Citing a newly-released housing industry analysis, Eli Tene, Principal and Managing Director of the Peak entities, expressed concern over the uncharacteristic spike reported in January 2015 Notice of Default (NOD) filings. “While an improving economy and new regulations governing lenders and servicers have resulted in a steady decline in mortgage defaults since the height of the recession in 2008,” states Tene, “this new wave of mortgage defaults is a cause for concern. Foreclosure now looms for a new wave of distressed homeowners despite prevailing sentiment that the crisis is over.”
Tene alludes to analysis from Black Knight Financial Services released earlier this month reporting foreclosures at a 12 month high, with repeat foreclosures comprising over half of recorded starts with an increase of 11% over December 2014 starts. The analysis also reflects the stark contrast in foreclosure filings occurring in judicial and non-judicial states. “While it’s encouraging that foreclosure starts for January are nowhere near the levels we saw five years ago,” he says, “the dramatic increase in repeat foreclosures foreshadows a new era of defaults, and along with it a return to increased inventories of distressed assets to investor balance sheets.” Tene is quick to point out, however, that the real victims at the end of the day are not the investors, but the “distressed homeowners who could find themselves facing eviction once again.”
Tene contends that permanent loan modifications structured under the Obama Administration’s HAMP programs factor into the rise in recent foreclosure starts. According to a January 2015 special report evaluating the ongoing progress of the government’s Troubled Asset Release Program (TARP) that earmarked an initial $30 billion to fund the HAMP initiative, nearly 238,000 permanent loan modifications arranged by lenders and servicers to help distressed borrowers are now in default (defined at 90 days or more past due on payments). And, as of December 31st, 2014, 10% of active HAMP loan modifications are behind one or two months on payments increasing the likelihood of a re-default. “The can is simply being kicked down the road,” observes Tene. “At some stage of the game, many of these borrowers will have to face the prospect that they are still dealing with extenuating circumstances that will eventually find them facing a protracted foreclosure process.” [read more]
By J. Scott Trubey – The Atlanta Journal-Constitution
Foreclosure notices spiked in March as banks had an extra week to process delinquent mortgages, but the number of properties at risk of being taken back by lenders remains well below the recessionary highs, according to a report released Monday.
Real estate research firm Equity Depot said 2,356 properties were advertised for foreclosure in March. That’s up about 22 percent from February and 39 percent from January, when the number of listings hit a 14-year low.
The jump in foreclosure notices is likely the result of a fifth week in March for lenders to advertise, said Barry Bramlett, president and CEO of Equity Depot. The figures for March are about 5.5 percent higher than March a year ago. [read more]
By Aviva Rutkin – New Scientist
For $1 a minute, online jurors are helping lawyers craft their arguments before ever setting foot in a real courtroom
I HAVE only a few pages of evidence with which to decide the fate of a maintenance man from Texas. While at work trying to untangle a spool of wire on a crane, his right hand was caught and severed when the line pulled taut. He sued for negligence, and I am leafing through his lawyer’s court strategy trying to decide who is to blame and what damages are due.
This is the work of an online juror. For 20 minutes to an hour of work and up to $1 per minute in pay, ordinary people can offer their opinions on real cases to the attorneys who are working on them. These amateur assessments, crowdsourced and interpreted by online services, give lawyers insight into how an actual jury might rule long before anyone steps into the courtroom.
Mock juries are nothing new, but they are typically performed in person. Lawyers often bring volunteers into a courtroom to observe a fake trial and reach a verdict. But these run-throughs can cost tens of thousands of dollars, all for a single jury’s opinion. Adrienne LeFevre of the service OnlineVerdict, based in Chicago, says online mock trials allow attorneys to pick the brains of dozens or even hundreds of mock jurors.
“If you hear over and over again what’s bothering the jurors about the case, you’ll know what your weakness is,” says LeFevre. “It’s a small investment for a great amount of information.” [read more]
By Patrick Lunsford – insideARM
A lawsuit filed in federal court in New York this week is seeking class action status under the TCPA. Named in the case is a major utility and nearly all of its subsidiaries and parent companies, including global holding firms, even though the alleged violation was committed by a third party debt collection agency. It is a continuation of a trend that sees plaintiffs skipping collectors and going straight after the big money.
The case in question, Jenkins v. National Grid USA, was filed by a recently-prolific pro se plaintiff that targets the ARM industry. But for this particular action, Jenkins retained an attorney to push for class action status.
The suit alleges that a third party collection agency, NCO Financial Systems, contracted by National Grid used an autodialer to make collection calls and send pre-recorded messages to the plaintiff’s – and other members of a potential class – cell phone without prior express consent to do so. The plaintiff was a utility customer of National Grid.
All of the actions named in the lawsuit were taken by NCO, not by National Grid. Jenkins claims that the company is “directly liable and/or vicariously liable” for NCO’s actions, however. NCO is not named as a defendant in the action. [read more]
By Aimee Picchi – MoneyWatch – CBS News
The U.S. economy may be strengthening, but by one measure Americans are flunking the basics of personal finance.
Credit card debt is ballooning, leaving American households with a net increase of $57.1 billion in new credit card debt in 2014, according to a new survey from CardHub. The credit card comparison site said it’s forecasting new credit card debt will rise 5 percent in 2015, reaching $60 billion this year.
While the increased spending could signal that Americans are feeling more sanguine about their prospects and the economy, it’s also a cause for concern given that most workers aren’t seeing the type of wage growth that would support that higher spending. The surge has left the average household credit card balance at almost $7,200, or not far from the $8,300 level that CardHub considers unsustainable.
“We’ve now had six consecutive quarters of year over year increases in our credit card debt load,” CardHub said in the study. “As a result, we must strive to remember the corrosive impact of debt on household finances during the recession and work to get out from under its influence before the burden becomes unbearable again.”
While Americans are carrying more debt, their earnings are barely ahead of where they were a decade ago. Household earnings have increased only 2 percent during the past 10 years, The Pew Charitable Trusts said in a study issued last month. [read more]
By Matthew Daneman – Democrat and Chronicle
More than 250 local debt collectors are losing their jobs.
Louisiana-based Coast Professional Inc., which has a pair of offices in the Rochester area, has notified the state Labor Department that 172 of its Geneseo workers and 92 of its Henrietta workers are being cut.
The cuts come as Coast and four other debt collection firms around the country saw their U.S. Education Department contracts canceled last month. Wyoming County’s Pioneer Credit Recovery also lost its contract. [read more]