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Articles Tagged with consumer

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This post was prepared by yours truly, with contributions from Phil Bradford, a financial web content writer. Phil graduated from New York University School of Law and recently joined Herald University as a reporter. He has also written for websites such as debtfreeguys.com and disabilitycanhappen.org

An now, on with the post…

Those who’ve exhausted their financial options or are unable to meet obligations due to illness, divorce, job-loss, or other life-altering events, may consider filing Bankruptcy to get their life back on track.  Here is a quick-guide to help you navigate the process with the help of a good Bankruptcy Lawyer:

Basic Types of Bankruptcy

The most basic distinction when thinking about Bankruptcy is the one between a liquidation (Chapter 7) and a reorganization (Chapter 13 for most people). Whether you need to file a Chapter 7 or 13 case will depend on several factors, including:

  • Total “household” income
  • The value of your property
  • What you stand to lose
  • What you intend to keep

That said, below you will find a few of the most important points when considering if Bankruptcy is right for you.
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Recently I got an e-mail from the newly-formed Consumer Financial Protection Bureau (CFPB). You remember the CFPB, right? No? That’s alright. But you probably remember the agency’s public face, now-Senator Elizabeth Warren of Massachusetts.

So, after coming out of the shoot a few years with the President’s blessing and much fanfare, the CFPB has released the first of several consumer-friendly web-based guides. This one is its Guide to Owning and Buying a Home.

The 3 primary resources offered on the CFPB site are:

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On November 1, 2012 Freddie Mac and Freddie Mae changed the prevailing short-sale guidelines that featured examples of eligible hardships that permit homeowners to sell their homes even if current on their mortgages. Ultimately that new guidelines enabled lenders and servicers to quickly and easily qualify borrowers. Let’s take a look at the main changes:

Eligibility Requirements

  • Mortgage must be owned by Fannie Mae or Freddie Mac
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Lopsided divorce settlement shortly before a husband’s bankruptcy filing did not amount to a “fraudulent transfer” of assets: ex-wife keeps it all!

Bankruptcy: In re Kimmell, 10 B 36039

Adversary: Trustee v. Kimmell, 10 A 2174

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According to the best practices website maintained by the National Governors’ Association, legislators, courts, and law enforcement officials in Illinois have taken steps to deal with the mortgage mess. Whether any of them will do any good is still up in the air.

Mortgage Fraud Hotline: 800-532-8785

Governor’s Homeowner Assistance Initiative: free mortgage counseling and assistance. Use one of 2 hotlines to contact them — foreclosure prevention or mortgage fraud.

House Bill 3762 (signed by Gov. Quinn May 29, 2010): permits service members to apply for a 90-day stay of their foreclosure proceedings while they are on active duty – improving on rights afforded under Federal Service Members Civil Relief Act.

Senate Bill 1894 (signed by Gov. Quinn Dec. 31, 2009): requires that lenders provide sufficient information for the State to determine whether counseling is needed before the borrower takes on a loan. It also increases education requirements for real estate agents and expands Illinois’ anti-predatory database program to the 3 counties with the highest foreclosure rates in Illinois. This program previously applied in Cook County only.

HB 2653: allows homeowners facing foreclosure to qualify for assistance under the state’s Homelessness Prevention Act.

Outreach

The Illinois Housing Development Authority and Department of Financial and Professional Regulation have been bringing together mortgage loan providers, local housing assistance groups and state agencies in one place through Home Ownership Outreach Days to help struggling homeowners. The events cover how financing works, how foreclosure works, and how to refinance.The events also give homeowners the opportunity to meet face-to-face with lenders.

Scams

Illinois enacted the Mortgage Rescue Fraud Act (SB 2349) in June 2006.

Stabilization

Illinois enacted H.B. 621 in August 2009 to allow a township to provide for certain aspects of property maintenance after foreclosure such as yard maintenance.The bill allows the township to collect compensation from the owner for the cost of the maintenance. 

Renters

Illinois S.B. 258 signed in August 2007 provides that a tenant who is current on his or her rent must be allowed to remain in their unit for at least 120 days following notice of the foreclosure; while S.B. 2721 signed in August 2008 prevents the owner of foreclosed property from evicting tenants unless the tenants receive an eviction notice.

Other

Illinois has established a task force to determine the best way to handle the rising number of foreclosures. The Governor’s Mortgage Fraud Task Force and the Illinois Statewide Foreclosure Prevention Network proactively work to mitigate foreclosure throughout the state.

Illinois joined 11 other states as part of the State Foreclosure Prevention Working Group. The body is comprised of State Attorneys General, two State Bank Regulators, and the Conference of State Bank Supervisors.

Anti-Predatory Lending

Illinois enacted S.B. 1167 in 2007 to prohibit financing certain insurance premiums, equity stripping and loan flipping, and encouraging default. The legislation requires brokers to disclose refinancing options. The legislation also establishes a predatory lending database program. 2003 815 ILCS 137 High Risk Home Loan Act (Public Act 93-0561),

Of course this is only a partial list, and the post could go on for pages.The point is that we in Illinois need real assistance but, instead, get more laws.Too bad the levy has already broken when it comes to bad mortgages and plummeting real estate values. But for what it’s worth, I hope some of the information about leads to relief for those who need it.

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Before the weekend, take a look at the link below. It’s a concise, simple, and accurate explanation and criticism of the Department of Justice’s argument in the E-Book battle.
AppleAmicusBrief.pdf

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Justia Opinion Summaries

In U.S. v. Robertson the 7th Circuit weighed in on the factors that should be taken into account when sentencing the perpetrators of non-criminal fraud – in this case, bankruptcy and mortgage fraud. Here the Defendants, a husband and wife, appeared to have reformed themselves and were contributing to their community when the matter came to a head.

Facts: The defendants bought up residential properties then sold them to straw men at inflated prices. The inflated bank loans were justified using false information about the buyers’ finances, down payment resources, and intentions about remaining in the properties. Before it collapsed, the scheme had resulted in 37 transactions that cost the lenders involved more than $700,000.

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According to the American Bankruptcy Institute, interpreting the data supplied by the National Bankruptcy Research Center, the number of consumer bankruptcies filed last month was 11% lower than it was last year. That fact is also consistent with the 2011 trend of fewer new filings each month than in the same month of 2010.

All of which sounds promising until we remember that last month 113,432 Americans still had to file bankruptcy to ward off severe financial turmoil, much of it due to their upside down mortgages and ever-sinking home values: trends that have not changed in 2011.

According to ABI Executive Director Sam Gerdano, consumer bankruptcies are declining due to the deleveraging of credit card accounts by consumers and the fact that new credit is so hard to get. 

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