2006 March — McLeod Law Offices

Archive for March, 2006

Finding (more) Foreclosure Fraud(s)

Friday, March 31st, 2006

Here’s another interesting report of a mortgage scam. This one is out of Salt Lake City: KUTV.

And more detailed report on what’s going on in Illinois.

Finally, here’s something that I fear we’ll be seeing more of in the months and years ahead. In a Kansas City federal court, a former loan officer and a former real estate appraiser were sentenced for their part in a mortgage fraud scheme. They would help consumers get inflated mortgages by using inflated appraisals. Both got five years probation and both have to pay more than $1 million in restitution. The loan officer worked for Ameriquest Mortgage, a company which has agreed to pay the Commonwealth of Massachusetts millons in restitution for similar practices which ultimately left homeowners with debt they could not handle.

Tags: Consumer Rights, Consumer Scams, Mortgages and Foreclosures
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Finding Foreclosure Fraud

Friday, March 31st, 2006

The LA Times reports this week that as foreclosures rise in Southern California, so do incidents of foreclosure fraud.

Check out what’s going on in Illinois.

The US Department of Housing and Urban Development has helpful information on mortgage scams.

Tags: Consumer Rights
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Bankruptcy Myths and Misinformation

Thursday, March 30th, 2006

There’s nothing that incenses me more than the misinformation (…or perhaps better said, outright lies) that are being told about the new bankruptcy laws. I came across a press report posted on the website for WKOW out of Madison, Wisconsin. It’s bad enough when a reporter gets the facts wrong, but it’s even worse when their source is similarly wrong.

The most glaring untruth is the quote reportedly from Michael Gutter, a University of Wisconsin Extension Financial Specialist: “There’s a new needs-based test put into place on chapter 7 that will essentially eliminate most middle-class families from being eligible for bankruptcy.”

The fact is, a means test is applied to those seeking bankruptcy who have mostly consumer debts. The means test does not eliminate bankruptcy eligibility. In theory, it is designed to determine whether the filing of a Chapter 7 petition by those who (from a bankruptcy attorney perspective) “fail” the means test raise a “presumption of abuse.”

There’s not enough room here for me to discuss all of the factors which can help a debtor overcome the presumption of abuse. Suffice it to say, the “presumption of abuse” does not result in the doors of the bankruptcy court being locked for needy and honest debtors.

(more…)

Tags: Bankruptcy
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Don’t Give Collectors Your Account Information

Wednesday, March 29th, 2006

An old client called today to tell me about a problem he was having with a bill collector. It seems he fell behind on their credit card payments, and the credit card company sent the account out to two different collection companies who took turns calling (or harassing) the client.

While on the phone with one of the collection companies, the client offered to pay some money towards the account and asked for an address to where the check should be sent. The response was “we’ll settle it today for ‘x’ amount.”

The client jumped at the chance to get these boneheads off his back and off his phone.

“I’ll accept,” he gleefully responsed. ” Where do I send my check?”

The response:

“We don’t want your check. We want your bank account information and we’ll do a transfer.”

Smell a rat? I did and you should.

(more…)

Tags: Consumer Rights, Consumer Scams, Fair Debt Collection Practices
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RIP-OFF ALERT!: Another Update on Kensington Assistance Agency

Wednesday, March 29th, 2006

Another person wrote to me letting me know about the missive they received in their mailbox:

“Within my hand, this mail-merge Post Card I’ve recently received from Kensington Assistance Agency; 1357 Broadway, Suite 260; New York, NY 10018;….. I must express to you my gratitude for your efforts. Though Kensington offers me a $5,000 to $50,000 grant to pursue my further Education, Degrees, Manuscripts, etc., the $299.97 fee one must question. The card indicates a “free” application, etc. Fraud one may clearly sense. Thank you.”

Funny, I haven’t heard from anyone at Kensington Assistance Agency yet.

Tags: Consumer Rights, Consumer Scams
Posted in Uncategorized | 20 Comments »

The Scourge of Predatory Lending

Friday, March 24th, 2006

Today’s Christian Science Monitor reports on the continued growth of predatory lending in Boston’s minority neighborhoods. The article also lists out warning signs of a predatory loan.

Tags: Bankruptcy, Consumer Rights
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RIP-OFF ALERT! UPDATE: Kensington Assistance Agency

Thursday, March 23rd, 2006

A few days ago, I warned readers about Kensington Assistance Agency. The RIP-OFF ALERT! followed a call I received from someone who was facing foreclosure of their home, and was fairly convinced they were awaiting approval for a government grant that would get them caught up on their bills. Kensington sold the grant scheme to the homeowner for almost $300.

Today, I receive an email from a reader from another state:

“Thank you for the alert about Kensington Assistance Agency. I received one of their post cards telling me that I had been identified as a possible qualifier for a government grant. When I called the number, they ask me many questions among those was the name of my bank, account number and social security number. I did not give them the information and ask why they needed this data. The lady became argumentative and I hung up. Thanks for alerting the public about these scam artists.”

I am thrilled the reader was able to avoid the scam. But despite the warnings here, and in other places on the web, Kensington is still slithering out there preying on folks. If you get one of these postcards, please contact the consumer protection division of your state attorney general’s office to file a complaint.

Tags: Consumer Rights, Consumer Scams
Posted in Uncategorized | 32 Comments »

FTC: Debt Solutions, Inc. is Not Living Up to its Name

Wednesday, March 22nd, 2006

The Federal Trade Commission and the Attorney General for the State of Washington are seeking an injunction against Debt Solutions, Inc., as well as three other individual telemarketers in Washington and Florida.

Debt Solutions, Inc. along with the individuals and related agencies are alleged to have made unsolicited telemarketing calls nationwide touting a “debt elimination program.” It is also alleged that they falsely represented that they have a “special relationship” with creditors which would enable them to negotiate substantially lower credit card interest rates. But according to the complaint, those who got into the program did not see a significant reduction in interest rates, if any.

The Defendants are also charged with phoning individuals on the “Do Not Call Registry.”

The Defendants also marketed these services on the web at Accelerated Financial and DSI Financial.

If you believe you were ripped off by Debt Solutions, Inc., or any one of the companies noted in his suit, contact a consumer protection attorney in your state or your local attorney general’s office.

You can read more about the suit here.

Tags: Bankruptcy, Consumer Rights
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A Warning for Homeowners Facing Foreclosure

Tuesday, March 21st, 2006

I discussed on January 26 the need to obtain a “ticket” into bankruptcy court: the certificate from an approved credit counselor. As the new bankruptcy laws continue their evolutionary trek through the nations courts, another case has popped up that should serve as a warning to all folks facing foreclosure. Since foreclosure rates are creeping to multi-year highs, it’s important to heed this warning.

The Bankruptcy Appellate Panel for the 8th Circuit (which includes Missouri, the Dakotas and Arkansas, among other states) ruled on February 16, 2006 that even though the debtor could demonstrate he was facing “imminent foreclosure” that was not enough to show an “exigent circumstance” which would warrant a waiver of the credit counseling requirement.

(more…)

Tags: Bankruptcy, Consumer Rights, Mortgages and Foreclosures
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Where’s Your Refund Going?

Tuesday, March 21st, 2006

According to a survey released by the National Retail Federation, most people (46.7 of those responding) receiving tax refunds will be using it to pay down debt, although fewer younger adults will be using their refunds to pay down debt.

Tags: Bankruptcy, Economy
Posted in Bankruptcy | No Comments »