Feb 3

By David Lazarus – Los Angeles Times

Suzanne Husted went through a rough patch about a decade ago and had to take out a pair of $300 payday loans to get by. She said she paid each back within a couple of months.

Now she’s getting calls from two different debt collectors insisting that $2,400 in principal and interest is owed and that she better come across with some scratch or she’ll be dragged into court.

“When I ask when I took out the loans, they say it was in 2010 and 2011, which I know didn’t happen,” Husted, 53, told me. “When I ask for statements confirming the loans, they say I can only see them after they file lawsuits against me.”

Husted said she’s started sending money to the collectors “out of fear” but wants to know if there’s a better way to handle this situation.

There is — and it begins with knowing your rights.

“Consumers have very strong rights,” said Alec Trueblood, a Los Angeles lawyer who specializes in fighting debt collectors. “There’s the federal Fair Debt Collection Practices Act and, for Californians, there’s the state Fair Debt Collection Practices Act. Together, they provide a lot of protection.” [read more]

Feb 1

By Robert Hennelly – CBS News

With Goldman Sachs (GS) recently agreeing to pay $5.1 billion to settle claims related to its role in the 2008 mortgage scandal, the firm became the latest big Wall Street bank to reach a deal with the U.S. government. As part of the settlement, $1.8 billion is to be set aside for programs to help homeowners who are still trying to fend off foreclosure?

Yet nearly seven years since the Great Recession ended, the question remains: How well have these anti-foreclosure programs worked? It depends on whom you ask and where they live.

Back-stopping the nation’s banking system was the top federal priority during the height of the 2008 financial crisis. But out of the $475 billion that Congress authorized for the Troubled Asset Relief Program (TARP), $46 billion was supposed to help millions of struggling families avoid foreclosure.

A subsequent 2014 settlement between prosecutors and Bank of America (BAC) netted an additional $16.6 billion, of which then-Attorney General Eric Holder said $7 billion would go to “provide relief to struggling homeowners, borrowers and communities affected by the bank’s conduct.”

All told, between the programs administered through the Treasury Department — like the Home Affordable Modification Program (HAMP) — and the pools of money committed by Wall Street banks as part of their settlements, tens of billions of dollars have been set aside to assist families facing foreclosure by modifying their mortgage terms so they can remain in their homes. [read more]

Jan 28

By Katie Lannan, State House News Service – Lowellsun.com

An effort to repeal a new law dealing with foreclosed properties hit a roadblock last week, after a review by Attorney General Maura Healey concluded the state constitution would prohibit a referendum on the law.

Activists in December filed a petition seeking to have the law — which limits the timeframe for foreclosed property owners to file a title challenge — suspended and put on the ballot as a referendum.

Healey’s office was charged with determining whether the law, which went into effect on Dec. 31, was legally subject to the referendum petition process laid out in the Massachusetts Constitution.

Laws related to the “powers of the courts” are excluded from the process, and Healey’s review found that a section of the law expanding the jurisdiction of the housing court falls under that category.

“I recognize that nothing in the remainder of the Act purports to restrict or confer court jurisdiction,” Healey wrote in a letter to Secretary of State William Galvin. She goes on to say that an act must be viewed as a whole in determining whether it is subject to the referendum process, and because the jurisdiction expansion is not “incidental and subsidiary to the remainder of the Act,” the law as a whole is excluded from the process. [read more]

Jan 27

By Space Coast Daily

Behind in paying your bills?

You might find a debt collector calling. But the law says how and when they can do that.

For example, they can’t call before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you or lie when they try to collect a debt. And, if you ask them in writing to stop calling, they have to stop.

Even if a debt collector stops calling, the debt is still there, and you still need to deal with it.

So, if a collector contacts you about a debt, you may want to talk to them at least once to get the story. See if you can resolve it – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake.

The collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. The notice must include the name of the creditor to whom you owe the money.

If you don’t want the collector to contact you again, ask for the collector’s mailing address and tell them – in writing – to stop contacting you. [read more]

Jan 26

By David Porter – Associated Press

Ever had a debt collector on your back for money you knew you didn’t owe? Listen to the story of Steven Psaros and take heart.

The Great Recession forced Psaros into foreclosure on the house he had bought in this northern New Jersey town in 1999.

Then, another blow. A debt collector demanded about $11,000 in homeowners’ insurance, money Psaros claimed he didn’t owe under terms of a mortgage refinance signed several years earlier.

He fought back in court and, in a ruling that could change how law firms handle debt collection, a federal judge held last month that the firm representing the debt collector could be liable for damages even if it didn’t know its client was relying on incorrect information.

Some experts see the ruling as a game-changer in foreclosure actions, which by their nature target people who are under emotional and financial stress.

“Think of the psychological state of people going through foreclosure,” said Seton Hall law school professor Charles Sullivan, who specializes in contracts and employment law. “They can’t pay their mortgage and they think they’re going to be in foreclosure. They’re not looking at the papers, and if they are, whether it’s $360,000 or $370,000, neither is a sum they can pay. They may not even seek an attorney. But attorneys in the past didn’t have the tools this this decision now gives them.”

The debt collection industry is a top source of complaints from consumers, according to the federal Consumer Financial Protection Bureau. Formed in 2011, the bureau began collecting complaints in its system in mid-2013; by the end of that year, it had received more than 30,000 complaints about debt collectors. [read more]

Jan 25

By Avis Thomas Lester – Urban News Service

Affluence is no antidote to foreclosure.

In Prince George’s County, Maryland — one of the United States’ wealthiest majority-Black jurisdictions — the foreclosure crisis has hammered several solidly middle-class communities. These include Perrywood, a neighborhood of two-story homes near the county seat in Upper Marlboro; Marleigh in Bowie, where the local homeowners association mows the lawns of foreclosed residences that the banks don’t maintain; and Fairwood, where the median income is $170,000, according to the U.S. Census.

“They didn’t understand what it meant to take out a second mortgage, to refinance or to receive a subprime loan, they just made purchases,” said Bob Ross, president of the NAACP chapter in Prince George’s County. “So when the bubble burst, they were stuck.”

NAACP New York State Conference economic development chair Garry Anthony Johnson calls foreclosures “an epidemic” for people of color.

“It’s a troubling reality that African-Americans and other minorities continue to experience disproportionately high levels of unemployment, poverty and foreclosures,” Johnson said.

Housing counselors and other experts told Urban News Service they blame unscrupulous lenders for the crisis. At a time when many prospective buyers were eager to purchase and as home prices skyrocketed, some lenders took advantage by offering Black buyers discriminatory loans, these observers said.

“They were products that were predatory in nature where the interest rates were inflated, there were prepayment penalties if you tried to pay the loan off or refinance and balloon payments,” said Charles R. Lowery Jr., the NAACP’s director of Fair Lending and Inclusion. “You wouldn’t get a loan that was suited to you, but the broker and the lender would make money because they sold it to you. That was their only concern.” [read more]