Homeowners Seek To Cancel Predatory Mortgages With Class Actions

When standards loosened at many mortgage firms during the housing bubble it led to a rise of predatory practices. Now, record numbers of people are finding themselves with loans that are more than they were told they would be and are looking for a legal remedy to cancel the loans.

A federal appeals court is going to rule in a suit against Chevy Chase Bank if homeowners across the country can band together in class-action lawsuits against predatory mortgage companies and get their loans canceled.

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Collection Agency Charged On 132 Counts

Pacific States Credit Company in California is the latest collection agency to get caught placing illegal liens on property and blackmailing the owners into having them removed.

At least 113 Sacramento County homeowners have had illegal liens placed on their houses by the central California debt collector. And the debt collector faces trial this summer in Orange County on 132 felony counts involving fraudulent liens against 73 property owners. The Orange County charges include recording false and forged instruments and extortion.

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Experian Credit Bureau Finds A Consumer Who Fights Back

Attorney Robert Sola won the nation's largest consumer-credit verdict, $5 million in punitive damages against TransUnion, for Judy Thomas, an Oregon woman whose information was mixed up with another woman's who had atrocious credit. A judge later reduced the award to $1.3 million.

Hundreds of such cases are filed every year and Sola has filed new suits for a new client.

Sheldon Chrysler's finances have been ruined since a collection related to a DirecTV account in Detroit showed up without explanation on his credit report.

But Sheldon Chrysler has never lived in Detroit. He sent letters to DirecTV and the credit bureau Experian but his pleas went nowhere and his credit score plummeted.

"No one should have to go through this," Chrysler said. "All I want is my good credit back and my chance to make a good living."

Chrysler filed a complaint in U.S. District Court against DirecTV, the collection agency that DirecTV used and Experian for violating the Fair Credit Reporting Act, a federal law that says this can't happen to him.

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Predatory Lending Industry Front Group Disguises Itself As Consumer Rights Group

Astroturfing is slang for public relations campaigns that seek to create the impression of being spontaneous grassroots efforts, hence the reference to the artificial grass AstroTurf.

The goal of an Astroturfing campaign is to disguise the efforts as an independent public reaction to an opponent. Astroturfers attempt to orchestrate actions by both overt ("outreach," "awareness," etc.) and covert (disinformation) means.

An over-the-top bit of Astroturfing has shown up with a predatory lending industry front group calling itself the Consumers Rights League. The "Consumer Rights League" has actually been launched to oppose government reform of predatory lender loan sharking practices that have ensnared Americans in harmful payday loans, fostered hundreds of thousands of family foreclosures, tanked the stock market and helped put our country into a recession.

The predatory lenders have a lot to lose if governments ever catch on.

The primary target of this fake grassroots effort is the Center for Responsible Lending. Since they are the intended victims, the Center for Responsible Lending has provided facts about the misinformation and distortions predatory lenders are spreading here: "Debunking Industry Propaganda".

Payday Loan Victim Wins 200K

Emma Staton sued the payday lender Americash in 2001 and accused the company of violating state law by charging more than 17 percent interest. A judge ruled in her favor and awarded Staton $834,000 and $50,000 for attorneys' fees.

However, Americash successfully frustrated Emma's ability to collect the judgment.

Now, Arkansas' highest court has ruled Emma Staton can collect the two hundred thousand dollars in surety bonds from the payday lender it had posted in order to conduct business in Arkansas.

Collection Agency Gets Away With It

Jack Southern had an accident that sent him to the emergency room. He paid his co pay and put the incident behind him. Then the CMRE collection agency sent him a demand for 500 dollars claiming it was the remaining balance.

Jack paid CMRE. Then an insurance statement arrived showing medicaid and Jack's co pay had covered the bill in full.

Jack tried to get CMRE collection agency to refund the phony collection bill but got no response. Then he called the local ABC news affiliate. Reporter Jackie Callaway placed two calls to CMRE and days later the company sent Jack a full refund.

Happy ending? Not. The TV station didn't refer Jack to a consumer attorney who could have pursued Jack's right to $1000 in statutory FDCPA damages from the phony bill. What is worse is no investigation of medicaid bill fraud took place. Lots of medical collectors get caught billing for claims medicaid or medicare already paid. Some go to jail for it.

Because the TV station didn't pursue it however, CMRE is free to try again.

FTC Settles With Debt Reduction Companies

Debt-Set and Resolve Credit Counseling sold debt reduction services through Web sites and television and radio advertisements with claims such as “Reduce Debt Now” and “Eliminate Harassing Calls.”

When consumers called a toll-free number they were encouraged to enroll in a “debt consolidation program” if their unsecured consumer debt was up to one month overdue, or a “debt settlement program” if overdue longer.

The FTC sued them for violating federal regulations by falsely promising to obtain lump-sum settlements, such as “fifty cents on the dollar” or “50 to 60 percent” of consumers’ total unsecured debt, or to negotiate with creditors for lower interest rates.

The FTC complaint also accused them of claiming that they would not charge consumers any up-front fees before obtaining the debt relief and that participation in their program would stop creditors from calling or suing them to collect debt.

The settlement prohibit the defendants from engaging in the violations alleged in the complaint, and require them to disclose truthfully key terms of the program: all fees and costs they charge, including when and how such fees and costs will be paid by consumers; the approximate time period before settlements will be achieved; and the fact that consumers’ balances typically will increase before settlements for all accounts are achieved.