Mortgage Holders Can’t Foreclose on Consumers Without the Proper Documents, According to Ohio Court

Consumers who are sued by debt collectors can defend in court by demanding that the debt collector prove it is entitled to collect the debt. Particularly when the debt collector is not the original creditor, the debt collector is frequently unable to prove it owns the debt. The result? The court dismisses the debt collector’s case and the consumer wins. Yesterday, the New York Times reported that an Ohio federal judge dismissed 14 foreclosure cases brought on behalf of Deutche Bank National Trust Company for a similar reason: Judge Christopher Boyko ruled that the bank had failed to prove it...

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Consumers Are Targets of Skyrocketing Numbers of Debt Collection Suits, Most By Debt Buyers

Consumers in New York City are faced with unprecedented numbers of debt collection suits, according to a new study by the Urban Justice Center (UJC), a provider of free legal services to low-income working poor New Yorkers. The study’s results are shocking. In 2006 alone, debt collectors tried to collect nearly $1 billion from New York City consumers, and got judgments for about $800 million–an 80% success rate. Most of those suits are filed by debt buyers–not the original creditors–and about four out of every five of those suits result in default judgments for the debt collector, in which the...

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Lenders Charge Homeowners Questionable Servicing Fees to Add to Bankruptcy Burden

Loan servicers tack on all kinds of bogus fees and charges to consumers going through Chapter 13 bankruptcy and whose homes are being foreclosed upon, according to an article in today’s New York Times. Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question. The article suggests that when housing sales are down and the loan originating side of the lender is originating fewer mortgages, the loan servicing side makes...

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Debt Buyers Continue to Relentlessly–and Illegally–Pursue Consumer Debt Discharged in Bankruptcy

This post linked to BusinessWeek’s fine article about consumers who file bankruptcy under Chapter 7 and are supposed to have their debts erased. Many post-bankruptcy consumers were finding that debt collectors were continuing to pursue them for debts already discharged in bankruptcy. BusinessWeek’s article said the driving force behind this phenomenon is a vibrant market in which certain debt buyers avidly buy and sell debts that should have been extinguished. I just received a telephone call from one of these debt buyer’s New York lawyers. This person disputed the accuracy of a quote in the article from a lawyer for...

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Countrywide Says it Will Help 80,000 Consumers Keep Their Homes

Millions of consumers are facing foreclosure due to risky adjustable-rate mortgages. Countrywide, one of the nation’s largest mortgage lenders, has gotten a ton of bad press lately for its high-profile role in the crisis. Yesterday Chris Arnold reported in a story on National Public Radio that Countrywide planned to refinance or modify some $16 billion worth of loans for more than 80,000 borrowers who will soon hit an unaffordable rate reset, or those who have already fallen behind after their payments rose. Some of those borrowers’ interest rates had risen to as high as 13%. It was good news for...

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