Foreclosure Proceedings in Maryland: What Happens When
January 29, 2009
Below is a link to an article published by the Maryland State Bar Association. It gives detailed information about the mechanics of the foreclosure process in Maryland:
Foreclosure Proceedings in Maryland
New NCLC Report “Automated Injustice” Discusses Credit Bureaus’ Failure to Investigate Consumer Disputes
January 27, 2009
The National Consumer Law Center (NCLC) has published a new report revealing industry-wide problems with how credit bureaus handle consumer disputes.
The findings of the report are unlikely to surprise any consumer who has tried to dispute an error on his or her credit report.
Bureau representatives have repeatedly told our office that a dispute only requires them to compare the information they report to the information the creditor provided. If the information matches, the investigation is deemed complete. But, courts have repeatedly rejected this interpretation of bureaus’ investigation duties under the Fair Credit Reporting Act (FCRA.)
And, in the course of handling consumer disputes, our office has never seen a single example of a bureau actually forwarding a consumer’s dispute letter and supporting documentation to a creditor / subscriber for investigation. Yet, this is one of the tasks bureaus are charged with under the Fair Credit Reporting Act. The NCLC report discusses this industry failure as well.
Automated Injustice: How a Mechanized Dispute System Frustrates Consumers Seeking to Fix Errors in Their Credit Reports, Jan. 27, 2009
Status Report: Judicial Modification of Mortgages Legislation
January 27, 2009
It appears that the judicial modification of mortgages legislation (S. 61 by Durbin, HR 200 by Conyers, and HR 225 by Brad Miller) will NOT be part of the economic recovery package now under consideration in the House and Senate.
President Obama has reportedly asked Democratic leaders to exclude the mortgage legislation from the package.
However, President Obama has also reaffirmed his support for the mortgage modification legislation. The Administration is reportedly looking for a quick-moving vehicle to which to attach the legislation.
Possibilities include the 2009 omnibus appropriations bill, which congressional leaders hope to pass in the short term.
In the meantime, the House Judiciary Committee is marking up H.R. 200 at 1 p.m. today. Chairman Conyers will offer a manager’s amendment at that time. The amendment will reflect Citigroup’s January 8 decision to drop its opposition to the proposed legislation.
Some related information:
- Credit Suisse released a report yesterday, “Bankruptcy Law Reform – A new tool for foreclosure avoidance.” Report
- The Los Angeles Times editorialized yesterday in favor of judicial modification of mortgages as part of a broader approach to the foreclosure problem.
This post was excerpted from an email alert from the National Association of Consumer Advocates.
New Fannie Mae Policy Lets Qualified Renters in Foreclosed Properties Stay in their Homes
January 15, 2009
On January 13, 2009, Fannie Mae announced a new policy that lets qualified renters in Fannie Mae-owned foreclosed properties stay in their homes.
(Fannie Mae has suspended evictions in these properties until the end of January 2009, which should allow time to implement the new policy.)
“Renters in foreclosed properties have often been a casualty of the
foreclosure crisis the country is facing,” said Michael Williams, chief
operating officer of Fannie Mae. “This policy will allow qualified
renters to remain in Fannie Mae-owned properties should they choose to
do so, mitigate the disruption of personal lives that foreclosures can
cause, and help bring a measure of stability to communities impacted by
high foreclosure rates.”
The new policy applies to:
- Renters
- In properties foreclosed by Fannie Mae
- Who lived in the properties at the time of foreclosure.
- Former homeowners (people who held the foreclosed mortgage, also called “mortgagors”) do NOT qualify for this program. The party is for third-party tenants who rented from the foreclosed homeowners.
- Two-to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing all qualify.
Lease terms, security deposits, rental rates
- Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property.
- The company will not require renters to pay security deposits to qualify for the program.
- Renters in the foreclosed properties will be asked to pay market rate rent under the new leases.
- Rates will also be subject to any legal rent control restrictions.
Property condition and management
- The properties must meet state laws and local code requirements for a rental property.
- While the company markets the properties for sale, Fannie Mae will manage the properties through a real estate broker or a property management company.
How do I know if my home is a “Fannie Mae-owned foreclosed property”?
- Property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options.
- If you are a homeowner, you should contact your lender to find out if you have a loan that is owned or backed by Fannie Mae.
For more information, please review the policy FAQs at fanniemae.com.
[This post was excerpted from a Fannie Mae press release.]
Laws Regulating Debt Collectors: FAQ
January 11, 2009
Below are some questions our office frequently receives.
The collection agent I spoke to was very threatening and called me in the middle of the night. Is this legal?
No, such collection techniques are not legal.
Collection agencies must by law follow certain detailed procedures when contacting a consumer by mail or phone. Collection agencies must also by law provide you with certain information about your rights.
You can sue a collection agency if it breaks these laws in its communications with you.
How can I prove a debt collector broke the law?
To help you prove your case, it is very important that you save all letters and voicemails from collection agencies.
You should also save all old statements, the original account agreement, and any other documents you have for the account.
We do not recommend dealing with collection agencies over the phone. But, if you decide to speak with a collection agency over the phone, you may want to consider taping all phone calls. In Maryland, you must by law get the other partyÂs permission before recording a call.
Also, save any recorded phone messages from collection agencies. If you speak with a collection agent over the phone, make detailed notes about the phone call as soon as you hang up, even if you are recording the call.
And, if you have an attorney, the collection agency must by law (1) stop contacting you about the account and (2) direct all communications about the account to your attorney.
What kinds of debt collector contacts are prohibited by law?
Many state and federal laws regulate debt collection activities. In some cases, a consumer can sue a debt collector if it violates these laws. Below is a partial list of illegal debt collector activities.
You should contact an attorney for more information if you think a debt collector has behaved inappropriately or made suspicious statements to you.
Even if you donÂt see a description below that fits your situation, there may be other laws that apply.
Harassment. A debt collector may not:
- Threaten violence or harm.
- Refuse to identify him- or herself and the fact he or she is a debt collector.
- Advertise or publish a debt. (Exception: it usually may report the debt to credit bureaus.)
- Use obscene language.
- Call very early, very late, or in an otherwise harassing pattern.
- Contact you by postcard in an attempt to embarrass you.
- Charge you for collect calls.
- Contact neighbors, employers, or family members about your debt. (This is illegal in most cases.)
- Continue to contact you about a debt after you have informed the collector that an attorney represents you.
False Statements Prohibited. A debt collector may not make false statements when trying to collect a debt. Some examples are:
- Falsely implying that a debt collector is an attorney, police officer, or government representative.
- Falsely implying that a consumer can be arrested or imprisoned for not paying a debt.
- Falsely claiming or implying to be affiliated with a credit bureau.
- Misrepresenting the amount or legal status of the debt.
- Sending fake Âlegal papers in an attempt to collect on a debt.
- Telling a consumer that a letter is not a legal document when it is.
- Telling a consumer a lawsuit is in progress when that is not true.
- Telling a consumer the debt collector will seize the consumerÂs property or wages. (This is an illegal threat unless the debt collector both has the legal right to do so and intends to do so soon.)
- Telling a consumer the debt collector will garnish his or her paycheck “immediately” or “next week,” when there is no final legal judgment in place. Garnishments usually cannot take place until a creditor or debt collector gets a final court judgment against the consumer.
- Telling a consumer she or he will be sued. (This is an illegal threat unless the debt collector both has legal grounds to sue and intends to do so soon not months or years later.)
- Making contradictory statements about a consumerÂs legal rights. For example: in one paragraph, a collectorÂs notice might inform a consumer of his legal rights, but in the next paragraph the collector might write, Âyou waive all of the above rights if we donÂt hear from you in 30 days.Â
Will Paying a Collection Account Improve my Credit Score?
January 11, 2009
How do collection accounts affect my credit report and credit score?
The company with whom you originally had an account is called an “original creditor.”
Once the original creditor gives up on trying to collect on an account, it will charge off the account and may assign or sell the account to a debt collector.
Once the account has been sold or transferred to a debt collector, there may be two entries on your credit report.
One entry will be from the original creditor. It will usually show that the account has been “charged off.”
The debt collector may make a separate entry on your credit report. Both of these entries can harm your credit report and your credit score.
Will paying the debt collector improve my credit score?
Simply paying a debt collector may not help your credit score.
This is partly because of the double reporting problem described above, and partly because of the scoring model that is used to calculate your credit score.
Even if you pay a debt collector, the original creditor’s negative item will still appear on your credit report.
And, a debt collector may not delete its entry on your credit report after you pay. It may simply notify the credit bureaus to report the account as a “paid collection.”
But, the credit scoring models are designed to penalize consumers for any collection account appearing on their credit report– even if the account is a “paid collection.”
But, there may be other reasons to pay a collection account.
Even though paying the collection account may not help your credit score, there may be other reasons to pay and / or settle the account.
Avoid a debt collection lawsuit. These days, more creditors and debt collectors are suing consumers to collect on old debt.
You plan to make a large purchase. Most mortgage companies and some car financing companies will require you to pay any collection accounts before they will give you a loan.
You are looking for a job or applying for a security clearance. Many employers do a credit check before offering applicants a job. Many employers will see unpaid collection accounts as a red flag. And, it would be very difficult to get any kind or security clearance if you have outstanding collection accounts on your credit report.
Negotiate Improved Credit Reporting.
For the reasons discussed above, it is very important to negotiate the best possible credit reporting when paying any accounts.
Many times (though not always), the best possible outcome is a deletion of the debt collector’s entry (also called a “tradeline”) from your credit report.
But, be sure to negotiate improved credit reporting before making payment. After you have paid off the account, the creditor or debt collector has no incentive to change its reporting of the tradeline.
And, as always, get everything in writing.
Consumer Stories Needed: Participate in Arbitration Fairness Day April 29, 2009
January 10, 2009
The National Association of Consumer Advocates (NACA) is looking for consumers willing to share their experiences dealing with mandatory binding arbitration.
Specifically, NACA is looking for potential participants for Arbitration Fairness Day. They need more participants from the Maryland/Virginia region.
Arbitration Fairness Day is Wednesday, April 29th, 2009. The purpose of the lobby day is to tell Congress, the press, and the American public why binding mandatory arbitration is a biased system that denies accountability and justice.
There will be a morning press conference featuring Congressional co-sponsors of the arbitration fairness bills and select consumers who will tell their first-hand stories.
Following the press conference, consumers and advocates will meet with their Representatives and Senators.
NACA may be able to cover some transportation and lodging costs for consumers traveling to Washington, D.C.
If you are interesting in participating, please contact our office and we will forward your information to NACA.
[This post was excerpted from an email alert from the National Association of Consumer Advocates.]
Proposed Legislation Would Give Bankruptcy Courts More Power to Modify Residential Mortgages
January 7, 2009
On January 5, 2009, Senator Dick Durbin (D, IL) introduced S. 61, the “Helping Families Save Their Homes in Bankruptcy Act.”
This legislation would enable bankruptcy courts to modify mortgages on primary residences at risk of foreclosure.
Here are links to the legislation (S. 61 ), Senator Durbin’s remarks upon introduction (Durbin’s Talking Points – S. 61), and a section-by-section summary of the legislation (Section-by-Section Analysis).
Representative John Conyers (D, MI), chairman of the House Judiciary Committee, has introduced identical legislation, HR 200, in the House (HR 200 ).
[This post was excerpted from an email alert from the National Association of Consumer Advocates.]
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