A lot has been happening in the consumer law world. The big news is that (sadly) Professor Elizabeth Warren WILL NOT serve as the new "Consumer Czar". I had great hopes that Professor Warren would enjoy the appointment. Professor Warren has had a big impact on the bankruptcy world given her work in the years leading up to the Bankruptcy Reform Act of 2005.

Elizabeth Warren is the well-known and well-regarded Harvard Law School professor who is perhaps the de facto national spokesperson on issues concerning consumer debt and consumer bankruptcy. She is perhaps most well known for her involvement in a study from the early 2000s which indicated that some 40% of consumer bankruptcy filings had as their root cause, or at least their “tipping point” cause, those hardships occasioned by uninsured or underinsured medical expenses. She was also an outspoken advocate for the consumer in speaking out in opposition to the passage of the bankruptcy law reforms of 2005. Many credit her testimony and writings with having the effect of shaving off some of the more abrasive and ridiculously punitive provisions of the 2005 reform law.

Most knowledgeable consumer bankruptcy lawyers were probably cheering for Professor Warren’s appointment to the position of Consumer Czar, as Professor Warren is somewhat of a “hero” to consumer bankruptcy lawyers, at least to those lawyers who care enough to join and financially support the National Association of Consumer Bankruptcy Attorneys (NACBA). Professor Warren has been a proud NACBA supporter and contributor for many years. Ms. Warren has helped provide NACBA with a voice before Congress. To my surprise, many local lawyers calling themselves “bankruptcy lawyers” refuse to join either NACBA or ABI (the American Bankruptcy Institute) just to try to cheaply save a buck or two every year. Membership to at least one of these organizations is essential to stay “plugged in” to what is going on in the legal field of bankruptcy/consumer rights as the organizations provide education and alerts as to cutting edge developments and strategies in the areas of consumer rights and bankruptcy law.

To the surprise of many, President Obama passed over Professor Elizabeth Warren and nominated Richard Cordray (Interestingly, I blogged about Mr. Cordray some time ago in early 2011 as a “person to watch”, when his foreclosure crisis campaigns came to my attention by way of a New York Times news article.) to head the new Consumer Financial Protection Bureau. Republicans had vowed to deny confirmation of Professor Warren or any other nominee until and unless the organization was revised to have real decisions made by a committee of five and be subject to the appropriations process. Most observers feel these changes would effectively eliminate the new agency’s ability to restrain financial institutions from improvident lending decisions and harsh anti-consumer business practices. Cordray is the former Attorney General of Ohio and came to national attention by his aggressive investigations of foreclosure practices. There is speculation that President Obama may get around the republican intransigence by making a recess appointment. Some republicans are exploring the feasibility of keeping the Senate technically in session to prevent this. Warren will leave her post as adviser and return to Harvard but may challenge republican Scott Brown for the Massachusetts Senate seat he won following the death of Ted Kennedy.

So getting back to the question at hand, I will give you the James H. MaGee Analysis of decision to appoint Cordray instead of Warren: I think Professor Warren would have done a fine job of reigning in some of the more ridiculously abusive consumer lending in our economy. To date, I have little opinion of what Mr. Cordray might do with respect to consumer law concerns and consumer issues. I anticipate that he will make not nearly the splash and impact that we would have enjoyed under Professor Warren. I think that his appointment signals that the President intends for the Consumer Czar position to be a rather quiet cabinet position with not much activity. So, with Richard Cordray, as the consumer you probably lose out more than you gain, as compared to what Professor Warren would have done with the position.

In plain, it may be the time to think about your options of decreasing your current debt, as progress of governmental programs that help relieve and minimize consumer debt may begin to slow.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

On Friday, September 9, 2011, I posted a blog about mortgage rates hitting record lows. I have an update to that previous posting.

In my previous post, I reported that the average 30-year fixed mortgage rate fell to a record low of 4.12%, but that rate has fallen yet again. In a KOMO News article written last week by economics writer Derek Kravitz, it was reported that 30-year fixed mortgage rates have fallen to 4.09%. 15-year mortgages have fallen from 3.33% to 3.30%. The lowest these rates have ever been.

With the current trend of the economy, interest rates are looking as though they will continue to plummet as the recession continues. Still, many Americans will never be able to refinance their home, no matter how low these rates end up falling. Unemployment, large debt loads, low credit scores, high down payments, and extra fees associated with refinancing, keep people from taking advantage of these incredibly low rates.

If you do decide to refinance your home, you will most likely have to pay fees associated with refinancing. These fees are known as points, and one point is equal to one percent of the total home loan amount. The average fee rates have held steady at .7 point for 30-year fixed mortgages, and .6 point for most other loans. Once these fees are factored in, the average interest rates for a 30-year fixed mortgage look more like 4.25% instead of the low 4.09%.

The Obama administration is working on a government program to help homeowner’s refinance their mortgages. When people refinance, they get lower interest rates. These lower interest rates help them to save money, thus having more money to spend. Theoretically, if more people are able to refinance, a drop in mortgage rates could help stimulate the economy in the long run.

To answer your question, it is looking as though interest rates will continue to drop. If you’re eligible to refinance now, waiting will allow you to get the lowest interest rate you can. On the other hand, if you’re ineligible to refinance now, waiting may be your only option. As the new government assistance programs are expanded more and more, more people become able to refinance their houses.

Many homeowner’s that have been able to take advantage of these low rates, have already refinanced in the past year. Now that the rates have dropped even more, those people may be considering refinancing yet again, but economists would tell you to hold off. Most homeowner’s pay a few thousand dollars in closing costs and the before mentioned fees, when they refinance. Most experts would tell you to wait until the interest rates fall an additional full percent point to make refinancing sensible.

If you are thinking of refinancing because you need more money, you may feel that you can’t possibly wait. Consider bankruptcy and apply to refinance in a couple of years, as many experts expect rates to remain low for quite a while. Hopefully with less debt to pay off, you will build some equity into your home and stop getting repeated monthly negative credit marks for late or missed bill payments, as bankruptcy helps clear most of your debts. This will help get you the lowest interest rate you can possibly get.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

The Tacoma News Tribune reported on Friday, September 16, 2011, that the Congressional Budget Office recommended slashing monthly payment requirements for troubled borrowers covered under a Fannie Mae or Freddie Mac government guarantee system by way of reducing interest rates on loans that are, at present, well above the low mortgage interest rates available today in the open market. E.g. If your Fannie Mae or Freddie Mac loan is at 7.0%, lowering it to 4.5% would significantly reduce your monthly payment.

But are you eligible to lower your payment?

Because the lowering of your payment would likely be through a “refinance” plan where a new loan is issued in place of the older higher rate loan, you may not be eligible if you have a really rocky payment history or if you have little or no income. “Who” would qualify for the refinancing is still murky because there is as of yet not even a program, but just rather a report recommending the implementation of a program, so help directly to you could still be a long way off.

Secondly, if there is a second mortgage, the second mortgage could refused to cooperate with the refinancing of the first mortgage as the second mortgage would have to sign off on a subordination “agreement” where in the second mortgage agreed to stay in second place notwithstanding the refinance of the first Fannie Mae/Freddie Mac mortgage.

Thirdly, it was reported the same in the News Tribune (by way of a cite to a Los Angeles Times article) that lenders are stepping up foreclosure efforts after being slowed down for about a year by the “foreclosure gate” documentation and “robosigner” processing controversies of 2010 – early 2011, so if you are struggling with your mortgage payments, you may not have time to wait around for a new Fannie Mae/Freddie Mac program that may never materialize in response to the recent Congressional Budget Office report.

Lastly, even if a program to refinance Fannie Mae/Freddie Mac mortgages does show up to help someday, it could be an even better step to file a bankruptcy case in chapter 13 to strip off and get rid of your second mortgage or perhaps a simple “straight bankruptcy” chapter 7 case to get rid of burdensome medical debt, repossession debt, credit card debt, collections and uninsured car accident problems.

Getting back to our question, there are three considerations (1) if you have a low credit rating you cannot easily refinance, (2) if you have little equity you will not be able to refinance, (3) if you can’t refinance to pay off debts, consider bankruptcy and then apply to refinance in a couple of years, as many experts expect rates to remain low for quite a while and hopefully you will build some equity into your home and stop getting repeated monthly negative credit marks for late or missed bill payments as after bankruptcy most of your debts will be gone.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

The Tacoma News Tribune reported on Friday, September 16, 2011, that the Congressional Budget Office recommended slashing monthly payment requirements for troubled borrowers covered under a Fannie Mae or Freddie Mac government guarantee system by way of reducing interest rates on loans that are, at present, well above the low mortgage interest rates available today in the open market. E.g. If your Fannie Mae or Freddie Mac loan is at 7.0%, lowering it to 4.5% would significantly reduce your monthly payment.

But are you eligible to lower your payment?

Because the lowering of your payment would likely be through a “refinance” plan where a new loan is issued in place of the older higher rate loan, you may not be eligible if you have a really rocky payment history or if you have little or no income. “Who” would qualify for the refinancing is still murky because there is as of yet not even a program, but just rather a report recommending the implementation of a program, so help directly to you could still be a long way off.

Secondly, if there is a second mortgage, the second mortgage could refused to cooperate with the refinancing of the first mortgage as the second mortgage would have to sign off on a subordination “agreement” where in the second mortgage agreed to stay in second place notwithstanding the refinance of the first Fannie Mae/Freddie Mac mortgage.

Thirdly, it was reported the same in the News Tribune (by way of a cite to a Los Angeles Times article) that lenders are stepping up foreclosure efforts after being slowed down for about a year by the “foreclosure gate” documentation and “robosigner” processing controversies of 2010 – early 2011, so if you are struggling with your mortgage payments, you may not have time to wait around for a new Fannie Mae/Freddie Mac program that may never materialize in response to the recent Congressional Budget Office report.

Lastly, even if a program to refinance Fannie Mae/Freddie Mac mortgages does show up to help someday, it could be an even better step to file a bankruptcy case in chapter 13 to strip off and get rid of your second mortgage or perhaps a simple “straight bankruptcy” chapter 7 case to get rid of burdensome medical debt, repossession debt, credit card debt, collections and uninsured car accident problems.

Getting back to our question, there are three considerations (1) if you have a low credit rating you cannot easily refinance, (2) if you have little equity you will not be able to refinance, (3) if you can’t refinance to pay off debts, consider bankruptcy and then apply to refinance in a couple of years, as many experts expect rates to remain low for quite a while and hopefully you will build some equity into your home and stop getting repeated monthly negative credit marks for late or missed bill payments as after bankruptcy most of your debts will be gone.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1 . To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

[Categories: Washington Bankruptcy Attorney]

Previously, lenders would often use tactics to trip consumers into paying late, so that the lender could impose a late payment fee or penalty interest rate thus jacking up the interest rate to stratospheric levels. The CARD Act of 2009 seeks to prohibit and interfere with these tactics as follows:

– Prohibits credit card issuers from setting payment cutoff times earlier than 5:00 p.m.

-Requires payment due dates to be on the same day each month.

-If the due date falls on a weekend or a holiday, it is now required that a payment received on the next business day be considered timely.

-It is now required that lenders mail to you the credit card statement no fewer than twenty one days before the due date or end of the no-interest grace period.

Special thanks to the National Consumer Law Center, "Guide to Surviving Debt" 2010 edition page 79, available at www.consumerlaw.org.

Yesterday, on September 8th, it was reported in an article by KOMO News economist writer, Derek Kravitz, that fixed mortgage rates have fallen to the lowest they have been in the last six decades.

The average rate for a 30-year fixed mortgage fell .1%, going from 4.22% to 4.12%, while the average rate for a 15-year fixed mortgage changed from 3.39% to 3.33%. These are the lowest rates on records dating back to 1971 and 1991 respectively, but economists say that it is likely that these are the lowest rates ever.

Except for two weeks over the past year, the average 30-year fixed mortgage rate hadn’t peaked 5%, but real estate prices and sales were still down and holding back the economy. Mortgage rates typically coincide with the yield on the 10-year Treasury note. That being said, when investors start pulling their money from stocks and putting it into Treasurys, that yield drops, and so do interest rates.

The U.S. Treasury note fell to an all-time low this last week, but even with such low interest rates; many people are still in no position to take advantage of these rates. In today’s economy, Americans are unemployed or taking pay cuts, and even if they’re not, they are unable to qualify for the lowest rates.

Banks are only accepting credit scores over 700, and asking for 20% down payments. According to an analysis of Fair Isaac Corp. data by the Associated Press, “roughly 40% of U.S. households have the necessary credit scores to get a prime mortgage rate”, and according to the National Foundation for Credit Counseling, only half of Americans believe they will ever be able to save enough money for a 20% down payment.

Kravitz writes, “nearly a third of homeowners have nearly zero equity or are underwater in their mortgage…leaving them unable to refinance because of lender-imposed limits and the cost of extra fees.”

Many people are struggling to shrink their debt. Some very smart people think that it is slowing again and many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1 . To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

On August 31st, in an article by Gretchen Morgenson of the NY Times, it was reported that a complaint was filed with the United States District Court on August 30th. That complaint, filed by Attorney General Catherine Cortez Masto, accuses Bank of America of violating a broad loan modification agreement it presented in 2008 to state officials.

The settlement between Bank of America and several states was first reached in October of 2008, and then later with Nevada in 2009. The settlement was originally reached to satisfy accusations of predatory lending against Bank of America. Part of this deal was to help troubled borrowers with loan modifications and other financial relief. Bank of America set aside $8.4 billion for just this purpose.

Masto claims that Bank of America has not upheld their end of the agreement, and wants to end Nevada’s involvement with the above agreement. If permissions are granted, Masto states that she will be allowed to sue the bank over what she calls “dubious practices”.

These practices were uncovered by an investigation by the Attorney General’s office that started shortly after the agreement was meet, when complaints about the bank’s loan servicing methods flooded into Masto’s office from some of the 262,622 loans originated in Nevada.

The investigation claims that Bank of America raised interest rates when making loan modifications, even though they previously negotiated to lower them. Along with that claim, it is stated that Bank of America also proceeded with foreclosing on pending loan modifications, and did not offer qualified borrowers loan modifications to begin with. Bank of America also neglected to meet the settlement’s 60-day requirement on granting new loan terms. Loans would be pending for months on end with no resolution.

According to the complaint, Masto discovered that Bank of America had “materially and almost immediately violated the terms of the settlement”.

Some very smart people think that it is slowing again and many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1 . To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Under the Credit CARD Act of 2009, lenders are now a bit more limited in how they can go about raising your interest rate for future transactions. Mind you, they can still be raised, though:

-Notice – Lenders must give you a written notice before increasing the rate. The rate applies only to purchases made on and after fourteen days following the date that the notice is sent.

– One year (first year) ban – Lenders cannot raise interest rates even on existing purchases on the account nor future purchases and transactions on the account until after one year has passed on the account unless one of several exceptions applies. The exceptions are (a)variable rate cards (e.g. prime rate plus 7.0%); (b) teaser rate cards, but the rate cannot increase for the first six months, it should be noted and (c) if your minimum payment is more than sixty days late.

-Mandatory review and adjustment every six months – Commencing August 2010, a lender increasing a rate must review the account ever six months and should reduce the rate if things have changed such that a reduction might be appropriate. Note: This should give you the opportunity to argue with them if the interest rate is not decreased.

Special thanks to the National Consumer Law Center’s "Guide to Surviving Debt", 2010 edition, pages 74-81, available at www.consumerlaw.org for a mere $20.00 or so. I highly recommend it.

[Categories: Washington Bankruptcy Attorney]

Finally, any amount that you pay in excess of the minimum payment must be applied to the balance with the highest interest rate, except in the last two months before a deferred interest plan expires.

Previously, many credit card companies would seek to apply payments to the lowest interest bearing portion of the debt. E.g., the creditor would leave high interest rate "cash advance" portions without any change, and would apply payments to the low interest rate "normal" purchases portion. Thus, you would rack up interest charges unnecessarily.

[Categories: Washington Bankruptcy Attorney]

There are now (finally!) some limits on penalty fees – such as pesky and expensive late payment and over-the-limit fees.

(1) Penalty fees must be "reasonable and proportional" – and the CARD Act requires the Federal Reserve Board to issue rules by August 2010 in order to define and effectuate this mandate.

(2) Over-the-limit opt-in. This is important! Now, no over-the-limit fees may be charged unless the consumer has agreed that the lender may approve transactions that will exceed the credit limit.

(3) Limitations on number of over-the-limit fees. Lenders may charge only one over the limit fee per billing cycle (e.g. usually just one per month). In addition, lenders may only charge the fee in the next two billing cycles unless the consumer uses the card again, or goes below the limit and then exceeds it again. This is a big improvement – you can’t be penalized again and again, billing cycle after billing cycle if your balance stays in excess of the limit.

Special thanks to the National Consumer Law Center’s publication "Guide to Surviving Debt" 2010 edition, page 78, available at www.consumerlaw.org for about a mere $20.00.