I have a primary mortgage with US bank worth 340k and a heloc with Bank of America worth 60k. 

B of A has already “written my loan off” and I see it on my credit (credit went from 775 to 623).   BoA hasn’t foreclosed yet - they said they would accept a short sale guaranteeing them 5% of the sales price of my home.  Also, BofA said they would settle with me for 26K or 444 per month for 5 years. 

There is so much information out there I don’t know what to do. US Bank has authorized a short sale - I know the value of my home is around 320k…

I am in Illinois, can either bank come after me for liability on a short sale? 

I am deathly afraid of a 1099 which I cannot afford.  To top it all off, I just got a civil service job and have to do all this from Europe (where the job is located). 

My house will go on the market for short sale in the next two weeks.  Additionally, I don’t quite know what  a write off is.

Thanks so much for any help, it’s amazing that this service is free.

Nick (more…)

Other companies started cutting cardholders’ credit lines when charges appeared for pawnshops or marriage therapy because data indicated those were signs of desperation or depression that might lead to job loss. 
 
Most of the major credit-card companies have set up systems to comb through cardholders’ data for signs that someone is going to stop making payments. Are cardholders suddenly logging in at 1 in the morning? It might signal sleeplessness due to anxiety. Are they using their cards for groceries? It might mean they are trying to conserve their cash. Have they started using their cards for therapy sessions? Do they call the card company in the middle of the day, when they should be at work? What do they say when a customer-service representative asks how they’re feeling? Are their sighs long or short? Do they respond better to a comforting or bullying tone?
 
 
What Does Your Credit-Card Company Know About You?

Many consumer practitioners and debt buyers may not realize that federal law specifies a two-year statute of limitations for actions to recover on cell phone and interstate and foreign landline communication charges.  This short limitations period has significant practical import because a large portion of collection lawsuits based upon telecommunications charges are brought beyond this two-year limitations period.  In addition, while the federal limitation does not apply to state-regulated local phone charges, today telephone bills often combine on the same bill charges for local, long distance and cell phone service.  After two years have elapsed, the collector will have to specify which telephone charges it seeks to collect on are just for local service.  This may impose an impossible burden on a debt buyer with limited access to the original monthly billing statements.

47 USC. § 415(a) states that “All actions at law by carriers for recovery of their lawful charges… shall be begun, within two years from the time the cause of action accrues, and not after.”  Note that this applies to all actions, and not just to actions under the federal telecommunications statutes or pursuant to federally regulated tariffs.

47 USC. § 153(10) defines common carrier or carrier as “any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy…”  Thus “carrier” includes cell phone, interstate, and foreign communications.  47 USC 332(c)(1) (A) exempts call phone service from federal regulation under subchapter II, but the provision relating to the limitations period is in subchapter IV.

Debt buyers may argue that cell phone service and long distance service are not subject to federal tariffs.  But this does not change their status as carriers subject to federal law, including the federal statute of limitations.  Tariffing and federal regulation are two different things.

Moreover, there should be no doubt that a shorter federal statute of limitations preempts a longer state limitations period.  This shorter limitations period applies not only to carriers collection on charges, but also to assignees of those carriers, such as debt buyers:

Congress could not have been clearer.  To suggest a carrier could otherwise assign its contract to a third-party debt collector to bypass the requirements of section 415 and bring a state action pursuant to a four-year limitations period, would undermine the express language and purpose of the statute.  Therefore, the clear lanuage of section 415 states a two-year statute of limitations applies.

NCLC Reports, “Debt Collection and Repossessions Edition”, Volume 27, May/June 2009

Daily Business Review - In a move an increasing number of condo associations are expected to follow, the Maison Grande in Miami Beach has filed for bankruptcy
 
Facing almost $1 million in claims by unsecured creditors, a troublesome recreational lease, and at least 100 unit owners delinquent on payments of their fees, the association filed a Chapter 11 petition last month in U.S. Bankruptcy Court in Miami.
 
As one of the first condo association bankruptcies of the current economic crisis, “it’s definitely cutting edge,” said attorney Mark Schorr, a solo practitioner in Fort Lauderdale who represents the Maison Grande association.
 
With residential foreclosures and personal bankruptcies soaring in South Florida, Maison Grande’s decision is expected to become more commonplace, said attorney Aleida Martinez Molina of Becker & Poliakoff in Coral Gables. She is not involved in the Maison Grande case.
 
The significant drop in property values is a key factor pushing associations toward bankruptcy filings, said attorney Robert Kaye of Kaye & Bender in Fort Lauderdale. He represents associations in Broward and Palm Beach counties that are considering bankruptcy. He declined to identify them.
 
“In prior times, there was enough equity in all the properties [in an association] so that assets would likely exceed liabilities,” he said. “Now, since a large percentage of associations are upside down, that’s changing their view about bankruptcy. Their debts have overtaken their assets.”
 
So many of Becker & Poliakoff’s association clients have inquired about filing for bankruptcy, that Martinez Molina has begun studying how a bankruptcy filing would impact associations.
 
“It’s not the answer for everyone,” she said. “It’s not a place to dump a situation to avoid other courts. But if there are special code sections or provisions that can help an association reorganize … it could be a very good forum.”
 
But associations shouldn’t go into bankruptcy without an exit strategy, she said. “They can’t hide under a rock. They have to have a game plan — what provision will you avail yourself of to weather the storm?” Martinez Molina said.
 
Typically, Chapter 11 petitioners are for-profit companies seeking financing as debtors-in-possession to bail themselves out of tough financial straits.
 
But associations are nonprofit organizations with limited budgets and funding. The severity of the recession means credit will remain tough to obtain for some time.
 
“The problem for everyone is the credit markets,” she said. “They are non-existent. But for that, there would be more bankruptcies.”
 
Unit owners’ maintenance fees are the only significant source of revenue for associations, but many owners are themselves filing for bankruptcy, she said.
 
In Maison Grande’s case, the board of directors is confident it can obtain financing to get out from under a burdensome recreational lease, Schorr said.
 
According to court documents, Maison Grande has to pay developer Dorten Inc. more than $112,000 a month for a 99-year lease of the pool and some parking spaces. The lease expires in 2074.
 
Miami-based Dorten, whose principals have included former executives of developer Avatar Holdings, sued the association in April for nonpayment of the lease. In May, Dorten sought to have a receiver appointed to collect the payments from the association. Shortly before a hearing on the receivership, Maison Grande filed for bankruptcy.
 
“If that pushed them into bankruptcy, so be it,” said Dorten attorney Norm Segall of Ruden McCloskey in Miami.
 
The association paid $15,000 in January and $75,000 before filing for bankruptcy but still owes Dorten almost $700,000, he said. 

The lawsuit is on hold while the bankruptcy action proceeds. The association plans to reject the lease and seek a cap on any damages that could result, according to the bankruptcy filing. If an agreement with Dorten can’t be reached to reduce the lease payment or buy the pool and parking spaces, Maison Grande will seek a loan, according to the bankruptcy filing.
 
Keeping the existing pool, even if the lease is rejected, is out of the question, said attorney Tom Messana of Messana & Stern in Fort Lauderdale, who represents Maison Grande in the bankruptcy.
 
A hearing is scheduled in bankruptcy court for July 15, but the parties have agreed to mediate.
 
Association president Ariel Melchor did not return phone calls.
 
Kaye represents a Tamarac condo association that is considering bankruptcy. With half of its 280 unit owners delinquent on their maintenance fees, the association is in the red to the tune of $50,000 per month, he said.
 
Kaye also represents a Palm Beach County condo association that is likely to file for bankruptcy after losing a court case against a roofing contractor.
 
A judgment of $130,000 could grow to more than $300,000 after attorney fees and court costs are added, he said.
 
“They can’t afford that, and 20 percent [of 120 unit owners] already are delinquent in paying fees,” Kaye said.
 
These associations, which he declined to name — and many more — are likely to file for bankruptcy protection as they run out of funding options, he said.
 
The state Legislature’s failure to amend the condo law this year to require lenders to pay a larger portion of past-due fees on foreclosed condos could force more associations into bankruptcy court, Kaye said.
 
State condo law currently caps lenders’ liability at the lesser of six months of unpaid fees or 1 percent of the original mortgage. But lenders don’t pay any association fees until a foreclosure is complete and they take title to a unit.
 
As foreclosure filings have soared in the wake of the housing and financial market bust, they can take almost two years to complete.
 
That means condo associations still must maintain the foreclosed units, and the remaining condo owners must pick up the tab of their non-paying neighbors.
 
“As long as lenders are extending foreclosures into 18 months and two years, the associations are pretty well stuck because there is no cash flow and they can’t raise funds necessary to operate,” Kaye said.
 
NO PAYMENT INCENTIVE
 
Meanwhile, unit owners in foreclosure have no incentive to pay their association fees, said Miami attorney Douglas Snyder, a solo practitioner who represents the 220-unit Greenwich condo in North Miami in its Chapter 11 bankruptcy filed in March.
 
Snyder said the association had been sued by service providers for non-payment of about $750,000. The court ordered the association to begin making payments “and it was bleeding them dry,” he said. “This way, they can handle everyone at the same time.”
 
About 20 percent of the unit owners are in foreclosure. Association president Lidia da Cunha did not reply to an e-mail seeking comment.
 
The financial crisis that is pushing condo associations toward bankruptcy is only going to worsen, said Martinez Molina.
 
“Bankruptcies are not the leading indicator of the economy, they are lagging indicators,” she said. “So people who were hurt with layoffs and cutbacks, those people won’t file for bankruptcy for some time. We haven’t even seen that wave of filings yet. And individual bankruptcy filings affect condo associations.”

Just prior to a foreclosure suit being filed against me, I received a letter from a debt collector.  The debt collector was actually the law firm that filed the foreclosure.  The letter appeared to follow the FDCPA requirements.  It had the required verbage stating that I had 30 days to dispute this debt.  The letter was dated February 13, 2009, and the actual foreclosure was filed on February 19th, just 6 days later.

My question is, under the FDCPA, does the debt collector have to wait 30 days to file suit on the debt.

Thanks so much for your input.  Your blog has been very helpful to me in the past.

Cooper (more…)

We bought a house in Brevard County, FL in 2005 with an FHA backed loan. It has recently been pointed out to us that our house should not have been approved for financing because it has no heat. I contacted FHA, they confirmed houses outside of a few South Florida counties are required to have a permanent heat source.

Do we have any recourse in this situation?  We are now trying to get out of the house by way of short sale, we owe $129,000 and the home is valued at $40,000.  We need to move to pursue work opportunities in other parts of the country.

Thanks for your help!
Melissa (more…)

        Brian C. Aber, with HTDI Financial and the National Association of Credit Services Associations is giving away 6 months of free credit repair ($773 retail value) to a lucky individual.  Please e-mail 2-3 paragraphs on your situation and why you believe you can benefit from credit repair.  The deadline for all entries is 12PM PST on 07/10/2009.  The chosen person will be announced on July 15th on this forum, after we have contact you directly.  On the forum the winner will only be identified only by their initials and the type of negative items they currently have.  An update will be posted after the 6 months have been completed showing the results, but again without personal or specific account information. 

        Please see the eligibility requirements below and please submit your contest inquiries to brian@htdifinancial.com.

The requirements for eligibility;

1. Six months since the last derogatory item was placed on the report “date of last activity (DLA)”
2. You are in a comfortable financial position with no future negative items expected.
3. Have at least 5 negative items on each bureau.
4. Sign our contract allowing us to work on their behalf.
5. Be able to provide 2 valid proofs of address (this can be their Drivers License if current and an electric or gas bill)
6. Provide a proof of social i.e. social security card, W-2, tax return (anything with the full name and full social will work)
7. Provide a tri-merge credit report that has been pulled within the last 30 days
8. To allow us to provide a status update after the 6 months have completed showing the fixes and deletions, while only using initials as identification.

Good luck to all and I wish you the best of luck,

Brian C. Aber
Senior Account Executive – HTDI Financial
Charter Board Member – National Association of Credit Services Organizations
877-877-4834 x704
brian@htdifinancial.com

Now I beseech you, brethren, by the name of our Lord Jesus Christ, that ye all speak the same thing, and [that] there be no divisions among you; but [that] ye be perfectly joined together in the same mind and in the same judgment. 

The Declaration of Independence was the document that announced to the world the American colonies status as free and independent states.  It was adopted in Congress on July 4, 1776.  The final sentence reads: “And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor”.

(pause)

I want the best for everyone everywhere and this article won’t travel down a political road, other than to make a comment that we, as a people, have become complacent.  I’m reminded of these words: “But many [that are] first shall be last; and the last first”.  I’ll now turn this article’s steering wheel into the Personal Finance Path.  Woah!  Look out!  It’s a rocky road and for some there’s a roadblock up ahead.  Fortunately, with a little maneuvering, the roadblock can be avoided altogether.  And don’t ask me about the cliff – we’ll get to that later.

The Broken Credit Blog is thankful for the many positive responses from readers who’ve shared true to life experiences of how they’ve triumphed over adversity.  It’s the goal of this site to be a positive voice in the marketplace sharing free information to anyone desiring credit score improvement.  This month marks our forty-second-month on the internet and we’ve recorded over two million hits in one month.  We are at the same time, amazed and thankful – it keeps us writing and working for you.

In my view, personal finances are similar to personal fitness.  I regularly see people working out at the gym with a personal trainer.  The same trainer may be working out with one person on one day and another on another day.  Regardless of that person’s fitness level, the trainer’s goal is to improve that individual at that time.  It doesn’t matter how out-of-shape or how Olympic-world-champion someone might be – the trainer’s goal is to assist that person with improvement.  Such is the same as the Broken Credit Blog’s role.

Are you facing foreclosure?  Free Avoid Foreclosure Seminar

Beginning credit repair? Free Credit Repair Seminar

Obtain Your Free Credit Report

Thousands of Credit Repair, Mortgage, and Avoid Foreclosure Secrets Revealed Here

So, wherever you are, and whatever your station in life, this trainer wants to see improvement in you.  I hope everyone enjoys their 4th of July and remembers what prompted the celebration in the first place.  Now then, after everyone has finished eating hamburgers and hotdogs, it’s time to start working out.

Hey you with the 672 FICO, give me eight more reps!

Recently I spoke with a Hud counselor connected to the Making Home affordable program. They advised me based on my situation I should be a  candidate for a loan modification under the Making Home Affordable program guidelines and that I should contact my loan servicer.

I did so and my loan servicer has indicated that my loan is owned by FHLB or Federal Home Loan Bank and that there not participating in the modification program.

I have not missed any payments or been late but time is running short and my liquidity is running dangerously low. Im still employed (albeit lower income) and could probably stay in my home with a modification.

Any suggestions?

Thomas (more…)