Alabama Consumer Law Blog

The CL&P Blog has posted an article about some companies beginning to use text messaging as a form of debt collection. This method has some conflicts with the Fair Debt Collection Practices Act's regulations on debt collectors disclosing themselves.

Some of them, like the validation message required under section 1692g, are only required within five days of the initial communication, and so can be sent in other ways, but under section 1692(e)(11), all communications must disclose that the communication is from a debt collector.

Character constraints in texting don't allow for adequate disclosure and then a more detailed statement of the debt from the collector. Also, billing plans charge recipients for text messages and not the sender, so consumers definitely won't be happy about paying for texts that tell them they owe money to debt collectors.

That also brings up section 1692f, which prohibits unfair practices, and in subsection (5) specifically bars:

Causing charges to be made to any person for communications by concealment of the true purpose of the communication. Such charges include, but are not limited to, collect telephone calls and telegram fees.

While the above was written before text messaging it is certainly applicable to this newest development.

If you have had problems with debt collector harassment feel free to contact us through our website or by calling 205-879-2447.
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The New York Foreclosure Law Blog has posted an article about some of the difficulties that consumers face when seeking a mortgage modification. Difficulties with banks seem to be the most common. Banks are generally not equipped and are too understaffed to deal efficiently with the large numbers of modification requests sent in over the past year.

The understaffing causes a delay before the bank gets back to you or can even confirm that they received your paperwork. Loan modification departments have groups of rotating phone representatives, meaning that you won't likely speak to the same person every time you call and will spend more time giving explanations that getting answers.

This method can take months if you go it alone, and be irritating when having to deal with courts or other legal proceedings that you might not be familiar with. This article suggests that if you are interested in pursuing a mortgage modification it's easier to contact a lawyer who can get you faster results.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have more questions about mortgage modification, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Yahoo!Finance has posted an article that gives insight into how social networking websites can work against you in several situations, including debt collection, employment prospects and scams that can lead to identity theft.

Jobseekers should automatically assume that potential employers will do a Google search of their name and often social networking sites are some of the first results. You should take down questionable material and pictures. Or just set your profile(s) to private. Even established employees can sabotage themselves by posting negative material about their company or boss on sites such as Twitter. It's also important to remember that even material you set to private is still on the internet and thusly still accessible.

Social networking sites are also being used by debt collectors to track down debtors.

"If they don't have a good phone number or the mail's being returned, a lot of them use Facebook to find out if they have a different address or their employment information."

Debt collectors also keep an eye on debtors, not necessarily by contacting them, but by watching what the debtor posts. Some debt collectors violate legal and ethical boundaries and assume fake identities online to closer watch the debtor and possibly gain more information. Of course, debt collectors can also use this opportunity to further harass their debtors.

People provide social media sites with such a large amount of personal information that scams and identity thieves are rampant. Identity thieves can use seemingly innocent information to forge access your accounts.

If you have a public Facebook profile that gives your birth date and your parents' names and that kind of thing, they can provide the answers to security questions that your bank might have on its Web site.

Be wary of people who try and add you as friends, on sites such as Facebook, who you don't actually know. They might be hackers or scammers or people trying to sell products.

Being smart with the information you put online can save you a lot of trouble in the long run. Be careful of what you say about yourself and other people online, don't add people you don't know and always be mindful that identity thieves and hackers are on the same website.

If you have had issues with debt collectors or identity theft, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

MortgageLawNetwork.com has posted an article that gives advice on when is the right time to contact a foreclosure defense attorney. Andy Miofsky, author of the article, lists four circumstances where it might be in your best interest to contact a foreclosure attorney.

#4. You have received a Summons and Complaint for foreclosure and are now being sued by your mortgage company. You are in danger of losing your property and usually have 30 days or less to respond.

#3. A collection lawyer sends you a letter that gives you a deadline to catch up on delinquent mortgage payments and also threatens foreclosure. The next step is for the bank to sue you.

#2. Your mortgage company sends out a notification that your payments are in default. The next notification you receive should be a letter from the mortgage company's lawyer.

#1. If you are knowingly behind on your mortgage payments, go ahead and contact a mortgage defense attorney to plan a strategy and confront the problem head-on.

If you would like further information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have received one of the above notices, or have other questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Yahoo!Finance has posted an article that discusses traits that victims of identity theft have in common. Experian, a credit bureau, has conducted a study that indicates identity thieves go for "affluent suburban consumers" who often live in higher-income neighborhoods with few renters and own one or more new or luxury vehicles. Of twelve categorizations of people, three were most highly sought after my identity thieves: "affluent suburbia," "upscale American" and the more middle-class "American diversity."

Experian says these consumers live in and around metropolitan areas, favor leisure activities, have college diplomas or advanced degrees and more often tend to be married.

Experian identifies the common activities of those most often victimized by ID theft:

• Tennis
• Politics
• Foreign travel
• Charities/volunteering
• Cultural/arts
• Skiing

Where consumers live is also important to an identity thief. For example, it's easier to steal a discarded document in a suburban area. Also, these affluent households "may have domestic help and service people who may have the opportunity to steal personal info from the home that can be used to acquire credit."

Lenders also target these groups of people. Because of this, thieves have an easier time getting services and credit in the victim's name.

How to protect yourself can be tricky because you can't control where your information goes after it leaves your hands. Banks and other financial institutions have an obligation to guard your information. However, this article says that lenders need to strike a balance between guarding consumers' information and still making it possible to get a loan or credit without major hassles.

If you should be a victim of identity theft, consider a credit freeze even though it might be a bit more work on your end. Credit Monitoring alerts you when changes are made to your credit score.

If you have been a victim of identity theft or have questions or concerns on the subject, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

MortgageLawNetwork.com has posted an article about a recent investigation into accusations against about 300 California law firms that were involved in loan modification scams, according to a California Bar Association report. "Typically, homeowners facing foreclosure complain that they paid attorneys who then did nothing to help them keep their homes.”

Mortgage modifications rarely work because the terms never go far enough to solve the long-term problem – massive negative equity. The only way a homeowner can eliminate negative equity is by convincing the “lender” that doing so is in the “lender’s” best interest. This ONLY happens by fighting the foreclosure in the state court case. A good litigator can shift leverage away from the lender and toward the homeowner, forcing the lender to offer more meaningful solutions.

California has seen huge numbers of unemployment and foreclosures, yet homeowners all over the country should avoid lawyers who only do loan modification "workouts" with a loan servicer rarely achieve long-term success and the foreclosure likely won't be permanently resolved. You should never hire a lawyer who does not intend to defend the foreclosure in state court.

If you would like more information about foreclosures, please check out our articles The Three Stages of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have more questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

The mortgage companies want it to be. Right now Florida, unlike Alabama, is a judicial foreclosure state which means the mortgage companies and banks that want to foreclose have to prove their case in court. They don't like to do this. Because they usually can't. Here's what a friend of ours in Florida, Chip Parker, says in a scathing blog post about efforts in Florida to turn the foreclosure process into a non judicial one:

As a Florida foreclosure defense attorney with over 500 actively defended foreclosure cases, I believe the banks have “thrown in the towel” in the cases I’m defending. I cannot recall the last time the plaintiff in a foreclosure case came to a court hearing with an intelligent argument that resulted in a ruling against the homeowner.

Since the plaintiffs rely on fraud in almost every foreclosure case, good defense lawyers are always frequency-tuned to find the lies, and now that Circuit Court judges have been exposed to the stench of foreclosure mill pleadings, more judges are looking at each foreclosure with more skepticism.

We in Alabama who face foreclosures that quickly proceed through the Three Stages Of Foreclosure often look at Florida with some envy since the courts at least get to review the foreclosures. We did not expect that to change but it seems the mortgage companies want to change the rules since they are not winning under the current rules.

If you live in Florida and are reading this - let your representatives know you oppose this non sense.

If you live in Alabama and are facing foreclosure, make sure you stand up for your rights and fight back against wrongful foreclosure. We don't have judicial review unless you take your case to court to stop wrongful foreclosures.

Our tele seminar on Wrongful Foreclosure In Alabama happened last month and if you live in Alabama and would like the audio let us know. We are getting a transcript but don't have it typed up yet.

Also if you have already been foreclosed and are facing an Ejectment Action in Alabama, on Tuesday February 9, 2010 we are offering an hour long tele seminar on the Five Critical Mistakes Often Made When Sued For Ejectment In Alabama. This is free and you can contact us to let us know you want to be on the call.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Feel free to contact us through our website or you can call us at 205-879-2447.

The Birmingham Business Journal has posted an article about the huge rise in Alabama foreclosures. Nearly one in every 107 households in 2009 was dealing with a phase of foreclosure. Foreclosures have risen 257% in Alabama since 2007.

Ourbroker.com has also posted an article that further elaborates on the massive rise in foreclosures nationally. 2009 saw a rise of 21% in foreclosures, which is 2,824,674 properties, because of the 7.2 million jobs that have been lost since 2007.

Going back to 2005, the annual totals from RealtyTrac look like this:

___ 2009 — 3,957,643 foreclosure filings — up 21 percent.

___ 2008 — 3,157,806 foreclosure filings — up 81 percent.

___ 2007 — 2,203,295 foreclosure filings — up 75 percent.

___ 2006 — 1,259,118 foreclosure filings — up 42 percent.

___ 2005 — 885,468 foreclosure filings.

However, due to state legislation, loan modifications and other short term factors, foreclosures actually decreased for about a four month window. However, the crisis is too severe for the turnaround to have lasted.

“In the long term a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.”

December 2009 saw 349,519 foreclosure filings, up 14% from November and up 15% from December 2008. Four states have seen the most dramatic rise in foreclosure rates:

___ Alabama (up 156.26%)

___ Hawaii (up 182.64%)

___ Idaho (up 101.61%)

___ Mississippi (up 135.59%)

___ West Virginia (up 115.91%)

This percentage for Alabama matches up with the data reported by the Birmingham Business Journal.

If you would like more information on foreclosures, please read our articles The Three Stages of Foreclosure in Alabama and Wrongful Foreclosures in Alabama.

If you have further questions feel free to contact us through our website or by calling 205-879-2447.
You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

BusinessWeek.com has posted an article about a recent identity theft case. Leonardo Darnell Zanders was convicted for helping to lead a ring of identity theft that caused $1.5 million in losses to financial institutions, including Ben S. Bernanke, a Federal Reserve Board Chairman, and his wife among the victims. Zanders must also repay $1.4 million in reimbursements.

Zanders pled guilty for...

conspiring to commit bank fraud. He helped direct the scheme to use the IDs and stolen bank information to impersonate victims and make “split” transactions, depositing a check drawn on the bank account of another victim, and then siphoning the money out of the falsely inflated account, court records show.

Darrell Earl Price, a co defendant in the trial, testified that Zanders gave him checks belonging to the Bernankes. Mr. Bernanke said that his family was just one of about 500 families affected by Zanders' crime ring. Zanders acquired the Bernanke's bank information after Mrs. Bernanke's purse was stolen.

Identity theft is one of the fastest growing crimes in the United States, victimizing about 700,000 people a year. Consumers should certainly be taking extra precautions to protect themselves from becoming identity theft victims themselves.

If you have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

American Banker has posted an article, written by Kate Berry, about two possible outcomes of the current mortgage crisis. Several hundred homes thousand homes have been repossessed and are n the process of foreclosure, and several million homes that have already been foreclosed. Such staggering numbers bring up a difficult question: "How long can lenders put off dumping these properties?"

There are two ideas of what will happen:

One group says a breaking point will come in the second or third quarter: The supply of these distressed homes will get so big that banks and mortgage servicers will have no choice but to begin moving more borrowers into foreclosure and working through their stockpiles of seized collateral...First American CoreLogic, an analytics unit of the Santa Ana, Calif., title insurer First American Corp., has estimated that 1.7 million homes make up the shadow inventory — properties that have been repossessed, are in foreclosure, or are seriously delinquent. This supply is not included in the official measure of inventory — amounting itself to 3.75 million homes - listed in Multiple Listing Services across the country.

Banks are in the difficult situation of trying to figure out what to do when the shadow inventory hits the market to prevent real estate prices from plummeting. Many think the situation will last longer because of programs like Obama's Home Affordable Modification Program.

"The time line for a recovery has been stretched out, because some of these government programs can't cleanly separate out the borrowers who can be saved from those who can't," she said. "Five years from now seems to be the time line for a lot of these servicers."

Servicers have approved 46,056 mortgage modifications under HAMP. Roughly 25% of the 787,231 borrowers in the program are expected to not make payments and drop out.

To speed the resale of foreclosed properties, the Department of Housing and Urban Development said Friday that it will temporarily waive a rule that restricts homebuyers from obtaining Federal Housing Administration-insured mortgages when the seller has owned the house for fewer than 90 days.

Pendley said she expects 65% to 70% of the small group of borrowers who received permanent mods to redefault within a year, largely because so many of these borrowers have large nonmortgage debts and they stretched to buy homes they could not afford.

Many experts say banks are expecting the government to come up with more money to fix the problems by tweaking the program to address borrowers who are unemployed and those who have negative equity.

If you would like more information about foreclosure, check out our articles Wrongful Foreclosures in Alabama and The Three Stages of Foreclosure in Alabama.

Feel free to contact us through our website or by calling 205-879-2447 if you have further questions or concerns.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Forbes.com has posted an article with tips you can use to clean up your credit score. First, get your credit report. However, be cautious when obtaining a copy as many advertisements for a free credit report can be scams. The Fair Credit Reporting Act enables you one free credit report a year from three major agencies. You can get a report from the FCRA in as little as 60 days if you have been denied credit, are unemployed, or have been a victim of identity theft.

Next, contact the creditor and credit reporting agency if there are any discrepancies on your credit report. An official dispute should be sent to both places in writing and include things like copies of canceled checks. If the error is the reporting agency's fault you should contact them directly.

You should try to bring your score up to the next round number, even if that is just a few points. For example, a score of 710 may be eligible for a mortgage company's best rate, but being as close as a 705 can cost you thousands of dollars. A good suggestion is to get a credit card with a low limit. Use it to buy some things that you would normally pay for with a debit card or cash and paying the balance off each month will boost your score.

Cancelling an unused card can actually hurt your score. If you must cancel cards, keep the ones with the oldest accounts as length of time is important when determining credit scores.

...reputable sources say that canceling an unused card can actually hurt your score rather than improve it. The reason is because in the eyes of the reporting agencies, you'll have a higher utilization ratio, or higher total outstanding credit vs. what you have available to you. You'll essentially have the same outstanding balance as you did the day before (assuming you haven't paid anything down), but you'll have less credit available to you.

Before doing something major, like searching for a mortgage, you'll want any credit repairing you do to show as soon as possible. Some lenders offer rescoring services in as little as 72 hours as opposed to thirty days. Your payment history is still the most important thing when factoring a credit score. If you're behind on payments, do your best to catch up with the accounts you currently have and don't open new ones.

If you have questions or concerns about your credit report, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

The New York Times has posted an article about the current financial states of Fannie Mae, The American International Group, GMAC and Freddie Mac. Despite receiving massive amounts of money in government bailouts, the companies are still not able to begin to repay the debt. Actually, it looks like they will probably will be given more taxpayer money "from the government just to keep up with their existing government debts."

Though the four are not in all the same businesses, they were caught in one of the same traps: They sold mortgage guarantees — in some cases to each other. Now when homeowners default, as they are doing in record numbers, these companies are covering the losses. Essentially, taxpayer money to these companies is being used partly to protect banks and other investors who own the mortgages.

Fannie Mae and Freddie Mac, which buy and resell mortgages, will likely receive another $400 billion this year from the Treasury. Together, the two companies have used $112 billion. GMAC, which finances auto sales, was already given $13.4 billion and is in negotiations for another $5.6 billion "because a government “stress test” showed it was still too weak."

A.I.G., the insurance conglomerate, recently drew $2 billion from a special $30 billion government facility, which was created in the spring after a $40 billion infusion proved inadequate.

Altogether, the four companies have been given or have been promised a total of $600 billion... and it may climb up to $1 trillion if the government doubles its Freddie Mac and Fannie Mae support.

A spokeswoman said that Freddie Mac and GMAC have made all their scheduled payments to the Treasury. A spokeswoman for AIG has said that repaying the taxpayers will be difficult and depend on the market. Fannie Mae also said it will have trouble repaying the Treasury.

If you would like more information on mortgages and foreclosures, please read our articles The Three Stages of Foreclosure in Alabama and Wrongful Foreclosure in Alabama.

If you have further questions, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below: