Jul 17

By Whitney Mallett – Fast Company

Lindsey Ellis had received phone calls from a debt collector when one of her acquaintances and a distant family member reported getting peculiar messages on Facebook.

“Hey Girl,” began a private message sent by Erika Edington Brinkley to Ellis’s cousin’s ex-girlfriend and her brother-in-law’s sister. Brinkley’s profile identified her as a TitleMax employee based in Alabama. “I’m looking for her veh[icle]. She’s been hiding it for some months, never paid on it.”

Ellis had taken out a loan from the title lending business TitleMax in April 2014 in order to pay $2,500 for a new transmission. TitleMax specializes in auto-title loans, whereby customers borrow cash against the value of their existing car. To people for whom traditional credit isn’t an option—borrowers with bad credit, little savings, or few family resources—these loans offer an easy alternative. But consumer advocates say that title loans, like payday loans, tend to carry a high price: astronomical interest rates, sometimes reaching into the triple digits.

At the time of the Facebook messages, Ellis was two weeks late on a payment for her loan. The company “seemed to be reputable,” she says, but once the messages began, it had crossed a line. “I said, ‘This is bull crap for her to breach my privacy like that.’”

Ellis complained to TitleMax management, and a representative told her that Brinkley had broken company policy in her use of social media. Brinkley, who still works at TitleMax, declined to comment, and referred me to TitleMax’s corporate offices. The company failed to respond to my inquiry regarding their social media policy. [read more]

Jul 16

By Paul Ausick – 24/7 Wall St.

In the month of May, 41,000 U.S. home foreclosures were completed, up 4.1% month over month and down 19.2% from a total of 51,000 in May 2014, according to research firm CoreLogic. The firm notes that the current foreclosure inventory totals 1.3% of all homes with a mortgage in the United States, down from 1.7% in May of 2014.

The number of U.S. homes currently in some stage of foreclosure totals 491,000, compared with 676,000 in May 2014. That represents a decline in the national foreclosure inventory of 27.4% compared with May a year ago.

The four states and the District of Columbia with the largest foreclosed inventory as a percentage of mortgaged properties are New Jersey (4.9%), New York (3.7%), Florida (2.9%), Hawaii (2.5%) and D.C. (2.4%). The five states with the lowest inventories of foreclosed properties are Alaska (0.3%), Nebraska (0.4%), North Dakota (0.4%), Minnesota (0.4%) and Colorado (0.4%).

The five states with the highest number of completed foreclosures in the past 12 months were Florida (104,000), Michigan (46,000), Texas (33,000), California (28,000) and Ohio (27,000). The five states with the fewest foreclosures in the prior 12 months through May were South Dakota (19), District of Columbia (105), North Dakota (326), Wyoming (498) and West Virginia (500). [read more]

Jul 14

By Erin O’Neil – NJ.com

A greater share of homes in New Jersey are facing foreclosure than anywhere else in the country, according to a report released Tuesday morning.

The report from the Irvine, Calif.-based firm CoreLogic shows 4.9 percent of mortgaged homes in New Jersey were in the foreclosure process in May, which is nearly quadruple the national rate of 1.3 percent. In May 2014, 5.8 percent of mortgaged homes in New Jersey were in foreclosure, compared to 1.7 percent of homes nationwide.

New Jersey has been dealing with a backlog of foreclosures, which are slowly winding their way through the state’s judicial process.

New York (3.7 percent), Florida (2.9 percent), Hawaii (2.5 percent) and the District of Columbia (2.4 percent) also have among the highest foreclosure rates in the nation, according the CoreLogic report.

Roughly 9,200 foreclosures were completed in New Jersey over the last year, according to the report, up from more than 6,300 completed foreclosure in the year ending in May 2014. That’s counter to the national trend. The number of completed foreclosures declined between those time frames 595,000 to roughly 528,000. [read more]

Jul 6

By The Detroit News

Policies and practices of mortgage lenders as well as poor government policies contributed to massive foreclosures; all must play a role in the remedy

Detroit has been ravaged by reckless and often unscrupulous mortgage lending. The resulting foreclosure crisis is a leading cause of the city’s blight, and a major impediment to its comeback.

An investigative report by The Detroit News found that one-in-three homes have been foreclosed in the last decade. Half of the foreclosed homes are now blighted, at a cost to taxpayers of $500 million.

The practice of subprime lending, driven in part by federal policies and in part by the irresponsibility of lenders, had the greatest negative impact on the nicest neighborhoods in Detroit, contributing to the ongoing decline in middle class residents.

Nearly every major lender in the country is complicit, including Detroit’s own Quicken Loans. Ironically, Quicken’s owner, Dan Gilbert, is also a leading force in attacking Detroit’s blight.

Gilbert. who blames high taxes not lending practices for Detroit’s abandonment, is at least trying to remedy the damage with major investments in the city. Other lenders have taken their profits and ignored the damage they’ve left behind.

Those companies should feel an obligation to help clean-up the mess. The News’ series found that many were exploitive in their practices, focused entirely on issuing loans and unconcerned with whether the borrowers could repay the debt. The News also found evidence of deceptive or misleading claims made to home buyers who lacked the knowledge to protect themselves. [read more]

Jul 3

By Tim Bauer – insideARM

On Tuesday of this past week the National Consumer Law Center (NCLC) published a report entitled “Debt Collection Communications: Protecting Consumers in the Digital Age.” The 25-page report was sent to the Consumer Financial Protection Bureau (CFPB) for their consideration in their upcoming Debt Collection Rulemaking.

NCLC (http://www.nclc.org/) is a nonprofit organization advocating consumer justice and economic security for low-income and other disadvantaged people, including older adults, in the U.S.

Historically, NCLC has been quite active and vocal on a variety of debt collection issues. In March of 2014 insideARM reported on the NCLC 200 page response to the CFPB’s debt collection ANPR. In January of this year insideARM published a story on NCLC’s call to the CFPB to create an outright ban on collection of “time-barred debt.”

In this latest publication NCLC suggests that the CFPB should issue regulations in a number of different areas regarding “communications” with consumers. This article will discuss just a few highlights.

1) Provide a specific limit for the number of telephone calls to consumers.

NCLC proposes that a debt collector can call a consumer about an account in collection up to three times a week (Sunday to Saturday), but if the debt collector speaks to a consumer by phone the collector cannot initiate any further phone calls that week unless the consumer requests additional contacts. Further clarity of this point includes:

If no one answers, the debt collector can leave a voicemail after each call (where the voicemail message otherwise complies with the FDCPA).

Every time that the debt collector causes the consumer’s phone to ring should count as one call, whether or not the debt collector actually speaks to the consumer or leaves a voicemail message.

Calling the consumer at any of the consumer’s phone numbers counts towards the three call limit per week. [read more]

Jul 2

By David Sherwood – Reuters

Homeowners in Maine gained stronger protection against bank foreclosures under legislation approved late on Tuesday over the objections of some of the United States’ largest lenders in what consumer advocates called a win for homeowners.

The new law makes Maine one of few U.S. states to legislate over accusations nationwide that banks used suspect mortgage documentation in home foreclosures after the 2008 credit crisis.

The focus of the dispute is Mortgage Electronic Registration Systems (MERS), set up by U.S. banks before the housing bubble of the 2000s. MERS was meant to streamline the packaging of loans into mortgage-backed bonds. After the bubble burst, MERS was besieged by litigation.

MERS lists itself as holder of millions of U.S. mortgages, allowing lenders to bypass public records when mortgage loans are bought and sold. During the housing crisis, critics said, MERS helped lenders push out poorly documented mortgages, confused homeowners about the true owner of their loans, and contributed to wrongful foreclosures. [read more]