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.
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.
Wow. Talk about scare tactics. Needless to say, this is not true. A Chapter 13 Bankruptcy can be used to save the home from foreclosure assuming a confirmable plan can be put together. The “11%” is neither cited to any source nor supported by any facts. Such a sweeping generalization is clearly and unambiguously intended to sway people away from even considering bankruptcy as an option.
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.
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.”
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
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.
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.
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.
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.
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.
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.
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