Articles Posted in Bankruptcy and Foreclosures

An eight-year dispute over allegations of debt harassment, illegal foreclosure and a resulting bankruptcy has been resolved, with Bank of America agreeing to pay $6 million to the couple affected. foreclosure defense lawyer

The proposed settlement has reportedly affected every aspect of the family’s life. While $6 million may sound like a lot, it’s far less than the $46 million originally ordered by a federal judge in March. At the time, the judge opined the mortgage modification process of the bank and the mistaken foreclosure on their home (in California) left them not only homeless, but bankrupt and battle-weary and demoralized.

It all started back in the spring of 2009. At the time, the bank issued statements indicating it wouldn’t consider loan modifications for its customers who were current on their payments. Based on this, the couple stopped making their mortgage payments, as they were underwater on their home and needed a loan modification. After they stopped payment, they made an estimated 20 requests for loan modification. However, the bank always declared the requests were insufficient, incomplete, stale, needed to be resubmitted, denied without reasonable explanation or lost.  Continue reading

There are a number of commendable accomplishments by President Barack Obama during his eight years in office. These were recently detailed in long-form story called, “My President Was Black,” by Ta-Nehisi Coates of The Atlantic. However, this profile of Obama is incomplete in one regard: It does not take into account his failure to stop the foreclosure crisis – or to hold anyone accountable for the enormous damage it inflicted on so many ordinary Americans. whitehouse

In fact, more than 9 million American families have lost their homes since the housing bubble burst, either due to foreclosure or some associated transaction. When we look at this in terms of the average size of American households, we’re talking about 20 million displaced people. These were individuals forced to uproot their lives. Forced to find a place to stay. Forced to start over. This had an out-sized impact on people of color in particular, who are more likely to keep their wealth in their home equity and who were also the primary targets of predatory subprime loans. Although Coates takes note of the fact that white homes hold seven times as much wealth as black households, yet fails to mention that this statistic actually worsened under Obama, in large part due to these foreclosures, according to The Federal Reserve.

This is not to say that Obama did not have noteworthy achievements. However, this has to be counter-balanced with Obama’s own role in one of the biggest losses of black wealth in history.  Continue reading

The biggest banks in the country set in motion the events resulting in the mortgage crisis that would tailspin the nation into an economic depression. Millions of people conned into overpriced and risky mortgages lost their homes to foreclosure. Many also had to file for bankruptcy. agreement

To pay for this, the federal government finagled a collective settlement: $110 billion. The idea was that these large institutions would have to pay recompense to those they affected.

But as The Wall Street Journal recently learned, underwater homeowners didn’t see much of this money, which was divvied up on a state-by-state basis, depending on how greatly each was affected. So how was that money spent?  Continue reading

Renters in Miami are being bled dry by a combination of sharply rising housing costs, stagnant wages and lower-than-average incomes. miami1

A report from the website, based on figures from the most recent 2014 U.S. Census, reveals that no other city in the county had as many renters as cost-burdened as those in Miami. Two out of every three renters in Miami are paying a third or more of their salaries to their landlord. Renters who pay more than 30 percent of their income for housing are considered “cost-burdened.”

Of course, rents aren’t necessarily as high as what you might see in Boston or New York or San Francisco. But people here in South Florida are earning much less in terms of salary. Further, home ownership is not an option that is available to many people who live here because home prices have skyrocketed as the housing market stabilizes from the housing crisis. South Florida had been hit particularly hard by the economic downturn, and while the uptick in housing prices has been good for some folks, it has meant others have lost their homes and/or are stuck in high-price rentals. Continue reading

The trial lawyers at Jacobs-Keeley have often noted the civil court system is skewed toward banks and other deep-pocketed entities. Even though courts are supposed to be one of those places where the playing field is even – justice being blind, and all that – there is much to suggest that is not the case.
Just take the recent editorial penned by Sue Bell Cobb, the former Chief Justice of the Alabama Supreme Court from 2007 to 2011. In a long, detailed piece in Politico Magazine, she delves into the dangers of requiring judges to undergo cash-soaked elections. She says the amount of money and favors exchanged in state judicial races made her “ashamed” to have participated.

She took note of how she had no choice but to accept nearly $2 million from lobbyists and lawyers in order to win the 2006 race. Her opponent raised more than twice that much. Although she won, she says a question from a reporter left her disturbed. The reporter asked how it felt to have won the most expensive race in history, and how the people of the state could rest assured those contributions wouldn’t affect her decisions on the bench.
Continue reading

A number of large financial institutions are preparing to settle with the U.S. Justice Department over allegations they engaged in a massive price-rigging scandal that involved many trillions of dollars in foreign currency trades.
The Justice Department has promised the settlement in this case will be far tougher than those negotiated in the past over other alleged wrongdoings by banks. Of course, as The New York Times‘ editorial board recently pointed out, “tougher than the last” isn’t saying too much.

We’re talking about a system where banks have committed crimes involving not just the rigging of interest rates and foreign currency trades, but mortgage fraud, money laundering, securities fraud, conspiracy to aid tax evasion and foreclosure abuse. When banks struck settlements with the government for these actions, very rarely did they even have to concede they’d done anything wrong. Most of the time, prosecutions were deferred or foregone entirely in exchange for payment of fines or other penalties. In four cases, all involving foreign institutions, banks pleaded guilty to criminal charges, but none of the penalties had any real impact on the firms’ day-to-day operations. And how many top-level bank executives were held civilly and/or criminally? A grand total of zero.
Continue reading

Democratic Senator Elizabeth Warren has been one of the very few voices in Washington that has consistently spoken out about systematic governmental failures in protecting average Americans. A Harvard professor and author, Warren ran the Congressional Oversight Panel, which supervised the bank bailout spending and helped launch the Consumer Financial Protection Bureau.
In a recent interview with writer Thomas Frank, Warren expounded on the failures of the Obama Administration and resulting protection of the Wall Street elite, at the expense of ordinary Americans who were losing their homes and their jobs throughout the Great Recession.

In the interview and her recent book, “A Fighting Chance,” she discusses how huge financial institutions spent more than a million dollars each day on lobbyists in the 12 months preceding the financial reform debates. Meanwhile, there are almost no advocates arguing for the rights of minimum wage and medium-wage workers.
Continue reading

During the housing bubble, many homeowners took out home equity lines of credit to tap into the equity in their homes. Now, an increasing number of those home equity loans have been outstanding for 10 years, which means that borrowers are required to start paying back principal while before they were just able to pay the interest on the loans. Many homeowners are having a hard time making the higher payments, which means that their homes are potentially at risk of being foreclosed on. bricks-and-money-4-208866-m.jpg

For those facing this problem with the home equity loan coming due, they are not alone. MSN has indicated that the trend of missed payments could actually lead to another foreclosure crisis and more trouble for the big banks in the United States. Miami foreclosure lawyers can help those who are getting caught up in the home equity loan mess to hopefully avoid losing their homes even if their home equity payments rise.
Continue reading

A federal bankruptcy judge has ordered banking giant Bank of America to pay $10,000 for every month it continues to hound a couple whose mortgage loan was discharged in bankruptcy.
Our Miami foreclosure lawyers know that bankruptcy law is quite clear on what it expects of creditors in the wake of a bankruptcy filing, and that includes immediate orders to cease and desist collections efforts.

The fact that Bank of America failed to do this, according to U.S. Bankruptcy Court Judge Robert Drain in New York, was not some “stupid mistake.” Rather, he said, it’s obvious that these collections actions were a matter of policy at the company – a policy that violates federal bankruptcy law.
Continue reading

As federal regulators are gearing up to issue sanctions against J.P. Morgan Chase & Co. for a litany of mistakes the financial giant made while collecting old debts, an internal review by the firm has proven what has already been alleged.
Our Miami consumer rights lawyers understand that the bank analyzed some 1,000 lawsuits filed against credit card debtors. Of those, about 9 percent were found to have significant errors.

Those mistakes reportedly ranged from wrongly-applied fees and interest to some cases in which the listed balances were higher than what was actually owed, according to The Wall Street Journal.

Of course, the bank has tried to downplay these errors as “minimal impact” and “mostly small.” That may be true from the perspective of a multibillion dollar corporation. But as any individual who has had to go toe-to-toe with the bank in court will tell you, it’s typically no small matter. You figure in not only the debt at the core of the dispute, but also the costs incurred for legal fees and time spent on the case, it all adds up very quickly.

These abuses eerily reflect the problems associated with the robo-signing scandal that plagued the housing market. It would never have to light, either, if former Chase Vice President-turned-whistle-blower Linda Almonte would never have stepped forward. She was fired for shedding light on these problems, and has since filed a civil lawsuit against the company.

Today, 13 states and the Office of the Comptroller of the Currency are investigating the bank. Some have outright accused chase of unlawful and fraudulent methods. California has even filed a lawsuit against the bank alleging problems with some 100,000 credit card debt collection lawsuits in that state alone.

The agency halted its credit card debt collection lawsuits back in 2011 after the allegations first emerged.

So why was Chase so sloppy in the first place? Because it is easier to sell debt to a second-hand collector if a court judgment for payment has already been obtained. That meant that Chase was willing to go to extraordinary lengths – perhaps even break the law – in order to get those judgments. The vast majority of these people never fought back in these cases, so many may not realize that the lawsuit against them was full of mistakes. In fact, we believe Chase was counting on that. And you can bet Chase likely wasn’t the only one, though it’s the only firm that has so far been caught.

We would also venture a guess that the 9 percent error rate determined by the bank is likely a severe understatement. The problems are likely much more widespread.

Consider the results of Chase’s mistakes regarding foreclosure case errors. The consulting firm hired by the bank had analyzed more than 60,000 foreclosure lawsuits. Of those, the consultant estimated about 1 percent were flawed, affected by the robo-signing scandal. However, independent reviews revealed error rates that were much higher, at between 9 and 11 percent.
Continue reading