Federal Judge Halts Home Foreclosures

A federal judge in Ohio has ruled against a longstanding foreclosure practice, potentially creating an obstacle for lenders trying to reclaim properties from troubled borrowers and raising questions about the legal standing of investors in mortgage securities pools.

Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize.

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Debt Collector Pays $1.3 Million to Settle FTC Charges

A Texas-based debt collection company will pay more than $1.3 million to settle Federal Trade Commission charges that it misled, threatened, and harassed consumers in violation of federal law.

“Debt collectors who get complaints from consumers should not only take notice, but also take action,” said Lydia B. Parnes, Director of the FTC’s Bureau of Consumer Protection. “The message from this case is clear: Either comply with the law or face stiff penalties.”

According to an FTC complaint, in many instances, collectors for LTD Financial Services, L.P., which collects on about 1.25 million consumer accounts per year, violated the FTC Act and the Fair Debt Collection Practices Act by falsely threatening or implying that LTD would garnish consumers’ wages, seize or attach their property, or initiate lawsuits or criminal actions against them if they failed to pay.

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Junk Debt Buyers Use NYC Courts To Scam Millions

The Community Development Project released a report entitled “Debt Weight: The Consumer Credit Crisis in New York City and its Impact on the Working Poor.” Among many other findings, the report reveals that third-party debt buyers are abusing the New York City Civil Court system to take unfair advantage of New York consumers, obtaining judgments of almost $800 million in the past year using largely inadmissible evidence, often without properly notifying the people being sued.

The report also finds that the number of consumer debt cases filed in New York City has increased more than 300% in the past five years to nearly 320,000 cases – roughly equivalent to the total number of all civil and criminal cases filed in United States federal courts in a given year.

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