Attorney General Kamala D. Harris announced that California will join the U.S.Department of Justice, Department of Housing and Urban Development, and 48 other states in entering into a consent judgment with mortgage lender and servicer HSBC over its mortgage faulty servicing practices. This ruling will address mortgage origination, servicing, and foreclosure abuses perpetuated by HSBC.
“California homeowners worked hard and played by the rules to stay in their homes during the housing crisis, but for too many, their struggle and sacrifice was met by abusive mortgage servicing practices,” said Attorney General Harris.
“This settlement holds HSBC accountable for its abusive practices that manipulated peoplefighting to stay in their homes. I encourage eligible borrowers who receive a claim form and feel they were a victim of HSBC’s practices to file a claim immediately.”
Under the terms of the agreement, HSBC will pay $100 million in cash, of which $59.3 million will be used to distribute payments to borrowers whose homes were foreclosed upon between 2008 and 2013, and $40.5 million will be paid to the federal government. The agreement also requires HSBC to provide $370 million in other consumer relief, such as loan modifications, principal reductions, and loan refinancing.
Based on foreclosure numbers, it is estimated that California borrowers are eligible for about 10% of the $59.3 million fund for payments to foreclosed borrowers.
This agreement is very similar to the National Mortgage Settlement of 2012, in which Attorney General Harris secured a historic $20 billion for California homeowners affected by the mortgage crisis.
In 2014, Attorney General Harris announced several multimillion dollar settlements regarding mortgage fraud crime, including a national settlement with SunTrust Mortgage that provided $40 million in payments and $500 million in consumer relief nationwide; a national settlement with Bank of America in which California recovered $300 million in damages and $500 million in consumer relief credits; and a national settlement with Citigroup in which California recovered $102.7 million in damages and $90 million in consumer relief.
Additional information concerning today’s announcement is listed below.
The HSBC agreement requires the company to provide certain California borrowers with loan modifications or other relief. The modifications, which HSBC chooses through an extensive list of options, include principal reductions and refinancing for underwater mortgages. HSBC decides how many loans and which loans to modify, but must meet certain minimum targets. Because HSBC receives only partial settlement credit for many types of loan modifications, the settlement will provide relief to borrowers that will exceed the overall minimum amount.
Payments to Borrowers
Approximately 7,526 eligible California borrowers whose loans were serviced by HSBC and who lost their home to foreclosure from January 1, 2008 through December 31, 2012 and encountered servicing abuse will be eligible for a payment from the national $59.3 million fund for payments to borrowers. The borrower payment amount will depend on how many borrowers file claims.
Eligible borrowers will be contacted about how to qualify for payments.
Mortgage Servicing Standards
The settlement requires HSBC to substantially change how it services mortgage loans, handles foreclosures, and ensures the accuracy of information provided in federal bankruptcy court.
The terms will prevent past foreclosure abuses, such as robo-signing, improper documentation, and lost paperwork.
The settlement’s consumer protections and standards include:
Making foreclosure a last resort by first requiring HSBC to evaluate homeowners for other loss
Restricting foreclosure while the homeowner is being considered for a loan modification;
Procedures and timelines for reviewing loan modification applications;
Giving homeowners the right to appeal denials; and
Requiring a single point of contact for borrowers seeking information about their loans and maintaining adequate staff to handle calls.
The agreement resolves potential violations of civil law based on HSBC’s deficient mortgage loan origination and servicing activities.
The agreement does not prevent state or federal authorities from pursuing criminal enforcement actions related to this or other conduct by HSBC, or from punishing wrongful securitization conduct that is the focus of the Residential Mortgage-Backed Securities Working Group.
Additionally, the agreement does not prevent any action by individual borrowers who wish to bring their own lawsuits.
The agreement will be filed as a consent judgment in the U.S. District Court for the District of Columbia.
If you need further information, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.Read More
Takata airbag recalls; safety advocates want executives imprisoned
Honda is expected to add 2.3 million vehicles to the recall list
The Takata airbag crisis continues. As the number of recalls mount, consumers and safety advocates are calling for criminal prosecutions and imprisonment of top executives.
In the latest development, Honda said it is expanding its recall of late-model Honda and Acura vehicles equipped with the devices, adding as many as 2.3 million vehicles to the recall list.
With as many as 60 million defective airbag inflators potentially on the recall list, Takata Corp. faces an uncertain future. The cost of the recalls is expected to endanger the company’s future, but more importantly, the slow recall endangers the lives of consumers. CEO Shigehisa Takada, grandson of the company’s founder, may be forced to resign as the amount of money needed to carry out the recalls continues to rise.
Of course, there are worse things. Going to prison is one of them — and that’s what safety crusader Clarence Ditlow is demanding. He says the grisly injuries inflicted by the defective Takata airbag inflators are the result of corporate greed and should be punished by a prison sentence.
According to Ditlow, executive director of the Center for Auto Safety, Takata decided in 2000 to stop using sodium azide as a propellant in its airbags and replaced it with ammonium nitrate, “an incredibly powerful explosive.”
It’s what Terry McVeigh used to bring down the government office building in Oklahoma City. It’s what a lot of terrorists in the Mideast are using in the improvised explosive devices. This propellant that Takata used was known to degrade, known to explode; nevertheless, they put it into the airbag inflator to save a few pennies per inflator.
In the U.S. Senate, Democrats Richard Blumenthal (D-Conn.) and Edward J. Markey (D-Mass.) urged President Obama to recall every vehicle with airbags using ammonium nitrate as their propellant, and to use “every tool at his disposal” to accelerate the repair of all vehicles with the airbags.
The renewed calls for action follow the death of Joel Knight, who was killed when his truck struck a stray cow. Instead of cushioning the impact from the wreck, the airbag ruptured, firing shrapnel into Mr. Knight’s neck and killing him, The New York Times reported.
The senators said the National Highway Traffic Safety Administration (NHTSA) “has consistently deferred to Takata,” allowing some automakers to take voluntary rather than mandatory actions to recall and replace defective airbags and later by limiting mandatory recalls to “high-humidity” states on the theory that the problem would not occur in low-humidity climates.
“This, coupled with NHTSA’s willingness to allow Takata to take until the end of 2018 to prove that ammonium nitrate is safe in existing airbags; and until 2019 to show that the latest models of the inflators that use the compound are safe, is an outrageous dereliction of NHTSA’s basic duty to protect consumers,” the senators said in a letter to the President.
As of the end of December 2015, 23 million airbags in 19 million vehicles had been recalled in the U.S. Two weeks ago, Takata agreed to recall another 5.1 million inflators and Honda is expected to recall another 2.3 million today.
Most of the recalls have not been carried out. Only about a third of the potentially deadly inflators have actually been replaced.
If you have had an accident where the airbags have exploded, or a have a car with the Takata airbags, please contact Attorney Linda Fessler at 213-446-6766 for a free consultation.
What to Do When You Lose a Credit Dispute
Consumers, creditors, credit bureaus, and collection agencies do not always agree when it comes to the information on a credit report. Disagreements are common.
In fact, the Federal Trade Commission receives numerous complaints from consumers every year regarding creditors, collection agencies, and the credit reporting agencies. If you disagree with something on your credit reports, you do have some options thanks to the Fair Credit Reporting Act (FCRA).
First, you have the right to dispute inaccurate items with the credit reporting agencies directly. The FCRA gives the credit reporting agencies 30-45 days in most cases to investigate your dispute once it has been received.
When you submit a dispute they will contact the creditor or collection agency that is reporting the item in question and request proof that the information is accurate. However, this process may not always end in your favor. What happens when your creditor verifies that the item is accurate, even when you know otherwise?
The Consumer Statement
It is important to understand that generally the CRAs are going to side with your creditors. If you dispute an account and lose, it will stay on your credit reports. However, you do get one last opportunity to tell your side of the story with a 100-word “Statement of Dispute.”
Per the FCRA, “If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute.”
Thus you can explain the problem in your own words so that anyone who pulls your credit reports in the future can read your side. This is advantageous because it allows you to tell potential lenders why you disagree with the item.
While it may feel good to tell your side of the story, you may be disappointed to learn that statements of dispute have zero impact whatsoever on your credit scores.
Credit score consider many items, but a consumer statement is not one of them, and it does not have a positive or a negative impact on your credit scores.
The Potential Downside
Keep in mind that writing a consumer statement can potentially do more harm than good. Even though it will not hurt your credit score, future lenders are able to read your statement and consider it when reviewing your loan application.
Think carefully about how your explanation may affect the decision of someone who is considering whether or not to loan you money. For example, if your consumer statement says: “Yes, I was late, but it was because I had unexpected expenses and couldn’t afford to pay my bills that month,” then not only have you admitted your guilt but you may have also made yourself appear even less credit worthy.
In a case like that, your time may be better spent building up your credit by paying your bills on time, keeping your credit card balances low, and opening new positive lines of credit. However, if you feel that you have been truly wronged and an explanation will help you get your loan or new credit card approved, the consumer statement could be a good option.
If you need more advice, call Attorney Linda Fessler at 213-446-6766 for a free consultation.Read More
How Long Can Items Stay On Your Credit Reports?
Credit bureaus cannot report negative items forever. Different items may be allowed to remain on your credit reports for 7 years, while others can remain for 10 years, and a few can actually remain forever.
And, under 3 scenarios the 7-10 rule doesn’t even apply.
Negative Items on Credit Reports
Collection Accounts – Required to be removed 7 years from the date of default on the original account. The “date of default” is the date that the original account became 180 days or approximately 6 months past due. The date the original account was assigned to the collection agency is NOT the date when the 7 year clock starts ticking. Nothing you do with respect to the collection can reset the 7 year credit reporting clock.
Foreclosures and Repossessions – Required to be removed after 7 years from the date of the original terminal delinquency. “Terminal Delinquency” means that the account has been unpaid for 180 days, which leads to the foreclosure or repossession. In other words, if you went 30 days delinquent in January of 2010 and into default in June of 2010 without bringing the account current in between, then the item can be legally reported until June of 2017.
Charge Offs – Required to be removed 7 years from the date of original terminal delinquency.
Settlements – Required to be removed 7 years from the date of original terminal delinquency.
Late Payments – Required to be removed 7 years from the date the late payment occurred. The account does not have to be removed if it did not go into default, just the late payments associated with the account.
Judgments – Required to be removed 7 years from the date the judgment was filed, whether it has been satisfied or not.
Bankruptcies – Chapter 7 bankruptcies must be removed no later than 10 years from the date filed. Chapter 13 bankruptcies can remain on your credit reports for 7 years from the date of discharge, though this date may not exceed 10 years from the date filed.
Tax Liens – Paid and released tax liens are required to be removed from your credit reports 7 years from the date released. Withdrawn tax liens will be removed from your credit reports immediately (though this is a matter of credit bureau policy and not a requirement under the Fair Credit Reporting Act (FCRA)). Unpaid tax liens are never required to be removed from your credit reports, although the credit bureaus may choose to eventually remove them.
Federal Student Loans – The FCRA is silent on the issue of defaulted federal student loans. Instead, the credit reporting limitations for these items are governed by the Higher Education Act. Once a defaulted student loan has been paid it is required to be removed from your credit reports after 7 years. However, unpaid federal student loans can remain upon your credit reports forever, although the credit bureaus may choose to eventually remove them.
Positive Credit Report Items
The FCRA is silent on the issue of positive accounts. There are no guidelines imposed. Inactive positive accounts are removed from credit reports after a period of 10 years as a matter of policy.
The Exceptions to the Rules
The credit bureaus are allowed to never remove any negative information from your credit reports if the credit report being pulled is for one of the following reasons.
- used for employment screening of a job expected to pay $75,000 or more.
- used as part of loan underwriting for an amount of $150,000, or more.
- used as part of loan underwriting for an amount of $150,000, or more.
The credit bureaus choose not to maintain negative items longer than normally allowed even under these last 3 scenarios, but they are allowed to according to the FCRA.
If you need further advice, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.Read More
HOW TO COLLECT DAMAGES AFTER AN AUTO ACCIDENT
Auto accident lawsuits can be filed when you or a family member is injured in a car accident caused by another person’s negligence or reckless conduct. When someone is killed in the auto accident, certain family members may have a claim for wrongful death.
Car accidents happen so suddenly that a person can go into shock even if physical injuries are relatively mild. Shock is an injury in itself and requires prompt treatment.
In your lifetime, you will likely be involved in at least one automobile accident.
What You Should Do After an Auto Accident.
Automobile accidents are common, so it is important to know what to do in case of an accident. Here is some advice:
- Get medical attention – you should be evaluated by a physician even if you don’t feel pain at the time. Adrenaline can mask pain and some injuries are not immediately apparent.
- Contact the authorities – the police report may become evidence in your lawsuit.
- Obtain contact information – obtain contact information of all parties who were involved in or witnessed the automobile accident. This information could prove useful to your lawyer.
- Obtain vehicle information – vehicle information should include make, model, year, license plate number, vehicle identification number (VIN), insurance company and policy number and driver’s license number for all vehicles involved
- Take pictures – if you have access to a camera, the photographic evidence you could provide may be helpful to the accident reconstruction expert and may get your insurance claim processed more quickly
Automobile accident injuries are often serious and commonly include whiplash, joint, bone, and muscle injuries, head and brain injury, and paralysis. Damages sought after auto accidents can include the cost of medical treatment, loss of property, loss of wages, pain and suffering, and mental anguish. Claims are often handled through the insurance companies and are sometimes settled quickly. It is not advisable to try to settle with the insurance company on your own. They will offer you a low amount, taking advantage of the fact that you do not have an attorney. If the case involves more extensive personal injury and property damage, it may lead to a lawsuit. Hiring an attorney is even more important in those situations.
If you have been in an accident and need more advice, call Attorney Linda Fessler at 213-446-6766 for a free consultation.Read More
Can The Front Driver Be At Fault In a Rear-End Collision?
When one vehicle crashes into the back of another vehicle, a collision results that is commonly referred to as a “rear-end collision,” a car accident commonly caused by tailgating. The general consensus is that the driver who was in the back of the rear-end collision should be at fault for the crash. After all, he should have been able to brake and stop in time to avoid hitting the car in front of him. While many rear-end collisions are, in fact, the fault of the rear driver, this is not always the case and, in many instances, the rear driver may be able to hold the front driver responsible for the accident.
While motor vehicle accident laws vary from state to state, you may not be at fault. Most states presume that the rear driver was responsible for causing the rear-end collision, which is called a “presumption of fault.” This does not necessarily mean that the rear driver will be held liable for the losses of injured parties, however, as the rear driver also has the legal right to present evidence against this presumption of fault. Because the presumption can be challenged, it is called a “rebuttable presumption.” The rear driver can present evidence in the form of documents, video recordings, or witness testimony to overcome this presumption and defend against any claims of negligence on their part.
While it is possible for a rear driver to successfully rebut the presumption of fault, it can be complicated. Most states require all drivers to “not follow another vehicle more closely than is reasonable and prudent” for the speed of traffic and the conditions of the roadway or highway. This generally means that drivers should not follow too closely that they would not be able to slow down or stop without a collision. If a rear driver was unable to stop, it makes it difficult to prove that the front driver was at fault.
When the front driver may be held liable
There are some situations in which a rear driver can rebut the presumption of fault in a rear-end collision, including the following:
- If the front driver suddenly changes lanes in front of the rear driver, essentially “cutting them off” and not allowing enough room to slow down or stop.
- If the front vehicle did not have properly working taillights or brake lights, so the rear driver could not see the car or did not know they were braking.
- If the front driver suddenly without warning or reason slams on their brakes and there was no way the rear driver could stop in time.
- If there was another defect or act of driver negligence that caused a collision in the traffic lane that resulted in a chain reaction collision.
- The rear driver’s brakes failed or the vehicle was otherwise defective and prevented them from stopping.
- The rear driver encountered a dangerous condition on the road—such as a pothole—that caused him to lose control.
In the above instances, the rear driver may be able to hold the front driver, the auto manufacturer, or the government entity responsible for road maintenance liable for the collision.
If you are the rear driver in a rear-end collision, you should not automatically assume that you were at fault for the accident. Instead, you should discuss what happened with an experienced lawyer who can help to identify whether another party may have been negligent and may be held responsible for your losses.
If you need further info, call Attorney Linda Fessler at 213-446-6766 for a free consultation.
There are approximately 300 fatal bus accidents in an average year according to the National Highway Traffic Safety Administration. An experienced lawyer can help you get the compensation you deserve if you’ve been involved in a bus accident.
Although bus accidents are relatively infrequent, they can significantly affect the lives of those involved in an accident. Factors that can contribute to a bus accident include driver negligence, dangerous roadways, improper maintenance and weather conditions. Bus accidents can result in serious injuries to the passengers, the bus driver, pedestrians or drivers of other vehicles involved in an accident. In fact, nearly 70% of those involved in a bus accident were occupants of the other vehicles involved. Despite efforts to further improve the safety record of buses, you or a loved one may have suffered bus accident injuries. You may be entitled to receive compensation from the bus company, its suppliers or other entities involved. To ensure aggressive representation in the recovery of such compensation, it is advisable to seek an experienced attorney.
If you need further info, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.
WRONGFUL DEATH LAWSUITS
When a loved one dies due to someone else’s recklessness or negligence that party should be held accountable. If your loved one died due to the carelessness or misconduct of someone else, you probably have a valid legal claim. No amount of money will bring your loved one back, but the person responsible for the death should be held accountable. In some cases, in addition to the normal damages, punitive damages will be awarded to prevent future similar bad acts. The bottom line a “wrongful death” occurs when someone dies as the result of another’s reckless, negligent or intentional act.
Negligence is the basis for most wrongful death lawsuits, just as it is for the rear end auto accident, or a slip and fall case. Your attorney will need to prove that the wrongdoer acted in a manner, or breached his/her duty to act in a responsible manner, which caused the death of a loved one. Though specific laws regarding wrongful death vary from state to state, the same general principles apply to all wrongful deaths. Generally speaking, a wrongful death claim consists of these four elements:
- The death was caused, in whole or part, by the defendant’s conduct.
- The defendant was negligent or strictly liable for the victim’s death.
- There are survivors (spouse, children, beneficiaries)
- Monetary damages have resulted from the victim’s death.
Wrongful deaths may occur as a result of:
Compensation may be awarded for:
- Funeral and burial expenses
- Medical bills
- Loss of past and future income
- Loss of companionship for the spouse and children
- Pain and suffering
If you need further info, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.Read More
Medicare ‘Open Enrollment’ Scams
November 5, 2015
Consumer Education Specialist, FTC
The 2015 Medicare open enrollment period runs from October 15 to December 7. It’s the time when Medicare recipients can comparison shop and make changes to their plans. It’s also a time when scammers take advantage of older consumers with ruses like these:
- Someone calls and says you must join their prescription plan or you’ll lose your Medicare coverage. Don’t believe it. The Medicare prescription drug plan (also known as Medicare Part D) is voluntary and does not affect your Medicare coverage.
- Someone calls or emails claiming they need your Medicare number to update your account, get you a new card, or send you Medicare benefit information. It’s a scam. If you need help with Medicare, call 1-800-MEDICARE or go to medicare.gov.
- Someone claiming to be a Medicare plan representative says they need “to confirm” your billing information by phone or online. Stop. It’s a scam. Plan representatives are not allowed to ask you for payment over the phone or online.
- Dishonest companies may offer you free medical exams or supplies. Be wary. It may be a trick to get and misuse your personal information.
Whenever someone asks for your bank account number or your Medicare number, stop. Only give personal or financial information when you have verified who you’re talking to. Call 1-800-MEDICARE to make sure you’re talking to a legitimate representative.
If you believe you or some you know is a victim of Medicare fraud, report it to the U.S. Department of Health and Human Services. Call 1-800-447-8477 or visit stopmedicarefraud.gov.
If you gave out personal information, call your banks, credit card providers, health insurance company, and credit reporting companies immediately. The FTC’s website has more information on health care scams and medical identity theft.
Need help deciding on a plan? For free personalized counseling services, contact your State Health Insurance Assistance Program at shiptacenter.org or call 1-877-839-2675.
If you need additional help, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.Read More
Wells Fargo Agrees to $82M Settlement of Mortgage Probe
By Jacob Passy
November 5, 2015
Wells Fargo has agreed to pay $81.6 million to settle a federal investigation into its alleged failure to properly notify homeowners of increases in their mortgage payments.
The Justice Department’s U.S. Trustee Program alleged that Wells Fargo violated bankruptcy laws that require timely payment-charge notices and analyses of escrow accounts. Wells Fargo reportedly failed to timely file more than 100,000 payment-charge notices and to timely perform more than 18,000 escrow analyses for about 68,000 accounts, between December 2011 and March this year.
About $53 million of the settlement will be used to compensate homeowners whose payments increased after Wells Fargo failed to timely file a notice. Homeowners will receive the funds as a lump sum, averaging about $1,254 per homeowner, in their mortgage accounts.
In addition to the payment, Wells Fargo will make internal changes to its procedures, including improvements to its computer platform and employee training and the implementation of quality control processes. Wells Fargo’s compliance will be subject to oversight by an independent compliance reviewer, Lucy Morris of the law firm Hudson Cook in Washington.
The settlement terms are subject to court approval.
“Wells Fargo has acted responsibly by accepting accountability for its deficient bankruptcy practices, agreed to compensate affected homeowners for those deficiencies and committed to making necessary improvements in its bankruptcy operations,” Cliff White, director of the U.S. Trustee Program, said in a news release.
Michael DeVito, executive vice president of Wells Fargo Home Mortgage, said the bank has made the necessary improvements.
“We believe we have made the necessary investments and improvements in our systems and processes to ensure that payment change notices for the bankruptcy court and escrow analyses for customers in bankruptcy are properly prepared and delivered in a timely fashion,” DeVito said in a news release.
“We will work with the U.S. Trustee’s office and an independent reviewer to demonstrate the effectiveness of our improvements and to provide payments to customers, as required,” DeVito said.Read More