Alabama Consumer Law Blog

The New York Times has posted an article that discusses how GMAC and Bank of America are resuming foreclosing on homes after a short break. However, the companies are still foreclosing on homes in the traditional way and not using other options, such as short sales. Short sales are when a home is sold for less than the homeowner owes on the mortgage.

Michael Powell, author of the article, mentions the particular example of Ms. Lydia Sweetland, from Phoenix, AZ, who was unexpectedly laid off and used all her retirement savings and her bank, GMAC, still wouldn't modify her mortgage. She was unable to pay her mortgage for seven months and decided that a short sale was a better option because it would give her more time to move out of her house and do less damage to her credit score than a foreclosure would.

She owes $206,000 on her house and found a buyer who would pay $200,000, but GMAC rejected the offer and would foreclose on her home in a week. Strangely, it's estimated that GMAC will make $19,000 less by foreclosing on her home that by going through with the short sale.

The halt in most foreclosures the last few weeks gave a hint of hope to homeowners like Ms. Sweetland, who found breathing room to pursue alternatives. Consumer advocates took the view that this might pressure banks to offer mortgage modifications on better terms and perhaps drive interest in short sales, which are rising sharply in many corners of the nation.

After examining their foreclosure processes and insisting they were sound, some major lenders are continuing going through with foreclosures. Several of the largest lenders have set up "complicated and balky" application systems for those interested in a short sale over foreclosure.

Worries over fraud are one reason for the difficulty of getting a short sale. Sometimes homeowners who aren't struggling want to portray themselves as destitute and want to cut their losses on a property just to get rid of it. Or a homeowner could make a short sale to a relative and then buy it back from them, which is illegal. About 2% of short sales annually are fraudulent and cost banks around $300 million a year.

Because of such concerns, homeowners often are instructed that they must be delinquent and they must apply for a modification first, even if chances of approval are slim. The aversion to short sales also leads banks to take many months to process applications, and some lenders set unrealistically high sales prices — known as broker price opinions — and hire workers who say they are poorly trained.

This causes homeowners who want a short sale to instead fall into foreclosure. Banks are very reluctant to do short sales because they're afraid they're being taken advantage of, or that the market will turn around and the foreclosed home will be able to sell for a much higher profit in six months or so.

Fannie Mae, with federal funding, offers "cash incentives to encourage servicers...to approve short sales." However, an email from a Bank of America spokeswoman says that they have processes only 61,000 short sales this year.

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 further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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Yahoo! News has posted an article about how the government programs designed to help with the mortgage crisis- Fannie Mae and Freddie Mac- could run up a tab of $259 billion of taxpayer money.

Currently, Fannie and Freddie have received $135 billion and have repaid $13 billion to the Treasury.

Fannie and Freddie were battered by losses on loans they backed, once the housing bubble burst and foreclosures soared. The two companies buy home loans from lenders, package them into bonds with a guarantee against default and sell them to investors.

The best case scenario would be if housing prices remained the same for the next two years. If the economy got worse over the upcoming months then Fannie and Freddie won't be able to recover as much revenue on foreclosures and would need more taxpayer money. The total bailout for the two programs could end up costing taxpayers between $142 billion to $259 billion through 2013. If this were to happen, housing prices could drop another 24% until 2012.

The two mortgage finance companies have been operating under federal control for more than two years. When the government stepped in to take them over in September 2008, their rescue was expected to cost only a combined $200 billion.

Allegations that mortgage lenders nationwide cut corners on foreclosure documents as they moved to seize millions of homes have put Fannie and Freddie under scrutiny. The two companies have used so-called "foreclosure mill" law firms that are accused of processing thousands of files in haste.

However, over the next year lawmakers are planning to review Fannie and Freddie's success and consider a potential replacement system, which wasn't originally mentioned in the financial overhaul. The Obama administration has been blasted for relying on Fannie and Freddie to modify home loans, which in turn has run up the cost of the bailout.

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 further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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Update as of November 1, 2010. Dale Spislander, in public relations with the Copyright Enforcement Group, contacted my lawfirm to say this about Copyright Enforcement Group (CEG):

We repeat: CEG does not practice, has never practiced, and will never practice a debt collection model.

Mr. Spislander referred me to the original article on CNET which contains this update:

Update: Dale Spislander, a spokesman for Copyright Enforcement Group, contacted CNET on October 27 and denied that the group had created a contract that included terms regarding debt collectors. The group does acknowledge, however, that the contract in question was distributed by Ira Siegel, an attorney under contract with the group. Spislander said that CEG does not use debt collectors.

Here is the original post:

The Michigan Collection Law Blog has posted an interesting article about a debt collection company that is hired to pursue the violators of movie studios' copyright laws. The collection company, named the Copyright Enforcement Group, seeks to obtain money damages from people before a judgment is issued in court.

Many people aren't aware that this area of debt collection is actually covered by the Fair Debt Collection Practices Act, which applies to "all debts incurred by a consumer for 'personal, family, or household use'." The Copyright Enforcement Group has just been very fortunate so far that they haven't tried to collect from someone who was fully aware of their rights under the FDCPA and also filed a lawsuit.

Many of these debt collectors are not training in the FDCPA and they are going to get into trouble. For example, under he FDCPA, the debtor has a right to demand validation of the debt. The debt collector then has to provide validation that the debt is owed and to whom the debt is owed. One large problem with collecting this sort of an obligation, is that there is no debt established yet. Violating one's copyright is actionable, without a debt. However, until a court actually reduces a studio's claim to a dollar figure, the debt collector cannot validate a debt because there is no number to attach to that debt.

If you have had problems with debt collectors, or have been harassed by one, and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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StarTribune.com has posted an article about the Federal Trade Commission cracking down on a Minnesota debt collection company, which is the 2nd largest civil penalty case the FTC has brought against a debt collection company.

Allied Interstate Inc. has had a history of consumer complaints and has been fined several times by the state. The company has been fined $1.75 million in order to settle on allegations that it broke the law when collecting on debts. The fine coincides with rising numbers of consumer complaints about debt collector abuse. This hefty fine is meant to show a message to other debt collection companies to show that illegal debt collection practices will not be tolerated.

The FTC also alleged that Allied debt collectors on numerous occasions spoke to neighbors, co-workers or others about a consumer's debts. The federal agency said Allied deceived consumers by threatening legal action it didn't intend to take. Both practices are illegal.

Many debt collectors are now using a repeat dialing system, called a "robo dialer", which calls the same person multiple times a day. With Allied, consumers were still be robo-dialed even after they insisted the company contacted the wrong person and the debt was not theirs. It appears that Allied also failed to follow up and make sure they had accurate information on alleged debtors.

In addition to paying a $1.75 million penalty to the U.S. government, Allied agreed to other measures, most of them already required by law. They include suspending collection efforts and conducting a reasonable investigation when consumers dispute a debt. The firm has also agreed to not use abusive language, another allegation in the FTC's lawsuit.

Predictably, Allied didn't admit any wrong doing, but did blame the robo-dialing on an "industry issue." They claim to have developed a system to reduce such errors.

"The fine levied for this relentless abuse of consumers is tiny compared to the profits this agency made over the years engaging in that abuse," said Peter Barry, a Minneapolis consumer attorney. "This lawsuit should send a strong signal to every debt collector in America: business as usual is over."

Even with the FTC's crackdown on enforcing debt collection tactics, actions are still rarely taken. In five years the FTC has only taken action and brought cases against 11 collection firms. Only 21 have been reprimanded in the past decade.

Last year, the FTC received 88,190 complaints about third-party debt collectors, up from 78,925 a year earlier. Nearly half of the complaints involved allegations that collectors harassed people by calling repeatedly, the FTC said in an annual report to Congress.

If you have had problems with debt collectors, or have been harassed by one, and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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USA Today has posted an article that discusses Old Republic National Title Insurance's decision to stop writing new policies for homes that have been foreclosed on by the companies JP Morgan Chase and GMAC Mortgage. Old Republic is one of the nation's largest title insurance companies. One consequence of this is that sales of foreclosed homes could be endangered because of faulty foreclosure paperwork.

Stephanie Armour, author of the article, says that:

Old Republic issued a bulletin to some agents stating that "the company will not insure title to any property which has been foreclosed by Ally Financial, Ally Bank or GMAC until further notice," according to a Sept. 29 copy of the memo. The concern is that other title companies will also refuse to issue policies for major lenders, which could have major ramifications for the housing industry.

Buyers are very reluctant to purchase homes that don't have insurance of a clear title. Some homeowners who have already purchased foreclosed homes might also face problems by having their ownership challenged. If a bank foreclosed on a house and sold it to a third party, then the original homeowners might be able to come forward and demand the foreclosure judgment be overturned because of faulty documents.

Distressed homes, which include foreclosed properties and that now make up a significant number of housing sales, rose to 34% of sales in August from 32% in July; they were 31% in August 2009, according to the National Association of Realtors.

If homes that are foreclosed upon don't sell, that will also lead to more housing inventory. About 1.9 million first-mortgage loan defaults, the first step in the foreclosure process, are expected in 2010, according to Moody's Analytics.

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 further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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:

Newsweek.com has posted an article that gives five signs that could mean you're headed for bankruptcy. The number of bankruptcies in the US has continued to increase. 1.6 million filings are expected to be made before the end of this year, putting bankruptcy at its highest since 2005.

In 2005 Congress tried to limit the number of bankruptcies by instigating the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). But bankruptcies continued anyway.

“While the 2005 bankruptcy overhaul law aimed to reduce filings, overall consumer debt and continued financial stress have led to consumer bankruptcies climbing back to pre-BAPCPA levels,” said ABI Executive Director Samuel J. Gerdano. “We expect that there will be nearly 1.6 million new bankruptcy filings by year end.”

To avoid being one of those 1.6 million filings, here are five warning signs that you might be headed for bankruptcy, if action is not taken:

-You're using credit cards to pay for necessities like groceries and housing. Credit cards aren't designed to be used to pay monthly bills, such as your mortgage, especially if you already have an unpaid balance.

- You don't have health insurance. Since the Healthcare Bill is still several years away, not having health insurance right now can be a disaster. Studies show that medical bills are a big reason for people to file bankruptcy. If you're uninsured and have an accident or chronic illness you can drive yourself to bankruptcy quite easily.

- Abusing a home equity line of credit – This one is hard to accomplish these days, as banks have really tightened the reins on home equity loans. But if you fall behind on your home equity payments, the bank treats it like you’ve fallen behind on your mortgage – and it could try to foreclose on your home. It’s imperative that you keep up to date on your home equity payments – banks and mortgage lenders are watching those payments very closely.

- Living paycheck to paycheck is another tell-tale sign. Not having any savings sets you up for serious financial straits if you were to become sick, injured or unemployed.

- Co-signing loans. Even co-signing with a family member can be bad for you. If the other borrower forecloses on the loan the bank will come to you looking for payment. If you can't pay the loan in full, then it's your responsibility. Co-signed loans are another main cause of bankruptcy proceedings.

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

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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ABC News has posted an article about Bank of America's questionable judgment used when the company hired a debt collection agency that was caught using obscene language and racist remarks when calling to collect on debts from the bank's customers.

For example, Alan Jones owed a mere $81 on his Bank of America card and received a call from a debt collector at 6:30 am. A few minutes later the collector called again and left a message that used racist remarks and profanity. The calls persisted even after Jones informed the collection agency that he had paid the balance. He said the representative from the collection agency acted like they had the power to contact him as many times as they wanted. Luckily, Jones had taped and saved all the messages and used it as evidence in a lawsuit he filed against the collection agency. He won the case and received more than $1.5 million.

The collections agency in question is Advanced Call Center Technologies (ACT), Philadelphia- based company that provides debt collection services for several large corporations. One of the collectors who had been contacting Jones was actually a supervisor at the company who was hired 7 months after being released from prison.

"They lived a thug life," said one of Jones' lawyers, Mark Frenkel, of the ACT operators. "They have a prison mentality."

Despite the verdict of Jones' case, Bank of America continued to use ACT. BoA accepted the explanation that the offensive calls were made by "rogue employees" until a copy of the messages was given to the CEO of BoA. He found them to be unacceptable.

Two days later, BoA informed ACT that their services were no longer needed, blaming issues "surrounding the economy." Since then, ACT has made changes in its management .

"I worked very hard to build this company and our management team and it is unthinkable that somebody would call somebody and do that," Debbas told ABC News. He declined to identify other major corporate clients but said they continue to his firm's collection services.

"Everybody understands in this business how hard it is, everybody was outraged by what they heard, and I was indignant," said Debbas

According to the Federal Trade Commission, debt collectors and their tactics have been the main source of complaints for the past three years. In the first 6 months of this year alone, the FTC had received 65,000 complaints about wrongful debt collector tactics.

If you have had problems with debt collectors, or have been harassed by one, and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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MSN Money has posted an article about the continuing problem of debt collector harassment. This has always been a problem but in recent years the debt-buying market has become quite lucrative. Debts can be purchased for just pennies on the dollar from the original creditor. Collecting on those purchased debts can be tricky, as sometimes key information is wrong or is missing. This leads debt collectors to relentlessly harass the wrong person over a very small debt. Collectors are even taking people to court over tiny debts and they have very little evidence to back up their claims. Their only goal is to make as much of a profit as they can on something that cost them nearly nothing.

These debt buyers and their debt collectors are using the courts for their own personal gain...as well as law enforcement. Some "hyper-aggressive collection agencies" have been local police to bring debtors in to court, even if there is little to no evidence that they are responsible for the debt in the first place.

Reforms have been proposed by the FTC and others, but one change would make a huge difference immediately: mandating that collection attempts must stop on all debt that lacks proper documentation. That documentation would include:

The name of the original creditor.

The amount owed, broken down into principal, interest and fees.

The date the account first became delinquent (to determine the statute of limitations and credit bureau reporting periods).

Sufficient information to positively identify the debtor, including full name and Social Security number.

All the reforms require is for debt collectors to have basic information before collecting...which they should have had anyway. If they can't provide an alleged debtor's information right off, then they have no business pursuing the debt.

Liz Pulliam Weston, writer of the article, gives some helpful tips on how to deal with a persistent debt collector:

-Don't ignore their calls. Even if you know they have the wrong person, don't just assume they'll go away if you ignore them long enough. If you don't owe the money you can send a "cease and desist" letter and the collector will have to stop contacting you.

-Monitor your credit reports. Debt collectors sometimes stick debts on the wrong credit reports and then try to get you to pay the debt (even if it's not yours) so they'll remove it. Noticing a wrongful addition to your credit report may be the only indication you get before a lawsuit is filed against you.

-Defend yourself. If you find out you're being sued, take action to defend yourself. If the debt is yours you can talk to a bankruptcy attorney to discuss options. If the debt isn't yours you should, at minimum, do the work to be able to prove it isn't your debt when you're in court.

-Contact your Congressional representatives and say that the Fair Debt Collection Practices Act, which is designed to protect consumers and our legal system, needs updating to protect against "debt collector bullying."

If you have had problems with debt collectors, or have been harassed by one, and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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InsideArm.com has posted an article that discusses how private student loan companies have been very inefficiently collecting debt payments. Just a few years ago, debt losses in the form of student loans were extremely low because of benign credit conditions, strict underwriting, and the existence of guarantees for the loans.

Back then, traditional student loan collection practices -- copied and pasted from check-the-box federal standards for collections practices -- were a ticking time bomb, albeit with a very slow fuse. Deferments and forbearances could delay a loan from requiring a first payment for five years, and even longer in some cases. This meant the collection manager did not see the impending explosion of losses for some time.

Because of this, many companies weren't in a rush to collect and some adopted a very laid back approach. But it caught up to them beginning in early 2007 and continuing into the middle of 2009 when the normal rate of delay of 120 days went up 7 times. This prompted some companies to step up their debt collecting by more frequent calling and other methods to more readily pursue payment.

But old habits die hard and many firms are still way behind, using anachronistic collections practices based on the federal check-the-box standards. This means as few as four attempts per month at borrower contact in Buckets 2 and beyond. Credit card portfolios with similar loss expectations of 3-5% annually are making more attempts than that per day! Many also still use ineffective letters, don’t measure the effectiveness of segmented strategies (or try new ones), and don’t monitor their agencies for performance. One issuer was surprised to find that their agency, which was paid by the hour with no incentive for cures, had set up a dialing strategy to minimize the likelihood of making contact in order to reduce their own expenses. They did this by setting the dialer to redial an account right after it received a no-answer.

Debt buyers stand to make a large profit from this. Since several loans are defaulting every month and are not being collected on by the original loaner, it's hard for a debt buyer to pass up since it's the money is just "sitting there to be scooped up." If they were to find a student loan pool that hadn't been touched in several years, a debt buyer could make quite a profit. Sales of defaulted student loans have been rare in the past but it has been gaining popularity and there is little to no competition in the market yet.

If you have had problems with debt collectors, or have been harassed by one, and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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The Bankruptcy Law Network has posted an article that discusses how each bankruptcy case is unique and you shouldn't go into an appointment with a bankruptcy attorney with the idea that it will be a remarkably easy, like ordering a pizza. Bankruptcy is a highly specialized area of law and if you fail to hire the right attorney or are filing yourself and unclear of some details you could lose basically everything.

People usually think that their bankruptcy case is simple, identical to every other bankruptcy case and will take no time at all to resolve. Every single bankruptcy case is unique. There might be similar characteristics between some, but there are always factors that make your case unique. These factors can make your case easier or harder, it just depends on your financial situation.

Rachel Lynn Foley, writer of the article, reminds readers considering bankruptcy that it's very important to take the time to carefully review your financial situation with your attorney. This is the time for you to be perfectly honest and forthcoming about all your assets, it's not the time to try and hide things from the trustees and creditors. You may end up having to pay back some or all of your debt, it just depends on your case.

Look at your financial situation from the flip side as a creditor. Let’s say the Joe Mokey owed you $10,000 and he did not live in Florida or Kansas. Now let’s say Joe owns a million dollar home free and clear. If Joe filed for bankruptcy and walked away debt free and still owning his million dollar home you would be very upset. Why? Because it is not fair or just under this situation that you are not paid but Joe gets to keep his million dollar home.

Your attorney will analyze your situation from the point of view of what will be a fair and realistic solution for you and the creditor, whereas the trustee will only analyze so things fall in their favor. Each bankruptcy should be analyzed from a trustee's point of view to anticipate any problems or situations that could come up.

Remember that knowledge is power and the more knowledge you have about filing bankruptcy the more power you will have to determine who is going to treat your case like making a pizza or who is going to take the time and talent to properly analyze your financial situation.

If you are interested in filing for bankruptcy and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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USAToday.com has posted an article about how foreclosed homes could become harder to buy since Old Republic National Title Insurance has stopped insuring homes' titles that have been foreclosed by GMAC Mortgage and JP Morgan Chase.

This started last week when the insurance company made the announcement, claiming that the main reason is because both mortgage companies have out a halt on foreclosures in 23 states. The company is also reviewing legal files that might not have been properly notarized or verified.

Generally, lenders won't issue a mortgage without title insurance. This protects buyers by guaranteeing they have clear ownership of the property and protects both the homeowner's and the lender's financial interests if a dispute over ownership came up.

Old Republic's action is the latest twist in a growing controversy that has called tens of thousands of foreclosure cases into question in the 23 states that require court approval. Bank of America said Friday that it, too, will stop foreclosures in those states while reviewing its records for the same problems tying up JPMorgan and GMAC foreclosures.

Representatives of the three servicers have given sworn statements in lawsuits that they signed thousands of foreclosure affidavits without signing them in a notary's presence or verifying the supporting documents, as the law requires.

Questioning if foreclosures were carried out legally could lead to homeowners who had been evicted claiming that they still own their home, even after it had been put up for sale as a foreclosure and sold, according to Mark Stopa, a Florida attorney.

"The bank forecloses on a property, sells it to a legitimate third party," Stopa says. "Two weeks later, the former homeowner says the paperwork was wrong and the judgment has to be set aside. The (new) owner is out."

The American Land Title Association, which represents title insurance companies, says that errors in foreclosure paperwork would have just a very small effect on people who have purchased foreclosed homes. They can argue that they legally bought the home and the law will protect them. ALTA also says that it's unlikely a court will take a home away from someone who recently bought a foreclosed home and return it to the original owner who was unreliable with making payments.

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 further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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 Washington Post has posted a distressing article about a family whose son was diagnosed with a terminal disease soon before their home was pushed into foreclosure by Chase.

Mike and Kathy Wales, from Prince William County, Virginia, say they fell behind on their mortgage payments last year after learning that their son had cerebral adrenoleukodystrophy, a terminal neurological disorder that leaves him unable to walk or see. Their other son has been diagnosed with ALD.

Mr. Wales admits they are at fault for getting behind, but says they were paying what they could each month and had even applied for a mortgage modification through Chase. The family was told they were approved for the modification, only to have Chase turn around and foreclose on their home just a few days later, selling the house to Fannie Mae. The Waleses are (understandably) very confused about why Chase was not willing to help them stay in their home after all the money the Obama administration has pumped into mortgage relief programs.

Chase sent them a notice stating they were in default on their mortgage, but it arrived when the family was in Minnesota for a medical emergency.

The Waleses had bought their 2,200-square-foot house for $415,000 in 2006, when prices were inflated and credit was easy. With a down payment of $5,000, a conventional mortgage and a 6.375 percent interest rate, their monthly payments are almost $3,300.

Until Alex's emergency flight to Minnesota, they had been managing, Mike said.

After a missing a payment while Alex was hospitalized, they resumed paying but could send only $2,000 to $2,500 each month, they said. In May, Kathy called Chase to seek a modification but was told the family's income was too high to qualify for the federal program, she said. By early June, they were nearly $11,000 in the hole. By the end of July, the bank had scheduled a foreclosure sale for Sept. 8.

In early August, Kathy contacted Chase to rule out the possibility of a short sale or filing bankruptcy, which they had already done in 2002. They weren't pursuing refinancing since they were so overwhelmed with medical bills, so they began to discuss mortgage modification. They filled out and sent in the paperwork, but every time Kathy or Mike called to check on progress, they were told that something was missing from their packet.

Other people seeking assistance from the federal mortgage relief program also find themselves repeatedly sending the same information, said James Scruggs of Legal Services of Northern Virginia, which works with low-income families facing foreclosure in hard-hit Prince William and other counties.

"It's still a difficult program for people to navigate," Scruggs said.

On Aug. 11, the bank sent the Waleses a letter confirming receipt of the application.

On Sept. 2, they were told by a Chase representative that their application had been approved. The next day, they were told their new interest rate, 4.75 percent, and their new payment amount, $3,138.81. The foreclosure sale, scheduled for Sept. 8, had been put on hold, the bank representative said, and a packet with all of the paperwork would arrive by FedEx after the Labor Day weekend.

It didn't.

On the day the postpones sale had been scheduled, Kathy saw someone checking out the house and she called Chase to ask about the modification paperwork that was supposed to have arrived by then. It was then she found out their application had been denied. A few days later a notice was posted on their door stating the house was now owned by Fannie Mae and they had ten days to respond to be eligible for relocation assistance.

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 further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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:

Our friend Denise Richardson, of givembackmycredit.com, has posted a helpful article where she gives eight reasons why you should take identity theft seriously. Identity theft is the fastest growing crime in the country, according to FBI statistics. While it hopefully will never happen to you, the possibility is still there and you should take precautions and know what to do after it happens.

Here are eight reasons why you should take identity theft seriously:

1. It's not just about credit.
Unlike commercials would have you believe, having your credit card number stolen in an identity theft ordeal is really just the least that can happen. Your medical records, tax returns, and/or Social Security number could be stolen as well. The information someone could get about you is endless.

2. Criminals always have the newest technology.

Phishing, smishing, vishing, skimming, spoofing, click-jacking, tab-napping, pharming--whatever you call it, it's bad news when it happens to you. We all need snooping / scanning / sniffing technology that is just as good if not better. Services that can now utilize up-to-the-minute technology to detect suspicious activity before the damage occurs, can go a long way in reducing the risk and impact of fraud.

3. Identity theft affects your finances.
An identity theft can cause you to have to pay higher insurance premiums, have errors on your credit report, and even prevent you from getting a house or apartment...all because your credit wasn't cleaned up correctly and fast enough. It can take months or years, and be quite expensive, of battling with credit bureaus to ammend your credit score.

4. Protecting against and cleaning up after identity theft takes knowledge and time.
Most people don't have the time or know-how to scour underground websites to make sure their personal information isn't being sold. It's impossible to immediately tell if someone fills out a credit card application using your name and giving your information, but websites like Lifelock.com can.

Lifelock was recently voted 8th overall and #1 in security in INC Magazine's top-growing 500 companies. An additional plus: they actually keep their jobs in this country.

5. Social Networking is everywhere.
The popularity of online social media sites has exploded, and while it's fun to update your friends and family about your life, it's also an opportunity for your personal information to land in the hands of thieves. With the rise of social media popularity, cyber crimes have also risen. Protecting your data is very important.

6. The best defense is a good offense.

You can't always avoid being a victim of a crime, fire or a storm, and you can't stop a determined identity thief either. But you can take steps to lessen the impact an identity theft can have on your life--and you can take those steps BEFORE anything happens to you. Knowledge is power.

7. Time is money.
It's true that you can save money by not having insurance, but when something happens you will definitely be paying the much higher price for being unprepared. Your interest rates could go up and, if you have insurance, your premiums could go up . It's important to have a decent amount of money in your savings account that way you can have money to live off of while the banks figure out what back funds they have to pay if your checking account is cleaned out by an identity thief.

8. Statistics
It's currently more likely that you'll have identity theft issues than your car will be stolen. But this doesn't mean that you would cancel that part of your car insurance, does it? Since identity theft is the fastest growing crime, it's important that you take every precaution you can and know how to protect yourself!

If you have had problems with identity theft and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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Yahoo! Finance has posted an article about common habits that really damage your credit score. Credit scores range from 300 to 850 and the higher your score the better.

One of the easiest ways to destroy your credit score is not to pay your bills. It seems obvious, but one of the most important parts to your credit report is your repayment history. If you don't pay your bills, even the minimum monthly payment, then eventually all the bills you haven't paid in 90+ days will go into collections, dragging your score down even more. Eventually, if you don't pay any credit card bills or mortgage payments, you could get so behind that you have to declare bankruptcy which damages your credit for both the short and long term.

Maxing out all your credit cards, or spending past the limit, also ruins your score. Applying for new cards also affects it. Ten percent of your credit score is based on how many new accounts you've applied for recently. Applying for every credit card you hear about or see will definitely help destroy your credit.

Your credit score will be higher if you have a combination of credit cards, mortgage and car payments, and store accounts. Just having credit cards makes your credit report look bad. Also, assuming your situation is hopeless and making no move to drag yourself out of debt will annihilate your score.

There are some habits that won't impact your credit score. For instance, overdrawing your checking account will be very expensive, but won't impact your score. Receiving unemployment checks or food stamps, getting divorced, or losing your job also won't impact your credit score.

If you have problems with your credit report, such as errors, and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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: