Homeowners Facing Foreclosure Need A Lawyer

With foreclosures hitting 20,000 per month and rising, millions of Americans had an interest in bankruptcy reform that would have empowered federal judges to modify home mortgage payments. Despite that hope for relief being extinguished when the U.S. Senate folded like cheap lawn chairs to the demands of the banking lobby, there is still a reason to see a lawyer before giving up a home.

After the vote, ABC World News ran a story about legal aid attorney Jessica Attie, who has been fighting to help families keep their homes in New York. Unlike most of the corporate media stories about the foreclosure crises, this one focused on consumer rights and legal remedies available when fraud, deceptive practices or Truth in Lending Act (TILA) violations are exposed. Of course, none of those violations will be exposed by the lobbyists that shut down bankruptcy reform. The point of ABC's valuable report was to have a lawyer review the mortgage before giving up.

ABC News has set up a web page to keep track of Attie's progress and allow her to post comments regarding new developments.

NCO Financial Moving More Debt Collectors Off Shore

NCO Group, the world's most severely fined collection agency, based in Horsham, PA, wants to cut costs. Trying to obey the law sufficiently to avoid having to defend hundreds of state and federal suits at any one time is not the way they plan to do it however.

Victims of FDCPA violations can sue not only the tortfeasing collection agency for statutory damages, but can also sue the offending debt collector for their individual statutory liability. However, enforcing that right will become even harder. NCO is moving more of its debt collector positions offshore.

In a conference call yesterday to discuss 2007 financial results, NCO said it has plans to open more international collection offices to make calls into the United States.

NCO is opening its third call center in the Philippines and is planning new operations in Latin America. NCO currently operates out of Panama, Barbados and Antigua.

NCO said that at the end of 2007, it counted approximately 22,400 full-time employees and 1,600 part-time employees, of which approximately 19,000 were telephone representatives.

The next time a NCO debt collector abuses someone, they can feel safe knowing their victim will be faced with having to serve the suit in Manila, Chichica, or Speightstown.

Luebke Baker and Associates: Collection Agency Or Co-Conspirator?

Updated. Includes FTC reply.

Luebke Baker and Associates is a collection agency in Peoria, IL. They collect delinquent magazine subscriptions for Consolidated Media Services among other supposed clients. They must do lots of collections for Consolidated Media Services considering the number of reports about them on sites like RipOffReport.com, ConsumerAffairs.com, etc. There are page after page of similar complaints about the way Luebke Baker and Associates is trying to collect old magazine subscription bills. Many of the complaints involve possible FDCPA violations because of the tactics and possible statute of limitations complaints because the alleged subscription debts are so old. Those are civil questions, however. What about the possible criminal aspects?

Res judicata comes to mind. Res judicata is a Latin phrase meaning the thing has been judged already. Consolidated Media Services was judged and judged harshly. The FTC nuked Consolidated Media Services after judging them to be a criminal operation which gained its revenue from victims of crime. In 2002 the Department of Justice, at the request of the Federal Trade Commission, charged Consolidated Media Services and the other names it went by (Cross Media Marketing, Media Outsourcing, Direct Sales, and Magazine Sweepstakes) with violating federal laws by misrepresenting and failing to fully disclose the costs and conditions of magazine subscription sales. They also charged that the defendants failed to cancel subscriptions and pay refunds. The complaint further alleged violations of a previously issued FTC order prohibiting deceptive practices in selling magazines.

The FTC settled with the defendants in 2003 for fines and more orders prohibiting deceptive practices. Consolidated Media Services, by way of its parent company Cross Media Marketing, subsequently filed filed for bankruptcy in June 2003 and went out of business.

Which begs the question, regardless of civil FDCPA or statute of limitations violations, what is legal about Luebke Baker and Associates collecting for unpaid magazine subscription bills already judged by the federal government of the United States to be criminally fraudulent?

Isn't Luebke Baker and Associates victimizing the same people already thought to have been protected by the actions of the Department of Justice and the FTC?

An answer has been received from the FTC.

And it says you are on your own. While the following answer might be interpreted to mean any contact by Luebke Baker and Associates is a FDCPA violation per se, the point is still that as far as your federal government is concerned each victim of the fraudulent magazine subscription charges is required to perform their own law enforcement action against Luebke Baker and Associates in state or federal civil court.

FTC: Although we can't opine on the legality of a particular business practice, the order (http://www.ftc.gov/os/2003/06/crossmediastip.pdf) defines what the settling defendants must do when attempting to collect debts, and they are bound by the FDCPA, which, among other things, prohibits false representations about the character or legality of a debt, and requires a collector to provide verification of the validity of a debt once a consumer has disputed it. We cannot say whether or not the FTC is looking into a collector's activities in this or any other matter.

I hope this is helpful.

Frank Dorman
Federal Trade Commission
Office of Public Affairs
202-326-2674

Credit And Collection Agency Watchdog Question

Dear Illinois Attorney General Madigan,

I've been reading about the scam Luebke Baker and Associates, a collection agency in Peoria, IL has been perpetrating on innocent victims in stories like the one here.

However, since the magazine subscription bills generated by Consolidated Media Services were ruled to be fraudulent by a federal judge as seen here why isn't your office prosecuting Luebke Baker and Associates for fraud? Has there been a reversal of the fraud ruling regarding the magazine subscription bills Luebke Baker and Associates are collecting? Are there no relevant fraud statutes in Illinois?

Isn't it too great a burden on each citizen to have them fight off Luebke Baker and Associates one at a time?



The answer will be posted here.

Campaign Manager Is Subprime Lender Board Member

Hillary Clinton has been spending more time on the campaign trail calling out predatory lenders who have left millions of Americans in the foreclosure process. Yet, her campaign manager, Margaret “Maggie” Williams, sits on the board of Delta Finance, one of the largest subprime mortgage lenders.

Williams has earned about $200,000 on the Delta board. Delta made most of its money buying and selling loans at a profit either through securitization or straight sale. Financial statements and federal filings indicate that Delta made huge profits between 2004 and 2007 mostly by refinancing loans to homeowners with moderate and middle incomes in urban neighborhoods.

When the average 30 year mortgage was 6.25 percent, public records show Delta brokered thousands of fixed-rate refinancing loans with rates of anywhere from 11.3 to 13.6 percent.

Reports provided by the Federal Financial Institutions Examination Council (FFIEC), an inter-agency body that proscribes standards for U.S. financial institutions, found that in 2006 the vast majority of Delta’s refinancing loans had rates of around 13.3 percent. The average rate on Delta home mortgages was 14.9 percent.

The Foreclosure Prevention Project has described Delta Funding as having epitomized predatory lending.

More...

Credit Rating Agency Sees Foreclosures Going Up

If an American can't make ends meet but wants to pay their debts they can, with the help of a federal bankruptcy court using chapter 13. Unless, that is, their problem is caused by a mortgage payment they can no longer meet. Although a bankruptcy judge can reorganize your car loan by making the interest rate and monthly payments realistic, the court has no power to do the same with a mortgage. Appeals to congress and the president to change the bankruptcy law to allow the courts to save families from foreclosure have gone unheeded.

Now, Fitch Ratings, one of the three rating organizations designated by the U.S. Securities and Exchange Commission along with Moody's and Standard & Poor's, has some bad news about foreclosures to come.

In a new report, Fitch Ratings is revising (up) its estimates of foreclosures and losses for subprime mortgages made in 2006 and 2007. The news is bad. Fewer homeowners who are behind are able to catch up on payments ("rolling current") and far fewer are able to sell or refinance their homes to avoid foreclosure.

Fitch is now predicting about half the subprime mortgages issued in 2006 and 2007 will end in foreclosure. In other words, the 20,000 American families losing their homes every month now, is a tragic number on its way even higher.