More Evidence of Indifference of Mortgage Companies

As I posted before, I have had little positive feedback regarding the home mortgage modification program instituted by the Obama administration earlier this year. Now there is objective evidence to support that. According to the government's recently released progress report on the mortgage modification plan, only about 15% of eligible homeowners were offered assistance under the plan. Some mortgage companies haven't modified a single loan. On Monday, Senator Dick Durbin threatened the banks that if mortgage companies don't get more aggressive with their modification efforts, Congress would re-introduce legislation that would allow a homeowner to modify their mortgage in bankruptcy court. Personally, I don't feel this threat has much teeth. The banking industry lobbied so hard against the legislation the last time. I don't think consumers have a chance against this financial Godzilla.

clipped from www.msnbc.msn.com In its first monthly progress report on the plan launched in March, the government on Tuesday detailed big disparities among the 38 companies that have signed up. Several loan servicing companies — including American Home Mortgage Servicing and PNC Financial Services Group Inc. — have yet to modify a single loan.

Mortgage Modification is a Fraud

I represent homeowners from all walks of life who have been hurt by the recent downturn in the economy. Some have lost their jobs as a result of employers trying to cut back in order to stave off foreclosures themselves. Others have high medical bills and are finding it difficult to buy medication and pay their home mortgage. Recently, the federal government initiated a program designed to help homeonwers modify their home mortgages through their mortgage company. The Making Homes Affordable act was part of a $50 to $75 billion government effort to prevent foreclosures. Now it has come to light that many mortgage companies have taken the "who, me?" approach when it comes to approving these modifications. Homeowners are spending hours on the phone with their mortgage companies, sending in voluminous documents with personal information that seem to become lost when it reaches the mortgage companies (even though the homeowner has verification of the delivery) and enduring other sneaky tactics designed to deny homeowners access to this program. Now someone is fighting for these homeowners. See below.

clipped from www.hppinc.org Making Home Affordable HAMP Litigation On July 28, 2009, two Minnesota homeowners sued the government alleging that the administration of the federal foreclosure prevention and loan modification program violated their procedural due process rights.  Specifically, the Home Affordable Modification Program does not require the government to provide written notice of the specific reasons for a denial and notice of a right to appeal, a uniform procedure for appealing an adverse decision, and a method to undo a foreclosure that was done in violation of program guidelines or otherwise unlawful.

Jobless recovery is no recovery

Unemployment is a serious concern for anyone in this broken economy. In simple terms, if you don't have a job, you can't pay your bills and you don't spend money at local retailers. Retailers who face decreased sales can't afford to repay business loans, pay for health care for their employees and sometimes can't even make payroll. Almost $165 billion in U.S. commercial real estate [shops, offices, hotels, apartment buildings and land] loans will mature this year and need to be sold or refinanced as rents and occupancies fall, according to First American CoreLogic. Personally I don't understand how a "jobless recovery" can turn the country around. The only people a jobless recovery could possible benefit would be bankers. The ordinary consumer doesn't benefit and continues to struggle.

clipped from www.google.com Verizon 2Q profit falls, tops view, plans job cuts By PETER SVENSSON (AP) – 1 hour ago NEW YORK — Verizon Communications Inc., the nation's largest wireless carrier, said Monday its second-quarter profit fell 21 percent as cost-cutting in its wireline business failed to keep pace with falling revenues. The company will be cutting more than 8,000 employee and contractor jobs before the end of the year in the wireline business, speeding up its efforts to keep costs in line, according to chief financial officer John Killian.

Debt Collectors Now Using MySpace and Facebook

In the most audacious move yet, collections firms are now using MySpace and other social media sites as a way to track down debtors and even posting messages on MySpace asking the user in some instances to 'contact our office immediately so we can discuss the peaceful recovery' of the collateral. Consider one Michigan debtor who fell behind in her car payments and suffered repeated, harassing phone calls from three companies -- including 15 calls on one Saturday and claims that phone calls were "concerning a 'family emergency' ". The debtor was told that if she did not pay up, her car would be reported stolen, and she would be arrested and the collector threatened the debtor that they would even camp out in front of her house. As if all this weren’t enough, the fact there were overdue payments for her 2005 Chevy Impala was broadcast on her MySpace account. The key word here is "broadcast". Messages posted on MySpace, Facebook and other social networks are not private and any information posted by debt collectors on a public forum is obviously intended to embarras and humilate a person rather than recover the debt. Be careful who you "friend"

Check out the story.

Overview of New Credit Card Legislation

The following are some of the major changes coming to credit card consumers as a result of legislation passed this week in Congress. The law will go into effect nine months from the date of enactment. I'm struck with how we have to legislate fair treatment and honesty.

WHAT CONSUMERS NEED TO KNOW ABOUT THE NEW CREDIT CARD LAWS:
• Creditors cannot increase the annual percentage rate (APR) during the first 12 months of opening up an account.
• Creditors are required to provide consumers with a 45-day advance notice of changes in rates and significant contract changes. Rates that change due to a change in the index that the rate is based on are excluded from this 45-day notice requirement.
• Promotional rates need to be in effect for at least six months from the beginning date of that promotion.
• Creditors need to provide a 30-day advance notice of an account closure.
• With certain exceptions, credit card issuers are prohibited from charging a finance charge based on the double billing cycle method.
• Creditors are prohibited from charging a fee on an outstanding credit card balance at the end of the billing period if the fee is attributed to the interest accrued on an outstanding balance that was fully repaid during that preceding billing period.
• Consumers have the right to reject a new credit card after the creditor notifies a consumer reporting agency of its corresponding account.
• Creditors are required to remove information provided to a consumer reporting agency about newly established credit card accounts if the consumer has not used or activated the account and and if the consumer contacts the creditor within 45 days of its establishment to close it.
• If two or more different APRs apply to different portions of an outstanding balance, the amount of any payment above the required minimum payment needs to be applied to the balance with the highest APR first and then to lower APR balances.
• Creditors are required to provide a grace period for payments even if the cardholder takes advantage of a promotional rate balance or deferred interest rate balance.
• Creditors are required to send credit card statements at least 21 days before the due date of the outstanding balance.
• Creditors are prohibited from providing credit to consumers under age 18 (unless they are emancipated under state law, or the consumer's parent or legal guardian is designated as the primary account holder).
• For college students who do not have a co-signer, the maximum amount of credit extended will be limited to the greater of 20 percent of the student's annual gross income or $500 dollars. The aggregate amount of credit extended from all of their credit cards will be limited to 30 percent of the student's annual gross income (for the recently completed calendar year).
• Creditors are prohibited from opening a credit card account for any college student who does not have any verifiable annual gross income or already maintains a credit card account with that creditor, or any of its affiliates.
• Creditors are prohibited from charging a fee to make telephone and web-based payments. However, a fee may be charged for expedited telephone payments made on the due date or the day before the due date.
• Creditors are required to post their written credit card agreements on the internet.

If you need to buy a gun with a credit card....

I remember when Obama told the country it wouldn't be politics as usual in the United States. I am disappointed in myself for buying into Obama's insincerity.

clipped from www.nytimes.com Advocates of Gun Rights Are Poised for a Victory WASHINGTON — Advocates of gun rights are poised to win a Congressional victory that eluded them under a Republican president. To the frustration and discouragement of many Democrats, House and Senate lawmakers and aides say it now appears likely that President Obama will this week sign into law a provision allowing visitors to national parks and refuges to carry loaded and concealed weapons. The White House is lukewarm at best on the gun provision, which was added to a popular measure imposing new rules on credit card companies. But the Democrats who now control both Congress and the White House appear ready to allow it to survive rather than derail a consumer-friendly credit card measure that Mr. Obama is eager to sign as Congress heads off for a Memorial Day recess.

Pigs Are Flying

Every day I have to confront Alabama's meager homestead exemption (Ala Code Sec. 6-10-2). Homestead exemptions across the country differ per state if the state has opted out of the federal exemptions. Mississippi's homestead exemption is $75,000 and there are some states where the homestead exemption is unlimited. Alabama, however, has a meager $5,000 exemption to protect your home. This means that is you own your home and get behind on your bills, if the equity in your house exceeds $5,000 you would lose your house if you file a Ch. 7 bankrutpcy petition or would be forced to file a Ch. 13 repayment bankruptcy in order to protect your home from creditors. The more equity you have in your house the more money you have to pay in a repayment plan, regardless of whether you can afford the payment or not. How does that help the consumer? It doesn't.

Thankfully, now with the help of Alabama Appleseed, a bill has been proposed to the state legislature which would increase the homestead exemption in Alabama to $10,000. I know, not a tremendous increase but it is a start. The sponsor of the bill, Jeff McLaughlin, is at least making an attempt to protect people's property in the midst of one of the most disastrous economic era ever.

Eighteen months ago, approximately 2 million foreclosures were predicted across the country. Now economists are predicting an additional 8-10 million foreclosures over the next four years. It is painfully obvious that the housing crisis is fueling the downturn in the economy and just as obvious is the Bush administration's refusal to address the problem in a swift an meaningful manner. Finally, legislation has been introduced which will alleviate the problem. The "Helping Families Save Their Homes in Bankruptcy Act of 2009" was introduced in both House and Senate yesterday and seeks to modify the bankruptcy code to allow homeowners to modify their mortgages in a bankruptcy case. Some interesting facts about the bill:

• The bill, if enacted, will be effective on the date of the enactment. Previous changes to the bankrupty code provided a 6 month waiting period.
  
• The bill would allow mortgages to be modified in several ways including fixing interest rates on adjustable rate mortgages at reasonable rate and modifying loan terms.
• The bill would not only apply to new debtors filing Chapter 13 but also to existing Chapter 13 debtors.
• The bill also deals with servicer abuses as well such as improper fees and penalties which, in my experience, can put a homeowner in foreclosure just as quickly as missing payments.

All in all the legislation is encouraging and is the best way to turn the economy around. Keeping people in their homes while at the same time providing lenders and servicers to deal fairly with homeowners sends a message of hope to those struggling in these tough times.