Alabama Consumer Law Blog

UPI.com has posted an article that discusses how new foreclosures and new home delinquencies are continuing to fall. However, increases in the number of foreclosures being processed and sold on the market are still not enough to offset the sheer number of homes that have been lost to foreclosure and are still vacant.

The average home loans that are in foreclosure have been delinquent for as many as 500 days, according to a report from according to Lender Processor Services. January 2011 saw a slight increase in the number of delinquencies up to 90 days because lenders were moving loans from the foreclosure bracket back into the 'seriously delinquent' bracket. The number of new foreclosures actually dropped 11.4%.

"Delinquency rates in January increased for the first time since May 2010 by .8 percent over December but the growth was concentrated in the 90 days plus category, which rose 1.2 percent. New delinquencies fell for the third month in a row. All delinquent mortgages are 18.8 percent below last year, according to LPS monthly mortgage monitor and they are about 2.1 times the historical average."

Every state has seen a drop in foreclosures and delinquent loans is certainly a good thing, but it still leaves a huge foreclosure loan inventory, and a huge number of delinquent loans that are waiting to be processed.

"Despite the increase in processing activity, timelines from foreclosure to REO lengthened and contributed to the rise in foreclosure inventory. Most of the properties in the foreclosure inventory today have been in the foreclosure pipeline for more than a year, whey delinquency rates were significantly higher. Almost 30 percent of loans in foreclosure have not made a payment in over 2 years, according to LPS.

States with loans having the longest average number of days in delinquency are New York (644), Florida (638), New Jersey (580), Hawaii (563), Maine (551) and Connecticut (532). All are judicial states, where foreclosures require a court order."

Foreclosure sales are still slow, even though they picked up a bit in January. The fact is that the number of foreclosed home for sale outnumber sales 3 to 1 so it will take quite a while for sales to catch up with the available inventory.

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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Fox Business has posted an article that discusses how a rise in home value can cause a rise in your property taxes. The article lays out some steps you can use to determine if your property tax assessment is accurate, and if it's not, you can learn how to appeal it.

Property tax appeals have grown in popularity recently due to the drop in home values all across the country. But this drop in value doesn't necessarily mean that tax assessors have kept up with the current values, meaning that you could be paying too much tax on an over-valued home. An appeal would only require you to pay taxes on what your home is currently worth, based on national trends. Most, but not all, states charge property tax, so the first step to filing an appeal is to find out who to take it up with. Normally this information is printed on the tax invoice.

It's crucial that you find out when deadlines are. You may have a rock solid case for an appeal, but if you don't file the paperwork on time or don't show up for a hearing, your case will immediately stop being processed and you have to wait until the next year to appeal again. Deadlines can be printed on your tax invoice, or you can contact your local tax assessor's office to find out.

The next step is to gather information about how homes are selling that are similar to yours. The "comp" houses should be a similar size to yours, have similar amenities, and be in the same area. Comps are very important because it indicates what your home is really worth in the current market.

The tax assessment authority's website or bricks-and-mortar office might be the best place to find comps. A website operated by a local multiple-listing service (MLS) also may be a good resource. Other websites might be helpful as well, but keep in mind that sites may be incomplete or contain outdated or erroneous information. A search of several databases, based on the parameters of your home, should turn up some useful results.

A local real estate broker could also help you determine your home's value.

It's important to remember that an appeal can take months to process. It's processed in several levels, with each level having its own set of rules that are established by the government and/or tax officials. How long the appeal takes largely depends on your local resources. Some places finish processing appeals in just a few months, whereas other places can take up to a year.

Overpaying property taxes is similar to having a home with an underwater mortgage and automatically going into foreclosure- if you have other options you shouldn't be afraid to explore them.

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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CNNMoney.com has posted an article about the difficulties that can come up when purchasing a home from a divorcing couple. Divorcing couples can sometimes be the most eager sellers and accept offers below market value just to get rid of the house.

But house hunters looking to purchase a divorcing couples' house can also find themselves in an awkward situation if one person wants to sell the home and the other wants to keep it. Or one person can hold off on signing just to agitate their ex, since owning the home is the last thing that is binding them together. Or the potential buyer could make a deal with one spouse only to have the other spouse find it unacceptable. Things can get even nastier if the home is being foreclosed on, adding more stress to the divorce. It's a good idea to find out if the divorce is amicable or bitter because unless both parties in the divorce have signed off on the deal then there will definitely be a hold up on closing.

"Most of my divorcing clients dislike each other very much so navigating the transaction can be tricky," said Scott Weeda, a Seattle-based real estate agent who specializes in divorce.

The article mentions one specific instance where a divorcing couple was selling their home and had a buyer and was prepared to close on the deal. A few days before closing the deal, the wife quit answering calls and no one could get in touch with her, making closing seem impossible. However, because the ex-husband or any of the attorneys couldn't reach her they continued with to close the deal on time without the wife, citing that the she was "unreachable." While this situation played out in the end for the homebuyers, it still caused them stress and anxiety.

If the home of your dreams is being sold by a divorcing or recently divorced couple, don't be afraid to go for it but just be aware that negotiating a deal and closing can become very complicated and be postponed multiple times.

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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Philly.com has posted an article about why filing for bankruptcy is no longer considered a financial "doomsday." Many people are afraid to file bankruptcy because they don't want to feel they are branded as 'financially ruined' their whole lives.

Bankruptcy actually offers a lot of benefits. For example, even though bankruptcy stays on one's credit report for 10 years, it offers those deeply in debt a fresh start while still usually keeping their most important assets. Bankruptcy lawyers have even said that people who are serious about putting their lives back together after bankruptcy can even get a home loan in two or three years. They can also get credit cards, but the interest rates are much higher.

Even though it's possible to rebound rather quickly from bankruptcy, it's still important that you consider other options before filing, such as trying to work out payment agreements with lenders.

With 15 million people jobless and about one in four homeowners underwater on their mortgages, many people have learned that charging today on the belief that they can pay tomorrow is a dangerous trap. Following a lull in bankruptcies after Congress tightened rules in 2005, personal bankruptcies are increasing. According to the U.S. government, about 1.5 million Americans filed for bankruptcy in the 12 months ended Sept. 30, a 14 percent increase over the number who filed during the 12 months ended Sept. 30, 2009.

And studies show "people are in worse shape than ever" when they file, said Robert Lawless, who teaches bankruptcy law at the University of Illinois at Urbana-Champaign. Too many people wait until it is too late "and suffer more than they need to," he said.

If a lender threatens to seize your home or car, it's a wise move to talk to an experienced bankruptcy lawyer. Talking to a debt counselor can also help you determine if your debt is manageable by living on a strict budget, or if bankruptcy is your best option.

If bankruptcy is your best option then it's important that you not wait too long to file. Once you file, only the debts you have had up until the point of filing are relieved. Credit card companies might cancel your card since you filed, but other companies will bombard you with offers because you can be considered a "safer risk" now that your debt is wiped out or significantly reduced. These new credit card offers may be tempting, but remember debt acquired after filing bankruptcy isn't included.

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.

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MSN Money has posted an article that discusses Massachusetts Supreme Judicial Court's crackdown on Wells Fargo and US Bancorp over two separate foreclosure cases that were being appealed in lower-court. The court decided that the banks cannot foreclose on the homes and has to return them because they can't prove who owned the homes at the time foreclosure proceedings began.

Neither Wells Fargo nor US Bancorp made the loans for the homes. Instead, they're considered more of an investor since they purchased the mortgages as part of a securities package. The banks received the deeds to the properties only after instigating foreclosure. The banks argue that was just a technicality, but critics see it as an issue of property-rights.

Apparently the court agreed. Writes Q-Law Blog:

… two of the concurring judges felt it necessary to include their own written opinions. While they agreed with the majority, they added the following: "(W)hat is surprising about these cases is not the statement of principles articulated by the court regarding title law and the law of foreclosures in Massachusetts, but rather the utter carelessness with which the plaintiff banks document the title to their assets(Q-Law's italics)."

Everyone is wondering how these two cases will impact banks, homeowners, and investors all across the country. Some think that banks will begin to complete more mortgage modifications or any other method that thwarts foreclosure and leaves a clear paper trail.

As you'd expect, bank critics were crowing. Some predict the implications will be enormous.

"Not only does this decision affect individual foreclosures, but it throws into question the entire mortgage securitization process," says reader "Riversider" at StreetEasy, a real estate blog.

A Home Equity Theft Reporter headline calls the decision "a train wreck for f'closure industry," quoting Boston lawyer and foreclosure specialist Gary Klein. The court didn't put a time limit on the decision -- its provisions are effective retroactively. Edward Bloom, president of the Real Estate Bar Association for Massachusetts, told the Reporter that the jurists created a legal traffic jam: "There will be a lot more litigation which could have been avoided."

Other consequences could include defaulting homeowners demanding that banks show them the paperwork saying they own the mortgage, financially stable homeowners could feel more free to abandon their underwater mortgages if their lender can't prove they own the mortgage, and foreclosures (once they make it to court) could take a lot longer to process.

Housing Wire interviewed James Frischling, president of NewOak Capital, who summed up the dilemma:

"No doubt the process of documenting the titles of these assets was careless, and that we need a system that prevents banks from unlawfully foreclosing on homes of borrowers," he said. "What we can't afford is a system that protects severely delinquent borrowers to remain in their homes for free."

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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Denise L. Evan's Real Estate Advice has posted an article about the former Colonial Bank executive Catherine Kissick pleading guilty to mortgage fraud charges on March 2nd. Reports claim to show that she helped Taylor Bean Whittaker sell at least $700 million in phony mortgages to Colonial Bank. Experts estimate that another $500 million to $1.1 billion in phony mortgages was sold to Colonial even though Taylor Bean Whittaker no longer owned the mortgages. The mortgages had been sold to other investors, sometimes even more than once.

Sort of explains why TBW was ready to buy a 75% share in Colonial in order to bail out the bank so it could get TARP money. TBW needed more control over covering up the fraud, it needed the gravy train to continue, and it SURE didn’t need regulators closing Colonial and rooting around in the paperwork details. That plan didn’t work out so well.

A scary fact is that TBW has actually been praised for their superior underwriting, audit trails, and quality control compared to other mortgage companies. But, on the same hand, consider how unreliable and disorganized other mortgage companies are.

Cases like this might seem like you as the innocent consumer can't do anything to protect yourself and your home. But there are some precautions you can take. For example, if you're involved in a loan modification or a short sale you need to make sure you're dealing with the right company who actually owns your mortgage loan. You do have to pay off your mortgage loan, but only to the lender who supplied you with the money. Be sure to hang on to original documentation that states who the original lender is, so no difficulties or questions will arise in the future.

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 Seattle Times has posted an article about an elderly New Jersey widow who is fighting fees after missing her last house payment. The 85 year old was sent a bill for $5,800 from two banks and their law firms, which is now being called "unfair or unconscionable" by her lawyers.

Ms. Dorothy Rhue Allen had borrowed $40,000 in 1976 to purchase a home and missed the final payment of $432 in 2006 due to hospitalization. The New Jersey lenders, and across the country, are being investigated for the way foreclosures have been handled during the housing crisis.

LaSalle Bank and Cenlar Federal Savings Bank, both based in New Jersey, filed court foreclosure papers against Ms. Allen and have also said that in order for them to fix a $432 mistake, they are charging Ms. Allen $5,797, of which nearly of half is legal fees.

Ms. Allen's lawyers are claiming that the fees are higher than is allowed by New Jersey and by federal regulations and the Federal Debt Collection Practices Act.

For example, court rules limit attorney fees to $15, not the $910 charged; document searches to $75, not $335; and process serving to $175, not $475, the suit said. Allen is now in a nursing home, while a nephew serves as her advocate. The banks stopped foreclosure proceedings after she countersued, and she was able to sell the home in 2008 for $112,000, according to online records.
A district judge in New Jersey had dismissed the lawsuit on grounds the fee notice was never sent to Allen, but only to her lawyers, and therefore was not covered under consumer-protection laws.
However, a U.S. appeals court in Philadelphia ruled this week that the notice amounted to an indirect communication with Allen, and ordered the district judge to revisit the case. Allen is seeking class-action status.

However, this case isn't the typical outcome. 65,000 foreclosures were filed last year in New Jersey and 94% of those went uncontested. State Supreme Court Chief Justice Stuart Rabner said that so many went uncontested because the homeowners were unable to pay legal fees and therefore didn't seek legal advice.

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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I spoke with a friend yesterday about a situation and I thought it might be helpful to share with you. My friend mentioned to me that she was receiving calls, repeatedly, from a national debt collector looking for a relative.

My friend has told this company on several occasions that the relative they are looking for does not live there and that she is not going to provide any contact information to the debt collector.

The debt collector has called multiple times asking for the same information and has asked that my friend give a message to her relative about calling this debt collector back.

I want to make several observations about this.

First, it is normally illegal for a debt collector to contact what is known as a "third party" more than once asking for location information. A third party is anybody other than the debtor or their spouse.

Location information only includes address, home phone, and place of employment. Nothing else.

It is also illegal for a debt collector to ask a third party, such as my friend, to give a message to the consumer/debtor.

So as we look at what this debt collector did, we can see several illegal actions.

It has violated the Fair Debt Collection Practices Act against my friend by repeatedly calling her. The only explanation is to intend to annoy or harass her into paying the bill or to force her to get her relative to contact this company and pay the bill. This is illegal.

Another violation is by calling her repeatedly and by requesting more than just location information, this company has violated the rights of her relative. A consumer/debtor cannot be subjected to calls to third parties.

This is one of the more common violations of the FDCPA by collectors. They know this is illegal but they do it because it is so effective. The idea is to "wear out" a relative so that that relative will ultimately pay the debt that is supposedly owed or will cause the debtor to pay the debt. It's also designed to present a lot of pressure on the debtor as naturally the debtor is very embarrassed by a relative receiving multiple calls about the debtor's personal financial situation.

And that gets to the core of the matter-the whole purpose of this conduct is to bring illegal pressure to bear upon everybody affected. There is nothing wrong with collecting debts. There is nothing wrong with making collection calls. But it is wrong to violate the law in an effort to collect a debt. While debt collectors like to say that the "end justifies the means," even they will admit that you cannot use profanity or make threats of physical violence or lie to a consumer or to a consumer's family in order to get a debt paid.

The only way this type of conduct stops is by either the debt collector suddenly deciding that it wants to be a good corporate citizen and stop violating the law (I'm not putting any money on that one!) or it needs to be sued by either the relative or the debtor or both to get it to stop this illegal conduct.

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 Post has posted an article about a case against the six largest mortgage lenders for their "shoddy foreclosure practices" and also for threatening to freeze thousands of foreclosures.

New Jersey Superior Court Judge Mary Jacobson, the judge presiding over the case, ordered the banks to appear in court to prove their foreclosure practices were completely legal.

Lawyers for banks ensnared in a nationwide robo-signing foreclosure scandal -- including JPMorgan Chase, Bank of America and GMAC's Ally Financial -- are scheduled to meet with Edward Dauber, the court's lawyer in the case, to discuss a possible deal this morning, court documents show. Dauber didn't return a request for comment.

The banks are going to try and prove that they've cleaned up their foreclosure practices after a scandal that showed banks were forging paperwork and robo-signing documents to speed up foreclosures. Stuart Rabner, New Jersey's chief justice, even made an unusual call that ordered banks to have to prove "their foreclosures are on the up-and-up within 30 days or risk their foreclosure cases being suspended." GMAC says it has postponed 1,800 New Jersey foreclosures until the case is cleared up. Citigroup says it currently has 4,023 pending foreclosures in New Jersey.

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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