AUGUST 2008 NEWSLETTER- DON’T FALL FOR FORECLOSURE RESCUE SCAMS

August 9, 2008

Return To Archives

Behind on your house or in Foreclosure? Don’t fall for foreclosure rescue scams that are so very common on the internet. According to the Federal Trade Commission, if you’re looking for foreclosure prevention help, avoid any business that:

• guarantees to stop the foreclosure process – no matter what your circumstances
• instructs you not to contact your lender, lawyer, or credit or housing counselor
• collects a fee before providing you with any services
• accepts payment only by cashier’s check or wire transfer
• encourages you to lease your home so you can buy it back over time
• tells you to make your mortgage payments directly to it, rather than your lender
• tells you to transfer your property deed or title to it
• offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
• offers to fill out paperwork for you
• pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

If you need help trying to save your home, contact Mr. Black, and bring in all your mortgage company letters and house papers. Mr. Black can help you stop foreclosure by filing Chapter 13, or if there is time and circumstances permit, attempt to work out a Loan Modification, a short sale and/or a Deed in Lieu of foreclosure, if it turns out that it is impossible to save the house.

Other foreclosure prevention options, including reinstatement and forbearance, are explained in Mortgage Payments Sending You Reeling? Here’s What to Do, a publication from the FT C. Find it at www.ftc.gov.

You also may contact a credit counselor through the Homeownership Preservation Foundation (HPF), a nonprofit organization that operates the national 24/7 toll-free hotline (1.888.995.HOPE) with free, bilingual, personalized assistance to help at-risk homeowners avoid foreclosure. HPF is a member of the HOPE NOW Alliance of mortgage servicers, mortgage market participants and counselors. More information about HOPE NOW is at http://www.995hope.org/

But whatever you do, don’t fall for a foreclosure rescue scam. It can get worse! ■

“Negative Equity” in your car or truck? There may be help. Recent Bankruptcy Court rulings in Texas say that if you trade in a car or truck, while still owing on your previous vehicle, and the new finance company pays off the previous loan as part of the purchase of the new vehicle, then this negative equity may not have to be repaid, if the purchaser files Chapter 13 bankruptcy and proposes a plan that provides for that. In a recent court case in Houston, Judge Jeff Bohm ruled that Wells Fargo Bank, N.A. would have to be repaid on this “negative equity,” only what the Debtors in that case could afford to pay on it, which was about 4%, in addition to the percentage of the loan that represented the actual purchase price of the new vehicle, plus interest. In re: Brodowski, 2008 WL 2852878 (S.D. Tex.)

This is a very important decision, because if it is upheld on appeal, people filing Chapter 13 can propose more affordable plans. Changes to the Bankruptcy Code in 2005 require that if a vehicle is purchased within 910 days (about 2 1/2 years) before filing bankruptcy for the personal use of the debtor, then the debtor must repay the entire amount of the purchase money security interest (PMSI). Some courts are holding that the PMSI includes the negative equity, others are not. It’s not clear yet which side will win out, but we’ll continue to work for the debtors. I never liked “negative equity” and continually “rolling” more debt into your next vehicle can only lead to financial disaster. ■

Unexpected outcome
“I loaned a friend of mine $30,000 for plastic surgery . . . and now I don’t know what he looks like.”

–Emo Philips

Getting your free credit report
The federal government requires that each of the three national credit-reporting agencies -Experian, Equifax, and TransUnion- gives you a free credit report every year. You can order them from all three at once, or at different times. But the ONLY authorized online source is at www.annualcreditreport.com, says the Federal Trade Commission. Consumers should be aware that there are many sites out there that claim to offer “free” credit reports but often charge you for another product if you accept the report. To request your credit report by phone, call 877.322.8228; by mail, write to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Do not contact the individual credit-reporting agencies.

Get centered in a minute or three
Having a tough day? Try taking a mini-meditation break, suggests Kathleen Hall, founder of The Stress Institute. You can do a mini-meditation nearly anywhere- while you wait in line at the store or when you’re stuck in traffic. A mini takes only about one to three minutes. Here’s how you do it: Take a breath and, if you are able (use discretion), close your eyes. Now take several deep breaths and repeat a short affirmation that is meaningful to you, such as “I am calm” or “I’m letting go.” After a couple of minutes, you should be able to notice a shift in your energy. Keep in mind, Hall says, that tension is sometimes simply exhaustion, and giving yourself the space to relax can reenergize you and clear your head.

Nowhere to go but up–

60% of working single mothers earn less than $30,000 a year.
35% of all single-parent female households live in poverty.

Why you should raise your credit scores
Consumers could save $16 billion if they raised their credit scores by only 30 points on average, says Providian Financial’s chief public policy officer, J. Christopher Lewis.

ARE YOU IN CHAPTER 13 NOW? Always keep the law office updated with your current address, telephone numbers, and email address. We may need to reach you quickly. 24 hours/7 days a week, you can check on the status of your Trustee payments, how much you still owe on your case, etc., by going to www.13datacenter.com to set up your user ID and password.

Lose job or overtime? Expenses increase? Want to give up property to lower payments? Go to www.jthomasblack.com, click on ” Current Clients Click Here” on my home page, and fill out the Motion to Modify worksheet. Fax to office. We’ll review it and contact you if a change to your plan is possible.
J. Thomas Black was licensed as an attorney in Texas by the Texas Supreme Court in May, 1982. Mr. Black is Board Certified in Consumer Bankruptcy law by the Texas Board of Legal Specialization.

August 2008 Newsletter- Don’t Fall for Foreclosure Rescue Scams