Earlier this week I was talking with a client who let me know that their home was headed into foreclosure. I was a bit surprised to hear this because I had been led to believe that there was no problem making the home mortgage payments, only the other debt (which included other real estate). I was also surprised to learn that this problem had been going on for a few months. And I was even more surprised to learn that the clients had been working with a mortgage broker. But what really surprised me was why I was only learning about this now.

Apparently, the clients had been solicited by a mortgage broker who assured them they need not file bankruptcy. He assured them that they would refinance the house and avoid bankruptcy. He also told them not to discuss this at all with me: their bankruptcy attorney.

For reasons that only they can explain, the clients chose to follow that advice. And unfortunately, they may pay a price for doing so: they risk losing their home, and they have complicated their bankruptcy filing and made it more expensive. I write about his with the hope that this error will serve as a cautionary tale to others in a similar situation.

Mortgage brokers get paid a commission based on the mortgage they obtain. If they do not obtain a mortgage, they do not get paid (although some may charge non-refundable applicable fees). If a mortgage broker is able to get financing, no bankruptcy attorney is going to dissuade a consumer for taking it…unless the mortgage product (or the act of refinancing itself) is going to place the client into an even more precarious financial position. With that said, the only reason why a mortgage broker would be concerned about a client talking with an attorney is if the attorney attempted to talk the consumer out of the mortgage….and the only way I see that happening is if the attorney is doing his or her job by protecting the client.

If you’re trying to refinance and are speaking with mortgage professionals, please do yourself a favor and speak with an attorney. If any of these professionals urge you not to speak with an attorney of your choosing, do not do business with them. There is no harm in speaking to your attorney, but there can be great harm to you and your family if you follow the recommendations of someone whose interest is not the same as yours.

Posted by Bill McLeod at 3:31 PM | Permalink | Comments (0) | TrackBacks (0)

The foreclosure crisis sweeping the nation is also sending some mortgage companies into financial ruin, leaving many folks caught in the middle. Last week the Federal Trade Commission issued a new publication giving consumers advice on what to do if their mortgage company files bankruptcy.

The PDF of "How to Manage Your Mortgage If Your Lender Closes or Files for Bankruptcy" can be found here. There is also information how to obtain the publication by mail.

Posted by Bill McLeod at 12:45 PM | Permalink | Comments (0) | TrackBacks (0)

There are ads on local radio stations that make this declaration. Earlier this month, the Federal Trade Commission filed a lawsuit in New York against a couple that operated a variety debt settlement companies: The Debt Settlement Company, The Debt Elimination Center, Pay Help, Inc., Money Helps and Edge Solutions. According to the FTC, unsuspecting consumers looking for help visited websites such as idebthelp.com and moneycares.com and lured into a "debt meltdown program." According to the FTC,

The complaint alleges that, as a result of being in the defendants’ program, many consumers experience substantially increased debt because of late fees, finance charges, and overdraft charges, and suffer damage to their credit rating because of significant negative information such as late payments, charge-offs, collections, and garnishments, all of which may appear on their credit report for up to seven years.

Read more from the Arizona Republic.

Read more from the Federal Trade Commission.

Posted by Bill McLeod at 4:43 PM | Permalink | Comments (0) | TrackBacks (0)

Attorney General Martha Coakley announced yesterday that a settlement has been reached with five lenders involved in a foreclosure rescue scheme. The lenders involved are First Horizon Home Loans; Option One Mortgage Corp.; Wells Fargo Bank, N.A.; America Brokers Conduit; and Ocwen Loan Servicing, LLC.

More on the settlment can be found here.

Posted by Bill McLeod at 12:51 PM | Permalink | Comments (0) | TrackBacks (0)

Clients have been kind enough to share with me some of the many letters and solicitations they receive from people and companies who have learned of their looming foreclosure. Actually, to be more accurate, clients tell me they are deluged with these letters. Some of these letters offer assistance and provide truthful and accurate information. Others however, are clearly designed to mislead.

Recently a co-called “US agency” (who for now will remain nameless) sent a letter to a client declaring this:

Bankruptcy stops foreclosure but you will lose your home. (Note: Only 11% of bankruptcies are successful.

People facing foreclosure need to do their research and not rely on what one company, or a group of companies tells them. Unless a bankruptcy attorney who they have met with has told them that in no uncertain terms, bankruptcy is not an option, no one should assume that it is not. And companies who make such broad sweeping generalizations that are simply false should be avoided.

Posted by Bill McLeod at 2:03 PM | Permalink | Comments (0) | TrackBacks (0)

Consumer groups have called for Congress to reform the bankruptcy code to save the homes of Americans who are mired in the subprime mortgage foreclosure crisis.

"For most of these families, bankruptcy is the only viable option to save their home," said Henry Sommer, president of [the National Association of Consumer Bankruptcy Attorneys]. "This current exclusion is contrary to sound policy, and operates to disadvantage low-wealth and middle-income borrowers as compared to debtors with the wealth to own more than one home."

Read more here,

And here,

And here.

Posted by Bill McLeod at 2:49 PM | Permalink | Comments (0) | TrackBacks (0)

On Paula Zahn Now, host Paula Zahn examines whether mortgage brokers are to blame for the mortgage crisis. The series "Debtor Nation" continues tonight at 8:00 pm ET. Transcripts from last nights "Debtor Nation" are available here

Posted by Bill McLeod at 6:01 PM | Permalink | Comments (0) | TrackBacks (0)

I spent last night at the Kendall Square Cinema in Cambridge with a number of local bankruptcy attorneys for a special screening of Maxed Out. The movie tackles an important subject for my clients, for me and for just about everyone else I know: debt.

Director James Scurlock take us on a journey from the living rooms of average Americans to the halls and hearing rooms of Capital Hill. From there you will hear the personal stories (some funny, some not) of average people. You'll hear from bankers and credit card companies. You will hear from folks that you can agree and empathize with. You will also hear from folks that will leave your stomach feeling a little…um, let’s just say a little “off.” If you are remotely curious how the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 sailed through the House of Representatives, you need to see this movie.

Also, if you are wondering…

...how and why people are facing foreclosure;
...how and why people find themselves buried in debt they can not (and may not ever) climb out of; and
...what average people do when they are staring the debt-monster in the eye,

see this movie. No one can afford to miss it.

The screening was sponsored by Americans for Fairness in Lending, a non-profit group based in Boston. Please visit their website where you can learn more about what they do.

Click here for movie times at the Kendall.

Posted by Bill McLeod at 2:53 PM | Permalink | Comments (0) | TrackBacks (0)

Legal fees are pushing some people into foreclosure, according to a report in this morning’s Boston Globe. Many of the comments following the article on www.boston.com had a smidgen of indignation. Many people suggested that folks promptly call the lender if they see financial difficult coming down the road. Sage advice. However, many of my clients tell me that they did call the lender when they saw financial difficulty coming down the road and their lenders (or mortgage servicers) told them “sorry, we cannot help you until you’re actually late with a payment.” I’ve heard the same tale often – it’s no anomaly.

Imagine calling a dentist with a toothache and being told “sorry, we cannot help you until it starts to abscess and you’re walking around in excruciating pain.” Or imagine going to your mechanic and telling them that you hear a noise when the car goes over 30 MPH and being told 'why don’t you give us a call when you have smoke coming out from under the hood.'”

The Globe article shines light on the growing problem with foreclosures in Massachusetts. Homeowners are paying a heavy price for the hype fueled by the real estate market. The issues in this article are just the tip of the iceberg.

Posted by Bill McLeod at 7:19 PM | Permalink | Comments (0) | TrackBacks (0)

Getting telephone calls from debt collectors can be unpleasant. But what happens when you’re getting hounded by collectors for a debt that is not even yours? How can that happen? Today, the Boston Globe asked those questions and found a system that isn’t working as well as it should or could.

Posted by Bill McLeod at 7:57 AM | Permalink | Comments (0) | TrackBacks (0)

Many homeowners are discovering that the American Dream of owning a home is slowly turning into a nightmare. Business Week explores this development, which undoubtedly is contributing to sky-rocketing foreclosure rates locally and nationwide.

Posted by Bill McLeod at 2:18 PM | Permalink | Comments (0) | TrackBacks (0)

Attorneys all over the country are increasingly taking bad debt collectors to task for their abusive tactics. This comes from Texas:

The problem's so bad; the Federal Trade Commission gets more complaints about debt collectors than anything. The tactics of debt collection agencies have been described as heavy-handed and mafia-like.

Posted by Bill McLeod at 5:14 PM | Permalink | Comments (0) | TrackBacks (0)

The IRS is slated to begin its "private debt collection initiative" on September 7. In other words, they are sending private debt collectors out to collect Uncle Sam's money. In anticipation of the occassion, the IRS issued a statement today entitled "Simple Steps Can Prevent tax Scams as Private Debt Collection Begins."

The IRS sees a variety of different scams on different issues. One recent example involves a bogus e-mail claiming to be from the IRS. In this “phishing” scheme, the scam artist’s e-mail claims to be from the IRS, tells recipients that they are due a federal tax refund, and directs them to a Web site that appears to be a genuine IRS site. The bogus sites contain forms or interactive Web pages similar to IRS forms or Web pages but which have been modified to request detailed personal and financial information from the e-mail recipients.

In general, all taxpayers should keep in mind the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts. If in doubt about someone claiming to be from the IRS or working on behalf of the IRS, call the agency’s toll-free help line at 800-829-1040.

Posted by Bill McLeod at 6:42 PM | Permalink | Comments (0) | TrackBacks (0)

Today I battled a debt collector who was harassing one of my clients. I enjoyed myself, and I tend to when I know I am right. I am waiting for authority from my client to sue them. Here’s why:

My clients retained me to seek bankruptcy. They told the creditor (Discover Card) – and this collection agency (Nationwide Credit) that I was their attorney and to call me. They did, and on July 17 (shortly after they left a message seeking confirmation of retainer) I called and spoke to them and confirmed representation. But today, they called my client – and told my client that I never returned their call. They also told my client they were going to continue to call her until I returned the call. My client was troubled by this, since it’s my job to help her and her family get through this tough financial time.

So I called and spoke to the collector. She was a peach. She told me they the company never heard from me, and then in the same sentence, acknowledged that “my name was in the system” – and spelled incorrectly (McLeon). I called her out on that and said “if my name is in the system, then clearly you know I am her attorney. Why are you calling my client.” Her reply was that if I would “do my job and return the call” they would not bother my client. Can you sense how that my got my blood to boil?

Continue reading "A Battle with Nationwide" »

Posted by Bill McLeod at 3:43 PM | Permalink | Comments (1) | TrackBacks (0)

Some people have credit cards because they rely on them, and others have them for sheer convenience. Newsweek lists out 10 things you might now know about credit cards. This one even I found a bit surprising:

One late payment can result in a significant drop in your credit score—of up to 100 points—so pay on time every time. A drop in your credit score of just 50 points can mean you pay $100 more a month in your mortgage payment.

Posted by Bill McLeod at 1:04 PM | Permalink | Comments (0) | TrackBacks (0)

In January I wrote an article about some of the hidden costs of settling a debt claim. Among those costs can be taxes. You'll find more about this subject in an article published today.

Posted by Bill McLeod at 11:09 AM | Permalink | Comments (0) | TrackBacks (0)

Retired Massachusetts Bankruptcy Judge Carol Kenner appears in today's Boston Globe with this great op-ed.

Posted by Bill McLeod at 12:35 PM | Permalink | Comments (0) | TrackBacks (0)

In November of last year, I wrote an article highlighting what I perceived to be some of the weaknesses in court rules that are exploited by unscrupulous debt collectors, their attorneys and their agents. I also pointed out in April that in Maryland, debt collectors were indicted. Those collectors were engaging what is called "sewer service": representing to the court that a defendant had been served, when in fact they were not. The term "sewer service" is derived from the presumption that the process papers are tossed in the sewar, rather than properly given to the defendant.

Following last week's series on the debt collection system in Massachusetts in today's Globe, Warren Fitzgerald, president of the Massachusetts Bar Association had this to say:

An amendment to current small-claims rules may be required to ensure that notice requirements are meaningful. In terms of professional debt collectors, requiring them to serve personal notice on an individual who allegedly owes money may be necessary....Collection agencies and their attorneys have every right to pursue people who owe money, but they must do so lawfully. Lawyers in particular are governed by ethical rules that clearly prohibit some of the conduct described in the Globe series. If some lawyers are not obeying the rules, they should face disciplinary charges. Such behavior is an embarrassment to the overwhelming majority of lawyers in Massachusetts who are honest and ethical.

Posted by Bill McLeod at 10:35 AM | Permalink | Comments (0) | TrackBacks (0)

Was the Boston Globe’s four part series this week was just the wake up call that elected leaders needed to seek a revamping of the debt collecting industry? In what appears to be a collective quest to do away with the wrongs cited in the reports, leaders including state attorney general and gubernatorial candidate Tom Reilly to Boston Mayor Thomas Menino are vowing to seek various changes in response to the report.

Too little, too late.

Lieutenant Governor Kerry Healey, the presumptive Republican nominee for governor, said Reilly "has failed to do enough to protect consumers in Massachusetts." But Healey also found fault with the state court system. It has been, she said in a statement, "too lax, loosening notification rules for debt collectors instead of enforcing them to protect average citizens."

Deval L. Patrick, one of two Democrats vying with Reilly for the Democratic nomination, was less direct in his criticism. But he said the lack of enforcement is stark evidence that, "at both the federal and state level, the government is on the side of the big players, and not the little guy."

Posted by Bill McLeod at 10:02 AM | Permalink | Comments (0) | TrackBacks (0)

Harvard Professor Elizabeth Warren comments Harvard Professor Elizabeth Warren comments on the four part Globe series I have written about here:

It isn’t just the debt collection agents who get a black eye in this series; it is the government officials who are charged with the responsibility to watch out for the public and who instead made themselves the dupes of out-of-control debt collectors.

Do three things: First, read the series. Second, drop an email to the Globe to tell them what you thought—this makes a huge difference on the amount of follow-up reporting. Third, post a blog here about what you thought was the most outrageous act or your view about what is happing.[sic]

I want to taste this awful stuff one more time. The people who were featured in the Globe articles deserve at least that much, and the officials who didn’t help them deserve so much more.

If Professor Warren's weblog is not in your favorites yet, it should be.

Posted by Bill McLeod at 6:25 PM | Permalink | Comments (0) | TrackBacks (0)

The final of the four part Globe Spotlight series, Debtor’s Hell, asks if regulators and legislators (and in some case gubernatorial candidates) unaware of the debt collection industry's free-for-all or are they simply unwilling to act.

Unwilling? Or simply uncaring?

Posted by Bill McLeod at 8:49 AM | Permalink | Comments (0) | TrackBacks (0)

Every person who comes before the courts in Massachusetts has the right to be treated with dignity and respect, to be accorded an opportunity to present his or her case and to have that case decided in a way that is fair, impartial, and timely. The Boston Globe’s report on debt collection in small claims sessions of the District Court focuses attention on an “industry which has swamped the court dockets with lawsuits.”

The rest is here

Posted by Bill McLeod at 9:36 AM | Permalink | Comments (0) | TrackBacks (0)

The third Globe installment focusing on the hell debtors go through looks at constables as well as county sheriff offices.

The office of constable is as ancient as it is obscure, governed in Massachusetts by laws that date back to the 1600s. One power of the office - never repealed - is to ''take due notice of and prosecute all violations of law respecting the observance of the Lord's day, profane swearing and gambling.''

Nowadays, constables, and the deputy sheriffs who perform parallel work, busy themselves delivering subpoenas and other court papers, placing liens on real estate, and seizing personal property to satisfy court judgments - in the case of constables, judgments of no more than $2,500.

Where they differ is in accountability. Constables, for example, can legally operate only in the communities that license them. But that restriction, the Globe found, is often ignored.

Posted by Bill McLeod at 9:28 AM | Permalink | Comments (1) | TrackBacks (0)

Today's Boston Globe installment (the second of a four part series) focuses on the Massachusetts Court system.

[The small claims session] is a de facto arm of a fast-growing and aggressive industry that has swamped court dockets with lawsuits - cases that often lead to threats of jail for debtors.

A Globe review of proceedings and records in 20 of the state's 70 small-claims courts found that court officials and collection lawyers routinely break court rules, almost always to the detriment of the defendant. Collectors are almost never asked to prove the debts they claim; defendants are rarely informed of their rights. And debtors, usually too strapped to afford a lawyer, must contend with this legal mismatch alone.

Posted by Bill McLeod at 11:24 AM | Permalink | Comments (2) | TrackBacks (0)

Today the Boston Globe starts a four part series on the plight of consumers facing debt collectors (it also appears on the front page of the Sunday Globe. The piece describes many issues and I have written about here in the last several months. Even though I have linked it here, you'll only have access to a few pages before you're required to sign in with a user name and password. If you’re not already registered with Boston.com, you’ll need to do so. Registration costs nothing.

Posted by Bill McLeod at 11:49 AM | Permalink | Comments (0) | TrackBacks (0)

This second post was prompted by Dana's comments to earlier post from this morning. While KAA's phones are busy and/or disconnected, they are apparently still trying to get money from folks by using their bank information.

Click here for Kensington Assistance Agency's website. There is a place on the site that enables viewers to "contact them" via email however, I could locate no phone number. I sent them a test email, and it appears to be working.

Please keep us posted. If you're located in Massachusetts, please contact me directly using the contact information shown at the right.

Posted by Bill McLeod at 2:47 PM | Permalink | Comments (3) | TrackBacks (0)

Months ago, I warned readers about Kensington Assistance Agency. Since then, reports have popped up all over the country with similar warnings about this outfit, such as this one from the NBC affiliate in Greenville, South Carolina.

Recently, I have been flooded with calls and emails from folks all over the country. When they call Kensington Assistance Agency, they get a fast busy signal. We do not know if they have packed up their offices and moved into another rat-hole, or if they chose not to pay their phone bill with the hundreds of dollars they have been swindling from folks who can least afford to lose it.

If you have been victimized by Kensington Assistance Agency, here’s what you should do:

Contact your local Attorney General’s Office or Office of Consumer Protection. This is usually a state agency.

Contact your local bar association and get a referral for a local attorney who concentrates in consumer protection and consumer rights. You may have rights under your local state laws.

Earlier posts:

Rip Off Alert: Another Update on Kensington Assistance Agency
Rip Off Alert! Update: Kensington Assistance Agency
Rip Off Alert!: Kensington Assistance Agency

Posted by Bill McLeod at 9:43 AM | Permalink | Comments (2) | TrackBacks (0)

How can a debt incurred in 1995 somehow be in debt collection now? It’s called “re-aging.” In other words, debt collectors may do what scientists, philosophers and politicians only wish they could do: turn back the clock. The Dallas CBS affiliate reported on this subject on Tuesday.

Posted by Bill McLeod at 9:23 AM | Permalink | Comments (0) | TrackBacks (0)

Five people have been indicted in a foreclosure scam coming out of Southern California.

From DailyBreeze.com:

The defendants visited homeowners defaulting on their mortgages and offered to stop their foreclosures with short-term loans and refinancing options. But instead of applying for refinancing, the defendants allegedly submitted loan applications to banks under the names of the homeowners.

The defendants allegedly pocketed the loan money from the banks, which were never repaid. The victimized homeowners, meanwhile, lost their property titles, according to the indictment.

Posted by Bill McLeod at 5:14 PM | Permalink | Comments (0) | TrackBacks (0)

Foreclosures continue to spike here in Massachusetts, and nationwide. There are a number of bottom-dwellers out there preying on people who may be facing a foreclosure. According to a report from today’s Winston-Salem Journal, these scams on rising all over the country. The president and chief executive of the local Better Business Bureau had this to say:

"At-risk homeowners are bombarded with offers...Just take a look at the signs at the nearest phone pole or intersection. Smooth-talking salespeople appear everywhere, eager to buy your property and promising to 'save' your home by paying off the amount that is overdue on the loan."

He said that homeowners are often talked into moving out and deeding the property over to a third party, who tells them they can rent the property with the option to buy it back later. But the rent payment is often higher than the homeowner can afford. If homeowners decide to buy back the property, the price is typically too high for them.

Posted by Bill McLeod at 12:05 PM | Permalink | Comments (0) | TrackBacks (0)

Foreclosures in Massachusetts continue to rise. ForeclosuresMass.com reports that they are at a 12-year high.

From today's Worcester Telegram:

The role played by the state’s slow economy [in the high foreclosure rate] is not clear, but many home buyers who used sub-prime loans or variable-rate mortgages are having trouble keeping up with payments as interest rates increase — especially those who purchased properties with little or no down payment.

Posted by Bill McLeod at 12:17 PM | Permalink | Comments (0) | TrackBacks (0)

Fannie Mae announced that it is extending the foreclosure moratorium to homeowners in the Gulf who were hard hit by Hurricanes Katrina and Rita to August 31, 2006.

Posted by Bill McLeod at 6:59 PM | Permalink | Comments (0) | TrackBacks (0)

More good news on a dreary day: Today Massachusetts Attorney General Tom Reilly announced that his office is investigating “several individuals and businesses who allegedly target homeowners by offering to ‘rescue’ them from foreclosures, but instead trick them into deeding over their property.” He urges homeowners who think they have been victims of a foreclosure “rescue” scam to call the Consumer Hotline at 617.727.8400.

His office also issued a consumer advisory warning homeowners not to fall victim to mortgage foreclosure scams.

"Families in Massachusetts are being squeezed on all sides - from soaring gas prices to utility and health care costs." AG Reilly said. "Now as foreclosure rates are going up, we're hearing complaints about companies taking advantage of people who are trying to save their homes. Consumers need to be careful. I urge homeowners facing foreclosure to talk with licensed professionals, including lawyers and real estate professionals, before entering into any agreement or arrangement involving their home."

Posted by Bill McLeod at 5:46 PM | Permalink | Comments (0) | TrackBacks (0)

The Northeast is getting record rainfall, and I think most people are just hoping for a little sunshine...and for some of us, warm, dry socks. While rainy days and Mondays might get folks down, there is good news coming out of Washington:

The Internal Revenue Service has canceled the tax-exempt status for some of the nation's largest educational credit counseling services after audits revealed they exist mainly to prey on debt-ridden customers, Commissioner Mark Everson said Monday.

Posted by Bill McLeod at 2:07 PM | Permalink | Comments (0) | TrackBacks (0)

Tonight's 60 Minutes highlights Sallie Mae, a once government and now private entity that administers student loans.

Among the people interviewed in the segment is the founder of this site: Student Loan Justice. Harvard bankruptcy professor Elizabeth Warren is also interviewed

Remember, there's no relief and there is no fresh start for the vast majority of people burdened by student loans. It's easier to discharge almost all other debt, than it is to discharge a student loan.

Posted by Bill McLeod at 7:08 PM | Permalink | Comments (2) | TrackBacks (0)

The Federal Trade Commission announced this week that Lighthouse Credi Foundation, Inc. along with co-Defendants will pay more than $2.4 million to settlle charges stemming from a complaint filed by the FTC in the US District Court for the Middle District of Florida.

According to the FTC’s complaint, defendant Integrated Credit Solutions, Inc. solicited consumers for Lighthouse’s debt management plans by leaving prerecorded messages on home answering machines stating that the consumer had been approved through “a certified non-profit nationwide program” to consolidate credit card debt before the next billing cycle at interest rates “as low as 1.5%.” People who responded to the messages were told that the program included counseling on how to manage finances, and that a monthly administrative fee was tax-deductible because Lighthouse was a nonprofit organization. Consumers agreed to pay large fees to enroll in debt management plans based on these representations, the complaint alleges.

Posted by Bill McLeod at 11:15 AM | Permalink | Comments (0) | TrackBacks (0)

In today's Hartford Courant, Washington Post columnist Michelle Singletary comments on the amendments to the FDCPA to exempt "check-diversion" companies now under consideration in the Senate:

Every consumer ought to be paying attention to this legislation because if it passes (it's already been approved by the House and is now being considered by the Senate), it will erode our consumer rights - not our right to bounce checks, but our right to be treated fairly when we do make a mistake.

See the May 3 blog entry for additional informaton on this legislation.

Posted by Bill McLeod at 10:57 AM | Permalink | Comments (0) | TrackBacks (0)

USA Today is reporting today:

A private debt-collection firm tapped by the IRS to seek repayment from Americans who owe back taxes has been tangled in legal controversy, including a bribery scheme involving a collection contract in Texas and a federal investigation of another collection deal in Louisiana.

An interesting development indeed.

Posted by Bill McLeod at 10:19 AM | Permalink | Comments (0) | TrackBacks (0)

The Secret History of Credit Cards, a show produced by PBS' Frontline, is a revealing documentary on how our plastic money system has evolved....and also how credit card companies can get away with charging upwards of 20% interest.

Posted by Bill McLeod at 10:57 AM | Permalink | Comments (0) | TrackBacks (0)

The Boston Business Journal is reporting today that foreclosures were up in February.

Posted by Bill McLeod at 5:25 PM | Permalink | Comments (0) | TrackBacks (0)

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.

Posted by Bill McLeod at 5:37 PM | Permalink | Comments (0) | TrackBacks (0)

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.

Posted by Bill McLeod at 10:34 AM | Permalink | Comments (0) | TrackBacks (0)

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.

Continue reading "Don't Give Collectors Your Account Information" »

Posted by Bill McLeod at 7:41 PM | Permalink | Comments (0) | TrackBacks (0)

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.

Posted by Bill McLeod at 7:30 PM | Permalink | Comments (20) | TrackBacks (0)

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.

Posted by Bill McLeod at 1:22 PM | Permalink | Comments (0) | TrackBacks (0)

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.

Posted by Bill McLeod at 2:19 PM | Permalink | Comments (32) | TrackBacks (0)

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.

Posted by Bill McLeod at 12:35 PM | Permalink | Comments (0) | TrackBacks (0)

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.

Continue reading "A Warning for Homeowners Facing Foreclosure" »