a full-court marketing blitz, which is likely to include filling mailboxes with various aggressive and persuasive letters, calling account holders directly, and sending a steady stream of e-mail to urge consumers to keep their overdraft service turned on." ...more...
Topics:
Bankruptcy
Credit Cards
Financial Planning
Legislation
"After Congress passed credit card legislation last May, new rules governing credit card companies take effect Monday. Some changes to the way companies can set interest rates and pay schedules already took effect last August. For an idea of what consumers can expect from the new changes, we spoke to Adam Levin, chairman and founder of Credit.com, a consumer education and advocacy group. He's also the former director of New Jersey's consumer affairs division." ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
"The number of homeowners falling behind on their mortgage payments almost always rises with the start of winter. But late last year, the total fell slightly, the Mortgage Bankers Association said in its quarterly delinquency report.
“We’ve got fewer new problems coming into the system,” Jay Brinkmann, the group’s chief economist, said in a briefing. The improvement in the fourth quarter, he added, “frankly surprised us.”
The system, however, is still overwhelmed with millions of distressed homeowners. In a series of events in the Las Vegas area on Friday, President Obama said he was designating $1.5 billion from the Troubled Asset Relief Program to develop assistance programs in five of the most troubled states, including Nevada.
.......
The housing market is at a difficult juncture. Last summer’s modest recovery in home prices has apparently ceased. The government’s effort to compel lenders to modify troubled mortgages has done relatively little. And the pool of pending foreclosures is so large that it is likely to be a drag on the market for years.
About one in seven homeowners with a mortgage is struggling to pay it, an unprecedented level of distress that threatens to undermine the fragile economic recovery." ...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:
Bankruptcy
Foreclosure
Financial Crisis
Financial Planning
"“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”
After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying." ...more...
Topics:
Foreclosure
Bankruptcy
Financial Crisis
Financial Planning
"Steven Colbert’s take on the “Walk Away From Your Mortgage” article in the Sunday New York Times magazine... (video, 6 minutes)" ...more...
Topics:
Bankruptcy
Foreclosure
Financial Crisis
Financial Planning
"Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials. Former Treasury Secretary Henry M. Paulson Jr. declared that “any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.” (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)" ...more...
Topics:
Financial Planning
Bankruptcy
Foreclosure
"Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.
As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.
Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system." ...more...
Topics:
Financial Crisis
Foreclosure
Financial Planning
"Fannie Mae, Freddie Mac and Citigroup Inc. have announced that they will suspend evictions during the holidays.
Freddie Mac and Fannie Mae said they have ordered mortgage servicers and foreclosure attorneys to suspend evictions for occupied single-family homes owned by the government-controlled companies between Dec. 19 and Jan. 3, 2010. Foreclosure processes will continue, however." ...more...
Topics:
Foreclosure
Financial Crisis
Legislation
Financial Planning
"Mortgage rates in the United States have dropped to their lowest levels since the 1940s, thanks to a trillion-dollar intervention by the federal government. Yet the banks that once handed out home loans freely are imposing such stringent requirements that many homeowners who might want to refinance are effectively locked out." ...more...
Topics:
Bankruptcy
Financial Crisis
Financial Planning
"“This has really become the insurance system for the country,” said Susan R. Limor, a bankruptcy trustee who calculated that 13 of the 48 Chapter 7 liquidation cases on her docket one recent afternoon included medical debts of more than $1,000." ...more...
Topics:
Foreclosure
Financial Planning
Legislation
"F.H.A. insurance was created for minority and low-income families who could not come up with the traditional down payment of 20 percent required by private lenders. Buyers receive loans from government-approved lenders and are required to document their income and assets. They must pay a substantial insurance premium of 1.75 percent of the loan. But in return, their down payment can be as low as 3.5 percent.
For decades, most F.H.A. loans were in low-cost states like Texas and Michigan. Under the agency’s loan limits, houses along the coasts were usually too expensive to qualify. In 2007, fewer than 4,400 F.H.A. loans were made in California, according to the research firm MDA DataQuick, and none were in San Francisco.
The Economic Stimulus Act of 2008 helped change that by temporarily doubling the maximum loan the F.H.A. insured, to $729,750. A two-unit property like the one bought by Mr. Rowland and his friends can be insured for up to $934,200.
“F.H.A. financing was a lost language in San Francisco, the real estate equivalent of Aramaic,” said Michael Ackerman, the agent who represented Mr. Rowland and his friends. “Once the limits were raised, smart buyers started calling.”" ...more...
Topics:
Foreclosure
Financial Planning
"Unless foreclosure modification efforts begin succeeding on a permanent basis — which many analysts say they think is unlikely — millions more foreclosed homes will come to market.
“I’ve been pretty bearish on this big ugly pig stuck in the python and this cements my view that home prices are going back down,” said the housing consultant Ivy Zelman.
The overall third-quarter delinquency rate is the highest since the association began keeping records in 1972. It is up from about one in 14 mortgage holders in the third quarter of 2008." ...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:
Bankruptcy
Credit Cards
Financial Crisis
Financial Planning
Foreclosure
"Accounts receivable management companies are shifting their collection strategies to include more settlement offers and payment arrangements as debtors struggle through a recession that shows little sign of letting up on the American consumer.
In insideARM’s most recent Credit & Debt Collection Industry Confidence Survey, more than 72 percent of collection agency respondents said that they have tried “more payment arrangements” in the past six months in an effort to increase revenue. Nearly 68 percent of debt buyers responded in a similar way." ...more...
Topics:
Foreclosure
Financial Planning
"The Federal Housing Administration, the government agency whose loan-insurance programs have become a crucial source of support for the housing market, said on Thursday that its cash reserves had dwindled significantly in the last year as more borrowers defaulted on their mortgages.
“There is a real risk. Nobody has a crystal ball,” said Shaun Donovan, secretary of Housing and Urban Development.
The agency released an audit that spelled out the rapid deterioration of its finances. It is tightening loan standards in hopes it will not become another drain on the United States Treasury, but is reluctant to clamp down so much that it snuffs out the tentative recovery in housing." ...more...
Topics:
Credit Cards
Legislation
Financial Planning
"Banks began raising interest rates and pulling back credit lines about a year ago as delinquencies crept upward and regulators discussed reforms. As banks have become more aggressive in making changes, lawmakers have accused them of trying to impose rate increases before many of the new rules take effect in February.
On Monday, the Federal Reserve provided new evidence of the banks’ actions. About 50 percent of the banks responding to the Fed’s survey said they were increasing interest rates and reducing credit lines on borrowers with good credit scores. About 40 percent said they were imposing higher fees. The banks also said they were demanding higher minimum credit scores and tightening other requirements." ...more...
Topics:
Foreclosure
Legislation
Financial Planning
"Gov. Schwarzenegger signed Senate Bill 94 Oct. 11, immediately prohibiting any person, including attorneys and real estate licensees, from collecting an advance fee to perform foreclosure relief services. The new law, adopted as an emergency measure, closes a loophole that permitted foreclosure scam artists to exploit the ability to charge advance fees.
It is now unlawful for any licensed attorney or real estate agent “who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower … to claim, demand, charge, collect, or receive any compensation until after the [attorney or agent] has fully performed each and every service the licensee contracted to perform or represented that he, she, or it would perform.”" ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
"In separate actions to address Americans’ continuing economic hardship, the government moved Thursday to assist long-unemployed workers and struggling businesses, as well as home buyers and homeowners facing foreclosure.
Fannie Mae, the federally controlled mortgage company, announced a Deed for Lease program in which those in danger of eviction may be able to stay as tenants in their houses for at least a year.
At the same time, Congress gave final approval to a stimulus measure that will extend unemployment benefits for the longtime jobless, aid that will bring total assistance for many to nearly two years. Other provisions of the bill will expand two popular tax breaks — one for home buyers, the other for businesses operating at a loss." ...more...
Topics:
Financial Crisis
Credit Cards
Financial Planning
"Borrowing by consumers for revolving credit, including credit cards, fell at an annual rate of 13.3 percent in September, the same as August. This category has declined for a record 12 straight months.
Borrowing for non-revolving loans, including auto loans, dropped at an annual rate of 3.7 percent in September after edging up 0.1 percent in August. The August gain reflected the surge in car sales as consumers rushed to take advantage of the government's Cash for Clunkers program.
The $14.8 billion overall decline in borrowing left total consumer credit at $2.46 trillion in September. The 7.2 percent annual rate of decline followed a 4.8 percent drop in August. The Fed's report doesn't include mortgages or other loans secured by real estate." ...more...
Topics:
Financial Planning
Credit Cards
Financial Crisis
"Federal law guarantees free credit reports each year, but many consumers who got theirs from FreeCreditReport.com unintentionally paid for an expensive credit monitoring service" ...more...
Topics:
Foreclosure
Financial Crisis
Bankruptcy
Financial Planning
"Just flip on the television or radio, or surf the Internet, and you will find countless ads placed by companies offering to help you get a loan modification.
The only problem is, it's tough to know if they truly will be able to help you. Why? A new study reveals that servicers actually make more money when a loan goes into foreclosure than if it is modified." ...more...
Topics:
Financial Crisis
Foreclosure
Bankruptcy
Financial Planning
"mortgage servicers -- companies that collect monthly mortgage payments and distribute them to investors -- have found it's cheaper to foreclose on homeowners than to offer loan modifications that would benefit homeowners and investors, according to "Why Servicers Foreclose, When They Should Modify, and Other Puzzles of Servicer Behavior," a new report from the National Consumer Law Center (NCLC)." ...more...
Topics:
Bankruptcy
Financial Planning
Means Test
"In 2008, only 10% of chapter 7 debtors had above-median incomes. And nearly all of that 10% passed the means test once expenses are deducted. According to its report, the U.S. Trustee filed a motion to dismiss for abuse in 2,881 Chapter 7 cases--that works out to 4% of all above-median cases and .4% of all chapter 7 cases. Those numbers are hard to square with any fear that there will be any measurable change in the fraction of people made ineligible for chapter 7 this year. Importantly, these numbers don’t reflect how the very existence of a median income test may discourage people from filing a bankruptcy case or may push people directly to chapter 13 rather than risking an abuse determination. But again, that effect—whatever its magnitude—probably won’t change with median income fluctuation." ...more...
Topics:
Financial Crisis
Financial Planning
Credit Cards
Legislation
"Lawmakers worked this week on defining what the agency covers and what it doesn't.
These kinds of credit will face scrutiny: payday loans, paycheck cashing, debit cards, overdraft protection and mortgages.
Providers would have to register with the new agency, pay its fees and fines; and face its regulators.
Not included are: auto dealers, retail stores, doctors, lawyers and anyone else who's not in the finance business but who might extend credit." ...more...
Topics:
Foreclosure
Financial Crisis
Bankruptcy
Financial Planning
Chapter 13
"A recent study suggests that most homeowners have qualms about abandoning a mortgage that they can afford to pay, even if it straps them to an investment that’s unlikely to pay off anytime soon
But if the house has lost significant value, or if many neighbors walk away from their mortgages, the study says, “strategic defaults” are significantly more likely.
It is an increasingly common question facing homeowners, many of whom have seen their properties lose large amounts of equity in recent years: would you give up a home that is considered to be “underwater” even if you could still afford the monthly payments?" ...more...
Topics:
Bankruptcy
Financial Planning
Chapter 13
Legislation
"A committee in the U.S. House of Representatives was expected to move forward this week with legislation that would create a new regulator, the Consumer Financial Protection Agency (CFPA), which could supplant the Federal Trade Commission as the primary regulator for collection firms.
A bill currently before the House Financial Services Committee, H.R. 3126, would also take regulatory powers from the Federal Reserve and other agencies and place it in the hands of independent regulators who would oversee products such as credit cards and other financial services. As such, the CFPA would oversee the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA)." ...more...
Topics:
Bankruptcy
Financial Crisis
Financial Planning
"Older Americans are heading into and through retirement with a boatload of debt. They're carrying everything from mortgages and home-equity loans to big credit-card balances, and many are finding the burdens harder and harder to bear. In the last eight years, the over-55 crowd has become the age group most likely to declare bankruptcy, according to the AARP." ...more...
Topics:
Financial Crisis
Financial Planning
"In what must seem like a cruel joke to many, the accounts proved the most dangerous for those closest to retirement. During the market downturn, the 401(k)s of 55-to-65-year-olds lost a quarter more than those of their 35-to-45-year-old colleagues. That's because in your early years, your 401(k)'s growth is driven mostly by contributions. You control your own destiny. But the longer you hold a 401(k), the more market-exposed it becomes. It's a twist that breaks the most basic rule of financial planning." ...more...
Topics:
Financial Planning
Credit Cards
"For many people who do not have bank accounts, or cannot get a credit card, the appeal is irresistible, making the reloadable cards among the consumer banking industry’s fastest-growing products. But their convenience comes with a catch: fees, often hidden in the fine print.
The MiCash Prepaid MasterCard docks cardholders a $9.95 activation fee. Like many competitors, it then charges numerous recurring fees, including $1.75 for each A.T.M. withdrawal, $1 for each A.T.M. balance inquiry, 50 cents for each purchase, $4 for monthly maintenance, $2 for inactivity after 60 days and $1 for a call to customer service." ...more...
Topics:
Financial Planning
Financial Crisis
Bankruptcy
Means Test
"4. “This could actually improve your credit score down the road.”
Yes, bankruptcy will pummel your credit score, says Barry Paperno, consumer-operations manager for FICO, the company that develops the credit scoring formula used by the three major credit bureaus. Yet bankruptcy can be less damaging in the long run than juggling late payments on credit cards for years in a bid to postpone the inevitable. Bankruptcy stays on your credit report for 10 years, but you can begin repairing it immediately, if gradually.
The fact is, most people go bankrupt with lousy credit. They’ll be able to return to (and maybe surpass) their prebankruptcy FICO score more quickly than the rare debtor with pristine credit who needs to file bankruptcy after, say, a serious illness—which could mean a credit score drop of 100 points or more, Paperno says." ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
"From 2004 to 2008, "one in five people who took out a mortgage loan (for both purchases and refinancing) in the San Francisco metropolitan region (San Francisco, Alameda, Contra Costa, Marin and San Mateo counties) got an option ARM," said Bob Visini, senior director of marketing in San Francisco at First American CoreLogic, a mortgage research firm. "That's more than twice the national average.
"People think option ARMs (will be) a national crisis," he said. "That's not really true. It's just in higher-cost areas like California where you see their prevalence."" ...more...
Topics:
Credit Cards
Financial Planning
"Ron Lieber, author of the Your Money column, explains the inner workings of debit cards and how to avoid overdraft fees that can cost hundreds of dollars a month." ...more...
Topics:
Bankruptcy
Legislation
Foreclosure
Financial Planning
"“I submitted the paperwork three times, and nothing happened,” said Mrs. Giguere, 41, who has a high school education and worked as restaurant manager before losing her job.
On Thursday, something happened. She questioned a Wells Fargo official about the bank’s lack of response — under oath.
The spectacle of a high-ranking banking executive being grilled by an ordinary homeowner was the result of an unusual decision by Judge Randolph J. Haines of the United States Bankruptcy Court to summon a senior executive from Wells Fargo to appear in Mrs. Giguere’s bankruptcy case." ...more...
Topics:
Bankruptcy
Financial Planning
"People who are insured often find themselves in debt because their insurance has limited benefits and high out-of-pocket costs, Lavarreda said. She said a growing number of people are buying policies with high deductibles or those that require them to pay a percentage of the total bill.
"When you get a high deductible plan, you have less coverage and you're exposed to more risk," she said, adding that some people buy policies with deductibles of several thousand dollars in order to afford the monthly premiums." ...more...
Topics:
Financial Planning
"how can you avoid being caught in a hospital debt collector nightmare? Here are some practical, worthwhile tips for you to know and share. These came from many sources, but kudos go especially to the California Hospital Association, for pro-actively providing detailed information." ...more...
Topics:
Financial Planning
Credit Cards
Foreclosure
"The National Top 10 Consumer Complaints List for 2008 is:
Debt Collection
Auto Sales
Home Repair/Construction
Credit Cards (tie)
Internet Goods and Services (tie)
Predatory Lending/Mortgages
Telemarketing/Do-Not-Call
Auto Repair
Auto Warranties (tie)
Telecom/Slamming/Cramming (tie)" ...more...
Topics:
Credit Cards
Financial Planning
"Last year, debit card use surpassed credit card use for the first time in history: Americans made 28.4 billion debit purchases compared with 21 billion credit card purchases, according to payment systems newsletter The Nilson Report.
It happened, industry watchers say, because of tighter credit, recession-weary and strapped consumers, wider acceptance of debit cards for small purchases, and a burgeoning youth market that prefers paying with debit cards." ...more...
Topics:
Foreclosure
Financial Crisis
Financial Planning
"The foreclosure crisis will get much worse before it gets any better.
That’s the only conclusion to draw from a recent survey by the Mortgage Bankers Association, which found that six million loans were either past due or in foreclosure in the second quarter of 2009, the highest level ever recorded by the group. Worse, loan defaults are not the only cause of foreclosures. In some areas, unpaid property taxes are provoking foreclosures, even for homeowners otherwise current on their payments." ...more...
Topics:
Financial Planning
Foreclosure
Financial Crisis
"more than a half-million option ARMs scheduled to reset in the next four years, at rates many homeowners cannot afford. ..... Default and foreclosure rates on option ARMs recently passed those of subprime mortgages, according to the research firm First American CoreLogic, in part because so many subprime mortgages have already failed" ...more...
Topics:
Credit Cards
Financial Planning
"On Thursday, the first of a set of new rules went into effect resulting from the landmark credit card legislation earlier this year.
Banks must now provide written notice to customers 45 days before increasing the interest rate or changing the terms on a card. So banks raced to get out in front of that requirement, making a bunch of changes before Thursday, lest they have to give you a month and a half of warning.
Irritated by the changes? Inclined to take your business elsewhere now? This is exactly the right instinct, since plenty of people can still get a better deal from a different card. Fee-free balance transfers still exist. And banks have barely touched the most lucrative rewards programs — and wouldn’t dare fiddle too much given the revenue they generate.
The best revenge is a better card. Here’s how to find one." ...more...
Topics:
Credit Cards
Financial Planning
"Advocates say the new rules are a good first step but don't go far enough in protecting consumers. For instance, even though issuers now must give 45 days notice of "any significant change," account closures and credit line reductions don't count as major changes." ...more...
Topics:
Bankruptcy
Financial Planning
"After trying unsuccessfully to make ends meet, more people are opting to make the financial choice of last resort: filing for bankruptcy. .... How do you know when it's time to file?" ...more...
Topics:
Credit Cards
Financial Planning
Financial Crisis
"What debt should you pay first, and what debt should wait till last, with CNBC's Suze Orman." ...more...
Topics:
Financial Crisis
Financial Planning
Legislation
"palliative care specialists often talk about wanting to curb the excesses of the medical machine, about their disillusionment over seeing patients whose bodies and spirits had been broken by the treatment they had hoped would cure them. But their intention, in a year observing their intimate daily interactions with patients, was not to limit people’s choices or speed them toward death." ...more...
Topics:
Legislation
Financial Planning
Financial Crisis
"The issue of deceased collections gained national attention earlier this year when U.S. Senator Chuck Schumer (D-N.Y.) called for an investigation into “debt collectors that shake down relatives of deceased debtors.” The call came after the New York Times ran a piece detailing the practices of deceased debt collection agencies like DCM." ...more...
Topics:
Foreclosure
Financial Planning
Legislation
"Industry insiders and legal experts say the limited capacity of mortgage companies is not the primary factor impeding the government’s $75 billion program to prevent foreclosures. Instead, it is that many mortgage companies are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans." ...more...
Topics:
Financial Planning
Financial Crisis
Legislation
"The government’s long-awaited cash for clunkers program is underway. So we’ve attempted to answer your questions about it here. Visit our complete cash for clunkers special section, where you’ll find more information about the program, guidance on vehicle choice, and buying advice." ...more...
Topics:
Financial Planning
Financial Crisis
"Even before the collapse of the housing and financial markets last year, Americans were woefully unprepared to pay retirement in the traditional sense of a post-career period of leisure and personal pursuits supported by a pension, well-managed nest egg and Social Security.
Now, trillions of dollars of housing equity have been destroyed, retirement savings have vaporized and pension funds are being squeezed. The old-fashioned notion that when you hit age 65 your lifelong employer will give you a warm sendoff, a gold watch and a pension that guarantees your financial security for life is very much in the past.
With their nest eggs in tatters, the stock market in the doldrums and time running out, many older Americans are resigning themselves to Plan C: simply working much later in life." ...more...
Topics:
Credit Cards
Bankruptcy
Financial Crisis
Financial Planning
"While the economic recession continues to threaten the financial security of low- and middle-income households, its effects have been heightened by the reality that, even before the downturn, millions of households were experiencing difficulties meeting the most basic expenses. Now, as families experience declining home values and tightened credit markets, many are falling behind on their mortgage and credit card payments." ...more...
Topics:
Bankruptcy
Financial Crisis
Financial Planning
Foreclosure
"The fact that four old clients, all in their fifties and sixties, are all going back to ground zero via bankruptcy tells me a new wave of defaults is beginning.
None of these persons fit a bad-credit profile or an irresponsible-person profile. They all have a history of outstanding credit scores and hard work and strong savings. They have been ruined first by bad investments in real estate. Two of four are self-employed, and bad times in business have killed the chance for a turn around and getting through it. One of four borrowed irresponsibly on credit cards. Negative equity for all of them destroys all reason for struggling to keep up. In a way they have all been impoverished to their debt for years. It’s obvious they should pull-the-plug." ...more...
Topics:
Foreclosure
Financial Crisis
Bankruptcy
Financial Planning
"Many of the same people who dispensed risky mortgages during the real estate bubble have reconstituted themselves into a new industry focused on selling loan modifications.
Despite making promises of relief to homeowners desperate to keep their homes, FedMod and other profit making loan modification firms often fail to deliver, according to a New York Times investigation based on interviews with scores of former employees and customers, more than 650 complaints filed with the Better Business Bureau, and documents filed by the Federal Trade Commission in a lawsuit against the company." ...more...
Topics:
Financial Crisis
Financial Planning
Legislation
Credit Cards
Foreclosure
"It would create a one-stop financial protection agency for consumers, with authority over financial products from credit cards and home mortgages to payday loans. Proponents say the measure would stop people from getting mortgages, for example, that they don't understand and can't pay for. Opponents say the new entity would create unnecessary bureaucracy and shrink consumer choices.
Committees on both sides of the Capitol started working on the legislation this week. The Senate banking committee heard from Assistant Treasury Secretary Michael Barr. He said that even with half a dozen regulators out there, the system has major gaps.
"The present system of consumer protection is not designed to be independent or accountable, effective or balanced," Barr said. "It is designed to fail."" ...more...
Topics:
Credit Cards
Financial Planning
"Bank of America Corp., the biggest U.S. bank by assets, said net charge-offs on its credit-card trust rose to 13.86 percent in June from 12.5 percent a month earlier.
Payments overdue by 30 days or more fell to 7.73 percent from 7.95 percent in May, according to data posted today by the Charlotte, North Carolina-based lender on it Web site.
Bank of America’s charge-off rate was the highest among five U.S. credit-card issuers that reported today, and one of only two that climbed from the previous month." ...more...
Topics:
Bankruptcy
Foreclosure
Financial Crisis
Chapter 13
Financial Planning
"To most people, bankruptcy is a four-letter word. But when all else fails, declaring bankruptcy can be an honest and time-tested legal maneuver to save your house from foreclosure.
If nothing else, filing for bankruptcy protection will buy you some breathing room, which is particularly important in "non-judicial" states where the clock on foreclosure starts as soon as your lender posts a notice that it intends to accelerate your note." ...more...
Topics:
Financial Crisis
Financial Planning
Bankruptcy
"Sponsored by Assemblyman Ted Lieu, D-Torrance (Los Angeles County), AB350 is supported by the industry's two main trade groups, who say they want to weed out unscrupulous firms giving the business a bad name." ...more...
Topics:
Bankruptcy
Financial Planning
"Despite what the ads say, "This is not an easy way to get out of your debts," she says. Settling for less than the full amount can do serious harm to your credit score, and the debt that is canceled can be taxed as income." ...more...
Topics:
Financial Planning
"For people who choose to defer benefits until age 66, it generally takes about 12 more years to collect as much as if you started getting checks at 62. So you break even, so to speak, about age 78, according to Avram Sacks, a Social Security law analyst for CCH, a tax and accounting information service. “If you are in good health, and you expect to live to 78 or longer, then the advantage goes to the person who waits,” he says. “But that’s assuming we’re all prophets and we know what’s going to happen tomorrow, and we don’t all know.”" ...more...
Topics:
Credit Cards
Financial Planning
Financial Crisis
Legislation
"A full three quarters of loan volume of the payday lending industry is generated by borrowers who, after meeting the short-term due date of the loan, must re-borrow before their next pay period" ...more...
Topics:
Credit Cards
Foreclosure
Financial Crisis
Financial Planning
"Why congress should adopt Obama’s proposal for a consumer financial protection agency" ...more...
Topics:
Foreclosure
Legislation
Financial Crisis
Financial Planning
"Mr Obama’s chances of being any more successful depend on whether his team has correctly diagnosed what is driving the wave of foreclosures. Is it that homeowners cannot afford to pay; or is it that they are declining to do so, because their homes are now worth less than their mortgages, the phenomenon known as negative equity?
Both factors play a part, but economists are divided on their relative importance. One school thinks that, even in cases of negative equity, most homeowners will not default if they can afford the payments—not least because defaulting will wreck their credit records. A second school believes that once the home is worth less than the mortgage, homeowners have a significant incentive to walk away even if they can make the payment, since in many states lenders cannot then pursue them for the shortfall." ...more...