By Kristin Wong – LifeHacker.com
If you’re not prepared for it, homeownership can be a serious financial burden. When the burden becomes so overwhelming that consumers face foreclosure, the Consumer Financial Protection Bureau (CFPB) aims to help with certain rules for mortgage servicers. Recently, they made some changes to those rules.
A couple of years ago, the CFPB established some mortgage rules to help struggling borrowers who face foreclosure. Last week, they issued a press release saying they’ve revisited those rules and updated them. Here are a few things that will change:
Protection for successors and surviving family members: The new rules expand protection for successors, which includes someone who becomes a homeowner “when a property is transferred upon the death of a relative, as a result of a divorce or legal separation, through certain trusts, between spouses, from a parent to a child, or when a borrower who is a joint tenant dies.” Basically, these successors get the same protection as the original borrower.
Added foreclosure protections over the life of the loan: With the existing rules, the mortgage servicer must offer the borrower certain foreclosure protections once during the life of the loan (for example, an evaluation to avoid foreclosure to begin with). The new rule requires them to offer that protection again when the borrower gets current on their loan. [read more]
By Senka Huskic – Occupy.com
Many people are responsible for the financial disaster of 2008, and the economic hardship that has continued to unravel since. We still have not seen one criminal prosecution among the CEOs who were – and many still are – at the frontlines where everything started to crumble. Those people are hiding behind corporate protection, always blaming the next in line behind them, never accepting responsibility, and very often putting the blame on the very people they have ruined with their fraudulent dealings.
One of those people is a remarkable woman named Sherry Hernandez. She is the type of fighter you always encounter when society faces a crisis: the type who refuses to back down in the face of hardship. Hernandez decided to scratch beneath the surface of the mortgage-lending fraud that threatened to destroy her life savings, steal her home and ruin her family. She stood up, faced it, and denied the self-proclaimed “experts” on Wall Street from foreclosing on her California home. I first profiled Hernandez back in 2014. Here is a follow-up to her inspiring story, where the lesson is: never give up when you’re fighting for justice. [read more]
By Todd Shields – Bloomberg
A little-noticed measure passed by Congress last year allows student-loan debt collectors to auto-dial borrowers on their mobile phones — but a feared robocall deluge may turn out to be more of a trickle.
The U.S. Federal Communications Commission, acting against advice from bankers and even the Obama administration’s Education Department, has proposed limiting calls to three a month.
“As I’ve said from the beginning, this exemption never should have become law,” said Senator Claire McCaskill, a Missouri Democrat. “Since that’s unfortunately what’s happened, the FCC now has a responsibility to put clear, enforceable limits in place to spare consumers as much harassment from robocalls as possible.”
Loan servicers Nelnet Inc. and Navient Corp. are lobbying to be able to call 10 or more times a month and have gotten the support of the Education Department.
“We can only help borrowers avoid default -– and the harm it can do their finances -– if we can reach them,” Kelly Leon, Education Department assistant press secretary, said in an e-mail.
The issue pits consumer advocates, who note that more than two million annual complaints are lodged each year with federal agencies about robocalls, against servicers trying to collect on $121 billion in delinquent student loans. At stake is the treatment of $1.25 trillion in student debt held by 42 million people, an issue that has worked its way into the presidential campaign. Democratic candidate Hillary Clinton has called for a three-month moratorium on federal student loan payments. [read more]
By Fred Schulte – USA Today
In 2012, after a heart attack left him too ill to work and unable to make his mortgage payments on time, John M. Green turned to the Litvin Law Firm for help.
Green, according, in part, to records he provided to federal bankruptcy court, said he paid the firm about $8,000 over the next two years to negotiate better terms with the lender on his house in Baker, La. But he lost the home anyway, he says, because the Brooklyn, N.Y., law firm did little beyond taking his money.
“My experience was horrible,” said Green, 72, who is back at work part time as a schoolteacher. “They didn’t follow through with anything they said they were going to do.”
It’s not just former Litvin client Green who is aggrieved. The attorneys general of New York and Maryland have accused the firm of preying on other distressed homeowners by failing to deliver the legal firepower it promised. [read more]
By Molly Hensley-Clancy – BuzzFeed News
The Education Department has written off loans connected to a disgraced for-profit college operator. But a debt collector is still chasing down former students, according to a new lawsuit.
When Debbie Terrell was defrauded by a for-profit college that left her mired in debt, she got a lifeline from the federal government. The Education Department wrote off the loans she and thousands of other former sEverest College students owed to the federal government, saying they should not be on the hook for debt that they were tricked into signing up for.
But for Terrell, the “nightmare” of her experience with the disgraced college did not end there. She says she is now routinely harassed by a debt collector, the Balboa Student Loan Trust, demanding that she pay back the private loans she took out to attend the school. Balboa calls as often as five times a day, she claims, threatening to take her home or garnish her wages unless she pays.
Terrell and the consumer law firm Public Counsel filed a class action lawsuit Thursday against Balboa and its owner, debt collector Turnstile Capital Management, saying that the company is illegally chasing and collecting debt it has long known was rooted in fraud. [read more]
By Paul Ausick – 24/7 Wall St.
In the month of April, 38,000 U.S. home foreclosures were completed, up 5.5% month over month and down 6.9% from a total of 41,000 in May 2015, according to CoreLogic. The research firm notes that the current foreclosure inventory totals 1% of all homes with a mortgage in the United States, down from 1.3% in May of last year.
The number of U.S. homes currently in some stage of foreclosure totals approximately 390,000, compared with 517,000 in May 2015. That represents a decline in the national foreclosure inventory of 24.5%, 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 (3.6%), New York (3.2%), Hawaii (2.1%), D.C. (2.0%) and Florida (1.9%). The five states with the lowest inventories of foreclosed properties are Minnesota (0.3%), Alaska (0.3%), Utah (0.3%), Arizona (0.3%) and Colorado (0.3%).
The five states with the highest number of completed foreclosures in the past 12 months were Florida (63,000), Michigan (45,000), Texas (27,000), Ohio (23,000) and California (23,000). The five with the fewest foreclosures in the prior 12 months through May were District of Columbia (139), North Dakota (323), West Virginia (494), Alaska (648) and Montana (690). [read more]