Alabama Consumer Law Blog

The New York Times has posted an article about how the Obama administration's mortgage relief program, which was originally supposed to prevent about 3 million foreclosures, now looks like it will only stave off around 500,000 foreclosures.

The dropout rate for one of these programs, Making Home Affordable Program- designed to "modestly reward lenders for modifying mortgages", is very high. 96,000 of the trial modifications were cancelled by lenders in July of this year alone, bringing the total of cancelled trials to 616,000. Such high numbers have prompted housing experts to call the program a failure, but the administration insists that many households were helped, even if just temporarily.

“They were able to benefit from reduced mortgage payments each month at no cost to the taxpayers,” Herbert M. Allison, an assistant Treasury secretary, said during a briefing.

The high number of cancellations, according to the administration, is because of government's rush to set the program up. Lenders were told to enroll homeowners first and ask questions later. Because of this, many applicants didn't qualify for permanent modifications, whether it be because their paperwork was incomplete, they didn't live in the house, or because the "debt load was not heavy enough." Herbert Allison says that many of the homeowners who were turned away for permanent modification received other forms of aid.

About 422,000 mortgage modifications overseen by the government were considered permanent as of July, up from 389,000 in June. But the pool of candidates is shrinking rapidly. Only 17,000 trial modifications were started in July, down sharply from the 150,000 enrolled in September when the program was new.

The program will likely not offer any long term relief or solutions, as debtors are still in debt "up to their eyeballs," just with modifications instead of their original mortgage.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama, Wrongful Foreclosures In Alabama, The First Common Mistake Alabama Consumers Make When Sued For Ejectment, Should I Trust A Foreclosure Lawyer To Advise Me?, Overview Of Five Common Mistakes Alabama Consumers Make When Sued For Ejectment and What Do I Need To Bring To My Meeting With An Alabama Foreclosure Defense Lawyer?

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 givemebackmycredit.com has posted an article about how some homeowners are paying their mortgages, taxes, and insurance on time and wind up getting a foreclosure notice. One mortgage company, American Home Mortgage Servicing and other companies engaging in this are forcing the question to be raised: How is this allowed to happen and why isn't anyone doing something to stop it?

Here's an example of someone affected by this method of wrongful foreclosure:

Charles Smith says he is irate and at his wits end. He says he has never missed a mortgage payment yet he fears he could also lose his home because of delinquent taxes. Even though Smith has written proof from the county tax office that his taxes have been paid in full, he says his mortgage servicer set up an escrow account to cover the taxes. Then, the company nearly doubled his monthly payment. But he kept making his regular monthly payments.

Wrongful foreclosures and other illegal practices, like fabricated documents, are on the rise and the numbers won't go down until mortgage companies are held criminally accountable for these crimes against homeowners.

Here is a video from a Fox 4 investigative report on this:

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 givemebackmycredit.com has posted an article what's really behind the cause of the continuing mortgage and foreclosure crisis. It seems that one of the major underlying problems is that there's no motivation for the banks, credit bureaus, corporations, or debt collection agencies to tell the truth. When the facts and the law aren't on their side, they simply bend the facts and situation to their advantage and end up hurting you, the consumer.

Many people feel that's exactly the scenario playing out across this country in courtrooms and on Capitol Hill. With continued reports of unfair and wrongful foreclosures and use of fabricated title documents cropping up in courtrooms across the country, it adds up to trouble. A whole lot mistruths, twisted facts and personal attacks designed to cover the truth -and someone else's butts.

In fact, here's a great example of how they do just that:

"Legal Tips for Servicers" a guide that essentially teaches mortgage services how to side-step liability. This can be considered as a little "cheat sheet" in what one can easily view as a handbook designed to show how servicers can legally get out of owning up to one's own mess. Nice. Too bad consumers didn't have the same ready made manual.

Consumers are definitely playing a losing game. Recent financial reforms have succeeded in toning down the worst of the predatory lending, wrongful foreclosures, most people believe it hasn't gone far enough to protect consumers.

One example; Fannie Mae and Freddie Mac and the auto financing industry all got big get out of jail free passes. And, we now have a huge 2,500-page bill set to be law, without full understanding as of yet, what these reforms will mean for the consumer. One thing is certain out of this: there will now be a much needed consumer financial protection agency -an agency designated to act as the consumer's watchdog.

Richardson brings up a specific case about how the Bank of America lied to a couple about a loan modification. Lynne Lucas and her partner, Patrick, approached BoA about a loan modification after they saw a decline in their incomes after he was diagnosed with lung cancer and given a slim chance of survival. They were approved for a modification in January of this year, and discovered that their interest rate was lowered from 6.5% to 4.75%...which sounded great until they read the terms and BoA had actually increased their monthly payment by $570 a month.

Lynne and Patrick tried to negotiate the modification, which was denied in March with BoA claiming "investor denied." The very next day, with no warning, the property was sold as a foreclosure...an illegal foreclosure at that.

There are two problems with this; BAC Home Loan Servicing (Bank of America's servicing arm) owns the note.

Bank of America's attorneys sold the property at Sheriff's Sale less than 24 hours after being denied a loan modification.

However, Bank of America's servicing company BAC Loan Servicing didn't sell the property.

Fannie Mae sold it and they sold it to themselves for the filing fee of $35.00.

According to representatives in Barbara DeSoer's office and the Office of the Benzie County Register of Deeds, BAC Home Loan Servicing owns this note not Fannie Mae. Fannie Mae also has no record of owning this note.

This is yet another example of how creditors are tweaking the system to their advantage with little regard for the homeowners it hurts!

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:

Debt collectors and mortgage companies (including mortgage servicers) often use fraud against Alabama consumers.

In this video I give you an overview or big picture look at what fraud is in Alabama and what you have to prove in order to be successful in a fraud lawsuit or counterclaim.

We have found the fraud law to be a powerful weapon against debt collectors who lie (for example to obtain a payment from you) and especially against mortgage companies who lie about stopping a foreclosure, etc.

The four basic requirements include:

*Mis-statement or a lie;
*Concerning a material (important) fact;
*Your reliance upon the lie is appropriate (you did not close your eyes to the truth); and
*The fraud actually damaged or harmed you.

I hope this has been helpful - we will include more information on fraud but hopefully this is enough to give you a quick overview.

Feel free to contact us through our website or you can call us at 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:

The Federal Trade Commission has posted an article about how two Countrywide mortgage servicing companies are to pay $108 million to the struggling homeowners they overcharged with "illegal and excessive fees" before it was acquired by Bank of American in July of 2008. This case has one of the largest settlements of any FTC case.

“Life is hard enough for homeowners who are having trouble paying their mortgage. To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible,” said FTC Chairman Jon Leibowitz. “We’re very pleased that homeowners will be reimbursed as a result of our settlement.”

The FTC's filed complaint accuses Countrywide's loan-servicing operation, which is responsible for the daily management of mortgage loans, of deceiving homeowners who were behind on mortgage payments and trying to catch up. Homeowners, who can't pick their mortgage servicer, were charged inflated fees that ranged anywhere from hundreds to thousands of dollars.

Many of the homeowners had taken out loans originated or funded by Countrywide’s lending arm, including subprime or “nontraditional” mortgages such as payment option adjustable rate mortgages, interest-only mortgages, and loans made with little or no income or asset documentation, the complaint states.

When homeowners under Countrywide's servicing fell behind on payments the company offered to do things like lawn mowing and property inspection to "protect the lender's interest in the property."

But rather than simply hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors. The subsidiaries marked up the price of the services charged by the vendors – often by 100% or more – and Countrywide then charged the homeowners the marked-up fees.

The FTC alleges that Countrywide knowingly did this with the intent to increase their own profits through charging exorbitant fees.

According to the FTC, under most mortgage contracts, homeowners must pay for necessary default-related services, but mortgage servicers may not mark up the cost to make a profit or charge homeowners for services that are not reasonable or appropriate to protect the mortgage holder’s interest in the property. Homeowners do not have any choice in who performs default-related services or the cost of those services, and they have no option to shop for those services.

The complaint also accuses Countrywide of failing to inform homeowners who were already in bankruptcy to save their home, when fees or charges were being added to their account. The FTC says that after the accounts closed and the company no longer had the protection provided by bankruptcy court, they still tried to collect. Sometimes even through foreclosure.

The FTC’s complaint and settlement name two mortgage servicers as defendants: Countrywide Home Loans, Inc. and BAC Home Loans Servicing LP, formerly known as Countrywide Home Loans Servicing LP.

Countrywide is being required as part of the settlement to pay $108 million back to homeowners who were overcharged prior to July 2008. Additionally, the settlement prevents Countrywide from taking advantage of homeowners in the future by informing homeowners if it intends to use "affiliates for default-related services" and then provide a schedule of fees that the affiliates will charge.

In the servicing of loans, the defendants are permanently barred from:

-Making false or unsubstantiated representations about loan accounts, such as amounts owed.
-Charging any fee for a service unless it is authorized by the loan instruments, by law, or by the consumer for a specific service requested by the consumer.
-Charging any fee for a default-related service unless it is a reasonable fee charged by a third party for work actually performed. If the service is provided by an affiliate of a defendant, the fee must be within limits set by state law, investor guidelines, and market rates. Defendants must obtain annual, independent market reviews of their affiliates’ fees to ensure that they are not excessive.

The company is also required to make changes to its bankruptcy servicing practices. Homeowners in Chapter 13 bankruptcy will be sent a monthly notice detailing their amount owed, including any fees. Also, a data integrity program will be implemented to ensure the accuracy of information of homeowners undergoing Chapter 13.

This is one of the largest settlements of a case brought forth by the FTC, although, Countrywide's punishment is certainly deserved!

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:

When you are sued for ejectment (after a foreclosure) in Alabama, the first most common mistake is to not answer the complaint. The second most common mistake is to give up by assuming there is nothing you can do after a foreclosure.

If there has been a wrongful foreclosure, then the ejectment lawsuit is a perfect time to bring these issues up.

Don't believe all of the people who tell you it is too late - or who question your ability to fight a wrongful foreclosure.

To help you understand this area of the law a little bit better in Alabama, you can request our book (at no charge) - "The Five Most Common Mistakes Alabama Consumers Make When Sued For Ejectment" please fill out the form below:

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.

To get an overview of the five mistakes - read our blog post and watch the video here.

This story helps explain, at least in part, why debt collectors will abuse consumers and why mortgage companies will try to steal the homes of consumers.

Feel free to contact us through our website or you can call us at 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:

This is what consumers around the country face - people laugh and say "there is no way you can fight a giant mortgage company that has already foreclosed on your home!"

But when homeowners fight back - smartly and powerfully - when the mortgage companies feel the pain of answering for their evil deeds . . . the laughing stops....

You see people just assume . . . the mortgage companies just assume . . . that there is NOTHING you can do when a national mortgage company (you know - those "too big to fail" type of places?) decides to foreclose on you . . . and then decides to sue you to kick you out of your home.

If you dare to think out loud that there might be something you can do . . . that there must be something you can do . . . that surely this type of injustice can't keep going . . . then people will love to tell you how wrong you are.

Tell you that you have no chance . . .

Tell you that these mortgage companies hire the most expensive lawyers and have unlimited resources to fight you . . .

So why in the world would you think you could fight back?

This is where the laughing and snickering and the "you are so naive" head shaking goes on.

But remember this - its easy to sit on the sidelines and be critical. Be negative.

Those people aren't important in your decision on whether to fight back against the big mortgage companies. Or I guess I should say their "opinions" are not important.

If you believe you have a legitimate case. If you believe it makes sense for you to fight the mortgage companies. If you have met with a skilled foreclosure defense lawyer who you believe in and who believes in you and your case.

If you have all of that, then who cares about those negative "nay sayers" on the sidelines who are pulling up a chair to "watch you fail" - to watch you be brought back to their miserable level.

Thousands of years ago there was a ferocious enemy. He was huge. Well equipped. Well trained. Unstoppable.

Those who thought of opposing him wilted and hid.

But then there came someone who believed. Believed that he could defeat this giant. Believed that God was with him and the giant could be brought down.

People laughed at him.

Doubted him.

Even his own brothers.

But you know what? He grabbed a slingshot. He ran towards (not away) the giant. The giant was better equipped and had the odds in his favor.

But a slingshot and a single stone . . . placed in the right spot - right between the eyes - and guess what that giant did?

Fell.

Dead.

Those who laughed and made fun of that shepherd boy?

Oh they cheered him now.

Remember this - those on the sidelines are so quick to change their opinion . . . so if you know you have been wronged and believe that you have the ability to win . . . then let that laughter and mocking fade into nothingness.

Get prepared and run towards that giant. . . .

Best wishes

John Watts

If we don't answer the lawsuit (the complaint) then the mortgage company wins. Even if the foreclosure was bogus. Even if the foreclosure came about by fraud. If you don't answer the lawsuit, you lose.

Many people come to see us who don't answer and the court enters a default judgment against them. The time runs out to set aside that default judgment and then they show up at our office. There is nothing we can do.

Don't make this mistake. Instead fight back - at least answer the lawsuit.

To help you understand this area of the law a little bit better in Alabama, you can request our book (at no charge) - "The Five Most Common Mistakes Alabama Consumers Make When Sued For Ejectment" please fill out the form below:

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.

To get an overview of the five mistakes - read our blog post and watch the video here.

The five most common mistakes are:

1.Not answering the ejectment lawsuit;
2.Assuming since the foreclosure has already occurred that there is nothing you can do;
3.Assuming the company doing the foreclosure had the right to do so;
4.Assuming the foreclosure process was proper and valid; and
5.Not filing a counterclaim.

We'll have videos covering each of these points in detail. If you would like our book(at no charge) - "The Five Most Common Mistakes Alabama Consumers Make When Sued For Ejectment" please fill out the form below:

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.

Shamethebanks.org has posted an article about JP Morgan Chase's latest escapades in exacerbating the current foreclosure crisis. Apparently, the company was advising people to stop paying their mortgages, saying it was the only way to obtain a loan modification, then turned around and repossessed their homes.

The article specifically mentions one couple, the Jahanis, who have sued Morgan Chase and Washington Mutual Bank for these practices.

In their federal complaint, the Jahanis say they contacted the bank in December 2008 "to indicate that they were having trouble paying their mortgage and would like to discuss a possible loan modification."

The Jahanis say the bank representative told them "that they would not work with plaintiffs at all because they were currently not in breach of their loan terms. Plaintiffs were specifically advised at that time to stop making payments for a period of three months, at which time defendants would consider a loan modification. Plaintiffs were specifically informed that as long as they were current on their mortgage payments, that defendants would not consider a loan modification.

In June 2009, the Jahanis received a 'Notice of Intent To Foreclose' letter from Morgan Chase. They were told they were behind a little over $100 behind on their mortgage payments and unless the balance was paid in 30 days, foreclosure proceedings would commence.

Months of correspondence between the Jahanis and Chase followed, with the Jahanis repeatedly sending Chase documents it had requested, and Chase repeatedly sending them letters claiming it had not received proper documentation and that their loan modification was "in jeopardy."

The Jahanis say they called the bank to check on the status of their loan modification, and were told to disregard Chase's letters, that the bank "had in fact received all necessary documentation."

In October 2009, the Jahanis' home was sold at a trustee sale. The couple says that people came to their house and told them that "the property had sold at auction, that plaintiffs no longer owned the property and that they (meaning the unnamed persons) were interested in buying the house from the bank."

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 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:

Shamethebanks.org has posted an article about "the most dangerous man in America," but it isn't who you would expect. Jamie Dimon, CEO of JPMorgan Chase, has been dubbed the most dangerous man in the country. The article says that Dimon is only dangerous because "the people in charge let him be." Even so, Chase is responsible for creating 15 long months of loan modification chaos through something that looks similar to a monopoly.

Chase is worth something like 2 trillion dollars. Why does any corporation need to be that big, and what do you think their influence can be on our country, let alone the world? Money brings power, and this is too much power. We have already seen the abuses it can wreak, from the unfettered raping of the American Dream to the influence on the committee in Washington that recently proposed a financial reform bill that is essentially lackluster.

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 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:

Good morning,

I hope your week is going well. I received a lot of good feedback on the video last week - everyone that wrote in said they liked it. One person said my head was too big which reminded me of the Seinfeld episode (the "Andrea Doria" episode) where everyone kept saying Elaine's head was so large.

I don't think my head is too out of whack with my body - but I have taken the good advice and moved the camera a bit further away. :)

Speaking of video, here is this week's video.

So I took this negative - having the camera too close - and turned it into (hopefully!) a positive. Let's talk about this today for a moment . . .

We all face adversity in life but I read a quote years ago that has stayed with me and really has been helpful as I go through difficult times. It's from Napoleon Hill and it goes like this:

"Within every adversity, there is a seed of an equal or greater benefit."

The idea is that in every tragedy or difficult time, somewhere (and sometimes its hidden really well!) is something that will turn out for our benefit.

It can be something major - loss of a job or a broken relationship . . . this is bad but it leads to a better job or better relationship. You know the expression - we look back and say "Wow, that was a blessing in disguise."

Or it can be a more minor issue.

I'm not saying it is always true or easy - I understand from years of representing families who have lost loved ones through some company's negligence how tough some situations can be . . . but . . . we have to go through these difficult times anyway and if we have the asumption there is some hidden benefit, then we very often will find it.

OK - what in the world does this have to do with our newsletter on consumer issues?

Well, it applies to most situations our clients find themselves in . . . Facing some difficulty and having the choice to make - do we just wallow in self pity or do we find some way to turn this bad situation into a good one?

You are dealing with an abusive debt collector. One that calls your family members. Calls your neighbors. "Blows up your cell phone" with multiple calls a day. It's affecting your job - your mood - your work.

Bad situation? Absolutely. Is there a hidden benefit? Perhaps.

Maybe you reach the threshold and say "Never again will I be put in this situation where I have collectors calling."

Maybe you can sue the collector and receive compensation. That compensation allows you to pay off some debt.

Or like one client I had who owed no-one in the world but had a collector that would not take him off an auto dialer (robo calls) after he repeatedly told the collection agency they had the wrong person.

He finally sued because it was the only way to make the calls stop. He didn't need the money but I mentioned that obviously that collection agency wanted to give him money and he could take a vaction on them or donate it to charity. The point is - very annoying what he faced but he was able to turn this around and get a benefit out of it.

We have represented over a 100 clients who have been sued by debt buyers. Debt buyers who could not prove they owned the debt or that our clients owed the debt.

Bad situation being sued? Of course. But we won those trials. Now - but not before being sued - now we have a court order that we did not owe the debt buyer any money.

Ahhh.... now we have a benefit "greater than" the adversity.

We take that court order and tell the credit reporting agencies (Equifax, Experian, and Trans Union) that we do not owe the debt and to get the debt buyer's account off of our credit report.

Sometimes they would not remove it. Bad? Sure.

But then we sued the debt buyer and the credit reporting agencies. We generally received compensation and we had it removed from our credit reports.

All because of this bad situation of getting sued by a debt buyer and a bad situation of the credit reporting agencies not following the law.

One last example. We get behind on our mortgage payments. We are facing foreclosure. The mortgage company lies to you about what it will take to stop the foreclosure. You believe the lie (who else would know better than the mortgage company?) and because of that you end up with your home foreclosed.

Bad situation - adversity? Absolutely.

But because of the fraud and arrogance of the mortgage company you sue the mortgage company . . . and now facing a fraud jury trial the mortgage company decides to finally treat you with respect and honor.

Now the mortgage company agrees to modify the loan and compensate you for lying to you.

Bad situation you were in? Sure. But now you are in a better situation and you know better how to protect yourself in the future.

I'm not saying every situation turns out like I described above. Sometimes we lose if we are sued. Sometimes we lose when we sue the bad guys. Sometimes our health problems don't change for the better overnight.

That's life. But we have to look at the bad situation we are in and say "That stinks . . . but . . . what is the benefit I will find?"

Maybe its simply the life experience.

Maybe it prompts changes in how we handle our money or our health or whatever the case may be but my suggestion to all of us (talking to myself certainly!) is to have the assumption - to suppose - that somewhere we will find that benefit. . . and that benefit will be equal to or even greater than the adversity we are going through.

Or we could just say life is terrible.

Nah - let's not do that. :)

This reminds me of something my father told me when I was a kid - he said "Remember the 50:20 principle."

"What's that?"

"Genesis 50:20 -- when Joseph was sold into slavery. Then he became a ruler in Egypt and saved his family - who had sold him into slavery. He said to them 'You meant it for evil but God meant it for good.'"

A pretty good assumption to have don't you think?

Have a great weekend and next week I'll have a shorter newsletter (smile) - this one just kind of grew on me....

Best wishes . . .

John Watts

PS - 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:

DSNews.com has posted an article that discusses the continuing problem of home foreclosures. Despite numerous government instigated programs to curb foreclosure through loan modifications, the numbers continue to rise. The number of delinquent loans at the end of February of this year was 21.3% higher than the same time last year. The national delinquency rate stood at 10.2%.

Although delinquencies remained relatively level, the nation’s foreclosure inventories reached record highs in February. Based on LPS’ analysis, the foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase.

New problem loans are also at their highest numbers in five years. In January of this year, 1.1 million mortgages were at least 30 days delinquent.

LPS noted in its report that as a result of the federal government’s Home Affordable Modification Program (HAMP), delinquent loans that were modified and that remained current through HAMP’s three-month trial period – called “cures-to-current” – have increased. Advanced delinquency rolls, however, remain elevated from a historical perspective, the company said.

Both delinquency and foreclosure inventories remain bloated, LPS said, thanks to high volumes of problem loans in combination with prolonged loss mitigation efforts and foreclosure moratoria.

With 10.2 percent of borrowers delinquent and 3.3 percent in foreclosure, the nation’s total rate of non-current loans has hit 13.5 percent, LPS said.

Freddie Mac's economic team has released a statement saying that it may take two years or more for the housing market to calm down and return to normal.

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 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:

I have published a short consumer guide here that explains the difference between a "note" and a "mortgage" in the context of an Alabama Foreclosure.

Basically the Note is the debt - the amount you owe and it tells us who you owe the debt to while the Mortgage is the thing that ties the debt to your home - that makes the debt secured rather than unsecured.

I will be publishing additional guides under my Avvo profile on a variety of consumer issues.

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 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:

As an Alabama foreclosure defense lawyer I talk with a lot of consumers about "foreclosure."

People will call me and say "I'm dealing with a foreclosure" but I don't always understand what they mean.

The reason is sometimes they mean their house has already been foreclosed. Sometimes they mean the foreclosure sale was today. Other times they mean they are behind on their payments and foreclosure is coming.

I made this short video to explain the big picture of the three stages of foreclosure. I'll shoot some additional videos to explain each stage in more detail but here are the three stages:

1. Before the foreclosure sale date;
2. The actual foreclosure sale date; and
3. After the foreclosure sale date including the ejectment lawsuit to eject (or evict) you from your home.

If you would like more information about foreclosures in Alabama, here are some resources:

1. Our detailed blog post on 7 questions to ask before hiring a foreclosure defense lawyer;
2. Our articles section of our website (AlabamaConsumer.com);
3. Avvo.com consumer guides; and
4. Our two books on foreclosures - Stopping Wrongful Foreclosures and 5 Most Common Mistakes Alabama Consumers Make When Sued For Ejectment. These are available for free for Alabama consumers.

If you have further 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:

Hiring a foreclosure defense lawyer is a very serious matter. It should not be based upon a billboard (drive through Florida and you'll know what I mean) . . . it should not be based upon a television ad . . . or what your know it all brother in law says . . . or even a website.

Instead you need to find out if the potential lawyer you are looking to hire to advise you and represent you in your foreclosure case is the right one for you . . . not the right one for anyone else but the right one for you.

Here are seven suggested topics or questions to ask prospective foreclosure defense lawyers. You will think of other things but hopefully this will give you a good start:

1. How many foreclosure cases have you handled in court where you are actually litigating against the mortgage company (and filing a bankruptcy does not count as litigating)?
There is nothing wrong with being a new lawyer or being a lawyer that has never handled litigation cases against mortgage companies. But, you might want to know the level of experience your potential forecosure defense lawyer has so you can decide if he or she is right for you.

Ask if the lawyer has actually been in court. If the lawyer has actually sued a mortgage company or merely has thought about suing a mortgage company. Has the lawyer ever defended an Alabama consumer against an ejectment or eviction action after the foreclosure sale of their home.

You get the idea - get a feel for what the lawyer has experienced.

The advantage of experience is not being as easily surprised when facing situations. Litigation is notorious for bringing up surprises and if your lawyer is not prepared for the tricks of mortgage companies in litigation, then you may be disappointed.

This is not to say an experienced litigation lawyer is the best or an inexperienced lawyer is bad but this is an area of discussion you should consider exploring . . . .

2. How often do you attend training classes and seminars to learn the latest about new tactics and strategies of mortgage companies?
I've been handling car wreck cases for 15 years. There has not been much change in the law. The area of foreclosures and the way that home loans are structured has changed significantly. Foreclosure cases I handled five years ago are different than the way they need to be handled now.

We have a company called MERS that has fundamentally changed the way mortgages and notes are handled in this country. . . for the worse I might add . . .

Instead of mortgage companies holding mortgages for 30 years or until the home is sold or refinanced, we now have companies that immediately sell the loans to a company called a "depositor" who then supposedly sells the loans to a Trust. . . . but . . . The Trusts normally do not actually own the loans so the threatened foreclosures and actual foreclosures are improper if the Trust does not own the loan.

I say all of this point out that there is great change in this area of the law and one way (not the only way but one way) to learn and stay on the cutting edge is by attending seminars and conferences where your lawyer can brainstorm with other foreclosure defense lawyers.

Stan Herring and I have spent a great deal of time and money to attend conferences and seminars to stay on the cutting edge. This is not required to be an effective lawyer but this is something you might want to ask about as you interview potential foreclosure defense lawyers.

3. What type of materials do you have for me to review - books, videos, audios, etc. - so I can learn more about foreclosures and how you operate?
Some foreclosure defense lawyers believe that you do not deserve "free information" - instead you should simply trust that the lawyer knows the best way to represent you. Some lawyers do not want to share written or video information with you.

Why? Because of fear that you will take the information and then not hire the lawyer. This is a scarcity mentality.

You have to decide if you like this approach or if you prefer to learn more information about the foreclosure situation you are facing . . . if you would like to read a book or watch videos or read blog posts or articles about foreclosures, then you should seek that information out.

I won't say whether it is best for lawyers to offer information or if it is better to hide it . . . but I will tell you that my approach and the approach of Stan Herring is to share information. You can read a large number of articles on this blog about foreclosure and by looking at our website article section. You can also look at consumer guides that I have written on Avvo.com and many of these concern foreclosures. You can also look at our videos on Youtube.com which include videos on foreclosure.

You can request our books on Stopping Wrongful Foreclosures In Alabama and Mistakes Consumers Often Make When Facing An Alabama Ejectment Suit.

Decide which approach you prefer - to have information or to have information withheld - and let that influence your decision on what approach to take in your own situation.

4. Are you licensed in Alabama?
This may seem to be a silly question but here is why I suggest you ask this . . . there are so many lawyers around the country that are viewing the foreclosure crisis as a wonderful opportunity to scam and cheat people.

One classic way is for lawyers not licensed in Alabama to promise that they can "get a modification" or that they can "scare" the mortgage companies into stopping your foreclosure. They say this even though . . . they can't even practice law in Alabama!

If you search online you will see all sorts of groups that either are or claim to be lawyers that make amazing claims to be able to help you in Alabama. It is a legitimate question to ask:

"Are you a licensed lawyer in Alabama?"
"Can you represent me in Alabama to stop the foreclosure?"
"If the foreclosure happens and I get sued for ejectment, can you represent me in Alabama?"

If out of state lawyers can't represent you here, what about all of the non lawyers that are sending you advertisements or bombarding you with online ads? What about all of these "audit" or "TILA analysis" groups?

These groups will say that they will analyze your loan documents and then they will prepare a report that will intimidate your multibillion dollar mortgage company into being frightened by some group out of California or Chicago that can't do anything in Alabama.

You must make your own decision but do consider bringing up this question or topic with whoever you are looking at hiring as you face this difficult hour of your home being in jeapordy.

5. Is there only one way of doing things in your foreclosure defense efforts or do you have a variety of approaches?
There's the old expression that "to a man holding a hammer, everything appears to be a nail." The idea is that if you have only one way of doing things, you think that's the best way.

Some lawyers only have one approach. Other lawyers have more than one approach.

Its important for you to find out which group your potential lawyer falls into so you can decide what is the best.

Keep in mind that every person has different interests and desires.

Do you want to stay in your home?

Do you want to obtain a modification?

Do you want to file bankruptcy and pay your normal monthly payment as well as an amount more than that to the bankruptcy court?

Do you want the foreclosure to be stopped?

Do you want a foreclosure to be reversed?

Are you the victim of bogus charges and fees that drove you into foreclosure?

Have you been sued for ejectment because of fraud that led to the foreclosure?

For example, we do not file bankruptcies for Alabama consumers as we do not believe that for most people this is a good option. Instead we litigate cases in the court system to persuade the mortgage companies that it is in their best interest to compensate our clients for the bad conduct of the mortgage companies. Or we discuss before a foreclosure what would be a fair and reasonable settlement of our client's potential case.

We don't do everything - you won't see us file bankruptcy - but we do offer several options. You might prefer bankruptcy - if so perhaps you should consult a lawyer that only offers bankruptcy.

The point is that I suggest that you talk with a potential foreclosure defense lawyer to find out what approaches and options they can offer you so that you can decide on your own best course of action.

6. Is litigation the best way to deal with a foreclosure?
Not necessarily in my opinion.

Let me explain. Perhaps you are behind on your house payments but now you make plenty of money and can afford to pay your normal payment plus an "arrearage" - the amount of back payments you owe - so filing bankruptcy might be the best option.

But if you are the victim of fraud or bogus charges and fees, and if you plan on staying in your home, then litigation might be the best option.

By litigation I mean sometimes suing the mortgage company to stop the fraud. Other times this means when the mortgage company sues you for "ejectment" or eviction that you fight back by answering the lawsuit and filing a counterclaim.

I would suggest you ask this question of any lawyer you are talking to about helping you with saving your home. I personally don't always feel litigation is the best method - but normally I think it is the best option.

Let me explain.

When you are in litigation, you are not dealing with some unhappy disgruntled employee in a cubicle somewhere who really doesn't care about you. Instead, you have the company paying its lawyers hundreds of dollars per hour and those lawyers are telling the mortgage company that if it is guilty of fraud or bogus charges and expenses and the other things that we often sue mortgage companies for - then the company is going to have some serious issues facing a jury of Alabama consumers.

It tends to make the company escalate the process so someone with some real authority is making decisions on your loan - not the cubicle guy who won't return your phone call.

So, yes, I am not embarassed at all about feeling litigation is normally the best option if you have legitimate claims you can bring. In the month of April Stan and I filed ten foreclosure lawsuits against a variety of mortgage companies because in those cases we felt the best approach (and sometimes the only approach) was to file suit to best represent our clients.

You need to talk with a potential foreclosure defense lawyer to find the best answer for you.

7. How do you get paid - I'm not sure I can afford to pay a lawyer an hourly rate?
I understand this concern. Its a very legitimate concern.

My hourly rate (and Stan's) is $350 per hour. Several federal court judges in Alabama have ruled this year that this is a fair and reasonable hourly rate.

These cases - whether in litigation or not in litigation (i.e. in court) - take up a lot of time. Even if we just work five or ten hours a month on your case . . . a very low estimate . . . that's still a lot of money.

But if we handled the case on a pure contingency, it would be difficult to settle the case as we have had consumers who became used to "living mortgage payment free" while the case proceeded and then it was hard to accept paying a mortgage payment again.

So we offer a combination approach to most consumers. A flat monthly fee that is affordable and also a contigency portion that is fair to everyone.

But our approach is not the only approach. You may find a lawyer that will represent you for nothing except the contigency fee - if that is the best for you then that's wonderful. Or maybe you find a lawyer who will represent you for $150 per hour. If that is best for you - great.

But do understand that there are different approaches and find the one that gets you the right lawyer for you at a level you can afford.

Conclusion
By discussing these topics with a potential foreclosure defense lawyer, this will give you more insight into whether the particular lawyer is the right fit for you. No one lawyer is perfect for everybody . . . and any lawyer that says he or she is the best for everyone should next be asking "Hey, where are you going?" as you run out of his or her office!

But which one is right for you. Which one do you feel comfortable with - which one inspires confidence in you? Which one has shown you they know what they are doing?

I hope this blog post has been helpful to you.

Best wishes in your situation with your home.

John Watts
Birmingham, Alabama

If you have further 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:

NorthJersey.com has posted an article that discusses how "short sales" can actually take quite a long time. A short sale becomes an option when the seller's lender agrees to accept less in payment than the homeowner owes on the mortgage.

As a buyer, you can get some amazing deals from short sales. However...

"It's like a gamble," said Jan last week. "You have to go through multiple stages, and at the end they [the seller's lender] can say no. You can win; you can lose."

People who are interested in buying a home through a short sale often find that lenders make the process exceptionally difficult. They can ignore you for months, argue behind your back and in the end try ask you to give more money that originally.

This month, the federal government aims to limit those behaviors as it rolls out guidelines to streamline the short-sale process. The Home Affordable Foreclosure Alternatives Program – or HAFA — would require the seller's lender to agree on what price it would accept before the house is listed for sale; would set clear and short deadlines for the seller and lender to respond; and would offer cash incentives to get the deal done.

To qualify for this, homeowners must be a part of the Home Affordable Modification Program, or HAMP, which is one of the government's loan modification efforts. Homeowners who applied for but were turned down by HAMP, or are still unable to meet the requirements of their mortgage modification, are qualified for HAFA. HAFA is looking to institute a concrete deadline to force short sales to move along at a reasonable pace and reduce fighting amongst lien holders.

Yet another difficulty with the short sale is that many sellers have not only primary mortgages, but also multiple home equity loans.

"Some of the problem is dealing with second mortgages and third mortgages," said Nick Tselepsis of Nicholas Realty in Clifton. "They [secondary lien holders] have to agree to the short sale to clear the title, and they play so tough."

Giannantonio said: "Sometimes the second-lien holder holds things up. The first-mortgage holder may say, 'Give them a thousand,' and the second says, 'No, we want $5,000.' "

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 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:

This is a copy of our Consumer Power Newsletter today as we know some people like to read blog posts on their Google Reader or other newsreader and since we are including a video we thought it might be helpful to have everything in one place. So, here is our newsletter this morning:

Good morning . . . I hope you are having a nice week and I appreciate you allowing us to visit with you for a few minutes this morning.

I decided to shoot a short video that covers the same material as this email so if you would like to see that you can watch it below. I did shoot this video late one day so I'm a little bit scruffy and don't have on a tie so you'll have to overlook that . . . :)

Let me know if you find the video helpful and if so I'll include one for each week's newsletter.

OK I have two main topics for the day.

The first is to document calls from collectors and I want to share with you a reason why.

The second is to let you know about three books that you can request at no charge.

Importance Of Documenting

This week Heather and I met with a nice lady who is dealing with collection calls. She was very thorough in documenting the calls and as we looked through the calls she pointed something out to us. The calls came approximately every 30 minutes. So the two or three calls a day would be something like this: 10:18; 10:48; 11:18.

This is significant because it shows that we are probably dealing with computer generated calls as few human collectors would be able to call exactly thirty minutes apart day after day.

If you have been reading our newsletter you know that computer generated calls (or pre-recorded messages) to your cell phone is a big red flag. Unless you gave permission to the company calling - either the collector or the original creditor - then whoever is making these calls to you is likely violating the Telephone Consumer Protection Act (TCPA). This exposes that company to potential damages of $500 or $1500. Per call.

I share this story with you of this pro-active consumer to remind you to carefully document calls. Document who called, when they called, keep voicemails, keep a picture of your caller ID, etc. This is true whether you are dealing with a mortgage company, a credit card company, a bill collector, a car finance company, etc.

If you would like some more information about the TCPA - calls to cell phones - you can read our article here. You can also read a short article on how to use a simple collection log to track calls.

The system you use is not important - what's important is that you do have a system for keeping up with the calls as it may reveal options to you that you otherwise would not see.

Three Books

As you may know, we have held several tele-seminars on debt collection and foreclosure issues. We have started the process of getting those recordings transcribed and put into book form. That process is finished on three books and they will be available by Monday.

If you would like to receive a copy of any of these books, let me know. You can call us at 205-879-2447.

If you live in Alabama, let us know if you would like only the ebook format (PDF) or if you would like a printed version. If you live outside of Alabama, we are happy to send these to you in PDF. Do keep in mind these are focused on Alabama consumers which is where Stan Herring and I practice so you'll need to consult with a local lawyer in your area to see if the general information we provide in these books is applicable to you.

Our books that are available now include:

1. Little Known Ways To Stop Abusive Debt Collectors;
2. Four Secrets To Stopping Wrongful Foreclosure In Alabama; and
3. Five Mistakes Consumers Make When Facing An Ejectment Action In Alabama.

Next Tele-Seminar - Questions To Ask Your Potential Alabama Foreclosure Defense Lawyer

Our next tele-seminar will be in a few weeks (exact date coming next Thursday) and it will be on the Seven Questions You Should Ask Any Potential Alabama Foreclosue Defense Attorney Before You Hire. There are more and more lawyers who say they are foreclosure defense lawyers which is good as there are so many foreclosures and most foreclosures that we have seen have been improper. But how do pick the right one for you? What questions should you ask before you make a decision on your home and who will help you save your home?

If this is of interest to you, plan on joining us for our next tele-seminar where we will discuss these issues to offer you some suggestions on what you might ask about.

Final Thoughts

I'll close this email today and I want to thank you for being interested in consumer issues and taking the time to read this (or to watch the video).

Best wishes and have a wonderful weekend as we (amazingly) start a new month on Saturday....

See you next week!

John Watts

PS - 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:

Homeowners often wonder "Why won't the mortgage company (or servicer) agree to modify my loan so I can avoid foreclosure and still make payments every month? It just doesn't make any sense."

There are many reasons but I'll just give you . . . oh . . . say . . . 10,000 reasons . . . .

Once a loan is 90 days or more overdue, servicers charge processing and foreclosure fees along with markups for attorneys, appraisers and other services. That’s on top of monthly late fees that can run as high as 5 percent of the mortgage payment. A foreclosure on a $200,000 mortgage may result in $10,000 or more of income for servicers, who get paid before mortgage investors, according to Glenn Russell, a real estate attorney in Fall River, Massachusetts.

“Servicers can easily make 10 times any of the government stipends being offered by simply foreclosing on the house,” Russell said.

To put it bluntly and accurately without any fluff:

“Servicers love loans that are in default for an extended period of time,” McDonnell said. “They are cash cows.”

These enlightening quotes are from a fantastic story by Kathleen M. Howley entitled "Mortgage Servicer Profits May Threaten Obama Housing Programs"

So, if you ever wonder why your mortgage company seems so unwilling to help . . . so dead set on seeing you lose your house in this market where your house is not worth what you owe . . . remember -- $10,000 is what the servicer makes. As people often say - "follow the money". . . good advice here.

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 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: