Predatory Lenders Driving Midwest Foreclosure Crisis

When creditors started calling around the clock, she knew they had to make some tough choices to keep their house. Schindewolf says creditors were unwilling to work with them.

"The way you're treated is absolutely degrading. We've had good credit. We've paid our bills on time. We're working through this. My husband's looking for work. Just bear with us, but no one bears with you at that point," she said.

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TV Reporter Helps Expose NCO Collections Deception

NCO, a third party debt collector, admitted they never looked into whether there was an actual bill owed, but they told Nanita Whitman to pay them $10,000 anyway.

Last December Nanita Whitman got a letter from N.C.O. Financial Systems.They demanded that she pay $10,800. But Nanita already explained to the debt collectors that the debt is not hers.

“It’s just enough to almost give you a heart attack. I mean, my god, $10,000. It’s unbelievable,” Nanita says.

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Tax Rebate Scams Underway

Even before Congress passes an economic stimulus package, identity thieves are using promises of tax rebates to trick people into revealing financial and personal data, the Internal Revenue Service said Wednesday.

Under one scheme, the IRS said, people are receiving phone calls telling them they can only receive a rebate if they provide bank account information for a direct deposit.

The tax agency stressed that it does not collect information by telephone and that no legislation has been enacted that would allow it to provide advance payments to taxpayers or that specifies the details of those payments.

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FTC Busts Collection Agency

A federal court has entered a final order against a Florida debt collection agency, its principals, and its attorney, settling a Federal Trade Commission action that alleged that the defendants violated the the Fair Debt Collection Practices Act (FDCPA).

The FTC’s complaint alleged that the enterprise used misleading dunning letters and abusive telephone calls to falsely threaten that consumers would be sued, their property seized, and their wages garnished if they did not pay the money that the defendants said they owed. The complaint alleged that the collectors often shouted and used profanity and other abusive language to carry out their collections.

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Who Will Rescue Bond Insurers?

New York state officials have asked investment bankers to draw up a rescue plan that could include back-up credit financing for the sinking guarantors. They are also reaching out to private equity firms and uber rich investors such as Wilbur Ross, Warren Buffett, et al, about investing fresh equity capital for insurers such as Ambac and MBIA.

Capital and credit lines could head off credit rating downgrades. The work is headed by Eric Dinallo, the New York state insurance superintendent.

Debt markets have been pricing in the bet that bond insurers will lose their triple-A status. The withdrawal of triple-A ratings could lead to losses for banks with exposure to hedges, derivatives and bonds whose value depends on that rating.

FBI Investigates Subprime Fraud

The FBI has opened criminal investigations into 14 corporations as part of a crackdown on improper subprime lending, agency officials said on Tuesday.

FBI officials told reporters the probes involved potential violations, including accounting fraud and insider trading.

They did not identify the companies. But the probes reached across the industry to include developers, subprime lenders, companies that securitized loans and investment banks that held them, said Neil Power, head of the FBI's economic crimes unit.

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Identity Theft Ring Gets 20 Felony Charges

The ring leader, according to detectives, obtained victims' personal information from a business where his mother cleaned at night. He is accused of using the information to open credit cards.

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Verizon's Early Termination Fees Prove Costly

An arbitrator has certified a huge class action against Verizon Wireless that potentially could cost the No. 2 mobile phone carrier close to $1 billion in refunds of early termination fees.

“This ruling is a tremendous victory for Verizon Wireless subscribers,” said Scott Bursor, counsel for the plaintiffs. “After four years of extremely hard-fought litigation in several courts and in arbitration, this ruling ensures that Verizon customers who have been charged illegal early termination fees will have an opportunity to prove their claims on a class-wide basis and to seek a refund of nearly a billion dollars worth of illegal charges."

Bursor said Farber’s 35-page ruling to certify the class action has historical significance. “It is the largest class ever certified in arbitration, with approximately 70 million members of the subscriber class,” he said. “It is also the largest class ever certified on a contested motion in any type of forum, litigation or arbitration."

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Historic Wealth Loss For Minorities

Lending institutions have condemned minorities to further wealth disparity. Now standing at about ten-to-one, the wealth gap between African American and white median households cannot but grow bigger in the wake of the subprime lending catastrophe. The Boston-based United for a Fair Economy recently released a report, detailing the carnage wreaked on people of color by predatory lenders — and it is mind-boggling.

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