Bank of America Lied to Homeowners When Denying Loan Modifications, Says Class Action Lawsuit

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In a class action lawsuit filed in federal court in Boston last week, former employees stated that they were regularly rewarded for denials and referrals to the foreclosure department, including with cash bonuses and gift cards.  The same former employees claimed that they were encouraged to perform en masse denials and to give bogus reasons for denying or stalling HAMP loan modification applications.

According to this article in the Star-Advertiser, this is not the first time Bank of America and other mortgage servicers have been accused of such behavior.  Numerous lawsuits have already reached settlements to avoid further inquiry into such practices.

You may be one of the homeowners currently struggling with a loan modification, feeling as if you keep submitting the same materials over and over to no avail.  We specialize in helping out people in this situation – often bankruptcy can be the key to obtaining a successful loan mod through lowering your debt-to-income ratio and stalling pending foreclosure actions.  Please contact us now if you would like to discuss your options both in bankruptcy and otherwise.

Foreclosure “Starts” on the Rise in November 2012

The Pacific Business News reports today that foreclosure numbers for November 2012 are down 73% compared to the same month last year.  Foreclosure starts, a number that includes notices of default filed or properties with lawsuits pending, rose 94% in November 2012, as compared to October 2012.

Please give us a call for a free consultation if you are worried about a possible or pending foreclosure.  We’d be happy to sit down with you to explore your options.

FHFA Says “No” to Proposed Mortgage Debt Forgiveness Program

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The Financial Times reports that the Federal Housing Finance Agency (regulator for Fannie Mae and Freddie Mac) has blocked the Obama administration’s hoped-for program that would reduce the principal amount on mortgages worth more than the underlying homes.  It was hoped that the proposed program would serve to reduce defaults and foreclosures; however, the FHFA has determined that the costs of implementation as well as less than complete take-up by potential program participants will likely result in additional costs to taxpayers.  Treasury secretary Tim Geithner has criticized the FHFA’s decision and urged reconsideration.

Unfortunately, this isn’t good news for homeowners who are under water on what they owe to banks like Bank of America, J.P. Morgan Chase & Co., and Wells Fargo & Co.  It means that if you have been waiting for a chance at a principal reduction through this program, you will have to wait longer for a program that may never be implemented.  This is bad news for families and individuals that are in need of help now because they fell behind on mortgage payments during tough times or are having trouble paying their mortgage.

If you are behind on your mortgage payments or failing to pay other bills in order to make your mortgage payments every month, we think you would benefit from a discussion with the attorneys at Abelmann Law.  Please give us a call or email to schedule a free consultation.

Bank Of America’s Mortgage-Modification Practices Border On ‘Unconscionability,’ Judges Say

Posting this link to the Huffington Post without further comment other than to say that we see this borderline ‘unconsionability’ on a daily basis.

If you are contemplating bankruptcy, working on a mortgage loan modification, or fighting foreclosure and you’re fed up with feeling like your creditors are giving you the “bait-and-switch,” then please contact us for a free consultation.

Report Shows Increase in Abuse by Non-lawyers Filing Bankruptcy on Behalf of Consumers

According to a new report issued by the Administrative Office of the U.S. Courts, more consumers are filing complaints alleging abuse by Non-lawyers hired to file their bankruptcy petitions.

“We have seen an increase in abuse,” said U.S. Bankruptcy Judge Maureen Tighe in the Central District of California. “The increase in ‘foreclosure rescue’ and ‘loan modification’ services seems to be the source in the past three years. The homeowners are desperate and take advice from the most questionable sources. There is a wide range of BPPs [non-lawyer bankruptcy petition preparers], from those who are well-meaning but still are giving legal advice, to out-and-out fraud perpetrators—and the down-and-out consumer debtor doesn’t know the difference most of the time.”

“In its fiscal year 2011 report, the U.S. Trustee Program said bankruptcy trustees nationwide had filed 504 actions against BPPs, with a success rate of 98.8 percent. More than $1.9 million in fines were imposed and some $419,000 in fees recovered during that year, the report said.”

At Abelmann Law, we have worked with hundreds of families in Hawaii to repair their finances, to file their Chapter 7 bankruptcy and Chapter 13 bankruptcy, and to negotiate debt settlement on their behalf.  At Abelmann Law, you have direct contact with the attorneys who are working on your case.  We strive to provide competent, quality representation with close personal attention at reasonable rates.  Because we are a small firm, we have the flexibility to adapt to our clients and their needs.

If you are considering bankruptcy, please contact us for a free consultation before deciding to take your chances filing with a Non-lawyer.

Deserving local family saved from foreclosure

Recently we helped a client who was in a very difficult situation – he was trying to stop the foreclosure process threatening his home, while at the same time caring for his ailing wife who is terminally ill. Doloroso Dumlao was being forced to choose between spending his last days with his wife and using all of his time filling out forms and coming to our office.  Calls to his lender, Citimortgage, seemed to be ineffective – I spent hours going around in circles just trying to get representatives to understand that his wife was physically unable to sign a power of attorney, affidavits, or any of the loan modification application forms due to her illness.  We were trying to help Mr. Dumlao avoid having to file Chapter 13 bankruptcy, as the mortgage was his only real debt.

After contacting several different people at Citi, in the financial services industry, and in the media, we received the good news this morning that Citi had temporarily halted the foreclosure process and would continue processing Mr. Dumlao’s loan modification and other loss mitigation options, allowing him to rest easy with his wife for the last days of her life.  The news story is here by Tim Sakahara of Hawaii News Now.

Bankruptcy is not always the best, or even the only option.  We firmly believe that quality bankruptcy attorneys will explain and help you pursue all of your options – not just the ones you think might work.  We are hopeful that the Dumlaos will be able to have peace during the next few weeks as they struggle through this stage of their lives.  We wish them our best and stand by ready to assist should the need arise.  If you or your loved ones are in financial distress and want to discuss options, please feel free to contact our office to set up a free consultation.

Family fights terminal illness and foreclosure

Wrongful Foreclosures Still Occurring

A survey published in February 2012 by three consumer-protection groups shows that “mortgage servicers continue to initiate foreclosure proceedings improperly, either while a homeowner is awaiting a loan modification or due to improper fees or payment processing.”  The three groups are the National Association of Consumer Advocates (NACA), the National Consumer Law Center (NCLC), and the National Association of Consumer Bankruptcy Attorneys (NACBA).

Unfortunately, the results of this survey are consistent with what we find here in Hawaii – many homeowners are trying desperately to obtain loan modifications or stay current on their payments, and are finding that the loan servicers completely ignore such attempts while pursuing foreclosure, forcing such homeowners to seek protection by filing bankruptcy.  The results show that about 85% of the attorneys representing homeowners awaiting loan modifications under HAMP see foreclosures occurring during that time.

While Act 48 temporarily stopped many foreclosures in Hawaii, most of the servicers have converted their foreclosure processing into judicial foreclosures, sidestepping the remedies set up by the legislature in Act 48 and continuing to reflect the problems with the dual-track system of pursuing loan modification discussions and foreclosure processing simultaneously.

Many of our clients are using Chapter 13 bankruptcy to stop foreclosure and ensure that sufficient time is allowed for their loan modification applications to be processed.   A stepped Chapter 13 plan can often provide the time necessary for a homeowner to get a real chance at having the loan modification application considered properly, and can also provide a means for the homeowner to catch up on arrears over a five year timeframe.

We are working on awareness of this issue on a state and national level so that policymakers may address this along with other problems plaguing our housing market.