Alabama Consumer Law Blog

The Palm Beach Post has posted an article that discusses how the Florida Supreme Court has been trying to force banks into mediation with the intent to save struggling homeowners from foreclosure. But in recently acquired documents, it has come to light that the banks and lenders have been doing their best to make negotiations end in a stalemate so they won't lose money by not foreclosing on homes.

In some cases, mediators report that deals were struck for trial payment plans or to seek a loan modification, but that banks or their attorneys asked for the meeting to be recorded as an impasse.

The motive for a deadlock, homeowner advocates say, is money. Declaring a different outcome stalls the process and could mean a return to mediation if an agreement falls through. At the same time, several of the state's large foreclosure law firms also run title companies, which can pick up business when a home is repossessed.

There are over 350,000 foreclosures currently in Florida courts and experts in the field argue that the housing market can't improve until all of those foreclosures are dealt with. The mediation program (which is only for homestead properties) was started with the intent to "reduce the judicial workload" and give homeowners a chance to avoid foreclosure. This mediation program became a mandatory step over a year ago, but difficulties like not being able to contact borrowers have hampered its success.

A December report on seven of Florida's 20 circuit courts found just 6 percent of homeowners referred to mediation left the negotiating table with an agreement. One mediation management company says that agreement rate is lower than reality because of how mediations are tallied.

The program has seen similar results in Palm Beach County. Between July and September, 1,949 foreclosures were referred to mediation. Of those, 152 mediations were conducted, with 27 ending in a written settlement.

"Settlement in these cases is not in the economic interest of the foreclosure law firms or servicers handling the foreclosures," said Boca Raton foreclosure defense attorney Ron Kaniuk of Ricardo, Wasylik & Kaniuk. "The law firms not only do the foreclosure work, they do the evictions and the bank-owned home sales and the title work, so if they modify a loan, if they come to a settlement and the foreclosure case ends, their work ends."

In November the Florida Supreme Court removed the option for impasse, allowing for three possible solutions: adjournment, no agreement, or partial/full agreement. Adjournments lead to a follow up hearing at no charge; mediations are $750 that is paid by the lender. The court says the reason for this is because mediators are often pressured to report an impasse when an adjournment is more appropriate.

Disorganization and bad communication between lenders and their attorneys is responsible for a large part of the difficulties with the success of the mediation program. For example, paperwork can get lost, a young attorney who isn't familiar with the case can be assigned to mediate it, or the bank representatives don't have the authority to effectively negotiate.

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. We have also started handling bankruptcy cases.

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 Atlanta Journal-Constitution has posted an article about one of Florida's top foreclosure lawyers, David Stern. The worse the housing crisis got for homeowners, the wealthier Stern became.

When homeowners got behind on their mortgage payments, the bank would turn it over to a "foreclosure mill," like the one owned by Stern. The foreclosure mill would push the foreclosure through the courts on behalf of the bank. Some of Stern's clients included big name banks like GMAC, Goldman Sacs, Bank of America, Citibank and Wells Fargo. At industry meetings Stern would even brag about how well he was doing, saying that he was glad that the government's homeowner relief plan efforts were failing.

Stern continued his life of luxury as the "foreclosure king" until last fall when he became the subject of an intense investigation and class action lawsuits. Stern's crooked success is representative of how the foreclosure industry has operated in the past decade or so. Stern's actions shed light on how banks and their law firms have designed a "quick-and-dirty foreclosure machine" to take as many houses from as many homeowners as they possibly can.

Stern's employees churned out bogus mortgage assignments, faked signatures, falsified notarizations and foreclosed on people without verifying their identities, the amounts they owed or who owned their loans, according to employee testimony. The attorney general is also looking at whether Stern paid kickbacks to big banks.

"What Stern represents is an industry that was completely unrestrained, unchecked, unpunished and unsupervised," says Florida defense attorney Matt Weidner. "This was business gone wild."

Not long ago, the world of back-office bank procedures was of little interest to the public. But revelations last fall about robo-signers powering through hundreds of foreclosure affidavits a day, without verifying a single sentence, changed all that. Today the banking industry's eviction juggernaut is under intense scrutiny as allegations of systemic foreclosure fraud mount.

State and federal regulators, along with the 50 state attorney generals, are conducting an investigation into the foreclosure industry. There are more and more class action lawsuits taking shape and because of the corruption of the foreclosure industry, the courts are ruling in favor of homeowners and not the banks.

Stern is no stranger to trouble with the law. He was named in a class action lawsuit in 1998 for "padding fees on foreclosed homes" and settled for $2.2 million. Fannie Mae was warned of his past misbehavior, but they still gave cases to him to work. In 2000, he was sued again, this time by a former employee for sexual harassment.

The firm's fall has spawned more chaos in Florida's circus-like foreclosure courts. A slew of homes Stern foreclosed on that sold for $240,000 each during the credit bubble sold at auction as orphaned cases for $200. Recently, even the most infamous "rocket docket," in Lee County, where judges were reported to have signed off on a foreclosure every 30 seconds, ground to a virtual standstill as the Stern firm withdrew from case after case. Some of Stern's remaining lawyers show up court with greasy hair, fleece jackets and food-stained clothing. As for Stern, if federal and state prosecutors file criminal charges, he could end up in prison.

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. We have also started handling bankruptcy cases.

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:

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Yes -- recording the abusive calls is not a requirement to sue or even to successfully sue a debt collector who is abusing you.

It is always nice to have recorded calls (just make sure they are legally recorded) but it is not a requirement.

The Fair Debt Collection Practices Act (FDCPA) prohibits all sorts of abusive conduct. It does not require you have tapes or recordings to prove your claims.

Instead, just like in any other trial, if you offer evidence that the jury believes, you win.

So, the key is to do everything you can to increase your credibility. Never exagerate. Keep good records. Can you document the calls on your cell phone or through your caller ID? Take pictures of those. Keep a notebook by the phone and write down the calls.

Every FDCPA case we have involves the defense lawyer lecturing us on "Our notes don't show that we cussed at your client or lied to your client so it must not have happened."

Really? That's a shocker! The collectors don't write down the truth when the truth would get them fired. Wow. Didn't see that one coming! :)

Bottom line is when you are a truthful person and you testify with authenticity and honesty, you increase your chance of a jury understanding your testimony and believing you. And when the Defendant debt collection agency knows that a jury may believe you, then it is more likely to settle with you before the case is tried.

So you don't need recordings. You need the truth and you need to be authentic.

If you live in Alabama and have questions about debt collectors and the way they are treating you, 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 New York Times has posted an article that gives some helpful tips on how to repair your credit score. So many people have lost their jobs, are overwhelmed by bills piling up, or were hurt by the housing crisis or filed for bankruptcy that millions of peoples' credit scores have plummeted.

The best thing you can do to improve your credit score is to focus on the information that FICO uses to determine your credit score. FICO is the most commonly used method of credit scoring by lenders to determine a consumer's "creditworthiness". A credit score ranges from 300 points up to 850 points, the higher the score the better.

The first thing you can do is to assess your situation. You need to make sure you will be able to pay your bills on time and not go further into the hole. You could call the credit card company and explain your situation and see if the two of you can work out a payment that you can afford. But if you do so, be sure to ask how the credit card company is going to report it to credit reporting agencies. Even though you're paying an amount agreed on by the credit card company, they could still report it as you aren't paying as agreed, which will further damage your credit score. Be sure and get the agreement in writing.

Next, focus on paying off credit cards, which will give your score almost an instant boost. Next pay off other loans, like car loans, student loans, or mortgages.

You also want to get your so-called debt utilization rate into good shape. FICO considers how the total amount of debt on each of your credit cards compares with your total available credit. The credit score “elite” — that is, people with FICO scores above 760 — typically don’t have debts that exceed 7 percent of their available credit. But if you are at 50 percent and can get the rate down to 30 percent, that will help.

You can also "leave a note" through FICO's website that allows you to give a brief explanation of your situation- like a job loss. It doesn't affect your credit score and probably won't change lender's minds, but at least you're able to explain yourself.

Getting a secured credit card is a good alternative to a traditional credit card for people with poor credit. A secured credit card works by requiring you to have a set amount of money in your bank account to use as collateral. That amount of money determines the amount of credit you get on the card. Be sure to read the fine print and make sure the required deposit amount won't change and that your payments will be reported to the credit reporting agencies.

“What is the most predictive and powerful in your score are the things you’ve done most recently,” Mr. Ulzheimer said. “That cuts both ways. If you add a secured card and you pay it religiously and the balance is low, it will help your score a lot more quickly than if you do nothing.”

Talking to a credit union is a good idea because they are more likely to work with someone who has less than ideal credit. Different credit unions offer different options, but some offer things like free credit counseling, have products designed for people with poor credit, or are willing to look at alternative credit scores.

For a monthly fee (sometimes a large one) you can sign up for "alternative verification." Other credit reporting agencies or companies will collect your payment history from things that aren't included on the traditional FICO credit report. Banks are becoming more willing to look at these alternative verification reports, however, the traditional FICO report is still the main decision maker, but things are slowly changing. Lenders may soon start looking at things such as rental payment history or alternative credit scores.

It' a good idea to avoid credit repair offers.

“We really tell our clients to stay away,” said Ms. Glass, of CredAbility. One re-emerging scam, she says, involves companies that claim they can clean up your credit. Some companies manage to do this for a limited time by disputing all of your accounts, sending letters to the bureaus claiming the accounts aren’t valid. But after the credit bureaus validate the accounts and debts, they reappear on your report and your score will plummet again.

Legitimate credit repair companies exist, and they can assist in disputes. But there’s nothing they can do that you can’t do yourself at little cost. Besides, these companies often besiege the bureaus with letters, and the bureaus are allowed to ignore what they believe are frivolous disputes. Be wary of companies that do not disclose in writing that you can do these tasks free on your own, that guarantee results or that try to charge you before they perform any services.

To repair your credit score, you should also avoid certain credit cards that are designed to improve peoples' credit scores, yet charge so much in fees that the purpose is defeated. Before you sign up for any credit cards be sure to read the fine print.

If you have had problems with a credit card or a credit report 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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Our friend Denise Richardson of givemebackmycredit.com has posted an article that discusses some of the different ways identity theft can impact your life.

Not only does identity theft cost you money due to false charges, it also consumes a huge amount of your time to fix once you have discovered the problem. Calling the bank, credit card companies, and creditors and proving that the debts aren't yours can feel like it's consuming your life.

As irritating as credit card identity theft can be, it's nothing compared to how devastating Social Security identity theft is. Correcting this type of identity theft can take months, and maybe even years, because it takes so long for it to be noticed. It can also happen multiple times, since the identity thief has access to your Social Security number, birth certificate, and/or medical records, etc.

Take the case of Larry Smith. Mr. Smith is a Florida resident whose name and personal details were used by someone else. Over the past 17 years, it is alleged that Joseph Kidd used Smith's birth certificate to obtain medical benefits; all the while, he also used Smith's name and "identity" when committing (and getting caught for) various crimes. This caused the police to arrest the real Smith, who spent several nights in jail for crimes allegedly committed by Kidd. The real kicker to this story is that when Kidd was finally apprehended--when Smith's wife finally managed to convince the police that they had the wrong guy--Kidd still managed to use Smith's name and identity. The police booked him as "Smith" and released him as "Smith," complete with a parole ID card in Smith's name so that Kidd could continue to confuse authorities and use Smith's name--and benefits.

The time, energy, and money the Smiths have invested in trying to get this fraud corrected is staggering. But it is nothing compared to the emotional toll this event has taken on their lives. Being jailed for a crime you didn't commit? Not many of us can even imagine that nightmare -but it happens.

Most of us can't imagine, either, what Anndorie Sachs has been through. She got a call at her home telling her that she had given birth to a baby addicted to methamphetamines. Since she hadn't had a baby in over two years, she quickly realized that someone had used her name and records to pay for a labor and delivery.

300,000 people were victims of identity theft in 2009. In the scheme of things this isn't a large number of people, however, medical identity theft can be quite expensive to correct and can even be life-threatening, as there is information on your medical chart that isn't accurate.

Banks have tried to really crack down on faulty charges on credit cards, causing identity thieves to use other ways to steal your money... such as getting into your checking account of messing with your home equity line. Having your identity tampered with, whether it be from a stolen wallet, data breach, or dumpster diving can result in you having to spend your personal money and time trying to defend your innocence.

The reported number of hours it takes to recover from fraud (59 hours!) means it's nearly impossible to do so without attempting much of the clean up during working hours--which means losing job productivity and in some cases causing you to lose pay.

"...the average consumer out-of-pocket cost due to identity fraud increased to $631 per incident in 2010, up 63 percent from $387 in 2009. Such costs include the expenses of paying off fraudulent debt as well as resolution fees, such as legal costs."

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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CNN Money has posted an article that discusses a credit card offer from First Premier Bank with a huge 79.9% interest rate. The card is geared toward people with little credit or bad credit and starts out with a $300 limit and a 29.9% interest rate. Six months after opening the account, the interest has been known to jump from 29.9% to 79.9%, but the card was still popular with consumers, nearly 700,000 people have signed up for it and about half of them carry a monthly balance.

Because so many cardholders were defaulting due to the high interest, First Premier dropped the interest rate down to 59.9%.

"We also tested it at 23%, 33%, 45%, but 59.9% is the one that shows the best performance and where the organization can market the product," said First Premier Bankcard CEO Miles Beacom.

And yes, that rate is completely legal. The Card Act, which was passed in late 2009 to protect consumers from predatory lenders, only prevents issuers from raising rates retroactively. Credit card issuers are free to charge whatever rate they want at the front end.

First Premier doesn't deny that they have high fees for everything:

First Premier charges a total of $135 per year in fees. It starts with a $45 processing fee to open the account. Then there's an annual fee of $30 for the first year -- $45 for every subsequent year. Plus, there's a monthly servicing fee of $6.25 (or $75 a year).

Cash advances will cost you $5 or 3%, whichever is greater; late payments ring up at $35. The bank will also charge you $35 if a payment on your account is returned due to insufficient funds or any other reason.

But Beacom said the bank used to charge $175 for just the processing fee and annual fee alone.

The fees don't seem to be scaring consumers off- First Premier receives 200,000 to 300,000 applications monthly because of the demand for a credit card for people with "less than perfect credit." But because of the new Credit Act, the company is being cautious and only opening around 50,000 accounts a month.

If you have had problems with a credit card 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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Associated Press has posted an article that discusses how there will likely be over 1 million foreclosures in 2011, which is more than any other year since the housing crisis began back in 2006. Around 5 million homeowners are at least 2 months behind on their mortgage payments and experts say that in the upcoming year, even more people will fall behind on payments due to job losses and the amount owed on loans will, in many cases, exceed the value of the home.

"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year.

On Thursday, Freddie Mac reported that fixed mortgage rates dipped this week for the second straight time, extending a sliver of hope for some home owners. .

The average rate on the 30-year mortgage dropped to 4.71 percent from 4.77 percent the previous week. The rate on the 15-year loan, a popular refinance choice, slipped to 4.08 percent from 4.13 percent.

But both are a half-point higher than the lows they reached in November. The 30-year loan rate hit a 40-year low of 4.17 percent and the 15-year mortgage rate fell to 3.57 percent, the lowest level on records starting in 1991.

This dip pushed borrowers to try to refinance, but prospective homebuyers are reluctant to purchase homes. The current low mortgage rates just aren't incentive enough to push people to buy homes because of the impending high unemployment, tightening credit standards, and home values continuing to fall. The number of foreclosures is expected to stay elevated this year, which will push home prices down as much as another 5% before finally bottoming out.

The number of homes that received at least one foreclosure-related filing in December was the lowest monthly total in 30 months. Total notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.

Foreclosures will continue to remain high in states that were hit the worst: California, Florida, Arizona, and Nevada- where nearly half of all the country's foreclosures have occurred, roughly 1.5 million. States that are struggling economically, like Michigan and Illinois, will join those states with the highest numbers of foreclosure.

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. We have also started handling bankruptcy cases.

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 BKBlog has posted an article about a recent Supreme Court case's outcome that ruled in the favor of creditors.

The U.S. Supreme Court issued a creditor friendly decision in the case of Ransom v. Fia Card Services. At issues was the "ownership expense" deduction in the means test.

The means test is a calculation used to determine whether a debtor has enough "disposable income" to afford a Chapter 13 bankruptcy repayment plan.

In the Ransom case, the debtor (Jason Ransom) claimed a means test deduction for both operation of a vehicle ($338 per month) and for ownership ($471 per month). The problem – Mr. Ransom owned his vehicle free and clear.

The 8-1 decision held that if a debtor owns his vehicle then he can only claim a vehicle operation deduction, but not an ownership deduction. For Mr. Ransom, it means that for bankruptcy calculations it looks like he has an extra $471 that could be used to pay credit card companies in a Chapter 13 bankruptcy.

Chapter 13 cases last 5 years, so assuming Mr. Ransom has his car paid off it's probable that the car isn't new. If he had to replace his car in that 5 year period, he wouldn't have the funds to do it because of the money he's paying to fund his Chapter 13. It's quite unreasonable to assume that Mr. Ransom, or anybody for that matter, won't have an emergency in the next 5 years that will cost money.

The Supreme Court's decision ignores the realities of life. In the immediate near term the debtor may have $471 to pay towards his Chapter 13, but is it reasonable to expect that this "disposable" money will be there month after month? The Chapter 13 trustee will expect it, and these funds will come out in a payroll deduction. But I fear that even more Chapter 13 cases will fail when debtors lose their jobs because they do not have transportation or checks for mortgages will bounce because the funds were used for plumbing repairs or other emergencies.

The outcome of this case sends mixed messages to debtors who are about to enter into the process of bankruptcy. It doesn't encourage people to avoid debt, but rather rack up even more debt before filing for bankruptcy. For example, a debtor would be able to benefit from taking out a car title loan before filing bankruptcy because owing money on a car allows the person to claim it as an ownership expense and not be penalized for it.

Before you decide to file for bankruptcy, it's imperative that you consult with an attorney. If you have further questions or concerns about bankruptcy, 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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We have received a tremendous amount of response to our blog post on what National Credit Solutions, a debt collector, is doing to Alabama consumers related to alleged Movie Gallery fines and late charges.

As we mentioned, if you owe the debt then pay it.

But, if you are like many of the people who call us, and do not owe the money, what do you do?

We suggest sending a letter, certified mail return receipt requested, along these lines:

-----------------------------------------------------------
National Credit Solutions

Equifax

Experian

Trans Union

[whichever credit reporting agencies are showing this on your report]
[get addresses off of credit reports as they change frequently]

Dear Sir or Madam,

I was surprised to find this National Credit Solutions account [put account number] on my credit reports as I did not and do not owe Movie Gallery any money for any movie rental.

This is a bogus account that is greatly damaging my credit report.

Either remove this account as I dispute that it is mine or that I owe it, or have National Credit Solutions prove in writing that I owe this amount. I'm sure that you want to see, just like I want to see, the documents proving that I rented the movie(s) National Credit Solutions claims I did and that I was late or never returned them or whatever the story is from National Credit Solutions.

National Credit Solutions has apparently made it a practice to put false accounts on credit reports according to information I have found. Please remove this from my credit reports and never allow this account to be placed back on my credit reports.

If you are in any way confused by this letter or don't understand what I'm asking you to do, please contact me in writing.

Thank you for promptly correcting my credit report.

Name
Address
DOB
Last 4 of SS#

------------------------------------------------------

Keep a signed copy and keep the green cards that come back.

By sending the letter to National Credit Solutions, you put them on notice in writing that you dispute this debt and want it off.

If the bogus account (remember if you owe it, you need to pay it) remains on your credit reports, you can look at suing under the Fair Credit Reporting Act or the Fair Debt Collection Practices Act.

If you live in Alabama, please feel free to contact us through this blog or through our website or by calling 205-879-2447.

Our friend Denise Richardson of givemebackmycredit.com has posted an article about a recent case where the "big bank" JP Morgan Chase's errors caused thousands of military families' mortgages to be overpriced. Paying too much for mortgages ruined the families' credit scores and was even the cause of as many as 14 wrongful foreclosures.

Chase would have been able to keep getting away with overcharging military families' mortgages if it hadn't been for Marine Captain Jonathan Rowles, who sued Chase for violating a law that protects active duty military from financial harm while they're deployed. The lawsuit took Chase by surprise and caused them to look at the way they handled military families. Chase found that 4,000 military families had been overcharged on their mortgages.

"Under a law known as the Servicemembers Civil Relief Act (SCRA), active-duty troops generally get their mortgage interest rates lowered to 6 percent and are protected from foreclosure. Chase now appears to have repeatedly violated that law, which is designed to protect troops and their families from financial stress while they're in harm's way."

It's very difficult to believe that Chase didn't know about this law, but nonetheless, Chase says it's an "honest mistake" and is paying $2 million in refunds to the families. The bank also claims that the 14 homes that were wrongfully foreclosed on have been returned to the rightful owners.

The military families get some money back, homes are restored, and Chase gets off easily in the cash department (I know 2 million sounds like a lot but it's a very small drop in the bucket for Chase, and it averages out to about $500 per family). Everybody's happy, right? Wrong. Banks are STILL just as prone to error as they ever were, and it is STILL the customer's responsibility to check--and if need be, sue--to get a bank to behave by the rules. That's just not right.

A lawsuit should be a last resort tactic to get a bank or company to follow the rules they should have been obeying to begin with. Lawsuits are expensive and time consuming, but a bank's reckless disregard for the law shouldn't be allowed to be excused as "honest mistakes."

Here's a short video about the case:

Visit msnbc.com for breaking news, world news, and news about the economy

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. We have also started handling bankruptcy cases.

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:

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The LA Times has posted an article about a foreclosure lawyer's very unusual advice to his clients. The Earl family of Ventura County, California was evicted from their home after falling behind on their mortgage due to a business reversal. Their home was then sold to an investment company.

Their attorney to fight the foreclosure is Mr. Michael T. Pines. After the court refused to allow the family to move back into their home, Pines threatened to hire a locksmith to break into the house so the family could move back in. With most lawyers this might sound like "courtroom theatrics", but with Pines is being serious.

Pines has admitted to breaking into at least 6 homes, including once with the Earls, so that families could move back into their homes while...only this time as squatters. I appears the families live there while Pines argues there case in court. His unusual tactics have caused him to be arrested in Newport Beach, fined in San Diego, and threatened with contempt and with jail time in Ventura.

Despite that, Pines still advises (and enables) his clients to squat in their foreclosed homes, which has been met with both criticism and approval.

More foreclosure cases are headed for court, housing experts and legal analysts say, as troubled homeowners run out of options and lenders pick up the pace of evictions. But they also note that people who want to stay in their homes have limited options in states such as California, where a lender can seize a house without a court order. That has prompted Pines to pursue some radical tactics and might cause others to imitate him — if he ever manages to win.

"Homeowners have the right to seek relief in court," said Boston lawyer Gary Klein, who has sued several banks over lending practices, but Pines' break-in strategy "ups the ante considerably."

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. We have also started handling bankruptcy cases.

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 New York Times has posted an article about new regulations the FDIC, which monitors 4800 banks, has put on banks to monitor the debit card industry. Congress set an excellent example in 2009 with the new credit card law that the FDIC could have followed to address the outrageous overdraft fees some banks charge on their debit cards.

The credit card law says that late charges or other penalties have to be "reasonable and proportional," which would have been a good place for the FDIC to start with overdraft fees. Some banks charge as much as $35 per transaction, sometimes several times a day, for overdraft fees. This only succeeds in driving the consumer even further in the hole over a purchase that can be as small as a newspaper.

An analysis issued last year by the Center for Responsible Lending found that it was “common policy among banks” to process the largest transactions first, regardless of when purchases were made, to increase overdrafts.

Last year the Federal Reserve began to require that banks customers to opt in to overdraft protection plans before overdrawing, but it wasn't successful. Some banks aren't honest about overdraft protection plans and don't tell consumers all the details such as how much it costs or even how the system works. This means that debit card holders are being exposed to false offers or "predations" that credit card holders are protected from.

The new F.D.I.C. rules require banks to clearly explain overdraft costs. Most important, if a customer is charged a fee for overdrawing his account more than 6 times in a 12-month period, the bank must offer a less costly alternative, like a reasonably priced line of credit or linking the card to a savings account.

Banks are starting to worry about their profits, and some are even threatening to change from the FDIC to another, less strict regulator.

If you have had similar problems 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 New York Times has posted an article about a National Guard reservist whose home was foreclosed on while he was deployed in Iraq in 2004 and 2005. Sergeant James B. Hurley returned home in December 2005 to find his Michigan home had been foreclosed on, forcing his wife and children to have to relocate, despite many laws that are designed to protect deployed servicemen from this.

Sgt. Hurley's National Guard unit was sent to California in the summer of 2004 to train to work as a power-generator mechanic in Iraq. He was advised by veterans who had been deployed to do the same thing to buy his own tools due to lack of resources in Iraq. The expense of the tools combined with a reduced income caused Sgt. Hurley to fall behind on his mortgage- which often happens when part-time soldiers or reservists are deployed. He owed $100,000 on the property and it was put up for action and sold for $70,000.

Sgt. Hurley believed that he was protected by the Service Members Civil-Relief Act, which was created solely to protect those on active duty in the armed services from any legal complications that their forced absence may cause. Under the law, only a judge can authorize a foreclosure on a deployed soldier's home and can only do so after a hearing where the soldier is represented. The law also caps servicemen's interest rate at 6%. As of September 11, 2004, he was protected, but the banks threatening foreclosure (Deutsche Bank Trust Company and its subsidiary called Saxon Mortgage Services) continued to refuse any type of relief or assistance, saying that they couldn't act until they received copies of his individual military orders, which he couldn't get until later.

Although Saxon's demand would have been legitimate if Sergeant Hurley had been seeking a lower interest rate, the law did not require him to provide those orders to invoke his foreclosure protections.

Nevertheless, Saxon referred the case to its law firm, Orlans Associates in Troy, Mich., which completed the foreclosure without the court hearing required by law. The law firm filed an affidavit with the local sheriff saying there was no evidence Sergeant Hurley was on military duty. At a sheriff's sale in October 2004, the bank bought the property for $70,000, less than the $100,000 the sergeant owed on the mortgage.

Orlans acknowledged in a court filing that one of its lawyers learned in April 2005 that Sergeant Hurley had been on active duty since the previous October. Nevertheless, neither Saxon nor the law firm backtracked to ensure the foreclosure had been legal or took steps to prevent the seized property from being sold, according to the court record. Lawyers for Orlans Associates did not respond to a request for comment.

When Sergeant Hurley sued in May 2007, the defendants initially argued that he was not allowed to file a private lawsuit to enforce his rights under the civil relief act. Federal District Judge Gordon J. Quist agreed and threw the case out in the fall of 2008.

This prompted Colonel John S. Odom, a retired Air Force lawyer who was working with Sgt. Hurley's civilian lawyer, is an expert on the Service Members Civil-Relief Act and appealed the judge's ruling in December 2008. In March 2009, the judge changed his decision and ruled that Sgt. Hurley's foreclosure had violated the Civil Relief Act. He also ruled that Sgt. Hurley be paid punitive damages, if applicable.

The banks refused to let it go and brought the case back to court. They argued against paying Sgt. Hurley any sort of damages. The judge ruled in December 2010 that Saxon didn't have to pay any punitive damages. Colonel Odom says he has challenged the ruling in court and is prepared to appeal, if necessary.

"Nothing says you screwed up as clearly as a big punitive damages award," he said. "They are a deterrence that warns others not to do the same thing."

The trial over damages is set to begin in March of this year, making it over four years that Sgt. Hurley has been fighting the system over his wrongful foreclosure.

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. We have also started handling bankruptcy cases.

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:

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