Mar 1

By Alan Pyke – ThinkProgress

People who make money collecting debts in Wisconsin are about to get a big favor from their government. A law sitting on Gov. Scott Walker’s (R) desk this week would make it much easier and much less risky for debt collectors to go after consumers in court, and much harder to prove that any given collection effort is bogus.

The same idea was defeated in 2014 after state officials testified it would harm consumers. The state didn’t raise those same warnings in a September hearing on the nearly-identical 2015 version of the bill, however. It passed both Republican-dominated chambers of the state legislature on party-line votes.

The bill dramatically lowers the standard of proof that collectors have to meet in court in order to bring the justice system to bear on the person they claim owes them money. It also makes it harder for people to recover the cost of hiring lawyers even when they win in collections court, thus encouraging collectors to take matters to court almost risk-free.

Winning a court judgment in a debt case frees collectors to use their most invasive tools. Collectors can start garnishing wages and seeking liens on private property once a judge decides they’ve proven their case.

Wisconsin’s consumer laws currently require collectors to lay out how they arrived at the dollar figure they’re demanding from a debtor. The bill on Walker’s desk, however, would dramatically ease those “pleading requirements,” allowing the collector to simply assert an amount owed without providing detailed substantiation. [read more]

Feb 26

By Ansel Herz – The Stranger

This happened on Sunday, reports the Wenatchee World:

A major police operation Sunday to get a 66-year-old Wenatchee man to vacate his home that had been foreclosed upon and sold ended in the man’s death by apparent self-inflicted gunshot wound.

Police responded to the Marilyn Street home at 1 p.m. after the home’s new owners reported they were at the home and heard two gunshots inside while they were outside trying to make contact with the man.

The new owners of the home are quoted calling what happened a “tragedy.” There isn’t any more information in the article about the man or the circumstances of his foreclosure.

In 2013, I wrote about a foreclosure suicide in South Seattle. 65-year-old Phyllis Walsh lived alone. She was deeply beloved by her neighbors. She would bring books from the library to the daughter of the family across the street. Her niece said that after her husband died, Walsh had repeatedly sought relief from the banks, who’d “passed her from specialist to specialist.” [read more]

Feb 22

By David Dayen – The Intercept

The California Supreme Court on Thursday ruled unanimously in favor of a fraudulently foreclosed-upon homeowner in a case that should serve as a wake-up call to state and federal prosecutors that mortgage companies continue to use false documents to evict homeowners on a daily basis.

“A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity’s hands,” the justices wrote.

But maddeningly, practically nobody in a position of authority has stepped up to prevent those injurious invasions.

The case, Yvanova v. New Century Mortgage Corporation, sends a powerful signal from the nation’s biggest state that the massive false document scandal, first discovered nearly a decade ago, is not over, despite mortgage company promises to the contrary.

In this case, Tsvetana Yvanova purchased a $483,000 mortgage in 2006 from New Century, a company that went bankrupt in 2007. Four years later, in December 2011, New Century somehow transferred the mortgage to a trust, from which thousands of pooled mortgages had created mortgage-backed securities. But by law, the mortgages placed in that pool had to be put in it by January 27, 2007. [read more]

Feb 19

By Lee Ann Hall – The Western News

Have you ever picked up your phone to find an aggressive voice on the other end demanding payments on a debt you know nothing about? You’re far from alone.

Once you’re in the sights of a debt collector, the impact on your life can be devastating: Your wages can be garnished and your credit ruined. You might lose your driver’s license, or even your job.

And it could happen over a debt you don’t even owe.

In a recent analysis of 75,000 complaints about debt collection practices submitted to the Consumer Financial Protection Bureau — just a sample of the total number — this was the most common complaint by far. Over 40 percent of people being harassed by collectors said they didn’t owe the debt in the first place.

Other complaints charged that the collectors made false statements or threats to coerce people to pay.

The government created the Consumer Financial Protection Bureau — or CFPB ­— to address abusive financial practices after the 2008 financial crash. This year, the bureau is considering strengthening rules to protect consumers from deceptive and aggressive collection practices.

Abusive collection tactics impact people with all kinds of debt — including credit card debt, medical debt, payday loans, student loans, mortgages and automobile loans. Collectors often strike when people are most vulnerable, such as when they’re recovering from illness or desperately seeking work. They aggressively target the poor, immigrants and people of color. [read more]

Feb 16

By Richard Nielson – DS News

In an effort to create a more uniform process in judicial foreclosure sales, the Kentucky Administrative Office of the Courts has amended the Rules of Administrative Procedure that govern the role and duties of the master commissioners of the circuit court.

The changes, effective as of January 1, 2016, and codified in Supreme Court of Kentucky Order 2015-25, apply to all cases and proceedings referred to the master commissioner of the circuit court. The master commissioner is a court-appointed officer whose responsibilities include conducting judicial sales of real property held to enforce judgments in mortgage foreclosure cases.

Among the changes is the adoption of statewide time frames for sales. Except in cases where property is found to be vacant and abandoned, the master commissioner is now generally required to conduct the sale within 90 days of the court’s entry of the order of sale. In addition, successful purchasers are required to pay the full purchase price within 30 days of the sale. Lastly, the master commissioner’s report of sale must be filed no later than three business days after the sale. Historically, these time frames have varied widely from county to county.

The amendments have also attempted to standardize some terms of judicial sales. With regard to the bidding process, at the time of sale the successful bidder is now required to either pay in full or make a deposit of 10 percent of the purchase price. If the purchase price is not paid in full, the successful bidder is now required to secure the unpaid balance of the purchase price by executing a bond, with sufficient surety, approved by the master commissioner prior to the sale. [read more]

Feb 12

By Ben Lane – HousingWire

A federal grand jury in Atlanta indicted two real estate investors on charges that they allegedly took part in a widespread foreclosure auction bid rigging scheme in Georgia, the Department of Justice announced this week.

According to the DOJ, Douglas Purdy was charged with one count of bid rigging and five counts of bank fraud for participating in the alleged conspiracy and scheme at Forsyth County, Georgia, foreclosure auctions from 2008 to 2012.

While Clifford Hill was charged with one count of bid rigging and seven counts of bank fraud related to public foreclosure auctions in Gwinnett County, Georgia, from 2007 to 2012.

According to the DOJ, Purdy and Hill are the 13th and 14th individuals charged in connection with its ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area.

All 12 previously charged individuals pleaded guilty. [read more]