Senator Weyden questions Consumer Protection Agency

Installment Loans Aimed At Poor and Senior Consumers Become Target Of Hearing On Payday Loans

Yesterday, Sen. Ron Wyden (D-Ore)  questioned a Consumer Financial Protection Bureau representative, associate director David Silverman,  about the agency’s authority to deal with installment loan lenders.  Silverman indicated that the CFPB had no supervisory authority over such lenders but did have broad investigation powers.

Installment loans are yet another exploitative “small money market” product notorious for resulting in usurious interest rates, extra fees and additional charges from unnecessary insurance placements.   Unlike payday loans which are usually due on a date certain, installment loans are paid in increments over time spanning from months to years.  Reportedly, borrowers are encouraged to unwillingly renew these loans, as though they are credit cards, which could accrue as much as 200% annual rates.

The focus of Senator Wyden’s questions was a company called World Finance which was highlighted in a ProPublica story this spring because of their predatory tactics.  World has more than $800,000 customers and a major share of what has become a $10 million industry.


Author’s Note: To learn more about how bankruptcy can help with consumer mortgage issues check out our Bankruptcy FAQ.  For more information regarding loan modifications subscribe for our free ebook 10 Secrets To Successful Loan Modification.

Loan Modifications Are Helping Very Few

HAMP Program Loan Modifications With High Defaults Hurt The Community But Enrich Servicers.

(Bankruptcy News Source:  “Loan Modification Recipients Redefault in Droves”  by Kate Berry, published in National Mortgage News)

Distressed homeowners are redefaulting in droves on loan modifications received through a government program, costing taxpayers billions and raising questions about the Treasury Department’s oversight of mortgage servicers.

Christy Romero, the special inspector general for the Troubled Asset Relief Program, says in a report to Congress scheduled to be released Wednesday that Treasury failed to analyze its own data to determine which borrowers were most at risk of losing their homes to foreclosure after receiving government support.

The watchdog says 46% of homeowners who got help in 2009 through the government’s Home Affordable Modification Program have redefaulted on their mortgages, while 38% who received loan mods in 2010 have done so.
“This is a real problem,” says Romero. “We want homeowners to get the same help they were promised that was given to banks.” Read More →



Rhinold Ponder to Speak on Bankruptcy, Loan Modification and BankruptcyOn July 13, 2013, 9:30 am,  at First Baptist Church of Princeton, attorney Rhinold Ponder will discuss strategies on how to survive mortgage problems and save homeowners from foreclosure at a free seminar.  Among the important issues to to be addressed are loan modifications, foreclosure defense and personal bankruptcy.  He also discusses the foreclosure process and how to avoid the numerous scams designed to take advantage of distressed homeowners.  Please join us.  The First Baptist Church of Princeton, the host for the event, is located at John Street and robeson Place in Princeton.  The church Pastor is Reverend Carlton E. Branscomb.

Update:  The seminar held at The First Baptist Church of Princeton was a huge success.  Many thanks to Lance Liverman and Reverend Branscomb.  Mr. Ponder looks forward to speaking to church members again in the future.















Author’s Note: To learn more about how bankruptcy can help with consumer mortgage issues check out our Bankruptcy FAQ.  For more information regarding loan modifications subscribe for our free ebook 10 Secrets To Successful Loan Modification and read the special report on HAMP redefault rates by the Special Inspector General for the Troubled Asset Relief Program..  Rhinold is also available to speak at other venues on loan modification, bankruptcy, foreclosures and other solutions to the problems the financial crisis has created for regular folks.  Contact him at or call the office at 888.501.2318.


Bank Of America Lied To Homeowners and Rewarded Foreclosures

By Paul Kiel

Bank Of America Forces Foreclosure and steals from homeownersBank of America employees regularly lied to homeowners seeking loan modifications, denied their applications for made-up reasons, and were rewarded for sending homeowners to foreclosure, according to sworn statements by former bank employees.

The employee statements were filed late last week in federal court in Boston as part of a multi-state class action suit brought on behalf of homeowners who sought to avoid foreclosure through the government’s Home Affordable Modification Program (HAMP) but say they had their cases botched by Bank of America. 

In a statement, a Bank of America spokesman said that each of the former employees’ statements is “rife with factual inaccuracies” and that the bank will respond more fully in court next month. He said that Bank of America had modified more loans than any other bank and continues to “demonstrate our commitment to assisting customers who are at risk of foreclosure.”

Six of the former employees worked for the bank, while one worked for a contractor. They range from former managers to front-line employees, and all dealt with homeowners seeking to avoid foreclosure through the government’s program.

When the Obama administration launched HAMP in 2009, Bank of America was by far the largest mortgage servicer in the program. It had twice as many loans eligible as the next largest bank. The former employees say that, in response to this crush of struggling homeowners, the bank often misled them and denied applications for bogus reasons.

Sometimes, homeowners were simply denied en masse in a procedure called a “blitz,” said William Wilson, Jr., who worked as an underwriter and manager from 2010 until 2012. As part of the modification applications, homeowners were required to send in documents with their financial information. About twice a month, Wilson said, the bank ordered that all files with documentation 60 or more days old simply be denied. “During a blitz, a single team would decline between 600 and 1,500 modification files at a time,” he said in the sworn declaration. To justify the denials, employees produced fictitious reasons, for instance saying the homeowner had not sent in the required documents, when in actuality, they had.

Such mass denials may have occurred at other mortgage servicers. Chris Wyatt, a former employee of Goldman Sachs subsidiary Litton Loan Servicing, told ProPublica in 2012 that the company periodically conducted “denial sweeps” to reduce the backlog of homeowners. A spokesman for Goldman Sachs said at the time that the company disagreed with Wyatt’s account but offered no specifics.

Five of the former Bank of America employees stated that they were encouraged to mislead customers. “We were told to lie to customers and claim that Bank of America had not received documents it had requested,” said Simone Gordon, who worked at the bank from 2007 until early 2012 as a senior collector. “We were told that admitting that the Bank received documents ‘would open a can of worms,’” she said, since the bank was required to underwrite applications within 30 days of receiving documents and didn’t have adequate staff. Wilson said each underwriter commonly had 400 outstanding applications awaiting review.

Anxious homeowners calling in for an update on their application were frequently told that their applications were “under review” when, in fact, nothing had been done in months, or the application had already been denied, four former employees said.

Employees were rewarded for denying applications and referring customers to foreclosure, according to the statements. Gordon said collectors “who placed ten or more accounts into foreclosure in a given month received a $500 bonus.” Other rewards included gift cards to retail stores or restaurants, said Gordon and Theresa Terrelonge, who worked as a collector from 2009 until 2010.

This is certainly not the first time the bank has faced such allegations. In 2010, Arizona and Nevada sued Bank of America for mishandling modification applications. Last year, Bank of Americasettled a lawsuit brought by a former employee of a bank contractor who accused the bank of mishandling HAMP applications.

The bank has also settled two major actions by the federal government related to its foreclosure practices. In early 2012, 49 state attorneys general and the federal government crafted a settlement that, among other things, provided cash payments to Bank of America borrowers who had lost their home to foreclosure. Authorities recently began mailing out those checks of about $1,480 for each homeowner. Earlier this year, federal bank regulators arrived at a settlement that also resulted in payments to affected borrowers, though most received $500 or less.

The law suit with the explosive new declarations from former employees is a consolidation of 29 separate suits against the bank from across the country and is seeking class action certification. It covers homeowners who received a trial modification, made all of their required payments, but who did not get a timely answer from the bank on whether they’d receive a permanent modification. Under HAMP, the trial period was supposed to last three months, but frequently dragged on for much longer, particularly during the height of the foreclosure crisis in 2009 and 2010.

ProPublica began detailing the failures of HAMP from the start of the program in 2009. HAMP turned out to be a perfect storm created by banks that refused to adequately fund their mortgage servicing operations and lax government oversight.

Bank of America was far slower to modify loans than other servicers, as other analyses we’ve cited have shown. A study last year found that about 800,000 homeowners would have qualified for HAMP if Bank of America and the other largest servicers had done an adequate job of handling homeowner applications.


Author’s Note: To learn more about how bankruptcy can help with consumer mortgage issues check out our Bankruptcy FAQ.  For more information regarding loan modifications subscribe for our free ebook 10 Secrets To Successful Loan Modification.


Who Else Did JPMorgan Chase Lie To About Mortgages?

Despite mounds of documentary evidence of  mortgage fraud that JP Morgan Chase was fully aware of the lies it told investors about flawed mortgage investments, the bank continues to dodge responsibility for the financial crisis.  Included in court documents are e-mails, exchanged amongst JP Morgan Chase employees, that show the bankhired independent analyst to review the quality of home loans packaged to be sold to investors before the  housing market collapse.  Although the independent review demonstrated that up to 80% of the loans did not meet underwriting standards — including loans to unqualified borrowers, loans made despite missing documents and based upon fraudulent home appraisals — JP Morgan sold the loans as securities and lied to investors about the number of delinquent loans.  Still, it looks like they will get away with it with a slap on the wrisst that will leave it the  most valuable bank in the country.

Below Alyona Minkovski and politics reporter Arthur Delaney of HuffPost live  discuss the meaning and the likely repercussions from the documented lies told by the bank.


Author’s Note: To learn more about how bankruptcy can help with consumer mortgage issues check out our Bankruptcy FAQ.  For more information regarding loan modifications subscribe for our free ebook 10 Secrets To Successful Loan Modification.


Forbearance Agreements In NJ Subject To Consumer Protection Laws

The Supreme Court provided homeowners with additional protection when it held that forbearance agreements were subject to the state’s consumer protection laws.

The court’s decision in Gonzalez v. Wilshire Credit Corp., A-99-09.



National Consumer Law Center Statement Regarding CFPB Mortgage Servicing Rules

The Following is the statement released by the National Consumer Law Center in response to the CFPB’s new servicer rules.
WASHINGTON─ “We commend the Consumer Financial Protection Bureau for seeking to address broad problems in the mortgage servicing industry and for extending some sensible, enforceable, guidelines to the entire market,” said National Consumer Law Center (NCLC) attorney Alys Cohen. “However, the CFPB’s final rules fail to implement the key lesson of the foreclosure crisis, that a loan modification requirement is essential to protect qualified homeowners from unnecessary foreclosures. While the establishment of industry-wide standards is important, the failure to require meaningful loan modification protections is a retreat from current safeguards under the soon-to-expire HAMP loan modification program.”

Earlier this week, NCLC published At a Crossroads: Lessons from the Home Affordable Modification Program (HAMP), which details key principles for national loan modification standards. Measured against those principles, the CFPB’s rules fail to ensure access to sustainable loan modifications for all qualified homeowners. Investors and homeowners stand to lose from the lack of a loan modification mandate. The CFPB’s new rules partially address the persistent “dual-tracking” problem, the simultaneous processing of a foreclosure and a loan modification. According to Cohen, “the CFPB rules require servicers who choose to do loan modifications to finish a review before starting a foreclosure. These provisions will help homeowners who respond to initial outreach by mortgage servicers. The rules also restrict a servicer from moving for a foreclosure judgment or order of sale, or from conducting a foreclosure sale, where the borrower submits a complete application for a loss mitigation option after the foreclosure process has commenced but more than 37 days before a foreclosure sale. While providing some additional protections to borrowers in judicial foreclosure states, this requirement provides significantly less protection to homeowners facing non-judicial foreclosure procedures. Moreover, because many homeowners will not know the sale date until after the 37-day mark, and will generally face difficulties knowing when the 37th day falls (because many sales are scheduled with less than 37 days’ advance notice), the rules give servicers an opportunity to manipulate the system. All homeowners need protection during the foreclosure process, with rules that recognize the real timelines they face. The rules also appear to deny homeowners an appeal of a loan modification review where that application has not been submitted 90 days prior to the sale. Every homeowner deserves a fair hearing and the rule does not provide for that.”

The CFPB’s new rules also implement the error resolution provisions of the Dodd-Frank Act. “We appreciate the CFPB incorporating a provision in the error resolution requirement so that homeowners have an opportunity to address all servicer errors, not just a select list,” said Cohen.

The federal banking agencies are currently drafting a guidance document on mortgage servicing, which, along with the Bureau’s own rulemaking process offers an opportunity to address the shortcomings in the CFPB’s rules. “We hope the agencies and the CFPB will take steps to completely end dual tracking, and to ensure that qualified homeowners have enforceable access to affordable loan modifications where the modification also provides a benefit to investors over foreclosure,” said Cohen. “Servicers must not be permitted to continue wrongful foreclosures.”


Author’s Note: To learn more about how bankruptcy can help with consumer mortgage issues check out our Bankruptcy FAQ.  For more information regarding loan modifications subscribe for our free ebook 10 Secrets To Successful Loan Modification.


BEEN THERE, DiY’ED THAT: How One Young Lady Defended Her Own Speeding Ticket

Been There, DiY'ed That

Been There, DiY'ed That

The “Been There, DiY’ed That” feature of DIY Lawyer provides us an opportunity to present real life stories of how people handled there own legal matters.   The experiences related here should be instructive to others on what to do and what not to do in similar situations.   In this installment of “Been There, DiY’ed That”, T.J., a 20-year old woman, received a speeding ticket which required a court appearance and threatened to put her first points ever on her driving record.  However, unable to afford an attorney, she did consult with an attorney who advised her how to handle the matter herself.  As she had from the police stop, she continued to be polite and was not afraid to ask the critical question with deferential politeness, “Can I have a reduction of points.” The interview was conducted by DiY Lawyer writer Martha Taylor.

Diy-Martha Taylor:  Tell us what happened leading up to you getting a speeding ticket.

TJ: It was Monday, February 28, 2011 around 8:30am.   I was on my way to school.  I was driving on Route 1 when I was exiting and I saw a white police van flashing with sirens. I couldn’t understand why I was being pulled over.  The policeman said he clocked me at 74 mph in a 55 mph zone.  The officer asked me for my driver’s license and registration and gave me a ticket 15 minutes later.  I had never gotten a ticket before and was very upset that I had gotten myself in the situation.

Q:  What were the consequences of the offense?

A:  I understood the original charge would result in about a $200.00 fine in addition to four points on my driver’s license.  The area I was pulled over in was a double fine area.

Q:  How did you feel when you initially went to court?

A:  When I walked into court my court time was at 1:00 pm.  I dressed in jeans and Uggs, prep style.  Everyone else seemed to be in sweat pants and very, very casual clothing.  Someone had pajamas on, or that’s what they looked like.  As I stepped inside the court building, I was filled with anticipation, anxiety, depression and state of shock.  I felt like I did not fit in because other [people] present were there for  robbery, driving without a license, etc.  It was scary.  I cried 5-6 times before I saw the judge.

Q:  Who did you speak to while in court?

A: The first person I spoke to was the prosecutor.  I asked the prosecutor to reduce the ticket to a no point ticket. She rudely said, “No, you were doing 24 miles over the speed limit and you are going to get some points.”  At this point, many things were going through my head:  my dad was going to take me off his insurance; how was I going to get to school, work, etc.?

I cried and sat back down.

Q:  How did you speak to the prosecutor?

A:  I spoke in a conservative soft-spoken tone.

Q:  What were your results? Read More →


Lender Processing Services’ Law Firm And Judge Targeting Foreclosure Defense Pioneer

Apparently,  mortgage servicers are relying on their Florida lawyers to get payback for the excellent work performed against them by a foreclosure defense legal aid attorney in Florida.   According to a report in Folioweekly, pro-bank members of the Florida bar are seeking a political solution to the termination of attorney April Charney and her legal aid boss. Charney was amongst the first attorneys to raise the issue of whether the mortgage servicers and lenders actually had the right to sue homeowners to foreclose on mortgages.  Charney is one of a number of attorneys who assist lawyers all over the country in defending homeowners against the banks.  Consumer attorneys have issued a call to action and ask those willing to help to contact JALA (Jacksonville Area Legal Aid) to let them know their actions are not occurring in the dark and they should cease and desist efforts to fire her simply because they feel “embarrassed” by her efforts to expose the systematic injustice in foreclosures and bank collection practices.

via naked capitalism via  FolioWeekly:

In some ways I’m surprised this hasn’t happened sooner, but pro bank members of the Florida bar are apparently orchestrating an effort to get Charney fired from Legal Services of Jacksonville, which on its face is absurd. If you want to help April, 4ClosureFraud has provided names and contact information of the JALA (I assume Jacksonville Area Legal Aid) board members. I hope you tell them (nicely) that getting rid of Charney, given her track record, would raise a lot of questions and likely very unfavorable press for JALA.

By way of background, Lender Processing Services, a firm that provides various software platforms and other services to mortgage servicers, is in a great deal of hot water. Its stock is down over 50% despite buybacks to prop it up, largely as a result of litigation taking aim at its dubious business model (see here and here for background).

Here are the details from FolioWeekly:

It’s not really surprising that attorneys whose law firms represent those big mortgage holders would like to silence Charney and punish her boss JALA executive director Michael Figgins for not reining her in. But it’s shocking that attorneys from Holland & Knight, the firm that represents LPS, and a local judge would be working behind the scenes to convince the JALA board to fire Figgins as a set up to go after Charney.

On August 3, Holland & Knight attorneys Buddy Schulz and Dominic MacKenzie and Duval County Circuit Court Judge Hugh Carithers hosted an informal lunch at the law offices with 10 members of the board of Jacksonville Area Legal Aid and JALA board president Hugh Cotney. A painting of a pod of sharks that hangs in the lobby of Holland & Knight offices set the tone.

Schultz, MacKenzie and Judge Carithers, who told the group he wasn’t speaking as a judge but as a private person, yeah right, described Charney as a “loose cannon.” Cotney seemed to share their view. They criticized her for embarrassing Jacksonville by bringing Rolling Stone writer Matt Taibbi to the foreclosure court of Judge A.C. Soud. (Taibbi wrote a wickedly scathing story on foreclosure in Florida that was published in November 2010 issue of the magazine). Charney’s lawsuit against the sacred cow nonprofit HabiJax was also discussed. Charney represents residents of HabiJax’s Fairway Oaks subdivision, which was built on top of an old garbage dump, see Folio Weekly, “Buyer’s Remorse,” published Feb. 13, 2007. fairway-oaks-1 fairway-oaks-2 fairway-oaks-3 fairway-oaks-4 fairway-oaks-5 fairway-oaks-6 fairway-oaks-7 (The details of negotiations between Legal Aid and Habijax have been discussed at JALA board meetings but are supposed to be kept private, and it bothered one board member that the Holland and Knight attorneys, who aren’t on the board, seemed to know about it.)

The lunch was billed as a casual one, but the intent was to build a consensus to replace Figgins. His contract is up for review and board members will be asked to make of vote of confidence in his leadership at their September meeting. In addition to Charney, the attorneys also opposed the surcharge on criminals tagged for JALA and a commercial where Figgins talks about the support of JALA by personal injury attorney Eddie Farah. A board member said it was wrong that Figgins wasn’t there to defend himself. “It was kind of a covert friendly little conversation over lunch,” she said, “but it felt like a mutiny.”


Author’s Note: To learn more about how bankruptcy can help with consumer mortgage issues check out our Bankruptcy FAQ.  For more information regarding loan modifications subscribe for our free ebook 10 Secrets To Successful Loan Modification.


Citibank Implicated In Interrogation Murder Over $5,700 Credit Card Debt


via Jonathan Turley blog via Washington Post

The death of Irzen Octa in interrogation in Jakarta has raised an outcry internationally. What is a bit surprising is that his interrogators were not Indonesian police but Citibank employees. The company who proclaims “your Citi never sleeps” appears to harshly interrogated the man for hours in a tiny room over just $5,700 on his Citibank credit card.

Octa, 50, was reportedly held in a room no larger than “the size of a broom closet” and was beaten. While some insist that there were blood stains on the floor, others question the report of physical abuse.

The bank offered Octa’s family a monthly stipend and life insurance for his widow, but she is suing for millions.

Even without physical abuse, there would be a powerful false imprisonment claim in the United States in the time, manner, and place of the interrogation as we have seen in other cases.