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New York Homeowners May Be at Risk of Losing Foreclosure Help

Last year, the foreclosure rate in New York State surged and today thousands of residents are at risk of losing their homes. It was recently announced that state-funded resources that provide foreclosure assistance will not receive funding as of October 2017 and will stop accepting clients as of this spring. Currently, there are no plans to replace the funds allocated to foreclosure assistance. Some warn that the lack of foreclosure resources for New York residents can have devastating effects, leading to homelessness and homeowners falling victim to scams.

 

Newsday reported that in 2016, there were nearly 33,000 new foreclosure filings across New York State. According to Legal Services NYC, New York City saw more than 7,500 foreclosure filings and more than 50,000 pre-foreclosure notices were sent to city residents during the year. New York City neighborhoods that have been hit hard by foreclosure are southeast Queens (including Jamaica, Ozone Park, and Saint Albans) and eastern Brooklyn (including East New York, Canarsie, and East Flatbush). Parts of the Bronx (including Highbridge, Crotona, and Fordham) have the highest foreclosure rates in the city, according to the Center for New York City Neighborhoods. More than 8,000 foreclosures occurred on Long Island, a number higher than that in 2007, when the financial collapse occurred, according to Empire Justice Center.

 

Currently, there are 32 state-funded entities that provide help to homeowners who need loan modifications or other forms of foreclosure assistance. However, New York residents may be in jeopardy of losing this support network. Since 2012, the New York State Attorney General’s office has committed $100 million to help New York residents avoid foreclosure on their homes. The initial funding came from the Attorney General’s settlement with the big banks over deceptive practices that led to the financial crisis. However, that settlement money now goes directly to the state’s coffers instead of the Attorney General’s office.

 

As of October 1, 2017, the entities that provide this help to homeowners in need will no longer receive funding. In Governor Andrew Cuomo’s initial 2018 budget, he has not included any money to replenish these foreclosure service funds.  Advocates are pushing for state officials to provide the $10 million for the remainder of fiscal year 2017 and an additional $20 million for 2018.

 

In anticipation of the lack of funding, state-funded entities will stop taking new clients this spring because the casework is so labor-intensive and it takes a long time to resolve. With the lack of foreclosure assistance resources, nonprofit entities will be unable to help New York homeowners save their homes using loan modifications and settlements. As a result, more people are likely to lose their homes to foreclosure and New York neighborhoods will be negatively impacted by the economic domino effect. New York homeowners may also be at greater risk of falling victim to scams. Oftentimes, these organizations can detect when a homeowner has been a victim of a scam and provide assistance.

 

At Hobson-Williams, P.C., we understand that facing foreclosure can be a difficult and overwhelming experience for homeowners and their families. Our foreclosure defense lawyers can negotiate with mortgage companies on your behalf to help save you time, money, and, ultimately, your home. If you are facing foreclosure on your home, call our New York foreclosure defense law firm at 1-866-825-1529.

 

SCOTUS Declines Review of Debt Collection Case

On June 27, the Supreme Court declined to review a ruling by the United States Court of Appeals for the Second Circuit, allowing the decision in the class-action lawsuit against the debt collection company Encore Capital Group Inc., Midland Funding and Midland Credit Management to stand.

As is typically done in the debt collection industry, Midland had purchased millions of dollars of debt from Bank of America for pennies on the dollar, hoping to collect repayment at a higher rate from the borrowers. Midland rendered a 27 percent annual interest rate on New York resident Saliha Madden’s credit card debt she incurred years earlier through the Bank of America.

In May 2015, Ms. Madden commenced a class-action lawsuit against Midland and argued that the company could not charge her the 27 percent interest rate on her credit card debt because it exceeded the interest limits in her home state. The Second Circuit ruled in favor of Ms. Madden, stating that debt collection companies are not protected under the National Bank Act and must abide by the interest rate cap set under a state’s “usury” laws. The Appeals Court’s ruling extends to borrowers in New York, Connecticut and Vermont.

According to the New York Times, the Appeals Court’s decision is limited. In the Madden case, the borrower no longer had a relationship established with the bank after it sold off the debt to the loan collection company. However, the original interest rate a financial institution charges on credit card debt may still be applicable even after the debt has been sold.

At some point, a business owner may need to collect on debt owed under loan agreements, contracts, services, transactions, promissory notes, and goods that were sold and delivered. Hobson-Williams, P.C. is a full-service debt collections department that is available to advise you of your rights when it comes to debt collection. The firm’s debt collection attorneys practice in accordance with all federal and state debt collection laws when dealing with debtors. For more information, call 1 (866) 825-1529.

CFPB Report Finds Many Borrowers Are Unable to Pay Back Auto Title Loans

The Consumer Financial Protection Bureau (CFPB) recently released a study which showed that the vast majority of borrowers who take out a single-payment automobile title loan cannot afford to make the payments and need to take out additional loans to pay it off.

The study, which was reported by The New York Times, showed that the car title loans — which are due in 30 days — can keep borrowers in debt for months as extra fees and interest are added to the loan amount. Although those who take out the loan usually have one month to pay it off, some states require the loan to be paid off in as little as two weeks.

Consumers take out a car title loan when they are short of cash or have an unexpected expense. They borrow the money for a short amount of time at a high interest rate and put up the title to their vehicle as collateral. The lender determines the amount based on a percentage of the car’s value and holds onto the title until the loan is repaid.

Of the 3.5 million single-payment loans issued by nonbank lenders and examined by CFPB, about 20% of all borrowers had their vehicles seized for failure to repay. Only 12% were “one and done,” meaning they paid off the loan — including fees and interest — in a single payment within 30 days, the report stated.

Hobson-Williams, P.C. offers a full-service debt collections department that aggressively collects bad debt accounts receivable. The firm’s debt collections attorneys adhere to all federal and state debt collection laws when dealing with debtors. We will handle your debt collection matters with speed and efficiency which results in a high collection ratio. For more information, call 1 (866) 825-1529.

Third-Party Debt Collectors Need to Follow New Regulations

As of 2015, new rules under the Fair Debt Collection Practices Act (FDCPA) went into effect.  These rules regulate third-party debt collector communication and disclosure requirements.  The aim of these reforms is to prevent predatory practices that deceive consumers for financial gain.

Debt collectors will now be required to give a disclaimer to the consumer if they believe the statute of limitations have expired.  This disclosure requirement and the statute of limitations rules are complex.  It is important to seek guidance from an experienced attorney to analyze whether the disclosure is sufficient or whether the collection efforts are time-barred.

There is also a new time-sensitive disclosure restricting behavior under the FDCPA.  The debt collector now has five days to list the original creditor, provide an itemized inventory of the debt due as of charge-off, the accrued interest, other fees accrued, and the total payments made since charge-off.

Previously, the law prohibited the use of a consumer’s email address to communicate with them.  Now, a debt collector is permitted to communicate with a consumer through the consumer’s personal email account if proper consent is obtained in writing.  With these new rules in place, dismissal of an otherwise valid debt could occur if the debt collector failed to obtain the proper written consent to communicate via email.

At some point, most businesses may need to attempt debt collection on monies owed.  To better understand your rights when it comes to debt collection, contact an experienced New York collections attorney Hobson-Williams by calling (718) 210-4744.