Is Getting Identity Theft Insurance A Good Idea?
To see which states have "credit freeze laws" (laws that allow you to "freeze" access to your credit report) and how to implement a freeze, see State Security Freeze Laws.
Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
For all the details, see Grand jury indicts eight on $14 million mortgage fraud scheme.
The bad news continues for subprime mortgage lending giant New Century Financial Corporation as they announced late today that it has stopped accepting loan applications because some of its financing sources are drying up, according to an article at MarketWatch. The company also reported that an unidentified company who bought loans from New Century that have since soured has demanded that New Century buy back the mortgages. For more, see New Century stops accepting loan applications (Subprime specialist tries to maneuver as financial backers clamp down)
For other recent news on New Century, see:
For Attorneys and Law Students Only
A point that was stressed by one of the witnesses in the hearing was that the credit card issuers weren't doing anything illegal when they were soaking the consumer with high fees, increased interest rates, universal default provisions, etc. My question simply is:
My understanding is that such a claim is an equitable claim, which may not be subject to the arbitration provisions that the major financial corporations are notorious for sticking into all their credit card contracts. Accordingly, such a claim could be litigated in a court of law as a class action lawsuit, rather than as an individual case in front of an arbitrator (If I'm wrong, somebody please correct me).
California Reverse Mortgage / Annuity Scam LegislationThe State of California passed (in September, 2006) an amendment (SB 1609) to their existing statute that protects the elderly who obtain reverse mortgages (Cal. Civil Code Section 1923 et. seq.) in a further attempt by the state to stop home equity theft by unscrupulous lenders through the use of reverse mortgage scams. The key provision in the 2006 amendment prohibits lenders from requiring the purchase of an annuity by an elderly borrower when obtaining a reverse mortgage. For more information, see:
California may be the first state in the United States to have a statute specifically addressing the prevention of home equity theft by the unscrupulous use of reverse mortgage scams when its statute when into effect in 1998. I don't know of any other state that has such a statute (if anyone knows otherwise, please let me know).
Unless I'm mistaken, California was also the first state in the country (in 1979) to pass statutes specifically addressing the prevention of home equity theft by unscrupulous foreclosure rescue operators, covering both:
Inasmuch as the other 49 states apparently failed to follow California's lead on regulating foreclosure rescue operators back in 1979 (it wasn't until a quarter century later when the State of Minnesota passed their anti equity stripping statute, Section 325N in 2004, expiring on 12-31-2009, that other states began to fall into line on regulating foreclosure rescue), I wonder if California will again be ignored on the issue of addressing home equity theft through reverse mortgage scams.
(If past is prologue, maybe we should just wait and see what Minnesota does on reverse mortgage scams before other states decide to fall into line on this issue as well. If so, we can all "set our alarm clocks for the year 2023"; 1998 + 25, if my math is correct.)
Go here for other posts on reverse mortgage problems.
Over the last few years, given the high rates of property appreciation, the upfront fee and the equity skimming operator scams have not been as prevalent since it was preferable for an operator to just position itself to get most or all of the equity appreciation in the property from a homeowner facing foreclosure by offering a sale leaseback program that I have referred to in other posts.
But because of the general downturn in real estate values, and the increase in delinquencies in mortgages secured by property with little or no equity, it seems clear to me that the use of the sale leaseback programs will diminish somewhat in the next couple of years and, instead, the "upfront fee" operators and the "equity skimmers" will be "coming out of the woodwork."
So, the next time you hear a story about the troubles in the subprime mortgage market, don't think that there isn't any connection between it and the foreclosure rescue industry. (Also, don't be surprised if you begin noticing some of the mortgage brokers and loan officers who were once fraudlently peddling subprime mortgage loans "drift" into the foreclosure rescue business as "mortgage consultants", "mortgage workout specialists", or equity skimmers.)
By the way, for another story on the subprime mortgage disaster, see Mortgage Crisis Spirals, and Casualties Mount, reported in yesterday's New York Times.
and Lenders take beating in subprime fallout, reporting that New Century Financial Corporation lost 60% of its market value yesterday.