Loan Modification, bankruptcy, debt settlement

Foreclosure Settlement Is Just Another Bank Bailout

February 17th, 2012 Posted in bankruptcy, debt settlement, loan modification, mortgage software
Feb, 17 2012
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Jan 4 Occupy Foreclosures, Stop Foreclosures! sign
Creative Commons License photo credit: mpeake

There has been big publicity about the deal the Obama administration made with the banks and that was joined by all State AGs except Oklahoma (why are they the only smart people?). While the Federal government is hailing it as a great deal for people who have been foreclosed on or whose homes are underwater, most of the blogosphere seems to be saying that the only people who are going to win from this deal are the banks.

While no one apparently has seen the full agreement yet, it appears some facts can be determined:

  • This settlement does NOT stop foreclosure proceedings.  Foreclosure proceedings are expected to speed up.  Banks are now set free from any   future any law suit liability and will be proceeding aggressively with foreclosure activity.
  • The banks have 3 years to settle on any and all cases.  They will stall for an extended period of time if they are given the opportunity.  You will need aggressive representation to push them along.
  • Interest rate reductions / loan modifications are still at the discretion of the mortgage lender.  Ultimately, you will need aggressive representation to complete any type of loan work out.  Again, the mortgage lenders are off the hook for any future law suits.
  • Only 1 out 11 home owners will receive a principal reduction.  The only way to get to the front of that line is with proper representation.

Time will tell if this really does help home owners, but on the face of things, it appears to provide only minimal aid.

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New Forms for Consumer Bankruptcy

January 31st, 2012 Posted in bankruptcy
Jan, 31 2012
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Simplify Your Life
Creative Commons License photo credit: mullica

Starting in 2008, the Bankruptcy Rules Committee has been working on creating new, “modernized” forms for consumer bankruptcy. Currently, there is one form for everyone from massively large corporations down to the struggling single parent. In an attempt to make things easier and better for the individual person, the Committee has developed these new forms. They are part of the Committee’s report from September 2011. I extracted the pertinent portion: Tab 7, pages 175-315 for easier review. (The full report covering a variety of subjects is a whopping 514 pages long.)

The stated goals of the project are to “improve the official bankruptcy forms and to improve the interface between the forms and available technology.” One of the bulleted criteria is to “streamline the look and feel of the forms, making them inviting and easier to read.” As Katie Porter pointed out in her Credit Slips posting about them, “the new forms are really long—way longer than the current forms as completed in the typical consumer case.”

One wonders how making them so incredibly long fits with the “streamlining” goal.

These are still just draft versions of the forms. More work will no doubt be done before they are presented for public comment. Still, it’s a good idea to give them a look and be prepared to make input when they do come out with the public comment version. The stated intent is to have all the draft forms published for comment in August 2012.

The Committee retained the Center for Clear Communication, Inc. a recognized expert on forms design. Among other things, the Center was involved with very successfully redesigning and simplifying several IRS tax forms. I am a little surprised at the length of the instructions in these forms, but since this is still a draft, maybe that will be corrected.

They do note, on p178 (page 4 of Tab 7), that many comments were made about the length of the forms during testing. They acknowledge the length but point out that in some cases, its due to combining previously single forms and in other cases, new instructions and checklists were added. Since not all forms will need to be filed, the entire package may not be that long. Read the rest of this entry »

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One Bank’s Credit Card Collections Down in 2011

January 12th, 2012 Posted in debt settlement
Jan, 12 2012
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As a sort of interesting addendum to the recent debt validation post, it seems JP Morgan/Chase has stopped taking people to court for delinquent credit card debt.

Chart of JP Morgan Chase credit collections by quarter since 2Q 2009A recent article at American Banker reported that, very quietly, Chase has stopped filing new cases and even laid-off some of its lawyers in Illinois. As the chart to the left indicates, the drop has been fairly pronounced. They collected $405 million in the first quarter of 2011, $321 million in the second quarter, and only $266 million in the third quarter.

Chase is not revealing anything so there is a lot of conjecture in the blogosphere. There is at least some indication that it could be due to poor documentation; somewhat akin to the “robo-signing” scandal for home foreclosures.

And no one knows if this is permanent because Chase has found another way to recoup these monies or if it’s only a temporary slowdown as they investigate and refine their documentation procedures.

A tip of the hat to Credit Slips for pointing to the American Banker article.

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Debt Validation a Problem Nationwide

January 5th, 2012 Posted in bankruptcy, debt settlement
Jan, 05 2012
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Merry Christmas or Slavery?
Creative Commons License photo credit: Brad_Chaffee

A recent post on the Bankruptcy Lawyers Blog about the Maryland high court ruling that for all cases filed on or after 1/20/12, debt collectors and creditors must produce real proof that the debtor incurred the debt. There is apparently a nationwide problem with debt collection agencies and similar organizations buying debt in bulk quantities at extremely cheap prices. They then go after the debtors using deceptive practices to try to get them to pay. Many times people don’t know their rights and pay unnecessarily.

There are many requirements a debt collection agency must meet, but many regularly skirt them or fulfill the letter of the law only.

For example, if a debt collection agency contacts you about a debt you supposedly owe, you have the right to request debt validation – proof that you actually owe this debt to the original creditor (not the debt collection agency). That means providing documentation that proves you owe the original creditor the amount the agency is trying to collect. Many times they will not bother as they are looking for quick payments, not a protracted process that will cost them money in the long run.

For a full discussion of what tricks agencies try to pull and the steps you can take to protect yourself, read What is Debt Validation: Make debt collectors provide proof.

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This Week in Bankruptcy, Debt Settlement, and Loan Modification

July 8th, 2011 Posted in bankruptcy, debt settlement, loan modification
Jul, 08 2011
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Interesting and informative blog posts during the week of 7/4/11-7/8/11

Bankruptcy

Bankruptcy Basics: What is a “cram-down”?

So, you meet with an attorney to discuss your options in bankruptcy.  The attorney discusses a chapter 13 and says that you can “cram-down” your car in a chapter 13 case.  Cram what!?  I like the thought of cramming something somewhere for a particular creditor but what exactly is a “cram-down”?…

Bankruptcy Issue: Insurance Proceeds After An Accident.

There are many issues that can arise when you file a Chapter 13 bankruptcy case and insurance proceeds from a vehicular accident may be one such issue.  Let’s presume the following facts:  You are two years into a five year  Chapter 13 Plan, you have had an accident that has totaled your vehicle, your full coverage insurance is going to pay the value of your vehicle…

Foreclosure Fraud Claims With Mortgage Companies: Settled?

We have bailed out the mortgage companies that brought us the foreclosure crisis, now the states and a federal government agencies are on the verge of a sellout buyout by the bad guys for fraudulent foreclosures. The Office of Comptroller of the Currency, or OCC, and the attorney generals for all 50 states are participating in the talks, with five of the main crooks:… Read the rest of this entry »

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