Life After Foreclosure: Boomerang Buying
Homeowners who have lost their homes can buy another home – there can be life after a
foreclosure or short sale. Buying another home has been termed “Boomerang Buying”.
Almost five million borrowers lost their homes to foreclosure and more than two million
gave their homes up to short sales. This loss equates to roughly 25-35 million people
who are looking for another place to live. That’s great for the rental market – but what
about those who want another chance of owning their own home?
Many borrowers defaulted on their loans due to unforeseen medical bills, unemployment,
layoffs, divorces, death of a spouse and other extenuating circumstances. These are
referred to as one-time events. There were predatory loans made by sales people,
experienced in ‘closing a sale’ making promises that would never be kept. Unsuspecting
borrowers signed – not understanding the fine print and believing what was told to them.
Other borrowers did nothing wrong but fell through the cracks by having their payments
misapplied, while the lender packed on late/miscellaneous/attorneys’ fees. Loans were
sold and resold without proper paper trail and documentation. The list goes on for these
one-time events (job transfers or relocation do not qualify as a one-time event).
Wronged borrowers are beginning to receive ‘relief’ from the failed Independent
Foreclosure Review (IFR). But the majority of wronged borrowers (who are told they
can file suit themselves for the wrong done to them) are only receiving checks for $500.
on average. That’s hardly the cost of trying to recover from a system gone wrong. What
happens to all these people?
While the housing market is trying to recover and interest rates are down, people who
lost their homes would like the opportunity to buy again. Some want to buy for obvious
tax reasons, others have regained employment and want to start building equity while
housing prices are lower. Still others say they’ve learned their lesson from overbuying,
overspending and over-borrowing and want another chance. Monthly payments today are
generally half what they were 6-8 years ago making it easier to repay loans.
There are different dates and times a borrower may again buy a home, but it is possible.
Key to buying again is re-establishing your credit and there are many ways to fix your
credit score. Obtaining a secure credit card, making purchases and paying them off on
time can help your credit score. If you lost your job and are gainfully employed again is
another important factor. Lenders want to see you have the ability to repay your loan.
Generally, there is a seven-year wait to buy a home again, however that time can be
reduced to two or three years or even less.
Loans backed by the Veteran’s Administration (VA) can be obtained in just two years
after a foreclosure.
Federally-chartered Fannie Mae and Freddie Mac normally have a seven-year wait period
before another loan is given. Under new rules enacted in 2010, that wait period can be
reduced to a two-year wait period but requires a credit score of 680 and a 20% down
payment (10% if there’s extenuating circumstances). If the would-be borrower doesn’t
have the down payment, their wait can be as little as four years to secure a loan with a
smaller down payment (10%) or no down payment under certain circumstances.
The Federal Housing Administration (FHA) will issue an FHA-insured loan three years
after a foreclosure (or short sale). FHA is more lenient in wanting a credit score of 620.
If the borrower can show documented proof of extenuating circumstances as to why they
foreclosed or had to short sale their home, the wait can be shorter and the down payment
lower.
There are private lenders who will loan money immediately, but they require larger down
payments and higher interest rates and fees. Caution is warned, but if a private lender is
your only option, make sure you can opt out after a short period (like 2-3 years) to be
able to refinance at a lower rate.
As in all these cases, it’s recommended you hire an attorney to go over that fine print
and assist you in re-establishing your credit. You don’t want to find yourself in the same
situation.
Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure defense and real
estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes
foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure
defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate,
civil litigation, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be
facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure,
contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your
situation and go over all your options with you.
New York Attorney General Eric Schneiderman announced that he plans on suing
Bank of America Corp and Well Fargo and Company over their mortgage modification
practices. He alleges both banks have repeatedly violated the terms of the $26 billion
National Mortgage Settlement (NMS) brokered last year. The New York Attorney
General has 339 documented cases of violations.
The National Mortgage Settlement was negotiated in February 2012 between 49 states
and the five major lenders: Ally/GMAC, Bank of America, CITI, JPMorgan Chase
and Wells Fargo. (The NMS is unrelated to the now-defunct Independent Foreclosure
Review.)
The Settlement has 304 rules or servicing standards meant to correct bad and illegal
mortgage lending practices at the above-named five banks because they “persistently
failed to provide fair and timely services to their customers” stated New York’s
Attorney General. The five banks that signed the settlement were legally required to take
specific steps to protect homeowners. The New York Attorney General (NYAG) also
stated “Wells Fargo and Bank of America flagrantly violated those obligations [from
the settlement] putting hundreds of homeowners across New York at greater risk of
foreclosure”.
Scheiderman’s office released a statement they intend to ask the court “to impose
injunctive relief and to require strict compliance under the settlement”. This lawsuit will
be the first time an attorney general has “brought a legal enforcement claim under the
auspices of the National Mortgage Settlement”.
The AG’s office also stated that Bank of America Corp and Wells Fargo and
Company violated four standards “dictating the timeline for banks to process mortgage
modification applications.” These standards include giving borrowers written approval
of a loan modification within three business days, and notifying borrowers within
five days of application if there are any missing documents that may hold up the loan
modification.
Homeowners who were calling the banks for help were having problems getting through
to a representative, could never get a single-point contact and were asked repeatedly
to send and re-send the same documents. Under the Settlement, these problems were
supposed to have been eliminated. Unfortunately, homeowners still have to send in the
same documents over and over again and have the same problems contacting the bank’s
representatives.
Due to the complexity of the mortgage market and the agreement itself, the NMS process
was expected to take three years. Most borrowers wouldn’t know immediately if they
were eligible for any relief. According to the NMS, no payments have been issued by the
NMS as of this date and payments won’t begin until mid-2013.
The settlement is supposed to have provided assistance for homeowners needing loan
modifications, including the first and second lien principal reduction, for borrowers
current with their mortgage but underwater, and for borrowers who lost their homes
to foreclosure between January 1, 2008 and December 31, 2011. Those who lost their
homes to foreclosure would receive cash payments. These borrowers were sent forms to
be filled out and returned. There was no requirement from the borrower to prove financial
harm. If you didn’t receive and return a Claim Form, it’s too late to file now.
To file a complaint in Colorado, please contact Colorado Attorney General John Suthers,
1525 Sherman St., Denver, 80203. 303 866-4500.
Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure
defense and real
estate attorney located in Denver and servicing all of Colorado. His
foreclosure defense practice includes
foreclosure prevention, foreclosure assistance, loan
modifications, short sales, and all other foreclosure
defense legal assistance. He also
handles bankruptcies, mortgage negotiations, lender liability, real estate,
civil litigation,
debt defense, debt harassment, contracts and landlord/tenant. If you think you
will be
facing debt collection, foreclosure, or are in the foreclosure process, or
have had a wrongful foreclosure,
contact Keith Gantenbein at (303) 618-2122 for
a one-hour consultation where he will discuss your
situation and go over all your
options with you.
Lawsuit Filed Against Independant Foreclosure Review (IFR)
A lawsuit has been filed to get bank regulators to release more details on the failed
Independent Foreclosure Review (IFR) which was shut down after a year and a half and
costing over $2 billion.
The lawsuit was filed in U.S. District Court for the District of Columbia on behalf
of an unknown client seeking “All documents and/or records relating to the Office
of the Comptroller of the Currency (OCC) definition of independence” and “Any
documents and/or records relating to determining whether any particular independent
consultant…was or was not independent.”
The mortgage servicers and lenders had hired Promontory Financial Group,
PricewaterhouseCoopers, Ernst & Young and Deloitte & Touche to conduct the reviews.
In my article “Independent Foreclosure Review Botched?” published April 1st, I wrote
how “Promontory Financial, hired by Bank of America were reviewing Bank of America
loans at a Bank of America facility under the management of full-time Bank of America
employees. Bank of America reported those results to the ‘independent’ Promontory
Financial who based their reviews on what Bank of America gave them.”
That a lawsuit has been filed questioning the independence of the reviews comes as no
surprise. Consumers, homeowners, lawmakers and attorneys have criticized regulators
over the handling of the foreclosure reviews. Homeowners who are lucky enough to be
on the list to receive some type of settlement are angry and filing complaints the payouts
don’t match the wrongdoings.
The OCC and Federal Reserve shut down the reviews for most mortgage servicers
deciding instead, to provide about $9.3 billion in compensation. Postcards were mailed
out last month to eligible borrowers stating they would receive more information and/or
payments in about 4 to 6 weeks. Those payments are supposed be sent out beginning this
month and over the course of this year.
In December 2012, the OCC released five pages of redacted documents that related to
the reviewer’s independence and released information that could also be found on their
website. The OCC also stated new grounds for withholding additional information,
specifically not releasing inter-agency and intra-agency memorandums and letters.
Homeowners and borrowers saw the IFR as a way to finally have their voice heard on
the wrong that was done to them regarding foreclosures, robo-signing, wrongful fees
and other mistakes the lenders had made. Shutting down the IFR reneges on the OCC’s
promises to provide “appropriate compensation to borrowers who suffered financial
harm”. To date, under this new settlement, there still have not been definite answers
to how much relief will be given to the borrowers. Regulators have not released any
information as to how the payment amounts were determined. Without the reviews
there is no way to determine the extent of wrong done to each homeowner and what that
homeowner should receive in compensation.
Federal Chairman Ben Bernanke stated in congressional testimony in March that the
failed reviews should have ended sooner due to their costs. It’s sad that some or most
of that $2 billion wasn’t given as compensation to the homeowners instead of a failed
program. The money spent on the reviews was wasted since they weren’t completed.
Sadly, we will probably never know the degree of wrongdoings by the lenders and
mortgage servicers. Perhaps this lawsuit, and other lawsuits that are sure to follow might
shed a little more light on offenses and violations done to homeowners and borrowers.
Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure defense and real
estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes
foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure
defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate,
civil litigation, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be
facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure,
contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your
situation and go over all your options with you.
In my article published July 9, 2012, (The Fall of Stockton, California?: Pensions, Foreclosures, Overspending) I wrote about Stockton – the largest U.S. city ever to file for bankruptcy and the implications that could occur if the bankruptcy was accepted.
Yesterday, April 1st, Stockton was ruled eligible for bankruptcy protection under Chapter 9 of the U.S. bankruptcy code in Federal Court after three days of testimony and arguments and ending with a 2-hour hearing today.
California law protects pensions. Today’s ruling from Federal Court supercedes state law and we now have history in the making. There will be massive “fallout” with bondholders and pensioners.
Stockton, will have to restructure millions of dollars worth of debt held by Wall Street creditors who have been fighting against the city’s bankruptcy.
This ruling today will have far-reaching effects especially the $900 million owed to the California Public Employee Retirement Systems (CalPERS) in pensions.
Stockton’s largest debt and reason for filing bankruptcy are the pensions promised to city employees and retirees. Stockton’s pension obligations are millions of dollars in the hole. Like many California cities, employees were able to retire at 50 or 55 years old, each averaging nearly $30,000 per year. During the 1990’s the city expanded generous healthcare benefits and owed $417 million to its retiree medical program. Under Stockton’s healthcare, a retiree and his/her dependent receive healthcare benefits for life – even if they had only worked one month for the city.
Stockton has been paying the pensions, even borrowing $165 to help pay the pensions – but in doing so, reneged on other debts. Many other cities are lined up to file bankruptcy and it’s feared these cities were waiting on today’s ruling. Mammoth Lakes and San Bernadino, California have already filed for bankruptcy protection.
During the mid-2000’s, Stockton had overbuilt and accumulated almost $1 billion of debt. They built a beautiful marina, high-rise hotel and promenade mostly financed by credit (bonds). Stockton reinvented itself and had a higher working class by 2009. People moved to Stockton and a housing boom was in full-swing. Starter homes were $400,000, much lower in price than the 80-mile-away- San Francisco homes. Then, the housing market went bust. As the housing market kept falling, the property taxes fell, and the city kept paying out the pensions. Unemployment rose and homes went into foreclosure.
Stockton has the highest metropolitan foreclosure rate in the United States with 1 in 25 homes foreclosed on which is three times the national rate. The unemployment rate in Stockton is 18.7% (January statistics), 4.6% more than it was in November 2012.
Bond insurers (Assured Guaranty Corp, Assured Guaranty Municipal Corp and National Public Finance Guarantee Corp) were joined today by Wells Fargo Bank, Franklin California High Yield Municipal Fund and Franklin High Yield Tax-Free Income Fund in contesting Stockton’s bankruptcy. They stand to lose millions of dollars – which will be passed down to investors
Nationally, the unfunded bond market is $3.9 trillion. Today’s ruling will impact the entire municipal bond market. The municipal debt market provides financing for various public capital projects from new buildings such as schools to stoplight installation and sidewalks. You can begin to see how far-reaching today’s ruling affects even the jobs associated with the bonds not being repaid, or paid pennies on the dollar. Bondholders will suffer the losses. Before today’s ruling, bondholders have always been repaid all their principal since the 1930’s.
Stockton now has to come up with a plan to pay what it can. Under bankruptcy Stockton will have to decide which bills to pay without fear other creditors will force asset sales and cuts in services. Restructuring its bills may at least help some of the creditors who might not have received any money at all.
Analysts believe Detroit, Michigan will be the next large city to file bankruptcy surpassing Stockton as the largest U.S. city to file for bankruptcy. A dozen other large cities are rumored to be next in line to file bankruptcy and all were waiting to see how today’s Federal Court Ruling went.
Keith A. Gantenbein, Jr. is a Colorado a consumer advocate attorney, foreclosure defense and real estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
Independent Foreclosure Review Botched?
The Independent Foreclosure Review (IFR) was supposed to have helped homeowners. As each day goes by, there’s more evidence the IFR, one of the costliest audit projects in history, was a nothing but a botched effort. The IFR was doomed from the start.
In 2011, the Office of the Comptroller of the Currency ordered some of the major banks to review their foreclosures and compensate borrowers where they found mistakes. The agreement was separate from the $25 billion National Mortgage Settlement in 2012. This review was to be the first time borrowers would have an independent review of their foreclosures.
In November 2011, eligible borrowers began receiving a Request for Review form by mail. If a borrower had previously filed a complaint with one of the participating servicers/lenders, the borrower would also have gotten a Request for Review form.
Some banks involved had audit teams (reviewers) who were ill-trained and made numerous mistakes. When the teams did find bank errors, some were told not to report the errors if they wanted to keep their jobs. Reviewers were also told to ‘change their answers’ and to ‘stop digging’.
Bank of America hired a consulting firm, Promontory Financial for the review. These reviewers were Bank of America contractors reviewing Bank of America loans at a Bank of America facility under the management of full-time Bank of America employees. Bank of America reported those results to the ‘independent’ Promontory Financial who based their reviews on what Bank of America gave them. Promontory reviewers were also given gift cards as much as $500 if they increased the speed at which they reviewed files. In other words – the more files they sped through the greater the amount of the gift card.
Late last year, the OCC was working on a new multimillion-dollar settlement that clearly sent the message the OCC was covering up the botched Independent Foreclosure Review.
The OCC then said the IFR process was too slow and wasn’t showing much proof borrowers were harmed. The OCC’s new $9.3 billion settlement doesn’t set maximums or minimums for the types of aid banks should provide to the borrowers. Banks aren’t required to reduce any principal. In the end, this new settlement moves further away from compensating borrowers. Identifying mistakes banks may have made is even further down the road. Is it no wonder the banks dumped the IFR for the new settlement?
In January 2013, most of the bank regulators, including Bank of America, stopped the IFR program in favor of the new settlement. The reviewers were abruptly told to go home. Many homeowners hoping for some kind of settlement after filling out the forms and repeatedly calling to find out what and when they would receive compensation, were simply told the program was shut down.
Some IFR reviewers said they found some kind of wrongful fee in every file they looked at. Other reviewers said 30% to 40% of the loan files they looked at had numerous mistakes that violated state statutes. Outside consultants showed error ratios of 21% for Wells Fargo and 16% for Bank of America. Wells Fargo files in Orange, California reportedly had error rates as high as 45% to 80% in late 2012. PNC posted rates above 20%.
Critics say the Office of the Comptroller of the Currency (OCC) should have had a uniform and a “real” independent review process set in place beforehand. The Independent Foreclosure Review only adds to the long list of failures for the OCC.
Bank regulators, under this new settlement haven’t been given definite answers as to how much relief they’ll give to borrowers or which borrowers will get the relief. The OCC’s original promises of “appropriate compensation to borrowers who suffered financial harm” now seem very distant. Borrowers who are deemed compensation should be contacted by the end of this month.
Under the new settlement are these lenders; Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. The Independent Foreclosure Review process continues for Ally, Everbank and OneWest.
One year and billions of dollars wasted and homeowners got the short end of the stick.
Keith A. Gantenbein, Jr. is a Colorado a consumer advocate attorney, foreclosure defense and real estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
LIBOR Scandal: Affects Homeowners and Consumers
LIBOR can affect the average homeowner and recent scandals are coming to light that the critics say will be worse than the entire foreclosure mess. Most Americans have never heard of LIBOR. As we plunge through the mess of foreclosures and home loans, LIBOR is becoming well known.
What exactly is LIBOR? LIBOR is the acronym for London Inter-Bank Offer Rate. Simply put, it’s the interest rate that banks charge each other for loans. LIBOR is fixed once a day by the London-based British Bankers Association (BBA) although the rate changes throughout the day.
The LIBOR interest rate set by these 16 international member banks (the BBA) is cast upon $360 trillion throughout the world. The LIBOR is important because the world’s most preferred borrowers borrow according to the LIBOR rating. The United States relies on LIBOR for a reference rate.
LIBOR can dilute the effects of Federal rate cuts and can restrict homeowners from getting loans.
We rarely think about where interest rates come from. Most of us think it’s just a competitive rate, but it’s all based on LIBOR. From mortgages, credit cards, savings accounts, adjustable-rate mortgages, student loans, car loans – all types of loans, we’re given an interest rate made by LIBOR. LIBOR’s also used to set rates on institutional investments that mutual funds, pension funds and government agencies can use to earn interest on short-term investments.
So, who are some of these banks who set LIBOR? Citigroup, JPMorgan Chase, Bank of America and Barclays are just a few names. We have to trust these banks are accurately reporting the interest rates they’d have to pay to borrow from each other. In other words – LIBOR depends on honesty and if the banks don’t tell the truth – LIBOR isn’t accurate which translates to trillions of dollars worth of loans and investments not being correct.
Banks lie? Why would the banks lie? They’d lie to make themselves seem stronger and better than they really are. If a bank seems healthier, they’ll pay less interest. Banks would lie about what it costs them to borrow in order to make more money. Major international banks do more than lend. They trade bonds, stocks and other investments to make a profit.
The traders working for the LIBOR-participating banks buy investments that increase in value when the rates fall and then can lie about their rates in an attempt to lower the LIBOR. This lying would result in manipulating the LIBOR. That, in turn means borrowers like us, could pay more interest than we should have. Cities that invest their pension plans may have earned less than they should have. People with adjustable rate mortgages (ARMs) could be paying more than they should. One former trader stated LIBOR manipulation has been common since 1991.
Last June, Barclays Bank revealed significant fraud and collusion by member banks and paid $450 million to settle accusations it lied in an attempt to manipulate LIBOR in order to make money and present itself as healthier than it was. Other banks participating in LIBOR are now under investigations and experts, along with some reliable ‘leaks’ are predicting more banks will have to settle just as Barclays did.
Last week, Freddie Mac filed a lawsuit (Federal Home Loan Mortgage Corp. v. Bank of America Corp. [BAC], 13-cv-00342, U.S. District Court, Eastern District of Virginia (Alexandria) against Bank of America Corp., UBS AG (UBSN), JPMorgan Chase & Co and a dozen other banks over alleged manipulation of the LIBOR over “substantial” LIBOR loss. Freddie’s complaint sited fraudulent and collusive conduct, violations of antitrust law and breach of contract with the banks’ using false and dishonest U.S. dollar LIBOR submissions that artificially increased the banks’ ability to charge higher underwriting fees to the detriment of Freddie Mac and other consumers.
Those are consumers are us – the homeowners, the students, people with car loans and other loans. Those consumers are us, the ones relying on their pensions to live on.
We’ll be hearing more on LIBOR in the coming days and weeks as this scandal unfolds.
Keith A. Gantenbein, Jr. is a Colorado a consumer advocate attorney, foreclosure defense and real estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
Creditors Still Using Facebook
Financial difficulties can happen to anyone, especially in this economy. One can find themselves quickly and unexpectedly in debt due to bad investments, medical expenses, Adjustable Rate Mortgages (ARMs), unemployment or any manner of other circumstance.
Once a creditor turns your debt over to a collection agency, that agency will diligently go after as much information as they can find, such as where you work, where you live and your current phone number.
Many collection agencies employ “skip tracers”. Skip Tracers are people who will unearth as much information about you as possible. They’ll go through public records (bankruptcies, marriage licenses, property deeds) to find out where you work in order to garnish your wages. Colorado is a state where a creditor can go through the legal process to garnish wages.
Debt collectors, and especially the skip tracers are, and have been using Facebook and other social media to gain information on a debtor. Creditors pose themselves as someone who wants to ‘friend’ you. One creditor would send a photo of a girl in a bikini asking to ‘friend’. Once ‘friended’ the creditor would then scour the Facebook page getting information on where the debtor worked, hung out, phone numbers and even where he banked and vacationed. There is nothing illegal about gathering information from your Facebook page, or any other social media.
A woman in Florida recently won an unprecedented lawsuit filed against MarkOne Financial for debt-harassment. Allegedly, MarkOne continually sent messages concerning her debt to all the people on her Facebook friends list. A Florida judge put a halt to the phone calls and stopped debt collectors from posting messages about the debt on Facebook walls or sending messages to friends telling the debtor to call the collector.
Never put any information online that you wouldn’t want a stranger to see and don’t friend people you don’t know personally. Adjust your security settings for a select few. Remember the internet can and is, constantly hacked into. Even with the Florida lawsuit, collectors are still using Facebook and other social media by any means available to harass and/or collect information on the debtor.
The Association of Credit and Collection Professionals (ACA) International have stated they caution their members to be careful about using social media to contact people who owe debts. They state their members can’t write on someone’s wall on Facebook, harass or threaten. But, they can still gather important information.
The Fair Debt Collection Practices Act (FDCPA) is a 1978 statute whose purpose is to eliminate abusive practices in the collection of consumer debt. Although the FDCPA has been amended since 1978, the FDCPA needs to be completely updated to include social media and the internet. In 1978, the internet, social media and email didn’t exist.
U.S. regulators are now considering enacting new federal oversight this year (2013) over the debt collection industry, including the use of using social media.
The FDCPA does allow a debt collector to call your friends and family ‘while attempting to find you’ although the collector can’t discuss your debt with a third party. The debt collector can call you at work unless you inform them their calls are: inconvenient, or their calls place you in jeopardy of losing your job. Put in writing you do not want to be called at work and send to the collector’s home office. This will stop some of the calls.
The Federal Trade Commission (FTC) is our nation’s consumer protection agency. The FTC’s Bureau of Consumer Protection works for the consumer to prevent fraud, deception and unfair business practices in the marketplace. They can enforce federal laws that protect consumers. However, they receive hundreds of thousands of complaints (over 200,000 each month on robo-calls alone). The FTC logs in the complaints to help detect patterns of wrong-doings.
If you are being victimized by deceptive, abusive or greedy business practices, reach out to an attorney for assistance. Hiring an attorney will stop the creditor from contacting you – they will have to contact your attorney. An attorney also has the legal knowledge and experience in dealing and negotiating with creditors.
Keith A. Gantenbein, Jr. is a Colorado a consumer advocate attorney, foreclosure defense and real estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
