While the loan origination fraud is largely shut down, the foreclosure crisis has spawned a whole new consumer fraud in the form of foreclosure rescue and loan modification scams. These companies offer to help consumers get a loan modification or to fend off a foreclosure in return for high, upfront [...]
Former Credit Slips guestblogger Max Gardner is always trying to understand the real mechanics and economics of mortgage servicing. At one of his infamous bootcamps, he had an employee at a now-deceased mortgage servicer share an insider’s perspective on default mortgage servicing. The employee used some terms of art [...]
It's Halloween, and time for nominations for the Spookiest Bankruptcy Opinion of the Year. Comments are open. Name the opinion that gives you goosebumps, and explain why others should be scared . . . very, very scared.
My own nomination is Sternberg v. Johnston, ___F. 3d. ___, 2009 WL 3381162 (9th [...]
Controversy abounds these days about whether government programs should adjust downward to reflect cost-of-living and income declines. I’d like to stir up a little controversy here at Credit Slips about Bob Lawless’ recent post that said the drop in median state income will "make it harder to file bankruptcy." [...]
You might think that we all caught the lesson that lying is wrong somewhere between Sunday School and warnings that Santa only brings presents to good boys and girls. But an Ohio federal court recently caught a debt buyer making a a load of lies--under oath, no less. The opinion in Midland Funding [...]
In a world of news stories about crippled credit markets, at least one group of Americans still faces the problem of aggressive loan marketing. Senior citizens are on pace to set a new record in 2009 for reverse mortgages, complicated financial products that enables seniors to extract equity in their homes. [...]
A foreclosure has a ripple effect, as a number of commentators have observed. Foreclosed properties often sit vacant, leading to nuisance concerns, lower property values for neighboring houses, and higher crime rates. But some properties are not vacant on the day of foreclosure, and these occupied properties generate their own [...]
A recent article in the Wall Street Journal reported on a new effort by the IRS to catch tax cheats. The IRS is going to compare data on mortgage-interest payments provided by financial institutions with homeowners' declarations of income on tax returns. The idea is that people must have [...]
Adam and I have recently discussed our take on whether and why the Fair Debt Collection Practices Act (FDCPA) should apply to mortgage servicers. The take-away was that the current interpretation of the FDCPA, based on its legislative history, is that it does not typically apply to mortgage servicers.
But perhaps debtors should [...]
In my own research, and frequently on Credit Slips, I've noted problems that homeowners face in dealing with their mortgage servicers. As a recent post from guest blogger Max Gardner explained, many of these problems are structural to the servicing industry. I think the people on the phone are good [...]
As always, it was a delight to spend (virtual) time with Max Gardner. His posts reflect his extensive experience as a consumer bankruptcy attorney, and his dedication to using legal tools beyond bankruptcy--such as RESPA, the Truth in Lending Act, and the HAMP modification program--to help his clients save their [...]
Credit Slips welcomes O. Max Gardner III as a guest blogger. In my opinion, Max is as close to a celebrity as the consumer bankruptcy bar has today, gaining fame for his Bankruptcy Boot Camps. At those camps, and as a speaker around the country at continuing legal [...]
The Federal Reserve Bank of Philadelphia is hosting its biennial researh conference, Recent Developments in Consumer Credit and Payments. The seven selected papers represent hot topics in economic research on consumer credit. Two papers focus on mortgage issues, including a paper by Tomasz Piskorski on the effects of securitization [...]
Complaints about mortgage servicers are piling up almost as fast as foreclosures. Yesterday CNN reported that the GAO has concluded that the Obama Administration's HAMP and HARP programs to do loan modifications are off to a very, very slow start. The programs were announced in February, and to date [...]
I'm delighted to welcome Professor Kevin Leicht to a guest-blog stint at Credit Slips. Kevin is a colleague of mine at the University of Iowa, where he is the Director of the Institute for Inequality Studies and the Director of the Social Science Research Center. He is [...]
Bankruptcy is a back-stop for risk management errors. Last week I attended a conference sponsored by the Center for Health, Economic, and Family Security at Berkeley Law on the appropriate level of risk that government, private industry, and individuals should bear for a variety of risks--job loss, illness, changes in [...]
Judicial criticism of mortgage servicing continues. Last week,
On a monthly basis, Tara Twomey and I post an updated version of our Mortgage Servicing Resources document. We are grateful to colleagues from around the country who forward us interesting cases, and we collect these
[...]The Association of American Law Schools' Debtor-Creditor Section issued a call for papers on debtor-creditor scholarship, most broadly understood, for presentation at the AALS Annual Meeting in New Orleans in January 2010. Proposals are welcome from a wide array of perspectives and strong preference will be given to proposals from those' [...]
Tuan Samahon's new article, Are Bankruptcy Judges Unconstitutional?, 60 Hastings L. Journal 233 (2008), offers a fresh twist on the constitutionality of the bankruptcy judiciary. He sidesteps the Northern Pipeline v. Marathon debate about whether bankruptcy judges can or should be shielded by Article III tenure. Instead, he [...]
This economic meltdown isn't fun for anyone, not even bankruptcy law professors. But Americans are creative, resilient folks and in the midst of hardship, some people are finding ways to cheer themselves with humor. Here are three recent examples to lighten your day:
A former student of mine wanted to [...]
Credit Slips has an internal policy of not posting about anything other than debt or credit. No movie reviews, no divulging secret recipes, no waning on about a fabulous vacation to Nebraska. But I am nothing if not resourceful in circumventing policies, especially when they are enforced by Credit Slips blog master Bob Lawless.
Like virtually [...]
I've clearly become predictable in my posts, as someone recently wrote to me wondering where is my annual tax-time rant against refund anticipation loans (RALs). In fact, I have written about them twice before on Credit Slips, here and here. But I think this annual lending "opportunity" deserves another round [...]
Credit Slips thanks Kathleen Keest, Senior Policy Counsel with the Center for Responsible Lending, for her contributions as guest-blogger last week. Kathleen highlighted some historic trends in consumer credit and gave her insights on some very pressing current matters, including the underwriting of loan modifications and the securitization of auto [...]
The National Mortgage Data Repository is making its data available to a select group of applicants to conduct mortgage resarch. The Repository is a joint project of the National Consumer Law Center and the University of Connecticut School of Lawand includes data from 750 loans made in 10-15 states between 1994 and 2007. [...]
Credit Slips welcomes Kathleen Keest, an expert in consumer credit. Kathleen brings multiple perspectives to her opinions, having provided legal representation to low-income families as a legal aid attorney, exercised enforcement authority as an Assistant Attorney General in Iowa, and worked on policy issues for the National Consumer Law Center. Kathleen [...]
Last Sunday's New York Times Magazine's feature, On Language, discussed the etymology and signification of the word "cramdown." (Or is it "cram down?" That's a separate debate that professors have with law review editors every year).
William Safire observes that cramdown is coming into popular parlance as bankruptcy becomes an everday [...]
Several news stories have tackled this question about when a consumer should consider bankruptcy. In addition to the Newsweek piece that attracted lots of attention, today's New York Times Cost of Living column by M.P. Dunleavey is entitled "Bankruptcy as a Step to Solvency." The column tackles some of [...]
Our active readers at Credit Slips already started debating the second controversy about the pending cramdown legislation: is the failure rate of chapter 13 too high to make mortgage modification in bankruptcy a very useful tool? To briefly reprise that discussion and add my own gloss, there are longstanding lamentations that [...]
The pending legislation to permit courts to modify home mortgages is stirring up some controversies--even among its advocates. The key issues are operational and very important, I think, to the success of this legislation. Here's the first brewing controversy: How will consumers make the payments on these modified mortgages (directly to the [...]
Bob scooped me on an initial post about the deal between Citigroup and Senate Democrats on pending legislation to permit bankruptcy judges to modify mortgages in bankruptcy. But I have details. And commentary. And questions.
First, the letters from Citibank to the House and Senate outlining the changes that they [...]
Aspiring bankruptcy geeks (I surely mean experts) and their law professors take note: the National Association of Chapter Thirteen Trustees is sponsoring a law student writing competition. The paper can be on any issue that concerns chapter 13. The winner will receive a prize and the winning paper will be published in the NACTT [...]
