UNFAIR DEBT COLLECTION PRACTICES - Time for you to Fight Back

Dear Readers:

Yesterday I had the privilege to attend a seminar put on in part by Amy Clark-Kleinpeter with the Central District Consumer Bankruptcy Attorneys Association.

She taught about what constitutes unfair debt collection practices. Most of us already know that creditors are not suppose to call you before 8:00 a.m. or 9:00 p.m. But did you know. . . .

... They cannot threaten garnish your wages if the statute of limitations has expired on the collection of the debt.

.... That after four years most debt (not based on fraud) they can sue you but they can't win the case. Which means you could be entitled to attorney's fees defending such an action.

... That they are not allowed to use profanity. . .

For more detailed information about what can and can't be done, click on the link to the State of California's publication on Fair Debt Practices which is below.

Additionally, I would highly recommend that you call her for representation. She is bright, articulate and is a down to earth attorney who genuinely wants to help. Click on this link to see her information. She is still working on her web-site so call her instead! In many cases it won't cost you anything to put an end to those harassing phone calls! http://lawyers.law.cornell.edu/lawyer/amy-e-clark-kleinpeter-1481386


Link to State of California publication re Unfair Debt Collection Practices
http://docs.google.com/viewer?url=http://www.dca.ca.gov/publications/legal_guides/dc_2.pdf&pli=1

Until I have more to report. . . .

Time to get financially fit. . . give us a call for your fresh financial start!

HAMP Program Is a Dismal Failure - Bank of America one of the worst in providing loan modifications to its customers. BOYCOTT BofA NOW!

Alan White recently reported "Million homeowners have been lured into temporary payment plans with false promises of permanent loan restructuring.  After 11 months, only one in ten has had their mortgage permanently modified.  More disturbing is the fact that these one million homeowners in trial mods, i.e. short-term payment plans, were given a deadine of January 31 to convert to a permanent mod. Treasury reports that about 33% of those who have been in trial payments for three months or more have missed payments.  The other two-thirds are making their payments.  That means that more than 500,000 homeowners are in trial modifications, making payments on time, but about to be kicked out of the program, presumably because of missing paperwork."

If you are going to save your house bankruptcy is about the only way to make it affordable.  Look at the numbers.   Bank of America has only completed 3200 loan modifications since the inception of the HAMP program.  This statistic is frightening in light of the fact that they took over most of the Countrywide Loans.  Many of the Countrywide loans were predatory and so declared by California's state attorney general in a lawsuit instituted in 2009.

There is just no way around us.  President Obama has abandoned bankruptcy reform that would allow you to reduce your mortgages to the fair market value of your home.  If you intend to keep your home and you can afford to make the mortgage payments on the first mortgage IF we can eliminate your credit card debit, refinance your motor vehicle to a better interest rate and reduce the amount owed to the present value of the vehicle then file your bankruptcy before its too late.  In Chapter 13 Bankruptcy you have to pay back all of the money you are behind on your first mortgage.  However you get five years to do it.    

Stop wasting time asking the bank for something they just aren't too likely to give you.  See any reputable bankruptcy attorney in your community immediately.

What to do with a 1099 you receive from lender post foreclosure or shortsale

If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable. The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17. Is Cancellation of Debt income always taxable?Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.               HOWEVER:  That is only for a debt on your RESIDENCE.  Does not apply to investment property.               Additionally, if you refinanced and took money out of your home to pay for debts, that is not subject to this               exception. Bankruptcy: Debts discharged through bankruptcy are not considered taxable income. Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income. Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences. These exceptions are discussed in detail in Publication 4681. What is the Mortgage Forgiveness Debt Relief Act of 2007? The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence. What does exclusion of income mean?Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?No. The Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness. The maximum amount you can treat as qualified principal residence indebtedness is $2 million or $1 million if married filing separately. Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home? Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified. For more information, including an example, see Publication 4681. How long is this special relief in effect?It applies to qualified principal residence indebtedness forgiven in calendar years 2007 through 2012. Is there a limit on the amount of forgiven qualified principal residence indebtedness that can be excluded from income?The maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven. If the balance was greater, see the instructions to Form 982 and the detailed example in Publication 4681. If the forgiven debt is excluded from income, do I have to report it on my tax return?Yes. The amount of debt forgiven must be reported on Form 982 and this form must be attached to your tax return. Do I have to complete the entire Form 982?No. Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of qualified principal residence indebtedness. If you are using the form only to report the exclusion of forgiveness of qualified principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of qualified principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return. Where can I get this form?If you use a computer to fill out your return, check your tax-preparation software. You can also download the form at IRS.gov, or call 1-800-829-3676. If you call to order, please allow 7-10 days for delivery. How do I know or find out how much debt was forgiven?Your lender should send a Form 1099-C, Cancellation of Debt, by February 2, 2009. The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all qualified principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b, if applicable, on Form 982. Can I exclude debt forgiven on my second home, credit card or car loans?Not under this provision. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion. See Publication 4681 for further details. If part of the forgiven debt doesn't qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?Yes. The forgiven debt may qualify under the insolvency exclusion. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent.  You are insolvent when your total liabilities exceed your total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982. Publication 4681 discusses each of these exceptions and includes examples. I lost money on the foreclosure of my home. Can I claim a loss on my tax return?No.  Losses from the sale or foreclosure of personal property are not deductible. If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or canceled is $600 or more, the lender must generally issue Form 1099-C, Cancellation of Debt, showing the amount of debt canceled. However, you may be able to exclude part or all of this income if the debt was qualified principal residence indebtedness, you were insolvent immediately before the discharge, or if the debt was canceled in a title 11 bankruptcy case.  An exclusion is also available for the cancellation of certain nonbusiness debts of a qualified individual as a result of a disaster in a Midwestern disaster area.  See Form 982 for details. If the remaining balance owed on my mortgage loan that I was personally liable for was canceled after my foreclosure, may I still exclude the canceled debt from income under the qualified principal residence exclusion, even though I no longer own my residence? Yes, as long as the canceled debt was qualified principal residence indebtedness. See Example 2 on page 13 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Will I receive notification of cancellation of debt from my lender?Yes. Lenders are required to send Form 1099-C, Cancellation of Debt, when they cancel any debt of $600 or more. The amount cancelled will be in box 2 of the form. What if I disagree with the amount in box 2?Contact your lender to work out any discrepancies and have the lender issue a corrected Form 1099-C. How do I report the forgiveness of debt that is excluded from gross income?(1) Check the appropriate box under line 1 on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to indicate the type of discharge of indebtedness and enter the amount of the discharged debt excluded from gross income on line 2.  Any remaining canceled debt must be included as income on your tax return. (2) File Form 982 with your tax return. My student loan was cancelled; will this result in taxable income?In some cases, yes. Your student loan cancellation will not result in taxable income if you agreed to a loan provision requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation. Are there other conditions I should know about to exclude the cancellation of student debt?Yes, your student loan must have been made by: (a) the federal government, or a state or local government or subdivision; (b) a tax-exempt public benefit corporation which has control of a state, county or municipal hospital where the employees are considered public employees; or (c) a school which has a program to encourage students to work in underserved occupations or areas, and has an agreement with one of the above to fund the program, under the direction of a governmental unit or a charitable or educational organization. Can I exclude cancellation of credit card debt?In some cases, yes. Nonbusiness credit card debt cancellation can be excluded from income if the cancellation occurred in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See the examples in Publication 4681. How do I know if I was insolvent?You are insolvent when your total debts exceed the total fair market value of all of your assets.  Assets include everything you own, e.g., your car, house, condominium, furniture, life insurance policies, stocks, other investments, or your pension and other retirement accounts. How should I report the information and items needed to prove insolvency?Use Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to exclude canceled debt from income to the extent you were insolvent immediately before the cancellation.  You were insolvent to the extent that your liabilities exceeded the fair market value of your assets immediately before the cancellation. To claim this exclusion, you must attach Form 982 to your federal income tax return.  Check box 1b on Form 982, and, on line 2, include the smaller of the amount of the debt canceled or the amount by which you were insolvent immediately prior to the cancellation.  You must also reduce your tax attributes in Part II of Form 982. My car was repossessed and I received a 1099-C; can I exclude this amount on my tax return?Only if the cancellation happened in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See Publication 4681 for examples. Are there any publications I can read for more information? Yes. (1) Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals) is new and addresses in a single document the tax consequences of cancellation of debt issues. (2) See the IRS news release IR-2008-17 with additional questions and answers on IRS.gov.

Why you won't be getting a permanent loan modification. Its time to boycott every major bank!

Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales

These guys confirm what I have been saying all along. There is a reason why the banks don't want you to have a loan modification. They put you into a trial loan modification hoping you blow a payment or you don't have proof you are submitting documents. Then they hope that you get so hopelessly behind on payments that you couldn't possibly cure your loan in bankruptcy. Any way you slice it the bank makes a bloody fortune of taxpayers backs. They spare no lobbying expense to convince our Senators and Congress don't vote to change bankruptcy law to help you. This sooooooo blows!!!!

I hope you find the video as informative as I did!

A Note to Homeowners from the Federal Trade Commission Re Loan Modification Fraud - If they can't help you, I will.

Dear Readers:

I received a recent notice form the Federal Trade COmmission. I have reprinted it below. I strongly agree with this message. At this point, it is clear the banks are playing unfair. I really believe they don't want you to have any representation when it comes to applying for a loan modification.

I'm personally of the belief, and it is just my opinion that most of the banks want you to get so far behind that you cannot save your house even in bankruptcy. The amount you will have fallen behind in making so-called "Trial Loan Modification Payments" usually don't get credited to your account. You end up farther and farther behind on your payments that you can't possibly pay your mortgage and make up the amounts you are behind.

Take the advice of the FTC and get help from the non-profits. If they can't help you, then come see us for your free consultation. We will help you plan your next step. If its possible to save your home, we will help you. The consultation is absolutely free.



An important message from the Federal Trade Commission

Facing foreclosure? Scammers are targeting people having trouble paying their mortgages. Some claim to be able to “rescue” homeowners from foreclosures, while others promise loan modifications – for a fee. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know how to avoid scams that could make your housing situation go from bad to worse.

Don’t Get Hit by a Pitch.

“We can stop your foreclosure!”
“97% success rate!”
“Guaranteed to save your home!”

These kinds of claims are the tell-tale signs of a foreclosure rip-off. Steer clear of anyone who offers an easy out.

Don’t Pay for a Promise.

Don’t pay any business, organization, or person who promises to prevent foreclosure or get you a new mortgage. These so-called “foreclosure rescue companies” claim they can help save your home, but they’re out to make a quick buck. Some may request hefty fees in advance – and then stop returning your calls. Others may string you along before disclosing their charges. Cut off all dealings if someone insists on a fee.

Send Payments Directly.

Some scammers offer to handle financial arrangements for you, but then just pocket your payment. Send your mortgage payments ONLY to your mortgage servicer.

Don’t Pay for a Second Opinion.

Have you applied for a loan modification and been turned down? Never pay for a “second opinion.”

Imitations = Frustrations.

Some con artists use names, phone numbers, and websites to make it look like they’re part of the government. If you want to contact a government agency, type the web address directly into your browser and look up any address you aren’t sure about. Use phone numbers listed on agency websites or in other reliable sources, like the Blue Pages in your phone directory. Don’t click on links or open any attachments in unexpected emails.

Talk to a HUD-Certified Counseling Agency – For Free.

If you’re having trouble paying your mortgage or you’ve already gotten a delinquency notice, free help is a phone call away. Call 1-888-995-HOPE for free personalized advice from housing counseling agencies certified by the U.S. Department of Housing and Urban Development (HUD). This national hotline – open 24/7 – is operated by the Homeownership Preservation Foundation, a nonprofit member of the HOPE NOW Alliance of mortgage industry members and HUD-certified counseling agencies. For free guidance online, visit www.hopenow.com. For free information on the President’s plan to help homeowners, visit www.makinghomeaffordable.gov.

A note to Homeowners
Federal Trade Commission
ftc.gov/MoneyMatters

Call for free personalized guidance from housing counseling agencies certified by the U.S. Department of Housing and Urban Development. The Homeowner’s HOPE™ Hotline – open 24/7 – is operated by the Homeownership Preservation Foundation, a nonprofit member of the HOPE NOW Alliance of mortgage industry members and HUD-certified counseling agencies.

For free information on the President’s plan to help homeowners, visit
1-888-995-HOPE
www.hopenow.com
www.makinghomeaffordable.gov

AURORA LOAN SERVICES ATTORNEYS SHOCKED AND STUNNED! Major loss for Aurora!

Finally we got a victory! Let's hear it for Mr. George Nicoletti who secured this victory against Aurora. If you are losing your house in foreclosure call him. He might be able to do for you what he did for Ms. Chavez!

Plaintiff's Counsel: George Nicoletti, Esq.
2945 Townsgate Road, Suite 200
Westlake Village, CA  91361
Tel:  (805) 719-2750


Chavez v. Aurora Loan Services LLC
Ventura County Superior Court - Simi Valley
Hon. David Worley

Chavez sued Aurora for Wrongful Foreclosure for failure to comply with Civil Code, Sec. 2923.5 et seq. Causes of Action for Declaratory relief, Accounting and UCL & Nuisance (causing blight in community by foreclosure behavior).

FACTS: Chavez entered into trial loan modification agreement which included 3 reasonable payments and a huge balloon payment. When debtor couldn't pay balloon payment, Aurora declared him in default of the agreement and proceed with foreclosure on the home. The foreclosure took place in violation of specific terms the Forebearance Agreement.

In typical fashion, Aurora attempted to defend the action by claiming that the California Foreclosure Prevention Act is completely preempted by Federal Law governing mortgages and banks. This argument has been winning around the country. HOWEVER. Our fellow warrior fought Goliath in true David fashion and won. I'm proud to report:

Aurora Demurrer Overruled as to Dec. Relief, Accounting & 17200.00 Claim

Complaint not based solely on Violation of Civil Code, Sec. 2923.6 but encompassing allegations of "unfair" practices with respect to the Forbearance Agreement. Our Foot is in the door!

We need more lawsuits attacking these forebarence agreement.


Plaintiff's Counsel: George Nicoletti, Esq.
6320 Canoga Ave #1500, Woodland Hills, CA 91367
TEL: (805) 991-6668 or TEL: (818) 991-6800