Consumer Financial Protection Bureau Archives - Page 7 of 8

Debt Relief, Foreclosures, Timothy Kingcade Posts

House Passes Foreclosure Extension Protection for Military Homeowners

Posted on March 23, 2016by Admin

The Foreclosure Relief and Extension for Servicemembers Act of 2015, which extends foreclosure protection for military homeowners, has been extended from the current 90-day period to a one-year period beginning in January 2018.

The foreclosure protection element of the Servicemembers Civil Relief Act (SCRA) expired at the end of last year, but the extended protection will be retroactive when the bill is signed by President Obama. The legislation was backed by a coalition of veterans’ organizations and housing and financial services trade associations.

The SCRA’s extension provides important foreclosure protections to the brave men and women of our military who are transitioning back into civilian life. This is a vital homeownership tool that helps members of the military stay in their homes.

The Consumer Financial Protection Bureau announced that it received approximately 2,800 complaints from military personnel related to mortgages during 2015. The majority of these complaints were related to servicing issues, including loan modifications, collections and foreclosures.

Click here to read more on this story.

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, Credit, Debt Relief, Timothy Kingcade Posts

Feds Shut Down Illegal Student Loan Debt Relief Company

Posted on March 17, 2016by Admin

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit last December against Student Loan Processing.US, a debt relief operation that allegedly stole millions of dollars from consumers promising to provide repayment benefits. Today, the CFPB has taken some drastic measures to put an end to this organization once and for all. It requested that a federal district court enter a final judgment and order it to shut down Student Loan Processing.US and refund customers millions of dollars.

According to the CFPB’s lawsuit, since 2011, Student Loan Processing.US (a fictitious business name of Irving Web Works, Inc.) along with its owner, allegedly marketed and advertised services to advise and assist borrowers applying for Dept. of Education federal student loan repayment programs.

The CFPB alleges that College Education Services and Student Loan Processing.US illegally tricked borrowers into paying upfront fees for these benefits. Many times the company told consumers that it was a “consultation service” for the Dept. of Education. The company even went so far as to use a logo that resembles a government seal, stamps “official business” on its mail to consumers and cites federal law prohibiting mail tampering to create the impression that its marketing material are sent or endorsed by the federal government.

The company would then charge consumers upfront enrollment fees of either 1% of their federal student loan balance or $250, whichever amount was higher. The CFPB reports that the company required borrowers to pay the entire fee before it would even mail an application to consumers.

The ruling also found in favor of the CFPB on its claims that College Education Services and Student Loan Processing.US violated the Telemarketing Sales Rule and the Dodd Frank Act’s prohibition against deceptive acts or practices by collecting payment information from customers before disclosing the total cost of the company’s services.

According to the final judgment, Student Loan Processing.US will be ordered to pay more than $8.2 million in relief and damages to customers.

For individuals struggling with student loan debt, it’s important to remember that the Department of Education provides numerous plans to borrowers with federal student loans to make payments more affordable FREE of charge.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you 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, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Federal agency warns student loan companies about automatic defaults

Posted on March 14, 2016by Admin

The Consumer Financial Protection Bureau (CFPB) is giving student loan companies a strict warning when it comes to collecting from borrowers in default when the co-signer of their loan dies or files for bankruptcy. These “auto defaults” leave borrowers with no choice but to repay the loan in full or ruin their credit, making it difficult to purchase a home or car.

This practice often occurs in the private student loan market, where banks and other lenders provide educational financing with loan contracts that give them the right to trigger a default even if the loan is being paid on time. Now the student loan companies are at risk of breaking the law, if they continue with this practice.

When parents or grandparents take on the legal responsibility of a loan, students can get lower interest rates because the co-signers are obligated to repay the debt if the borrower does not.

Lenders often require a co-signer to make the debt more attractive to investors. They will typically release a co-signer from the loan agreement if the borrower has made consistent on-time payments. However, some lenders and loan servicers make this process difficult by having the borrower jump through hoops to get such a release, according the CFPB. They often request proof of graduation, transcripts, employment or salary, and even conduct credit checks.

The bureau first brought attention to auto defaults two years ago after receiving complaints from consumers whose loans were placed in default because of the death or bankruptcy of a co-signer.

Click here to read more on this story.

Credit, Debt Relief, Timothy Kingcade Posts

Citibank Ordered to Stop Collections on $34 Million in Credit Card Debt, Fined $8 Million

Posted on March 1, 2016by Admin

The Consumer Financial Protection Bureau (CFPB) fined Citibank $8 million last week for allegedly selling credit card debt with inflated interest rates and failing to send consumers’ payments to debt buyers. The credit card giant has also agreed to stop collections on $34 million in credit card debt held by nearly 7,000 consumers.

The CFPB said that Citibank hired two debt collection law firms, Faloni & Associates, LLC, and Solomon & Solomon, P.C., who reportedly altered affidavits filed in New Jersey debt collection lawsuits. Both firms are accused of changing either the dates of the affidavits or the amount owed; in some cases both, after they were executed, which is a violation of the Fair Debt Collection Practices Act. Citibank claims the agency first learned of violations in 2011 and stopped referring new credit card accounts to it.

In a separate action, the CFPB ordered Citibank to refund $11 million to consumers who were affected by the alleged altered affidavits and nearly $5 million to approximately 2,100 consumers who were affected by the inflated APRs. Citibank has complied and has already issued refunds. Citibank did not admit or deny any of the CFPB’s allegations as part of the enforcement actions.

Fair debt collection practices have been a focus for the CFPB in recent years. Both JPMorgan Chase and American Express have been fined millions for illegal debt collection practices involving credit card debt.

CFPB Director Richard Cordray said in a press release, “Citibank sent inaccurate information to buyers when it sold off credit card debt and it also used law firms that altered court documents. Today’s action provides redress to consumers who were victimized by slipshod practices as part of our ongoing work to fight abuses in the debt collection market.”

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of 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.

Related Resources:

http://www.foxbusiness.com/features/2016/02/24/citibank-will-stop-collecting-34-million-in-credit-card-debt.html

http://www.americanbanker.com/news/law-regulation/cfpb-fines-citibank-8m-over-debt-collections-1079533-1.html

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Relief Tax Bill Introduced in Congress

Posted on February 24, 2016by Admin

Congressman Austin Scott (R-GA) recently introduced the “Student Tax Affordability and Relief Act,” into the House of Representatives. The bill would provide gross income exclusion for amounts that employers pay on employee student loans.

The bill excludes from gross income amounts paid as “qualified student loan payment assistance.” It defines their assistance as “amounts paid or incurred by an employer under a plan for the exclusive benefit of the employees of the employer to provide such employees with student loan payment assistance.” The bill provides a taxable limit of $10,000 per year.

Student loan debt has been an economic concern for some time. The Consumer Financial Protection Bureau reported in 2013 that the amount of outstanding student loan debt exceeded $1 trillion.

Individual states have recognized the economic ramifications of student loan debt and are taking matters into their own hands. States such as New York and Virginia have introduced their bills to assist struggling student loan borrowers. New York’s program will pay up to two years of student loans for eligible residents. While one of Virginia’s pending bills would allow students to refinance their student loans.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Courts Help Debt Collectors Prey on America’s Working Poor

Posted on February 18, 2016by Admin

Even though the economy is improving, many of America’s working poor, under-employed and unemployed people continue to struggle financially. In addition to their financial troubles, many households face debt collectors who harass and sue them on incomplete or inaccurate information.

To make matters worse for struggling consumers, court judgments often favor debt collectors without determining the validity of the claims. Due to the growth of this problem, it has been the focus in recent research. Both the Human Rights Watch (HRW) and the Alliance for a Just Society recently released reports documenting this disturbing trend.

The report released by the HRW titled “Rubber Stamp Justice,” revealed that courts routinely award default judgments, without the consumer present, in tens of thousands of cases.

The Encore Capital Group, the largest debt collector in the country, has reportedly filed between 245,000 and 470,000 new lawsuits per year in recent years. The report also showed that in 2014 Encore and its competitor, Portfolio Recovery Associates, collected more than $1 billion through debt collection lawsuits.

The report stated, “Fundamental problems with debt collector lawsuits often come to light only after the companies have already won judgments they were never entitled to, in courts that never asked them to present any meaningful evidence in support of their claims.”

Several states have created “judgeless courtrooms” for such cases where consumers are forced to participate in unsupervised discussions with debt buyers and their attorneys. The intention is to provide open forums for compromise, however consumers often end up forfeiting their rights for a future court hearing.

The top consumer debt collection concerns filed with the Consumer Financial Protection Bureau between November 2013 and August 2015 are below:

Demands to pay a debt that affected consumer(s) believes is not owed;
Frequent or repeated calls about the same alleged debt;
Failure to provide documentation to verify the debt.

The Fair Debt Collections Practices Act (FDCPA) originally enacted in 1978 requires that debt collectors provide consumers with certain basic information such as the amount of debt owed and the name of the creditor to whom the debt is owed. A lesser-known requirement of the FDCPA says debt collectors must give consumers a 30-day notice to dispute the debt before it is assumed as valid.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of 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, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Thousands Appeal to have their Student Loans Forgiven

Posted on January 20, 2016by Admin

Student loan borrowers are appealing to the government to have their student loans forgiven under an obscure federal forgiveness program. Since 1994 the program has only been used successfully three out of five times. The law forgives borrowers’ debt who prove their schools used illegal tactics to recruit them, such as lying about their graduates’ earnings.

The forgiveness program was used successfully in a case last year where the U.S. Education Department agreed to cancel nearly $28 million in debt for 1,300 former students of Corinthian College. The college was also forced to pay $550 million to the Consumer Financial Protection Bureau and later liquidated in bankruptcy.

The Education Department is unsure what to expect due to the law’s vague explanation of what evidence is needed to prove a school has committed fraud. However, the 7,500 borrowers who applied to have their $164 million in student loan debt expunged believe the forgiveness program will be their lifeline.

The Education Department’s undersecretary, Ted Mitchell said, “The law is clear about giving students redress when they’ve been defrauded.” He went on to say this goes for forgiveness on current loans as well as potential reimbursement of repaid loans.

Education Department officials said the agency failed to draft rules for the law due to a lack in urgency to do so since they had only received five applications since 1994. The recent surge in applications reflects the growing savvy of student activists who discovered it last year.

The majority of the borrowers who have applied for the forgiveness program have attended for-profit colleges such as Corinthian College. Others have attended Art Institutes owned by Education Management Corp. and ITT Technical Institutes owned by ITT Educational Services Inc. The federal government has investigated all three of these institutions in recent years for illegal recruiting tactics.

Related Resources:

http://www.wsj.com/articles/thousands-apply-to-u-s-to-forgive-their-student-loans-saying-schools-defrauded-them-1453285800

https://www.washingtonpost.com/news/grade-point/wp/2015/10/28/government-watchdog-wins-530-million-lawsuit-against-for-profit-corinthian-colleges-too-bad-it-will-never-see-a-dime/

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Relief Scammers Using Social Media to Target Borrowers

Posted on January 19, 2016by Admin

Scammers are now targeting struggling borrowers on social media websites such as Facebook to offer student loan debt relief. Higher education and consumer protection officials say that if you see advertisements on social media sites they are likely a scam. These scammers are circulating personalized ads using school information that is posted on user profile pages.

These companies are not affiliated with any of the student loan servicers and are scamming borrowers with fee-based assistance they can get for free through the federal government’s financial aid office.

Student loan debt in the United States has reached nearly $1 trillion making it the second largest consumer debt market. Approximately eight million federal and private student loan holders are in default and millions more are struggling to make their minimum payments each month.

Moira Vahey, a spokeswoman for the Consumer Financial Protection Bureau (CFPB) said, “Companies offering these type services do not have the ability to negotiate with creditors in order to obtain a special deal under the federal student loan program.”

Companies such as College Education Services (CES) in Florida are telling borrowers they can have their student loans consolidated and lower their monthly payments. CES requires debtors to pay upfront fees and sign over power of attorney to the company. After failing to deliver results, there have been multiple complaints filed with the Florida Attorney General against this company.

Some debt relief companies promise to save borrowers thousands of dollars, charging them upfront fees and then enrolling them in a repayment plan that is available and free to anyone with a federal student loan.

The CFPB offers the following warning tips to borrowers when it comes to these so-called student loan debt relief companies:

The promise of immediate loan forgiveness or debt cancellation;
Demands for a power of attorney;
Requests for federal student aid PIN numbers;
Charging large upfront fees.

Related Resources:

http://www.winknews.com/2015/11/12/warning-student-loan-scams-hitting-swfl/

http://www.wvgazettemail.com/news/20160118/ads-offering-student-loan-relief-scamming-borrowers

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How a Rise in the Federal Funds Rate Could Hurt Your Credit Card Debt

Posted on December 16, 2015by Admin

As many consumers turn to credit cards this holiday season to fund gifts, vacations and dinners out- a Federal rate hike could be the essential “anti-holiday” gift. The annual percentage rate is expected to increase on most credit cards and if it does, it will affect many card holders on their next bill.

That’s because the hook for most variable-rate consumer borrowing, whether credit cards, adjustable-rate mortgages, or home equity lines of credit, is the prime rate. And that rate moves with the federal funds rate. Today, prime is 3.25 percent, and card issuers add a certain percent on top of it to set the annual percentage rate (APR).

This is a non-issue for consumers who pay off their balances. However, for those who carry a balance month-to-month, it will affect the entire balance, not just new purchases. If this turns into a series of rate hikes, it could make paying off a big balance take longer and cost more.

In a recent report, a quarter point-rise in the federal funds rate would cost cardholders $1 billion annually, and a full percentage-point hike almost $6 billion, according to the Consumer Financial Protection Bureau.

The good news? In most cases, if you got a promotional rate on a balance transfer, that rate is fixed. So anyone who has taken advantage of such offers would not see their transferred balance affected by rate increases until the promotional period ends.

If you are carrying a large balance on a card with a double-digit APR, there are still opportunities to transfer balances at a zero percent rate, fixed, for a year or more.

Consumers are advised to call their credit card company to see if they qualify for a lower rate. But make sure your credit is the same or better than it has been in the past. If issuers find your financial situation has changed for the worse when they check your record, they can cut your credit limit, or even decide they do not want you as a customer anymore.

Click here to read more on this story.

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, Credit, Timothy Kingcade Posts

Texas Borrowers Jailed for failing to pay back Predatory Loans

Posted on January 13, 2015by Admin

At least six people have been jailed in Texas for defaulting on their payday loans, according to public court records. Texas Appleseed, an economic advocacy group, found that more than 1,500 debtors face criminal charges in the state- even though Texas enacted a law in 2012 prohibiting lenders from using criminal charges to collect debts.

According to documents, 1,576 criminal complaints were issued against debtors in eight Texas counties between 2012 and 2014. These complaints were often filed by courts with minimal review and based solely on the payday lender’s word and inconclusive evidence. As a result, borrowers have been forced to repay at least $166,000, to the group found.

In 2012 the Texas legislature passed a law explicitly describing the circumstances under which lenders are prohibited from pursuing criminal charges against borrowers. In Texas, failure to repay a loan is a civil, not a criminal, matter. Payday lenders cannot pursue criminal charges against borrowers unless fraud or another crime is clearly established.

However, according to Texas Appleseed’s new analysis, payday lenders continue to routinely press questionable criminal charges against borrowers. In response to these findings, Consumer Financial Protection Bureau spokesman Sam Gilford said, “Consumers should not be subjected to illegal threats when they are struggling to pay their bills, and lenders should not expect to break the law without consequences.”

Despite being against state law, the data show that criminal complaints are an effective way for payday lenders to get borrowers to pay. Of the 1,576 criminal complaints Appleseed analyzed, 385 resulted in the borrower making a repayment on their loan. This deceitful strategy in using criminal charges to coerce money from borrowers means that payday lenders have a financial incentive to file criminal charges against debtors with alarming regularity — even if those charges are eventually and rightfully dismissed.

Texas is not alone in taking this approach. In 2011, The Wall Street Journal discovered that more than a third of states allow borrowers to be jailed, even though federal law mandates that loan repayment be treated as a civil issue rather than a criminal one.