May 2016 - Page 2 of 3 - FREE CONSULTATION

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Auto and Credit Card Delinquencies on the Rise in the First Quarter

Posted on May 17, 2016by Admin

Delinquency rates for auto loans and credit cards increased drastically in the first quarter of this year, according to TransUnion. The serious delinquency rates for auto loans (60 days or more past due) reached 1.12 percent in the first quarter, marking the first time the figure exceeded 1 percent in the first quarter since 2011.

Serious delinquency rates for credit cards (accounts that are 90 or more days past due) increased to 1.47 percent in the first quarter. This is highest first-quarter amount since the first quarter of 2013, when serious credit card delinquencies were 1.51 percent. First quarter 2014 and 2015 delinquencies remained stable at 1.37 percent. Serious credit card delinquency rates, however, continue to remain below the average first quarter rate of 1.52 percent since the beginning of 2011, according to TransUnion.

The year-over-year growth in credit card balances is at a record high. The total balance for credit cards increased 6.4 percent to reach nearly $644 billion in the first quarter, also marking the highest year-over-year growth observed in more than six years.

The total balance for credit cards was $605 billion in the first quarter last year, according to TransUnion. Credit card debt accumulation increased 146 percent from the third quarter to fourth quarter 2015, or $21.3 billion to $52.4 billion, respectively, according to CardHub. The delinquency rate from the third to fourth quarter increased from 2.18 percent to 2.23 percent, respectively.

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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

U.S. District Court in NY Grants Debt Collector Motion to Certify Important FDCPA Issue

Posted on May 16, 2016by Admin

In an Order dated this month, a Federal Judge in New York determined that a decision he rendered in the matter of Halberstam v. Global Credit and Collection Corp.(U.S. District Court, ED, NY, 15-cv-5696 (BMC) be certified for an immediate interlocutory appeal.

The Fair Debt Collection Practices Act (FDCPA) case involved leaving a message with a person who answers the debtor’s phone. The issue presented in the case was whether a debt collector, whose phone call to a debtor is answered by a third party may leave his name and number for the debtor to return the call- without disclosing that he is a debt collector – or whether the debt collector must refrain from leaving call back information and simply attempt to make the call at a later time.

In the May 5, 2016 Memorandum, Decision, and Order Judge Brian M. Cogan wrote:

“I had no doubt, and I remain of the view, that the purpose of leaving such a message was to induce plaintiff to return the collection agent’s call without knowing that he was calling a collection agent. Describing the purpose of the call to a third party as a “personal business matter” was at least as suggestive, and probably more, of a business opportunity for plaintiff to make money as it was of its true purpose, which was to cause plaintiff to pay money. I granted summary judgment for plaintiff because I found that by leaving a message for plaintiff with a third party that was calculated to induce a return call without the debtor knowing that he would be calling a collection company, defendant violated section 1692c(b) of the Fair Debt Collection Practices Act (“FDCPA”).

The Fair Debt Collection Practices Act (FDCPA) was designed to help prevent creditor abuse and harassment.

Further, the issue of whether leaving a message with a third party violates the FDCPA has the potential to impact a large number of other cases, as well as debt collection practices more generally.”

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Credit, Debt Relief, Foreclosures

New Reverse Mortgage Updates Benefit Borrowers and Lenders, according to HUD

Posted on May 13, 2016by Admin

According to a new report issued by the Department of Housing and Urban Development (HUD), the latest reverse mortgage updates on the rules and laws have benefited both borrowers and lenders. New changes to the Home Equity Conversion Mortgage program are intended to: assure that foreclosures and defaults are limited; they are also designed to prevent lender abuse; they help assure that borrowers can actually afford to upkeep the home (i.e. – home insurance and property taxes on these loans that are not secured on the basis of income or credit).

The changes mandate that borrowers demonstrate they have the financial ability to maintain the home and pay the property taxes and home insurance. If the borrower is not able to provide proof of this, lenders are not allowed to approve the loans.

The draw from the loans by borrowers has decreased since the new rules took effect. This lesser draw means a decrease in risk to both lenders and borrowers, and assures (that in most cases) there is something to be passed on to heirs from the estate in the future.

Reverse mortgages are a special type of home loan that is offered to homeowners age 62 and older. They require that you have substantial equity in your home and that you are able to pay annual property taxes, home insurance and general upkeep. There are no income or credit requirements outside of these rules. Other requirements include that the home remains your primary residence and that you seek third-party credit counseling before you take out the loan.

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Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Reverse Mortgage will likely be modified

Posted on May 12, 2016by Admin

A reverse mortgage payable upon the pre-petition death of the borrower has been modifiable under section 1322(c). Section 1322(c) provides an exception to the anti-modification provision of section 1322(b) in the case of a debt secured by the debtor’s residence when the final payment comes due during the life of the chapter 13 plan.

In re Michaud, No. 14-23406 (Bankr. S.D. Fla. March 29, 2016), Julie Lisana Michaud sought to strip down the reverse mortgagee’s (James B. Nutter & Company) interest in her principal residence to its value at the time of her chapter 13 petition.

The reverse mortgage agreement was entered into by Ms. Michaud’s husband who died prior to her bankruptcy filing. By the terms of the reverse mortgage, the debt became due and was owed upon the death of Mr. Michaud. The agreement further stated that the full debt “if not paid earlier, would be due and payable on May 29, 2095.”

The issue at hand is whether the final payment became due when Mr. Michaud died, as argued by Ms. Michaud, or on May 29, 2095, as argued by Nutter. In the end, the court rejected Nutter’s due date based on “common sense,” finding the 2095 due date to be meaningless as the mortgagor would certainly pass away before that date.

The court also went by the terms of the lending agreement and federal regulations. By the terms of the agreement, the death of the mortgagor accelerates the due date without regard to the date listed in the agreement. Finally, federal regulations, provide that reverse mortgages become “due and payable” when “(i) The consumer dies; (ii) The dwelling is transferred; (iii) the consumer ceases to occupy the dwelling as a principal dwelling.” 12 C.F.R. §226.33.

Nutter countered with a “slippery slope” argument that debtors could use the ruling to their advantage when the debtor has caused the acceleration by his or her own default such as by failure to maintain insurance on the property, which the court rejected.

The court granted Ms. Michaud’s motion to value for a secured claim in the amount of $45,500 plus interest, and an unsecured claim of $67,096.75.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

The FCC Wants Debt Collectors to Stop Calling So Much

Posted on May 11, 2016by Admin

The Federal Communications Commission (FCC) recently approved a proposal that would reduce the number of collection calls consumers receive. A budget deal was approved last year that provided government exemptions from the Telephone Consumer Protection Act that blocks solicitors from sending automated calls to cell phones under certain conditions. Congress called on the FCC to limit those exemptions.

The proposal limits government debt collectors to three calls per month, which can only be made if an individual is late on making a payment. It also allows calls informing people about payment plans, though borrowers can request to opt out.

With taking this first step toward implementing the requirements, Congress recognizes the importance of collecting debt owed to the U.S. and respecting the consumer protections allotted in the Telephone Consumer Protection Act. It is still subject to two rounds of comments- the first on June 6, and the second on June 21.

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Debt Relief, Foreclosures

Florida can’t shake its High Foreclosure Ranking

Posted on May 10, 2016by Admin

Even though the numbers are shrinking, Florida can’t seem to shake its spot at the top of the nation for foreclosures. The state accounts for approximately 15 percent of all foreclosures nationwide. Mortgage lenders closed on 71,644 foreclosures in Florida during the 12-month period that ended in February, according to CoreLogic. That total was down by more than 41,000 foreclosures, or 37 percent, from 2015.

Florida’s foreclosure inventory (i.e. – mortgaged homes in some stage of the foreclosure process) was 2.2 percent in February, the fourth-highest in the nation. While that number is down from 3.4 percent over the year, it remains double the U.S. rate of 1.1 percent.

Nationwide, completed foreclosures have dropped by 10 percent and the foreclosure inventory has fallen by 24 percent. Statewide, 5.1 percent of all mortgages are considered seriously delinquent — at least 90 days past due — the third-highest level in the nation.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Payday Loan Changes Coming to Florida

Posted on May 9, 2016by Admin

Payday loans are quick cash that come with steep consequences, oftentimes the interest rate on payday loans can easily reach triple digits. However, for many individuals and families living paycheck-to-paycheck, it’s the only way to make ends meet. Tens of thousands living in Florida rely weekly on payday loans.

Payday loans are short-term and often paid off as soon as the borrower receives their next paycheck. But between the high interest rates and fees, this quick cash comes with a hefty price tag. Annual percentage rates can soar as high as 400%! This month the federal government is expected to impose national standards and limits on payday loans.

Consumer counselors agree that payday loan rules not only keep lenders in check, but protect people from getting in over their heads. In Florida, about 7% of the population relies on payday loans. That is one of the highest rates in the nation. There is also concern that if federal guidelines make the rules too strict, people who actually need the cash in a crisis – for example, to pay for a car repair or medical bill – may not be able to get it.

The question now is whether the new federal rules would strengthen, weaken, or leave in place what the state has already established.

Payday lending is limited in several ways in Florida. The law places limits on:

the amount of the loan ($500);
the number of loans you can have outstanding (only one at a time);
the length of the loan term (cannot be for less than seven days or more than 31 days);
the fees and costs that can be charged (interest is capped at 18%), and
the collection process if you do not pay.

To learn more about Florida’s payday loan laws, click here.

Foreclosures, Timothy Kingcade Posts

Seniors Face More Foreclosures as Reverse Mortgages “Bite Back”

Posted on May 6, 2016by Admin

Lenders who cannot work out a repayment plan with homeowners must foreclose or risk losing federal insurance. The insurance protects the lenders against loss on 600,000 reverse mortgages totaling about $146 billion in debt – almost the entire reverse market.

There is “a historic backlog” of loans with unpaid property charges, which are coming due, according to Peter Bell, president of the National Reverse Mortgage Lenders Association.

Nearly 24,000 borrowers in the U.S. received notices that their reverse became “due and payable” in the 2015 federal fiscal year ending last September, according to the U.S. Department of Housing and Urban Development.

Rules for new reverse mortgages, including assessments to make sure borrowers can pay property charges, were issued in the wake of the financial crisis to make the loans a sustainable way for seniors to age in place, the agency said.

Under a reverse mortgage, borrowers put up their homes as security and receive a loan either in a lump sum or in monthly payments and are allowed to defer payments on the debt until they die, move away or fail to pay property charges. They appeal to seniors who may have substantial equity in their homes but are having trouble meeting living expenses.

But five years ago, facing federal auditors’ criticism for losing millions on defaulting reverse mortgages, HUD notified lenders that they should foreclose when property charges were not paid, unless they could work out a plan for borrowers to pay them. Otherwise, the properties would no longer meet federal guidelines and FHA would refuse to insure the mortgages, leaving lenders at risk of financial loss.

Housing advocates have also heard from a number of troubled borrowers. In 2014, several borrowers sued HUD seeking to protect widows as more of them were being forced out of their homes because they were not co-borrowers with their spouses and therefore not covered by the guarantee that they could stay until they died. The suit prompted HUD to issue guidelines allowing lenders to turn over mortgages to the FHA when a sole borrower dies – getting fully paid for the debt – and allowing aged widows to stay in the home. But some housing advocates say that lenders do not have to initiate the process to have that happen, and not all of them do.

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Foreclosures, Timothy Kingcade Posts

Why more widowed homeowners are struggling to prevent foreclosure

Posted on May 5, 2016by Admin

Consumer advocates say more widows and widowers nationwide are having trouble saving their homes from foreclosure. Even though servicers will generally accept loan payments, surviving spouses who are not on the mortgage face increasing resistance when seeking loan modifications, once they have fallen behind on the mortgage payments. This is often due to the loss of their spouse’s income.

Many are being told there is nothing they can do to prevent foreclosure. Consumer advocates believe the problem dates back to practices done nearly a decade ago during the housing bubble. These include a rise in “risky” first and second mortgages, many that were taken out by older Americans who previously avoided taking on new debt- and securitization of loans, which has increasingly put servicers in control of the foreclosure process. Sometimes these servicers flat-out refuse to deal with the surviving spouse. Other times they give inaccurate information or require unnecessary documentation to prove ownership of the house, stalling a modification while the foreclosure moves forward.

Another roadblock for widowers- companies simply will not allow a modification until the surviving spouse assumes the loan, which cannot happen until the owner is current on the mortgage. This growing problem has caught the attention of federal regulators and state lawmakers. Rules are now being proposed to boost protections for surviving spouses. The Consumer Financial Protection Bureau is preparing regulations this summer that will assist surviving spouses and other so-called successors-in-interest.

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Bankruptcy Law, Credit, Debt Relief

Consumer Financial Protection Bureau Takes Action against Debt Collection Agencies Auto-Suing Borrowers

Posted on May 4, 2016by Admin

The Consumer Financial Protection Bureau (CFPB) has ordered two debt collection firms to stop an illegal collection operation that used automated lawsuit generator. The law firm- Pressler & Pressler, LLP and debt buyer- New Century Financial Services, Inc. have been harassing consumers with lawsuits often based on “flimsy or nonexistent evidence.”

“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray in a press release. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”

The lawsuits were allegedly manufactured by an automated system unsupervised by a lawyer, but rather untrained support staff, which spent less than 30 seconds on some cases to verify the claims of each lawsuit.

The CFPB found that the lawsuits violated the Dodd-Frank Act on three counts: making false or empty allegations about consumer debts, filing suits with bad information, and harassment with “unsubstantiated court filings.” The civil penalties include $2.5 million to $1 million for the law firm and $1.5 million for the debt buyer.

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