National Aribitration Forum (NAF) to Cease Credit Card and Other Consumer Arbitrations
July 19, 2009
The following is partially excerpted from the BusinessWeek article “Big Arbitration Firm Pulls Out of Credit Card Business.”
In a surprising turn of events, the National Arbitration Forum (NAF) has agreed to stop accepting consumer credit card arbitration suits, Minnesota Attorney General Lori Swanson said on Sunday, July 19.
The Minnesota AG sued the firm on July 14 for consumer fraud, deceptive trade practices, and false advertising.
Under the terms of the settlement, NAF by the end of this week will stop accepting new consumer arbitrations of any kind.
Update: Judicial Modification of Mortgages (Bankruptcy) Bill in the Senate
March 16, 2009
The proposed “Helping Families Save Their Homes Act of 2009″ would give bankruptcy judges power to modify residential mortgages. For earlier posts on this topic, click here.
A version of the bill passed the House on March 5, 2009. It is now in the Senate, where some of its key provisions are facing opposition.
Democrats had hoped to vote on the bill before the April recess, but a vote has not yet been scheduled due to ongoing negotiations in the Senate.
Main areas of conflict appear to be the bill’s “cramdown” provisions and a proposal to limit bankruptcy relief to subprime mortgages only.
According to the National Association of Consumer Advocates, limiting the proposed relief to subprime mortgages would deny bankruptcy protection to approximately 60% of the homeowners most at risk of foreclosure.
The Center for Responsible Lending has summarized key provisions of the House version in this document. The document also discusses how the proposed legislation would reduce foreclosures without creating additional costs for U.S. taxpayers.
To voice your opinion about the proposed bill, call your Senator. The US Capitol Switchboard’s number is (202) 224-3121. A switchboard operator will connect you with the Senate office you request.
Portions of the above post were excerpted from a National Association of Consumer Advocates email alert.
Now scheduled for Senate vote:Â read the April 29, 2009 update
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.]
Resources for Maryland Homeowners Facing Foreclosure: Where to Go for Help
November 24, 2008
Several Maryland state government agencies, housing counseling agencies, and legal services organizations have joined forces to offer legal help to Maryland homeowners facing foreclosure.
Their combined efforts have produced the “Foreclosure Prevention Project” and the HOPE (Home Owners Preserving Equity) Foreclosure Prevention Program.
What the programs do
The projects aim to have volunteer attorneys help homeowners facing foreclosure. The attorneys help the homeowners assess their mortgage situation and decide which foreclosure alternatives might work. You can read more about common foreclosure alternatives at this link.
Perhaps most importantly, the volunteer attorneys will (when appropriate) also contact the homeowner’s loan servicer to attempt to negotiate the desired solution.
An attorney working on a homeowner’s behalf may be able to get prompt responses from lenders and loan servicers. This is important because many homeowners throughout Maryland report getting the run-around from their loan servicer when trying to negotiate a modification of their troubled mortgage.
How to contact
The hotline to call is: 1-877-462-7555
The website is: www.mdhope.org
If you need legal help
If you need legal help, the HOPE Program counselors will help refer you to a pro bono attorney.
If you do not qualify for these programs, other help is available.
If you do not qualify for the program or you do not meet the income guidelines to qualify for a pro bono attorney, try contacting your county’s Bar Association.
Many have programs in which county residents can get a referral to an attorney who has volunteered to work at a reduced fee to help homeowners in foreclosure.
Click the link to learn more about the Bar Association of Montgomery County’s Reduced Fee Program.
Maryland Tenants’ Rights in Foreclosure
November 19, 2008
What happens to tenants in Maryland rental properties when the property goes into foreclosure?
General information
In Maryland, if a property enters foreclosure, tenants may be forced out. This is true even if there is time remaining on the lease.
During the foreclosure process, ownership of the rental property is eventually transferred from the former landlord to a new owner.
Until the foreclosure process is completed, the original landlord retains the right to collect rent from tenants.
How long does a foreclosure in Maryland take?
Foreclosure timelines are discussed in this post.
A big part of the problem is landlords’ failing to notify their tenants that the foreclosure process has begun.
Tenants may not discover that a foreclosure has taken place until the new owners attempt to take possession. Such short notice obviously limits the amount of time the tenants have to find a new place to live.
[Note: In Baltimore, effective August 11, 2008, tenants in foreclosed homes must get at least 14 days notice (by certified mail and first-class mail) before the new owner can file an eviction notice against the tenants. And, a week before the eviction action is filed, the sheriff's office must post a written notice on the door.]
[Note: In May 2008, the U.S. House of Representatives introduced H.R. 5963, which is a bill called "Protecting Tenants at Foreclosure Act of 2008. " The U.S. Senate introduced an identical bill S. 3034. These bills, if passed, would give additional rights to tenants whose dwellings are foreclosed upon. Click here to read the text and check the status of the bills.]
After the foreclosure is complete
Once the foreclosure process is complete, the new owner may be willing to execute a new lease with tenants.
But, the new owner is often the foreclosing lender. Lenders are usually reluctant to sign leases and act as landlords.
And, if it is not interested in entering into a new lease, the new lender or other new owner can then evict the tenant according to the usual eviction procedures in the jurisdiction.
Eviction procedures and tenants’ rights
In Maryland, the usual eviction procedure involves the new owner filing an eviction suit against the tenants in District Court. The tenants then receive a formal court summons and a court date. [Eviction procedures vary slightly in some Maryland counties.]
Tenants should be sure to attend this court date. At the court date, a tenant can explain his or her situation to the court.
If the tenant was given very little notice of the foreclosure and / or is having trouble finding a new place to rent, he or she can ask the court for additional time to find a new place to rent. (However, tenants should not assume that the court will grant the request for additional time.)
Alternatives to eviction aka “cash for keys”
In order to avoid filing an eviction action and going to court, the new owners may offer the tenant money or Âcash-for-keys as an incentive to move out quickly.
But, tenants should get any such offers in writing and should carefully review the written proposal. These proposed agreements often require the tenants to waive claims they may have against the old or new owners.
Tenants’ claims against the original landlord
Even after the foreclosure, tenants retain claims against the original landlord for breach of the original rental agreement.
The tenant can sue the landlord for breaching the lease agreement by failing to provide the rented property for the entire lease term.
The tenant may also have claims against the former landlord for moving costs, apartment hunting costs, rental application fees, and differences in prices between the old (foreclosed) dwelling and the tenant’s replacement dwelling.
The tenant may also need to sue the former landlord in order to recover any security deposits. In some cases, the tenant may also be entitled to additional damages when the former landlord fails to return security deposits.
[The above post includes excerpts from a press release from Maryland's Office of the Attorney General. For the complete press release, click here.]
DC Tenants’ Rights in Foreclosure
November 18, 2008
What happens to tenants in the District of Columbia when their landlord is foreclosed upon?
Fortunately, D.C. ‘s tenant-friendly rental laws offer protection in this situation. In many jurisdictions, the new owner can evict the tenants after taking possession of the property. But, tenants in D.C. cannot be evicted merely because ownership has changed hands due to foreclosure.
The law
The Rental Housing Act of 1985 (DC Code § 42-3505.01) states the circumstances under which a landlord in the District of Columbia may validly evict a tenant.
Under this law, foreclosure is not a legally valid reason to evict a tenant.
In other words, it is illegal for a landlord to evict tenants in the District solely because the dwelling is being foreclosed.
Payments during foreclosure process
Foreclosures take time– sometimes several months– to complete.
In most cases, tenants must continue making timely rental payments to their original landlord during the foreclosure process.
If a renter fails to make timely rental payments, he or she can then be evicted for failure to pay rent.
Payments after the foreclosure
After a foreclosure, the new owner becomes the tenant’s new landlord. Sometimes the new owner is a person; sometimes it is the foreclosing lender.
Tenants should pay rent to the new owners once the foreclosure process is complete.
What tenants should do
If you are a tenant who has been notified that the dwelling you live in is in foreclosure, you should take the following steps:
Let the new owner know you are there. If you have received a notice stating that the dwelling you live in is under foreclosure, notify the party who sent you the notice that you are a tenant in the dwelling.
Assert your rights in writing. In addition to letting the party know you are living in the dwelling, you should also notify them that you are asserting your legal right to stay in the dwelling. You can use this form. Send this form to the party that sent you the notice about the foreclosure. To be safe, send it certified mail, return receipt requested so you can prove it was received.
Rent payments during foreclosure. Foreclosures take time. During the time the foreclosure is in process, you should continue sending your payments to your original landlord. Be sure to send in your rent payments on time. If you do not make your payments on time, you give the old and possibly the new owners grounds to evict you.
Rent payments after foreclosure. If (after the foreclosure) your home has a new owner or is owned by the bank, you should start sending your rent to the new owner or to the bank. Try to contact the bank or its attorney and ask for the address where you can pay rent
Send written requests to the new owner, bank, and / or bank’s attorney asking for complete information as to where you should send your rent payments and how you should make payments payable.
Keep copies of all documents. It is very important that you keep copies of all documents you send or receive, including: the notice of foreclosure, your statement that you want to stay in your apartment, and your letters requesting information about where to send your rent payments.
[The foregoing is partially excerpted from a press release from DC's Office of the Tenant Advocate. For the complete version, click here.]
DC public hearings to be held re: community housing needs
November 15, 2008
DC’s Department of Housing and Community Development has scheduled a series of public hearings to discuss the District’s housing needs.
Citizens are encouraged to attend and to give testimony.
Registration
To register, call (202) 442-7251 or email pamela.hillsman@dc.gov
Topics:
- Affordable housing
- Special needs housing
- Homelessness
- Homeownership
- Community development and
- Public service activities
Dates, times, and locations:
Thursday, November 20, 2008
6:30 pm
Greater Washington Urban League
2901 14th St NW
Tuesday, November 25, 2008
6:30 pm
Matthews Memorial Baptist Church
2616 Marting Luther King Jr. Avenue, SE
FAQ: New Maryland Foreclosure Law (effective April 4, 2008)
September 18, 2008
A new foreclosure law went into effect in Maryland on April 4, 2008. A foreclosure filed after that date must comply with the new law.
The new foreclosure process and consumers frequently asked questions are discussed below.
Under the new law, lenders may not foreclose on residential property until the LATER of:
- 90 days after default OR
- 45 days after a ÂNotice of Intent to Foreclose notice is sent to the homeowner.
What is ÂdefaultÂ? What is the Âdate of defaultÂ?
- Homeowners should check their mortgage documents to see exactly how their lender defines Âdefault.Â
- Some lenders define Âdefault as happening when a homeowner is even 1 day late with payment
- Partial payments usually wonÂt help a homeowner avoid default.
- Example: Your mortgage payment of $1000.00 is due January 1. You send in $500.00 on January 1. On January 2, your lender might deem your mortgage to be in default even though you sent in a partial payment.
My mortgage is in default. When is my lender likely to send the required ÂNotice of Intent to ForecloseÂ?
Different lenders use different timelines. Most lenders will start off using normal collections procedures to try to recover the past-due amounts. At this stage, the homeowner might get phone calls and standard collection letters from a debt collector.
But, at some point, the mortgage holder will switch to foreclosure mode and will send the homeowner the required ÂNotice of Intent to Foreclose.Â
[Note: this Notice must follow a certain format and will be different in content from a standard collection letter. There are also rules specifying how this Notice must be delivered to the homeowner.]
After default, the lender will often use standard collections techniques for around 15 days before sending the required ÂNotice of Intent to Foreclose.”
In the example from (1) above, the homeowner in default might expect to receive a ÂNotice of Intent to Foreclose from his or her loan servicer in mid-to-late January if s/he went into default on January 2.
Some lenders will try to collect a little longer before sending the “Notice of Intent to Foreclose.”
I received my ÂNotice of Intent to Foreclose on January 15. What is the earliest date the mortgage holder can file a foreclosure case with the court?
The lender cannot file a foreclosure action until the LATER of the following: 90 days after the homeowner went into default, OR 45 days after you received your Notice of Intent to Foreclose.
In our example, the homeowner went into default on January 2. 90 days later would be April 2.
The homeowner received the ÂNotice of Intent to Foreclose on January 15. 45 days later would be March 1.
The later of these two dates is April 2.
So, the lender cannot file a foreclosure action with the court until April 2 at the earliest.
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