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2014 Bankruptcy Articles

USTP Notice of Proposed Rulemaking on Chapter 11 Monthly Operating Reports

December 30, 2014
ABI Newsletter

Section 602 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) authorizes the U.S. Trustee Program (USTP) to issue rules requiring uniform periodic reports by debtors in possession or trustees in non-small business cases under chapter 11. The USTP just published in the Federal Register a notice of proposed rulemaking seeking public comment on the proposed rule and periodic report forms. The proposed rule is published in the Federal Register at 79 FR 66659 (Nov. 10, 2014) (to be codified at 28 C.F.R. pt. 58). The proposed rule, along with the proposed periodic report forms and instructions, may be viewed on the USTP's website. The proposed rule may also be accessed at www.regulations.gov. All public comments must be submitted on or before January 9, 2015, via www.regulations.gov. Please note that the proposed rule and forms only apply in chapter 11 cases filed by debtors that are not small businesses. Small business debtors are already required to use Official Form 25C, "Small Business Monthly Operating Report."


Texas Is Throwing People In Jail For Failing To Pay Back Predatory Loans

December 29, 2014
Huffington Post

At least six people have been jailed in Texas over the past two years for owing money on payday loans, according to a damning new analysis of public court records.

The economic advocacy group Texas Appleseed found that more than 1,500 debtors have been hit with criminal charges in the state -- even though Texas enacted a law in 2012 explicitly prohibiting lenders from using criminal charges to collect debts.

Click here to read the full article


Maintenance Issues Linger for Abandoned Homes

December 24, 2014
USA Today

Making sure broken windows are fixed, lawns are mowed and piles of trash are removed at vacant homes remains a lingering challenge of the housing crash five-and-a-half years after the end of the Great Recession.

Foreclosures recorded by Fannie Mae peaked in late 2010, but an inventory persists of long-vacant homes with broken or boarded-up windows, peeling paint, overgrown bushes and weeds, and stacks of refuse.

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Analysis: Bank Bailouts Approach a Final Reckoning

December 22, 2014
ABI (American Bankruptcy Institute) e-newsletter

The U.S. government closed a chapter in financial-crisis history on Friday when it sold its remaining shares of Ally Financial Inc. and shuttered its auto-bailout program, ending the last major pieces of a $426 billion rescue package that saved a swath of U.S. companies but never won public support, the Wall Street Journal reported today. The Treasury Department said the 2008 Troubled Asset Relief Program has netted a small profit, returning $441.7 billion on the $426.4 billion invested in firms including Citigroup Inc., Bank of America Corp., General Motors Co., Chrysler and American International Group, Inc. That profit, unexpected at the time of the bailout’s inception, has been nonetheless overshadowed by criticism that the rescue program put Wall Street’s interests ahead of Main Street’s, a view that prompted Congress to outlaw future taxpayer bailouts as part of the 2010 Dodd-Frank law. About 35 smaller banks remain in the program, down from about 700 financial firms at the height of the program. Critics have also pointed to the possible costs of having such a large amount of government funds tied up for so long and to the risks assumed by the government with its bailouts.


Debt Collectors Hound Millions of Retired Americans

December 20, 2014
NBC News

It may be hard to imagine Grandma unable to pay her bills or Grandpa being hounded by debt collectors. But for millions of Americans, this is the harsh reality of retirement.

Faced with a fixed income and constantly rising cost of living, many seniors now spend their "golden years" juggling bills and fending off debt collectors.

Click here to read the full article


There Are More PayDay Lenders In the U.S. than McDonald's or Starbucks

December 9, 2014
Credit & Collection E-Newsletter


Federal Consumer Financial Protection Bureau Issues Latest Semi-Annual Report to Congress

Dec 08, 2014
ACA International

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau has released its sixth semi-annual report to Congress and the president, focusing on its actions from April through the end of September this year.

Click here to read the full article


Release of the ABI Chapter 11 Reform Commission's Final Report Start on Saturday at the Winter Leadership Conference

December 2, 2014
ABI Newsletter

The Final Report of ABI's Commission to Study the Reform of Chapter 11 will be previewed on Saturday, Dec. 6, at a session at ABI's Winter Leadership Conference. The Report is the culmination of more than two years of testimony, advisory reports and deliberations. To register and participate in the session, please click here. Those not in attendance can tap into the session via live webstream at http://commission.abi.org.


House OK of Bank Bankruptcy Bill Pressures Senate to Act

December 2, 2014
The Deal Pipeline

The House of Representatives late Monday voted to approve a bipartisan bill amending the bankruptcy code for large financial institutions as part of an ongoing response to the 2008 collapse of Lehman Brothers.


Indian Casinos Making Payday Loans Claim They are Not Bound by State Usury/interest Rate Regulations

November 24, 2014
Credit and Collection e-newsletter

Joshua Wrenn needed money to make the January payment for his Jeep Cherokee. The truck driver and aspiring country singer in Madison, North Carolina, got $800 within minutes from a website he found on his phone. When he called to check his balance a few weeks later, he was told he had electronically signed a contract to pay back $3,920 to a company owned by an American Indian tribe. “I didn’t ever see a contract, not one time,” said Wrenn, 30. “If I was that stupid, to sign for $3,000 for an $800 loan, I might as well bury myself alive.” Payday loans like Wrenn’s -- costly, short-term advances for those with poor credit -- are illegal in North Carolina and about a dozen other states. That’s driving online lenders to Indian reservations, where tribes say they’re not subject to interest-rate regulations.


Proposed Changes to our Mortgage Servicing Rules: New Protections for Surviving Family Members and Other Homeowners

November 20, 2014
Consumer Financial Protection Bureau

Today, we’re proposing changes to our Mortgage Servicing Rules, which took effect on January 10, 2014. These rules provide important protections for consumers with mortgages, including:

  • Requiring mortgage servicers (people who manage your mortgage loan account) to provide you with periodic mortgage statements or coupon books that give you important information about your mortgage.
  • Requiring servicers to respond quickly to written inquiries seeking information or requesting that they resolve potential errors about your mortgage.

Click here to read the full article


New Court Fees to Take Effect Dec. 1

November 19, 2014
United States Courts

Starting Dec. 1, bankruptcy courts will charge $25 to file a motion seeking to redact information from previously filed papers, the Wall Street Journal reported today. One other new fee will also take effect next month, according to the Administrative Office of the U.S. Courts. The existing $157 fee to appeal a bankruptcy court ruling directly to a U.S. Court of Appeals, bypassing the district court, will increase by $50 to $207.

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Concept of Debt Forgiveness, that is Main Aim of Bankruptcy, Dates Back to Biblical Times

November 18, 2014
BankruptcyData.com

Tracing the concept of debt forgiveness back all the way to the Old Testament, we see Moses referencing a Jubilee, or Holy, Year to take place once every fifty years. During that year, it was decreed that all debts would be eliminated and those Israelites that had sold themselves into slavery would be freed. In addition, the Jubilee Year called for all land that had been sold to revert back to its original owner. Leviticus 25: 10-13 asserts: "Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you; each one of you is to return to his family property and each to his own clan. The fiftieth year shall be a jubilee for you; do not sow and do not reap what grows of itself or harvest the untended vines. For it is a jubilee and is to be holy for you; eat only what is taken directly from the fields. In this Year of Jubilee everyone is to return to his own property."


Credit & Collection News e-newsletter of November 17, 2014 reports that 78% of National Football League Players Go Bankrupt Within 5 Years of Retirement


Driving Student Borrowers Into Default

November 3, 2014
New York Times

People who pay for college with federal student loans can avoid default when they fall on hard times by making lower payments — or no payments at all — until they recover financially. Borrowers who take out private student loans from banks and other institutions typically have no such option. When they lose their jobs or suffer other financial setbacks, they have little choice but to default, which, in turn, damages their credit histories and ability to borrow for other purposes or even to find a job.

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Feds Shut Down Debt Collector That Allegedly Defrauded Spanish-Speaking Consumers

October 23, 2014
Consumer Affairs

Collecting a debt is one thing. Collecting a non-existent debt is something else. And according to the Federal Trade Commission, a South Florida debt collection operation has been doing just that -- hounding Spanish-speaking consumers for debts they don't owe.

Click here to read the full article


Bankers Buried in Lawsuits Say New Loan Rules Fall Short

October 21, 2014
Bloomberg

Bankers who gathered in Las Vegas to hear Melvin L. Watt reveal mortgage rule changes said they won’t do enough to expand credit to many Americans shut out of housing. Lenders demand relief from government lawsuits too.

Click here to read the full article


San Bernardino Police Want Deadline for Filing Plan

October 17, 2014
Bloomberg

While Detroit is increasing momentum toward emergence from municipal bankruptcy, San Bernardino, California, is moving in the opposite direction.

In the Chapter 9 debt-adjustment proceeding, two years old in August, San Bernardino had negotiated a tentative agreement with the union representing police officers.

Click here to read the full article


CFPB Report Finds Distressed Private Student Loan Borrowers Driven Into Default

October 16, 2014
Consumer Financial Protection Bureau

Today, the Consumer Financial Protection Bureau (CFPB) Student Loan Ombudsman released a report highlighting complaints by struggling private student loan borrowers who describe being driven into default. Distressed borrowers report that they receive very little information or help when they get in trouble, that there are no affordable loan modification options available, and that the alternatives to default are temporary at best.

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Author Zane Filed for Bankruptcy as Her New Movie, ‘Addicted,’ Was in Production

October 4, 2014
Washington Post

Zane, the best-selling author who has sold millions of steamy novels and is listed as executive producer of a new movie, “Addicted,” based on one of her books, filed for bankruptcy in June, months after being dubbed Maryland’s top individual tax cheat.

Click here to read the full article


Pew Report Finds Online Payday Lending Beset by Abusive Practices

October 02, 2014
PEW Charitable Trusts

The Pew Charitable Trusts today released a report detailing fraudulent and abusive practices associated with payday loans offered online. The study found that Internet loans are more expensive than those offered through storefronts; that they are designed to promote renewals and long-term indebtedness; that many online borrowers report being threatened by lenders or debt collectors; and that the vast majority of payday borrower complaints are about online loans. Pew calls on federal regulators to address these problems by establishing strong, clear, and consistent consumer protections for the small-dollar lending market as a whole.

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Would a GOP Senate Foretell Change for Consumer Agency?

September 18, 2014
Sun Sentinel

At 3 years old, the controversial Consumer Financial Protection Bureau has survived opponents' attempts to dismantle it and is busy rolling out new regulations and doling out punishment to companies accused of bilking consumers.


Older Americans Inability to Repay Student Loans May Affect Financial Security of a Small Percentage of Retirees

September 10, 2014
U. S. Government Accountability Office

A new US Government Accountability Office Report reports that the total amount of debt owed by seniors (persons age 65 years old and up) grew to $18.2 billion in 2013, up from $2.8 billion in 2005. That is a HUGE increase. The 9/11/14Washington Post reported that increase in debt owed by seniors.

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Senior Americans Burdened with Student Debt

September 10, 2014
Associated Press

Rosemary Anderson could be 81 by the time she pays off her student loans. After struggling with divorce, health problems and an underwater home mortgage, the 57-year-old anticipates there could come a day when her Social Security benefits will be docked to make the payments.

Click here to read the full article


77 Million Americans Have Debt in Collections

September 6, 2014
Shreveport Times

If every penny possible is saved and each bill paid when it came, how long would it take to save $4,200?

Many Louisiana residents are - or should be - asking themselves this question if they ever hope to escape from debt. More than 43 percent of state residents with credit files have debt in collection, meaning they’ve owed for more than 180 days and are now facing down collection agencies.

Comment of The Bankruptcy Law Firm, PC: Many people in California have a lot more than $4,251 of overdue debt, in collection.

Click here to read the full article


Experian Automotive - Financing to Subprime Borrowers Begins to Throttle Back

September 03, 2014
CNN Money

Experian Automotive today announced that the percentage of new vehicle loans to subprime and deep subprime borrowers began to level off in Q2 2014. According to its latest State of the Automotive Finance Market report, the percentage of new vehicle loans going to consumers in the subprime and deep subprime segments was at 15.1 percent in Q2 2014, down from 22.1 percent in Q2 2013. While up from the 10.2 percent low at the peak of the recession in 2009, the current figures are still well below the prerecession level highs of 16.6 percent in Q2 2008 and 19.9 percent in Q2 2007.


You Thought the Mortgage Crisis Was Over? It's About to Flare Up Again

August 24, 2014
New Republic

We are nearly eight years removed from the beginnings of the foreclosure crisis, with over five million homes lost. So it would be natural to believe that the crisis has receded. Statistics point in that direction.

Click here to read the full article


Student Debt Threatens the Safety Net for Elderly Americans

August 12, 2014
Bloomberg Business Week

Until his Social Security check arrived nearly $300 lighter last June, Eric Merklein, 67, had no idea that he was carrying outstanding student debt. Merklein eventually learned that the government was taking money from his Social Security payments to repay loans he took out roughly four decades ago; he had thought they were paid. Merklein was unemployed, and the garnishment amounted to one-sixth of his total monthly income.

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Why the 'Living Will' Process Sets Banks Up for Failure

August 11, 2014
American Banker

Last Tuesday, the Federal Reserve and the Federal Deposit Insurance Corp. rejected the living wills of 11 of the biggest bank holding companies in the U.S. This gives regulators inordinate control to restructure the companies as they see fit.

Click here to read the full article


Feds Eye Online Lending Practices

August 9, 2014
Trib Live

Unregulated online lending is a growing problem, experts say, and state and federal regulators are stepping up efforts to control it.

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Debt Collectors in Memphis and New York State Settle with FTC Concerning Multiple Federal Law Violations

August 7, 2014
Federal Trade Commission

A Memphis-based debt collector has agreed to stop deceiving and harassing consumers and otherwise violating federal debt collection laws, and will pay a $1.5 million civil penalty to settle Federal Trade Commission charges, while a debt collection operation headquartered outside New York City will pay $490,000 as a penalty to settle a separate FTC complaint.

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Poll Finds Widespread Economic Anxiety

August 5, 2014
Wall Street Journal

Still scarred by a recession that ended five years ago, Americans are registering record levels of anxiety about the opportunities available to younger generations and are pessimistic about the nation's long-term prospects, directing their blame at elected leaders in Washington.

Click here to read the full article


New-home Sales Fall 8.1% in June

July 24, 2014
USA Today

Sales of new single-family homes fell 8.1% in June, and May's previously reported surge was slashed by a record revision. Paired with June's slippage, newly updated sales figures for March, April and May show the industry's spring performance was weaker than previously estimated, the Census Bureau reported Thursday.

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U.S. Economy Is Lumbering, Not Soaring

July 21, 2014
Wall Street Journal

The destruction of Malaysia Airlines Flight 17 and the fighting in Gaza are the sort of geopolitical unknowns that send markets off-kilter, albeit in this case not very far off-kilter. The overriding market thesis is that the economy is getting better, the jobs market is getting better, corporate earnings are getting better, the proverbial morning in America is just around the corner, and even with stocks around record levels, even with chaos overseas, now is still the time to buy.

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Foreclosures Fall in U.S. to Pre-Bust Levels: Mortgages

July 17, 2014
Bloomberg Businessweek

Foreclosure filings in the U.S. fell in June to levels not seen since before the housing bubble burst eight years ago, causing 5.5 million people to lose their homes.


CFPB Sues “Debt Collection Lawsuit Mill” Over Deceptive Court Filings and Intimidation

July 14, 2014
US Finance Post

The Consumer Financial Protection Bureau has filed a lawsuit on July 14 against Georgia-based company Frederick J. Hanna & Associates and its three principal partners, calling the company a “debt collection lawsuit mill.”

Click here to read the full article


Legislation Proposed To Wind Down Fannie Mae And Freddie Mac

July 11, 2014
Bidness Etc.

Fannie Mae (FNMA) and Freddie Mac (FMCC) may be counting their last days after a bill to wind down the government-sponsored enterprises (GSEs) and reform the mortgage finance market was proposed Thursday, according to a Delaney, Carney, and Himes press release. The bill proposes market-based pricing for loan guarantees and a different vehicle for mortgage insurance.

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Credit-Card Lenders Pursue Riskier Borrowers

June 26, 2014
Wall Street Journal

Lenders are courting risky credit-card borrowers more aggressively than they have since the financial crisis in a bid to jolt revenue in a period of sluggish growth and tight regulation.


U.S. Economy Shrank in First Quarter by Most in Five Years

June 25, 2014
Bloomberg

The U.S. economy contracted in the first quarter by the most since the depths of the last recession as consumer spending cooled.

Gross domestic product fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1 percent drop, the Commerce Department said today in Washington. It marked the biggest downward revision from the agency’s second GDP estimate since records began in 1976. The revision reflected a slowdown in health care spending.

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In Last Day of Trial, Stockton, Calif., Argues for End to Bankruptcy

June 4, 2014
Reuters

In the final day of a trial to determine if Stockton, California, is ready to end its two-year pilgrimage through Chapter 9 bankruptcy protection, the city argued its plan to handle its liabilities to creditors, public workers and the state's pension fund was fair and equitable.

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U.S. District Judge Finds that Payday Lender AMG Services Deceived Consumers by Imposing Undisclosed Charges and Inflated Fees

June 4, 2014
FTC

The Federal Trade Commission has scored another legal victory in its crackdown against deceptive payday lenders with the latest finding from U.S. District Judge Gloria M. Navarro in the case against AMG Services.

Click here to read the full article


HELOC Payment Jump Looms for Homeowners

June 3, 2014
The Wall Street Journal

Another bill is coming due from America's decade-old borrowing binge as payments jump on a number of home-equity credit lines taken out during the boom. Economists worry the new burden could reignite loan-payment troubles and dent consumer spending at an iffy moment in the economic recovery.


Late-payment Rate on US Loans Edged Higher in 1Q

May 19, 2014
Bloomberg Businessweek

More Americans fell behind on their car payments in the first three months of the year, reflecting strong growth in auto loans versus a year ago and increased lending to borrowers with less-than-perfect credit.


FTC Permanently Shuts Down Debt Collection Business

May 19, 2014
ACA International

The owner of a Houston-based debt collection operation that the Federal Trade Commission charged used insults, lies, and false threats of imprisonment to collect on payday loans will surrender his assets, estimated to be worth $550,000, to pay restitution to consumers who were charged unauthorized fees.

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Stockton Bankruptcy Judge to Decide if Pensions Should Share Losses

May 13, 2014
Reuters

The judge presiding over Stockton, California's bankruptcy case on Tuesday said he will question officials from Calpers to determine whether the nation's largest pension fund can be forced to take losses in the case along with other creditors.

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Sallie Mae To Pay $97 Million For Unlawfully Charging Troops On Student Loan

May 13, 2014
Washington Post

Government officials hit Sallie Mae and its former subsidiary Navient Solutions with $97 million in fines Tuesday for unlawfully charging active-duty service members high interest rates and late fees on student loans.

Click here to read the full article


Bankruptcy Is Preferred Path When Banks Fail, Hoenig Says

May 7, 2014
Bloomberg

Bankruptcy is the preferred path for resolving the largest U.S. banks when they collapse and firms should make fundamental changes to make that possible, Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig said today.

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Commentary: A Vision for Reforming Student Loans

With outstanding student debt topping one trillion dollars and the default rate on federal loans approaching 15 percent, many borrowers are finding themselves in a spiral of debt and financial ruin, according to a CNBC.com commentary by Sen. Marco Rubio (R-Fla.) and Rep. Tom Petri (R-Wis.). This week, the Federal Reserve announced that American consumer debt is higher than it's ever been, with student loans leading this surge. It's important to note that a significant number of borrowers default on small debt levels, according to the commentary. In fact, the average amount of a defaulted federal loan is roughly $14,000. Many of these defaults occur because our system focuses the burden of repayment on a borrower's initial years out of school when he or she is least equipped to bear it. As a result, temporary struggles to find a job right out of college or low initial earnings turn into needless defaults. And while other options exist, the system's bewildering complexity prevents many students from taking advantage of them. Far better would be to have each borrower's payments set automatically as an affordable percentage of income, according to Rubio and Petri. For most, this would mean paying less early in their careers and more as their income grows over time. Additionally, borrowers would be protected from income shocks such as unemployment, something many recent graduates have struggled with during the economic downturn.


Bank of America Reaches $772M Credit-Card Settlement

April 09, 2014
Fox Business

Bank of America (BAC) reached settlements on Wednesday worth $772 million with U.S. regulators to settle charges it duped customers with deceptive credit-card practices.

Click here to read the full article


US Consumer Borrowing up $16.5 Billion in February

April 7, 2014
AP

Consumers increased their borrowing in February on autos and student loans by the largest amount in a year. But for a second straight month, they cut back on their credit card use.


CCN Factoid:

April 2, 2014
Live From Naples, Florida

American consumers are $11.23 trillion in debt, eight percent of which-or about $900 billion-is delinquent, while $678 billion is seriously delinquent at 90 or more days late.


COMMENTARY: Burden of Student Loans Stifles the Housing Market

Despite shrinking unemployment rates and recovering housing prices, fewer would-be borrowers are applying for loans in part due to the growing burden of student loan debt, according to a commentary yesterday in American Banker. According to the Consumer Financial Protection Bureau, student loan debt has surpassed the $1 trillion mark. Seven out of 10 college graduates in 2012 have an average of $29,400 in student loan debt, compared to $26,600 for 2011 graduates, according to the Project on Student Debt at the Institute for College Access and Success. The high student debt burden is stifling the overall willingness to enter into a mortgage from both the lender's and the consumer's perspective, according to the commentary. From the lender's side, the Qualified Mortgage (QM) rule has codified tightened standards for lenders wanting to close QM-eligible loans by requiring a debt-to-income (DTI) ratio of less than 43 percent. With more young adults making large student loan payments instead of saving up for a down payment, combined with car payments and possibly credit card debt, the 43 percent DTI becomes a very difficult barrier for lenders working within the QM standards.

NOTE by Attorney Kathleen P. March of The Bankruptcy Law Firm, PC: Even in bankruptcy, it is not usually possible to discharge student loan debt, because the standard for discharging student loan debt, set by 11 USC 523(a)(8), is that the borrower must file bankruptcy, then in the bankruptcy case, bring and win an adversary proceeding, suing the student loan lender(s), and in that adversary proceeding, the borrower (debtor) must prove that it would be an UNDUE hardship on the debtor or debtor's dependents, if the debtor had to pay that student loan back, to the student loan creditors, over the debtor's whole remaining working life.


Debt Collection Complaints By Military Members And Veterans Skyrocket

March 21, 2014
Credit and Collection News

Federal law prohibits credit card companies and debt collectors from harassing military personnel and their families, and yet the government's new consumer protection agency is being flooded with complaints about this very problem. The Consumer Finance Protection Bureau (CFPB) says it received more than 14,000 complaints from military members in just over two and half years (July 2011 to February 2014). Among the complaints were 4,700 about mortgages, 3,800 regarding debt collection, 1,700 on credit card issues, and 1,500 pertaining to banking services. There were also complaints regarding credit reports (1,200), consumer loans (600), student loans (400), and payday loans (100). The overall complaint volume from military people skyrocketed 148% from 2012 to 2013, the agency said in its report (pdf). "I have heard in my many visits to military installations across the country about aggressive and deceptive tactics by debt collectors specifically targeting members of the military," Holly Petraeus, the CFPB's assistant director for service member affairs, wrote in an introduction to the report. "These tactics to coerce payment often involve contacting a service member's military chain of command, threatening punishment under the Uniform Code of Military Justice, threatening to have a service member reduced in rank, or threatening to have a service member's security clearance revoked," she stated. In some cases, debt collectors have even threatened military personnel with court-martial.

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Consumers Report Being Hounded About Debts Not Owed

March 20, 2014
CFPB

The Consumer Financial Protection Bureau (CFPB) today issued a report on the more than 30,000 consumer complaints it has received about the debt collection market. The report finds that many consumers complain that they are being hounded by debt collectors about debts they do not owe. Top complaints also include debt collectors’ use of aggressive communication tactics and threats of illegal actions.

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US Retirees Return to Reverse Mortgages, Big Banks Stay Away

March 17, 2014
Reuters

U.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead: the reverse mortgage.

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The Hidden Rot in the Jobs Numbers

March 16, 2014
Wall Street Journal

Most commentators viewed the February jobs report released on March 7 as good news, indicating that the labor market is on a favorable growth path. A more careful reading shows that employment actually fell—as it has in four out of the past six months and in more than one-third of the months during the past two years.

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Consumer Credit in U.S. Increased $13.7 Billion in January

March 7, 2014
Bloomberg

Consumer borrowing in the U.S. rose at a slower pace in January as Americans cut back on their credit-card purchases.

The $13.7 billion gain followed a revised $15.9 billion advance the previous month that was smaller than initially reported, the Federal Reserve said today in Washington. The median forecast of economists called for a $14 billion advance in January. Non-revolving debt, which includes financing for cars and college tuition, rose by the most in four months.

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New Lenders Spring up to Cater to Subprime Sector

March 6, 2014
Yahoo! Finance

A crop of new lenders is jumping into the subprime personal-loan market, wooing consumers with flawed credit who have been neglected since the financial crisis.


US Housing Recovery Sees Slowdown: S&P Case-Shiller Home Prices

February 25, 2014
International Business Times

Standard & Poor’s housing data released Tuesday indicate a slowdown in a recovering U.S. housing market from 2012 and 2013, even though a benchmark index posted its best annual gain since 2005.

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U.S. Consumer Debt Rises in Fourth Quarter by Most Since 2007

February 18, 2014
Chicago Tribune

U.S. household debt rose in the latest quarter by the most since before the recession, a sign that Americans may be nearing the end of a multi-year belt-tightening trend, data from the Federal Reserve Bank of New York showed on Tuesday.


Same-Sex Spouses Get New Federal Rights, Holder Says

February 8, 2014
Wall Street Journal

The Obama administration will give same-sex couples who are legally married the same status as other married couples in federal legal matters—including bankruptcy proceedings, prisoner visitation and death benefits for slain police officers, Attorney General Eric Holder said Saturday.

The Justice Department, Mr. Holder said, would issue new instructions to its employees on Monday to extend the same protections historically afforded to heterosexual married couples. He made the announcement at a speech in New York to the Human Rights Campaign, a major gay-rights advocacy group.

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Welcome Relief for Homeowners, Until the Tax Bill Arrives

February 4, 2014
New York Times

Come tax time, JPMorgan Chase will be able to write off the $1.5 billion in debt relief it must give homeowners to satisfy the terms of a recent settlement.

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Wall Street Suffers Worst Drop Since June after Weak Data

February 3, 2014
Reuters

U.S. stocks slumped on Monday, with the S&P 500 suffering its worst drop since June, after weaker-than-expected data on the factory sector in the world's largest economy provided investors with the latest reason to move away from riskier assets.

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Analysis: As Refinancing Wanes, Banks Are Wary of New Loans

January 16, 2014
ABI e-newsletter

Despite the confluence of promising economic signs, little in the system that provides Americans with mortgages has returned to normal since the 2008 financial crisis, leaving a large swath of people virtually shut out of the market, according to an analysis in yesterday's New York Times. Even as the housing market improves, new home loans are still scarce as interest rates have started to creep up -- a situation that was starkly underlined in the two banks' results on Tuesday. The nation's biggest mortgage lender, Wells Fargo, extended $50 billion in mortgages in the fourth quarter, down 60 percent from a year ago. The nation's largest bank, JPMorgan, for its part, extended $23 billion in mortgages, down 55 percent from a year ago. The declines reflected the waning of the refinancing boom prompted by record-low interest rates. Without substantial income from refinancing, the banks' mortgage businesses will now depend on making fresh loans to purchase houses, a business that, despite some revival, remains tepid.


Senate Fails to Advance Jobless Benefit Plan as Parties Spar

January 14, 2014
Bloomberg

The U.S. Senate failed to move forward a Democratic plan to restore emergency jobless benefits that expired Dec. 28 for 1.3 million Americans.

Click here to read the full article


Mortgage Services Face More Heat Under Settlement

January 7, 2014
ABI (American Bankruptcy Institute) e-newsletter

So far, the big mortgage servicers have received good report cards for their compliance with the $25 billion national settlement, but that could change this year as testing gets tougher, National Mortgage News reported on Friday. There is a big discrepancy between the strong test results to date and the massive number of consumer complaints, says settlement monitor Joseph A. Smith Jr. Consumers have filed more than 112,000 complaints with regulators, servicers and housing counselors since October 2012, mainly claiming that servicers are still too slow to determine whether borrowers are eligible for loan modifications. "Borrowers still don't know what the rules of the road are and how long it will take for a servicer to look at a loan mod application and decide whether they get relief or not," says Smith. The biggest potential challenge for servicers could come in April when four new tests go into effect that specifically address consumer complaints about shoddy billing practices, lax communications and widespread denials of loan mods. The results of those tests won't be available until the end of 2014, so it may be some time before it becomes clear how well servicers are complying with the servicing requirements in the settlement.

Note that the new Consumer Financial Protection Bureau rules for mortgage servicers are effective on Friday, Jan. 10. If you need to brush up on those rules and to hear a discussion by experts on their impact, be sure to take advantage of ABI's online CLE programming, which features a webinar on the new servicing rules.

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