UCAN

 Most consumers who purchased homes or condos from sub-prime lenders knew the time would come when interest-only payments would end and that the actual monthly mortgage payment to which they agreed, would be due.  The truth is that 95%+ of the people that took out the loans and now have problems knew the risks. And they took those risks in order to live the American dream. For future reference, the following tips could serve as a checklist: 

1.       Only bank with reputable conservative companies;
2.       If it seems too good to be true, it is;
3.       Always ask about the worst case scenario.  If you cannot afford it now, don’t do it; and
4.       Never assume that things won’t go bad.

Foreclosure trauma depends on where you live because of the differences in state laws and the backlog of the court systems.  Here are two tips for navigating the dangerous waters of potential foreclosure.

Before borrowers take the following steps, it's best to call lenders prior to missing payments to try to get payments frozen, delayed, or suspended for as long as the negotiation process results will allow---enough time to avoid any actions after the fact.  People who waited for the default notice (especially in states where no court actions are necessary), the clock has pretty much struck midnight!  Rick Sharga, VP of marketing for foreclosure listings firm RealtyTrac said "that the very first two calls distressed borrowers should make are to the lender loss-mitigation department and not collections -- and secondly, to a local real-estate agent to assess for how much the house will sell and how long it would take".  More tips can be found at http://www.hud.gov/foreclosure/.

The degree of foreclosure trauma depends on where you live due to differences in state laws and the backlog of the court systems.  Having owned and sold properties in Texas, the state allowed lenders to auction properties just 21 days after the notice of public sale (http://www.foreclosures.com/www/pages/state_laws2.asp?state=tx.   Homeowners in New Jersey or New York could have more than a year to raise money http://www.foreclosures.com/www/pages/state_laws2.asp?state=ny), refinance or sell their place, courtesy of slow court systems. 

The long foreclosure timeline in some states means more red ink for lenders due to court costs and missed loan payments stacking up.  With a bigger risk on the other end, the underwriting standards are usually more difficult.  Getting loans would be much harder for buyers in these markets. Complicating matters are right-of-redemption clauses that allow homeowners in many states to buy the house back for the amount of the note plus interest which can be found together with the following summary of foreclosure rules for each state (http://www.tryforeclosures.com/z-article-state-foreclosure-laws.shtml).

In Minnesota or Alabama (http://www.foreclosures.com/www/pages/state_laws2.asp?state=al), the previous owner has up to a year to buy it back, causing headaches for new buyers or investors if they don't get the previous owner to waive this right.

A long foreclosure process is no guarantee that owners can sell and duck foreclosure. In these cases, the "timing" wouldn't necessarily work to the borrower's advantage.

In hot markets like California or Florida, where real-estate values increased at such a dramatic and rapid rate before cooling off,  recent buyers are stuck with notes worth much more than the house. James Gaines, a Texas economist said, "They can't afford to pay a 6% real-estate commission and come out whole".  Also, if the mortgage has been securitized or sold on the secondary market, finding someone with the authority to agree to a short sale could be difficult".  California timelines and procedures can be found at http://dca.lacounty.gov/TSForeclosure.html.  Another source for the most common California forcelosure laws can be found at http://www.foreclosures.com/www/pages/state_laws2.asp?state=ca.

Real estate advisors say many foreclosures can be avoided if people call their lender and try to work something out before missing a payment. Most lenders don't want to incur the hassles and costs associated with the foreclosure process.  Therefore,  many are  waiting a bit longer than state timelines to give buyers a better shot at keeping their homes. Freezes or delays in the foreclosure process are better options for lenders if borrowers are taking verifiable actions to work out the debt..

If a default notice has been issued, remember the advice provided by Rick Sharga, VP of marketing for foreclosure listings firm RealtyTrac. "The first two calls distressed borrowers should make are to the lender loss-mitigation department- not collections and the second call should be made to a local real-estate agent to assess sale value of the homel and how long it would take". 

UCAN comes to the aide of a member with a Greendot Moneypack Credit Card Problem who purchased 2 prepaid credit cards through an H&R sponsored program to establish credit for his grandaughter. The outsourcing of customer service representatives has resulted in real frustrations for consumers. UCAN researched the company and found a corporate location in Monrovia, CA.  The UCAN member was made whole by Greedot Moneypack.

The Securities and Exchange Commission (SEC) is looking into "free" investment seminars geared toward retirees that are really high-pressure sales events.

Have you been receiving debt collection phone calls and messages from 800-684-8429? If so, you are not alone. A UCAN member recently filed a complaint regarding incessant phone calls and messages she had received about someone else's debt from the number 800-684-8429. The calls appear to be made on behalf of HSBC Bank, or Orchard Bank, a banking and credit provider. Under the Fair Debt Collection Practices Act, debt collectors must honor any request to cease telephone communication and contact you only in writing.

• Tell HSBC to quit calling you and Stop Debt Collection Harassment using our sample letter.

• If HSBC is calling you about a debt that you do not owe, send them a Collection Agency Debt Dispute letter.

UCAN Member amilin writes

"I heard this segment on npr about ameriquest's loan practices. The problem is that when people sell their house they then, among other things, owe ameriquest ridiculous closing costs. Also, there is a class action suit and apparently the state attorney generals have been watching and ameriquest has narrowed their call center to one main station only. Here's the story I saw.

http://www.npr.org/templates/story/story.php?storyId=9937595"

Ameriquest Mortgage and some of its other names is exposed throughout the Internet as an example of predatory lending. The advertising and teaming up with appraisers, real estate agents and a few specific lawyers, create an absurdly unregulated license to target innocent victims.

Reported as early as 2004, the BBB stated that Ameriquest Mortgage and its related subsidiaries entered into settlement agreements with 49 State Attorney's General.

It appears that even though 49 states get enough complaints to go after the same company, that no federal action on misrepresentation and fraud with criminal penalties has done anything more than allow states to make settlement agreements with fines. In the case of Virginia, the company's settlement agreement didn't even include fault. There are several Los Angeles business locations for Ameriquesst that show the numbers and types of complaints with only the Better Business Bureau. If you search www.bbb.org and type in Ameriquest, you will see approximately 200 U.S. locations. In California, this writer found about 18 locations, The Los Angeles area shows a total of 689 complaints. 498 of these complaints are for failure to "agree to perform according to their contract". So once the company pays the fines and the settlement agreement timelines end, the company is free to continue its practices. It's curious why politicians are just now getting to the core of the problem in hearings when the practice and its potential repurcussions have been going on since the federal government decided no rules need apply to industry because market competition will take care of all issues. Surprise, market competition didn't work for predatory lending and it's not working for any other industry abuses!

Predatory lending not stopped by Congress, is causing mass foreclosures throughout the country.  Consumers can either be victims or take action by rallying at their State Capitols to put pressure on governors for a moratorium on foreclosures.   Are we dealing with consumer greed or with victims?  In some cases, apparent victims may in fact have gambled on high returns and lost.  In other cases, planned strategies were used to trap victims.  One thing for sure is there's no doubt that the subprime lenders and their partners acted out of greed!

"In Debt We Trust: America Before the Bubble Bursts" by Danny Schechter emphasizes how the poor and middle class are led deeper into debt by predatory lending practices. We have a "hale the US economy" from pro-industry politicians as most Americans are sinking deeper into debt. READ MORE

We recently recieved the following email regarding freelotto.com:

Travelling on channels of Internet, I have found out ad about a prize. " If you have visited this site that you have won also it absolutely free-of-charge or free" - say the ad. It was the site www.freelotto.com. At times I like to play lotteries and I do not test to this disgust. I was registered, and they have sent me the letter, that I have won the large sum. But, to receive this sum - they ask the number of my credit cards and to pay for game at a rate of 14$. It seems to me is not so fair in connection with declared earlier. Whether you know this organization? Whether really they will pay me a promised prize? Sincerely yours, Nadezhda Russia

Nadezhda,

I hate to be the one to inform you, but you will not receive the cash prize promised in the letter. This is a scam. FreeLotto.com is a legitimate lottery site run out of the UK and they have samples of the fraudulent letters being sent out under their name. A legitimate lottery will NEVER ask you to pay money or give out credit card information in order to receive your winnings.

One of our senior UCAN members received a letter form North American Clearing Services in Canada stating she won a sweepstakes prize of $50,000. In addition to the letter was a check that looks real and is NOT. The scam artists used the Mellon United National Bank in Florida, State Farm Insurance name and logo and an agent of State Farm in Miami without the permission or knowledge of these companies. The UCAN member received the fraudulent check in the amount of $2775.26. State Farm Corporate and Mellon Bank are aware of the fraud and have notified the appropriate authorities.

If you receive a check like this for a sweepstakes or other prize, do not cash it. It is a scam!

Click on the images below to see the fake check and fraudulent letter for yourself, and remember to fill out our complaint form if you receive anything similar.