The news on local home foreclosures continues to be grim. According to a report in yesterday’s Boston Globe, more than 1,500 notices of auction of foreclosed properties were filed by lenders. In May 2006, there were only 654.
Archive for June, 2007
First Circuit: Attorneys Fees Cut in FDCPA Suit
Friday, June 8th, 2007
Yesterday, the First Circuit Court of Appeals affirmed a lower court’s ruling that slashed a request for legal fees sought by counsel representing plaintiffs in a Fair Debt Collection Practices Act matter. The FDCPA allows attorney fees on successful claims, and the plaintiffs in this case were successful, but for a variety of reasons, attorneys fee award ended up being a little more than 10% of what was sought. The case should serve as a wake-up call for consumers, attorneys and Congress.
The plaintiffs, a married couple, sued Corporate Receivables, Inc. and one of its employees for abusive debt collection practices (the husband owed the debt). They took their case to a jury and presumably did so with the hopes of getting a significant award of actual damages.
Thinking about Debt Settlement? Think about this…
Thursday, June 7th, 2007
People explore all of their available options before filing bankruptcy. Bankruptcy is not for everyone struggling with debt. Some may benefit from credit counseling, while others may benefit from loans from family members. However, there is one option that I am pretty sure does not work for most people I meet: “debt settlement” companies. In many cases, I have represented people who unsuccessfully tried this option and only ended up losing their money and adding to their stress. A conversation I had today with a prospective client reminded me that these “debt settlement” companies are still lurking out there, and people struggling with debt need to think about these issues before signing on the dotted line.
Mass AG: Mortgage Recuse Schemes Halted
Friday, June 1st, 2007
At a press conference from her office, Massachusetts Attorney General Martha Coakley announced newly imposed regulations barring foreclosure “rescue” schemes. The new rules – which are effective today – bank for-profit lenders from taking ownership to help struggling homeowners avoid foreclosure.
The new rules do not apply to nonprofit housing agencies, or from family members taking ownership. The new rules also will not prevent lenders from offering assistance, such as by relaxing repayment terms.
From the Boston Herald:
Coakley, whose office has been battling companies that offer complex transactions claiming to lessen the financial pressure of mortgages, said the regulations are effective today and valid for 90 days.
The regulations could become permanent after public hearings are held.
Coakley’s office vowed to review and possibly implement other reforms to deal with the foreclosure “crisis” gripping the state.
“These ‘rescuers’ take a bad situation – foreclosure – and make it worse by liquidating any remaining equity in the homes,” Coakley said in a statement.
From Boston.com:
Coakley’s action comes at a time when the state Legislature is still weighing whether to pass a law to deal with the subprime lending and the state’s foreclosure crisis. Subprime mortgages are targeted to homeowners with poor credit, but the low initial payments that make them attractive increase two years into the loan when the interest rate increases.
Coakley said she would seek comments from the public over the next 28 days for proposals to make it illegal for lenders to inflate a borrower’s income on their mortgage application, to make mortgages that borrowers clearly cannot pay; and to provide credit when it is not in the interest of the homebuyer or an existing homeowner who is refinancing a property.