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Bankruptcy has the ability to cease or delay legal action from lawsuits related to credit card debt. How the filing process provides a solution for the issue will likely depend on which chapter you file; whether it be Chapter 7 or Chapter 13. For the most part, debtors may have debt related to the suit [...]
You hear and see ads all over the place. “We will stop your foreclosure!” “9 out of 10 customers keep their homes!” “Modify your loan with us, guaranteed!” You might have even received personalized letters in the mail that make similar claims. If it sounds too good to be true, it probably is.
Scammers are all too eager to go after those who need help the most. Consumers want desperately to keep their homes, reduce their mortgage payments, and just be more financially stable. When companies offer them a light at the end of the tunnel, many are willing to travel down that path. Hopefully you will able to see through the false promises these companies make and avoid becoming another victim of their all-too-common scams.
Scam Warning Signs
Look for some of these telltale signs that you may be dealing with a scammer:
- Scammers often guarantee they can get the lender to modify your loan or stop foreclosure. No one but your lender can guarantee this—period. They may claim they have an outstanding relationship to work these things out. Do not believe them.
- If you hear a lot of incredible statistics, like 99% of customers get their loans modified, be highly skeptical. If they are shouting these kinds of “results” from the rooftops, run for the hills.
- No trustworthy company will tell you to avoid talking with your lender, attorney, or a counselor. You have to ask yourself, “Why would they not want me to speak with my lender or attorney?” They are up to no good, and they want to take your money.
- Fees are always a suspicious topic. First, know that a mortgage relief service provider may not legally charge you an advance fee, unless it is an attorney. (In which case, make sure the provider actually is an attorney. Many scammers falsely claim to be associated with a law firm!) If they are willing to violate the law, they are willing to steal your money. Second, do not pay for any services or any “initial fee” by wire transfer, or by sending cash or a cashier’s check. If you are dealing with a scammer, you will never see that money again.
Seeking Real Relief
It is unfortunate that so many are so willing to prey on distressed homeowners. Fortunately, there are a lot of resources offering legitimate help, and there are a lot of alternatives to foreclosure.
You may consider contacting HUD approved housing counseling agencies near you, or the Homeownership Preservation Foundation, which is a nonprofit organization that may be able to help you with loan modification and foreclosure prevention.
Of course, your servicer can discuss some of your options with you, including a possible loan modification, repayment plan, reinstatement, forbearance, short sale, or deed in lieu of foreclosure. Foreclosure is not in their best interest so they may work with you.
You may want to contact an attorney who can explain other alternatives, such as Chapter 7 or Chapter 13 bankruptcy. Also, an attorney can explain all of your options in a way that you can understand. An attorney can also help you determine which option is right for you, help you prepare for and execute your course of action, and explain any possible effects of each of your options.
If you are struggling with your mortgage, act quickly. The longer you wait, the fewer options you have.
See Related Blog Posts:
Alternatives to “Foreclosure Defense” Offer Better Results
Fannie Mae Loss Mitigation Options
The post Spotting Mortgage Relief Service Scams appeared first on AKB.
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for April 02, 2013 Pension Issue in Stockton, Calif., Bankruptcy N.J. attorney general to appeal bankruptcy ruling in favor of Birdsall Services Group Guggenheim Adds to Its Bankruptcy Group
Medical debt continues to be one of the top reasons why bankruptcy is filed. Yet, many debtors are unaware of how the filing process can help stop medical debt collections. Whether you’re facing a pending lawsuit for an outstanding balance, having wages or funds garnished from your account, need legal assistance in making affordable payments, [...]
Filing for bankruptcy without an attorney, also known as “pro se,” may not be as easy as it seems since it can be a challenge to complete successfully. Cases filed with the bankruptcy court need to be handled appropriately in order for the court to consider discharging debt associated with the filing. Meaning, an experienced [...]
The FTC has been busy cracking down on mortgage relief scams. Just this year, the FTC has obtained settlements from over 20 individuals and companies involved with scamming distressed homeowners.
Most recently, two individuals and seven companies settled FTC charges that they victimized over a thousand people through “mass joinder lawsuits” and “forensic loan audits.” These defendants allegedly violated the Mortgage Assistance Relief Services (MARS) Rule, which aims to curb deceptive and unfair practices related to such services.
Mass Joinder Lawsuit Scam
The FTC alleges that Sameer Lakhany, Brian Pacios, Precision Law Center, Inc., Precision Law Center LLC, National Legal Network, Inc., and Assurity Law Group, Inc. targeted consumers with a mass joinder scam. The defendants allegedly promised homeowners that they could stop their foreclosures or obtain some other mortgage relief if they joined together to sue their lenders. The defendants represented themselves as a law firm called Precision Law Center and charged between $6,000 and $10,000 in up-front fees. Unfortunately for the victims, every suit was dismissed soon after being filed.
Forensic Loan Audit Scam
Lakhany was also involved in a “forensic loan audit” scam, along with The Credit Shop, LLC, Titanium Realty, Inc., and Fidelity Legal Services LLC; but the defendants allegedly held themselves out as nonprofit organizations with the domain names “FreeFedLoanMod.org,” “HouseholdRelief.org,” and “MyHomeSupport.org.” The forensic loan audit scam sells consumers an auditing service, which supposedly finds lender violations in mortgage documents. In this case, the defendants generally charged nearly $800 up to nearly $1,600 for this service. According to the complaint, the defendants told consumers that lender violations would force lenders to favorably modify their loans and that violations are found at least 90 percent of the time. Allegedly, the audits may have never actually led to a single favorable loan modification for the victims.
Settlements
As part of the settlements, the defendants are required to surrender many assets and pay $4.75 million redress in total. All but Assurity Law Group, Inc. are banned from mortgage relief and debt relief services, through Assurity will be required to surrender $100,000 in funds and has been ordered to cease any deceptive practices.
Other FTC Settlements
In February, the Ryan Zimmerman, Consumer Advocates Group Experts, LLC, Paramount Asset Management Corporation, and Advocates for Consumer Affairs Expert, LLC settled with the FTC for allegedly preying on consumers using the forensic loan audit scam. The defendants charged nearly $2,000 or more for the audits, but they of course failed to make good on their false claims, allegedly. In addition to a receiving a $3.5 million judgment against them, the defendants have been banned from marketing relief services or products, as well as from making any misleading claims about any other type of product or service.
In January, eight defendants settled with the FTC over charges that they sold fake relief services to distressed Spanish-speaking homeowners over the phone. The defendants include David F. Preiner, Daniel Hungria, Freedom Companies Marketing, Inc., Freedom Companies Lending, Inc., Freedom Companies, Inc., Grupo Marketing Dominicana, Freedom Information Services, Inc., and Haiti Management, Inc. The defendants allegedly collected over $2 million from consumers over three years, but simply did not provide the services they falsely claimed they could provide. As part of the settlement, the defendants received a $2.39 million judgment, are banned from marketing relief products or services, and are prohibited from making misleading claims about anything they may advertise.
You Have Options
There are many options available to struggling homeowners. You can always speak with your servicer, a credit counselor, or an attorney about those options. Any company that offers its mortgage relief services and instructs you to avoid speaking with any of the above is breaking the law. Stop business with them immediately and contact an attorney who can help you with your situation.
See Related Blog Posts:
Fannie Mae Loss Mitigation Options
Be Aware of Common Debt Collection Scams
The post FTC Cracking Down on Mortgage Relief Scammers appeared first on AKB.
You definitely have the ability to keep your house and car in a Chapter 7 if you are current on your payments, provided you do not have significant nonexempt equity in those properties. Most people who come to see me for a Chapter 7 and who may be homeowners do not have significant equity. It+ Read MoreThe post Can I keep my house or car if I am current on my payments in a Chapter 7? appeared first on David M. Siegel.
There are some cases under Chapter 7 where I will file a case prior to being paid in full. Those cases involve wage garnishments, bank citations or other court appearances required that would be a burden to the debtor and would actually hinder the debtor’s ability to pay the law firm in the long run. + Read MoreThe post As an attorney, will I file a case before being paid in full? appeared first on David M. Siegel.
Did you put off filing bankruptcy until after somebody got a judgment against you?
Pre-bankruptcy judgments are liens on property you own before the bankruptcy. (Sometimes they can be removed; sometimes they can’t.) But they do NOT become a lien on property you buy after the bankruptcy.
Your pre-bankruptcy judgments are not a lien on your after bankruptcy house. Not legally.
At least, not legally.
The purpose of bankruptcy is a new start in life and a clear field for the future. Many people bounce back from bankruptcy and become home owners in a few years. Later when they go to sell that new home, those pre-bankruptcy judgments sometimes rise from the grave.
Not legally. But they do. Like zombies.
Michael Wells, an experienced bankruptcy lawyer in Midlothian, VA, gave this recent example.
Client comes to me with a problem: he is trying to complete a sale on his house, but is being told that he must “take care of” three civil judgments that were discharged in a 2007 Chapter 7. He did not own the real estate pre-bankruptcy; it was purchased several years later. The real estate attorney for the seller contacted the lawyers for the judgment creditors and has been sent fax letters with demands for payment from the proceeds of the sale. The paralegal handling the sale claims “judgments last for 20 years” and does not believe client when he explains that these are discharged debts and never attached to the real estate.
There are two problems here. Dumb and dumber.
The title people handling this transaction are dumb. The paralegal who says “judgments last twenty years” should know “but they don’t attach to new property after bankruptcy.” That’s the basic thing that everybody who has anything to do with real estate should know about bankruptcy
If you are in Virginia and you have that problem, there’s a smarter title company you can use. The lawyer for Old Virginia Title, in Fairfax VA, is Richard Bolger, who has experience in both real estate law and bankruptcy law. He knows that pre-bankruptcy judgments don’t attach to after-bankruptcy real estate. In our example, Old Virginia Title would do the title work approving the sale without paying those judgments.
If the title people are dumb, the collection lawyers for the judgments dumber.
First those collection lawyers should also know that the judgment liens don’t attach to after bankruptcy real estate.
Second, they should know that in asking for payment they are violating the bankruptcy discharge injunction.
Annandale bankruptcy lawyer Richard Hall recently got Judge Mayer to slam collection lawyers who did that exact thing. In fact, I think Judge Mayer gets mad enough that he will slam everybody in sight. In this example, he’d slam the dumb title people, too.
(Bankruptcy Judge Robert Mayer says that the judgment creditor is required right after the bankruptcy to show the discharge in the county land records. So even dumb title people aren’t confused. The lawyers in our example have two bankruptcy violations. Number One: They should have already updated the land records to show the judgments were discharged. Number Two: They should NOT try to collect on discharged debts.)
Finally, the collection lawyers who demand payment on a discharged debt are also violating the Fair Debt Collection Practices Act. They are making a false representation of the legal status of a debt. There’s thousand dollar statutory penalty under the FDCPA. That’s on top of penalties by the bankruptcy judge.
So, if you go to sell your after-bankruptcy house, and you’re told you have to pay your pre-bankruptcy judgments, don’t be fooled by dumb title people and dumber collection lawyers. Talk to your bankruptcy lawyer right away.
Did you put off filing bankruptcy until after somebody got a judgment against you? Pre-bankruptcy judgments are liens on property you own before the bankruptcy. (Sometimes they can be removed; sometimes they can’t.) But they cannot put a lien on a house you buy after the bankruptcy. At least, not legally. The purpose of bankruptcy is a new start in [...]The post Can they put a lien on a house I bought after the bankruptcy? appeared first on Robert Weed.
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