Articles Posted in Consumer Protection

There’s an old saying regarding two certainties in life: Death and taxes. As it turns out, you can also be pretty certain of another: The U.S. government is probably never going to forgive your student loan debt. elderly

In fact, not only with the government hound you throughout all your working years – no matter how little you actually earn – you can bet calls for payback won’t end when you retire. That’s due to legislation passed by Congress in 1996. The little-known law gives the government the power to garnish the wages of Social Security checks (paid to those over the age of 65) for student loan debts.

As of right now, according to a new report from the Government Accountability Office, there are approximately 700,000 senior citizens receiving Social Security who still have student loan debt. Of those, more than a quarter are in default and are having their monthly stipends garnished to repay those loans. The government takes 15 percent of the total, assuming that leaves the retired worker with at least $750 a month. Continue reading

The latest report from the Federal Reserve Bank of New York indicates a quarter of all borrowers whose loans have come due are severely delinquent.students1

That tells us the percentage of Americans who have fallen further behind on student loan debts has spiked over the last 12 months, even though other measures indicate an economy that is steadily getting better.

As of June 30th, the number of outstanding student loan debts that were at least three months late stood at nearly 12 percent. That’s up from 10.9 percent one year earlier. Continue reading

That high interest rate on your credit card could be giving you more than a headache. It could potentially make you clinically depressed.
That’s the conclusion of a recent study conducted by the researchers at the University of Wisconsin-Madison’s Institute for Research on Poverty.

Gleaning information from the National Survey of Families and Households in the U.S. and a series of regression models, study authors discovered household debt is positively correlated with a higher number of depressive symptoms. This was more true of short-term unsecured debt – like credit card debts or payday loans – as opposed to mid- or long-term debts, like mortgages or car payments.

Long-term debts might actually be considered a positive for some people, as they may be deemed good investments in the future. However, it should be pointed out that this data was collected in the late 1980s and early 1990s, which means housing debt might now in fact be a source of significantly more stress, especially if the home is not worth nearly as much as it used to be. That sense of financial security may no longer be what it was before the recession.

Also interesting was that the association was especially acute for those adults between the ages of 51 and 64 (those nearing retirement) with a high school diploma or less. It was also true for those not in a stable marriage for the duration of the study period (which was two separate two-year time frames).
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The middle class is on its way out. The income gap between wealthy and the rest of is continues to widen, as the share of middle class wealth has been contracting for most of the last three decades.
A new study conducted by economic researchers at the University of California Berkley found it recently fell to the lowest seen since 1940. To put that into perspective, remember that after WWII, the “average” American accumulated unprecedented wealth, and this was the formation of the middle class. But today, all of that is gone, at least according to the new study.

Researchers defined “middle class” as the bottom 90 percent of Americans, with wealth being all of their home equity, bond and stock holdings, pensions and other assets after subtracting the debt.
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The Consumer Financial Protection Bureau recently issued a 29-page report, outlining its activities over the last several years.
Most interesting to our Miami consumer protection attorneys was the portion on debt collection practices, in which the bureau highlighted risky practices on the part of an industry where revenue has ballooned 600 percent from 2003 to 2012, reaching a peak of $143 billion that year, according to the Center for Responsible Lending.

Debt buyers typically spend only about 4.5 cents on the dollar for charged-off debt, but then turn around and aggressively pursue you – the consumer – to get whatever they can for it. Many times, there is no proof you even still owe it.
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The Federal Trade Commission announced recently that defendants in a debt collection scheme frequently targeting Spanish-speaking consumers will not only be required to pay a $3.3 million penalty, but will also be barred from doing future business.
Our Miami consumer lawyers have learned that the settlement agreement involves the two primary owners of Rincon Debt Management, who stood accused of violations of the Fair Debt Collection Practices Act, as well as the Federal Trade Commission Act.

Specifically, the company targeted calls to debtors’ family, friends, employers and neighbors. In doing so, collectors pretended to be delivering legal papers relative to a pending lawsuit. In some instances, the defendants were reportedly threatened with arrest if they failed to respond to the collection firm’s calls. Also, the two defendants, as well as their staffers, pretended to be attorneys – or employees of a law firm – and demanded that consumers pay legal fees and legal costs. This was despite the fact that in almost all cases, there was no pending lawsuit. In fact, there were many instances in which it was later revealed that the consumer didn’t owe the debt at all.

Herein lies one of the most important lessons that consumers can take away from these cases: It pays to fight back – or at least have the case investigated by an experienced consumer lawyer. Even if the debt collection agency is collecting on a legitimate debt, their tactics may be illegal. You may not actually owe as much as they are demanding. In some cases, even if you technically owe the debt, the statute of limitations may have run out or the collection firm may not be able to effectively link the debt to you in court.
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Our consumer rights attorneys in Miami know that big banks and creditors sometimes do dishonest things to defraud consumers of money, to charge consumers more than they should or to obscure the terms of deals that they are trying to convince consumers to enter into. Yet another example of this type of behavior can be seen in the actions of American Express, which violated consumer protection laws through illegal credit card practices. cut-expenses-2-1176252-m.jpg

The Consumer Financial Protection Bureau (CFPB) has recently taken action against American Express in light of these violations. A multi-part federal investigation revealed that American Express had engaged in violations of the law at every step of the customer experience, from marketing its cards to collecting debts, and now AMEX will have to pay for this bad behavior. The credit card company’s three subsidiaries that engaged in the wrongful practices are being required to refund an estimated $85 million to around 250,000 customers.
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Since 2008, complaints about some of the biggest banks in the United States have not been hard to find. One of the most recent commentators to speak out about problems with the banks, however, is a powerful official from the U.S. Federal Reserve. William Dudley, the president of the New York Federal Reserve bank, shared some harsh criticisms about ethical failings and cultural problems at major U.S. banks. bank-1342748-m.jpg

Miami foreclosure lawyers know that many place blame for the foreclosure crisis at the feet of these banks that encourage lenders to give out bad mortgage loans and then packaged those loans for sale to investors who thought they were buying AAA rated debt. Robo-signing scandals and other foreclosure problems have also come to light and cast further doubt on whether big banks are playing fair. Now, William Dudley has indicated that Wall Street investment firms and too-big-to-fail banks may have a systemic problem that calls for a “cultural shift” in order to restore the public’s trust in a troubled industry.
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If it wasn’t already abundantly clear, the major banks in this country and the government have a special bond. Government officials have done much more to help banks survive than the very public who voted them into office. Struggling homeowners in Miami who are fighting foreclosure need to take note.

As Miami foreclosure defense lawyers reported in August as part of a three-part series, banks got $1.2 trillion in loans that were never released to the public.
Bloomberg, which first reported the secret loans, recently detailed the fact that banks made $13 billion on the loans that the public didn’t know about. The Federal Reserve never disclosed that it loaned out the astronomical amount of money or that the banks were in such bad shape that they had no choice but to make the loans.

At a time when so many people are struggling with foreclosure in Miami, banks are still making money hand over fist. First, they used robo-signing tactics and filed fraudulent paperwork. Then, the government loaned $1.2 trillion in taxpayer dollars to the very banks that have tried — and in many instances were quite successful — in taking away people’s homes.

At a time when the foreclosure crisis was as noticeable as ever in the United States, the Fed was doling out billions in cash — enough to buy out every foreclosed home in America. As Bloomberg points out, the country’s central bank says there were no losses, but it allowed the banks to grow stronger and more powerful at a time when homeowners are growing less powerful.

But the average homeowner doesn’t have to cower and lose his or her home without a fight. A strong defense to a Miami foreclosure is as good as a bank’s offense. Being able to show that banks created documents to support a foreclosure, used robo-signing procedures or aren’t able to show who actually owns the house are all strong defenses in a foreclosure.

Bloomberg previously reported that banks got $1.2 trillion in loans and they netted $13 billion from it. But most recently, the news service reported that between guarantees and lending limits, the Fed committed $7.77 trillion as of March 2009, more than half the value of everything produced in the country that year.

While there was public outcry about TARP funds totaling $700 billion to product bailouts to big companies (whose CEOs got major bonuses), the public didn’t know about these loans.

Six banks — Bank of America, JPMorgan, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley — received $160 billion in TARP funds and another $460 billion from the Fed. The 2010 Dodd-Frank law mandated that certain details of Fed borrowing be released to the public, which should stop these secretive practices in the future.

While the government comes up with failed foreclosure programs in the future, Miami homeowners should be wary of relying on it to help. These stories should serve as a warning and a call to action. Fighting back with a Miami foreclosure defense lawyer is the only way to save your home from greedy banks.
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The New York Times recently wrote about a Buffalo, New York, law firm that holds an annual Halloween party where its employees dress up and work in their costumes.

Amazingly, pictures allegedly from last year’s party submitted anonymously to the newspaper show the lack of compassion on behalf of the lawyers that represent banks and lending institutions in foreclosure cases. In one picture, two women “dressed” as homeless people with one holding a handmade sign mocking homeowners whose houses were taken away.
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If this indeed true, these examples make it clear that some lawyers hired to work for big banks apparently don’t care about homeowners stuck in foreclosure. We are hopeful we do not see this cavalier attitude in a Miami foreclosure or other South Florida foreclosure situation.

As Miami foreclosure defense lawyers know, there are banking institutions that appear not to care whether a homeowner will keep his or her home or go homeless after a foreclosure.

Banks have found it more profitable to proceed with foreclosure, spend money to put the house up for auction, take the amount they get at auction and attempt to go after homeowners for a deficiency judgment — the difference between the auction price and the original loan.

Deficiency judgments can put homeowners in an even more difficult spot. That makes it even more important that they consider challenging the banks on the authenticity of their loan documents and whether they can prove who owns the note on the house after it has been sold time and time again.

The article goes on to report on the contents of the photos provided to the newspaper, including a mock homeless camp of foreclosure victims, a mock “estate” of the law firm’s victories in foreclosure cases, and other shots at homeowners who are struggling with foreclosure.

The newspaper reports that the law firm is under investigation by the New York attorney general and has recently agreed to pay $2 million to resolve a Department of Justice investigation into “misleading pleadings” and other wrongs.

Don’t think this is the type of thing happens only in New York. There are big law firms right here in Florida that are unwilling to work with homeowners and in some instances treat them poorly. This is why homeowners fighting foreclosure in Miami must act aggressively. Rather than sitting back and trying to deal with the bank on their own, they must take a more forthcoming approach.

Banks and the lawyers they hire to represent them have in the past made up documents that didn’t exist. This is immoral and unlawful and yet it has happened. Law firms are being investigated by state and federal authorities for this very type of offense.

Homeowners deserve to have every right upheld in a foreclosure proceeding. They shouldn’t be forced out of their home unless the banks are able to prove with 100 percent certainty who owns the house, what the total amount owed is and who actually owns the note on the loan.
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