Debt Collection Law Firm Held Responsible for Client’s Misrepresentation

December 29th, 2015 by

U.S. District Court Judge Jose Linares denied a debt collection law firm’s motion to dismiss in Steven Psaros vs Green Tree Servicing, LLC. 

According to Judge Linares’ 16 page opinion,  Psaros successfully alleged that New Jersey law firm Stern Lavinthal & Frankenberg violated FDCPA laws by charging and attempting to collect improper fees of $10,974.37 for property insurance outlays to Psaros’ home mortgage debt.

The fees were improper because Psaros had paid all taxes/insurance, and his mortgage loan contained an escrow waiver. In response Psaros sued both Green Tree Servicing, LLC and Stern Lavinthal & Frankenburg.  Stern Lavinthal & Frankenburg argued that they were not liable for the false representations of the debt owed by Psaros because the information was generated by their client Green Tree Servicing, LLC.  Justice Linares rejected their defense, ruling that Stern Lavinthal cannot evade its responsibilities as a debt collector by blaming its client for providing it with factually inaccurate information used in the process of collecting a debt.” Green Tree Servicing, LLC did not move for dismissal of the claims.

Adam Deutsch, Esq. comments denial of a debt collection law firm’s motion to dismiss in Steven Psaros vs Green Tree Servicing, LLC.

“Judge Linares’ December 21st opinion is significant for Mr. Psaros and will prove meaningful to scores of other consumers facing debt collection litigation.  It is unfortunate how often lawyers choosing to make a living collecting debts do so based upon false information provided by their clients.  Green Tree Servicing, LLC was notified by Mr. Psaros of the error, and they still directed Stern Lavinthal & Frankenberg, LLC to collect funds not owed.  Industry wide, there is evidence that debt collectors and their attorneys regularly engage in this conduct unchecked, ” says plaintiff attorney Adam Deutsch, Esq. of the law firm of Denbeaux and Denbeaux.

NJ Foreclosure Process

December 29th, 2015 by

What is the NJ foreclosure process?

The NJ foreclosure process is guided by the fact that New Jersey is a “judicial foreclosure” state. Click here to download this guide to learn more.

NJ Foreclosure Process 2016

This means that all foreclosure actions must be prosecuted by attorneys before judges in the court system.

This structure is intended to impose a level of due diligence on lenders and assure an accurate disposition on the merits of a lender’s claim.  The result however, is a bloated legal field that incentivizes cutting corners and rushed, even if not prompt, resolutions.

This is why a proper foreclosure defense is so important.  The homeowner is the only person who understands their situation and truly cares about their home.  Therefore they must be the one to stand up for their rights.

The problem for many individuals is that the system is confusing, complicated, and overwhelming.  The average homeowner is not a legal expert, nor do they truly have the resources to understand a growing and nuanced area of the law.  The internet is rife with foreclosure defense theories – some of which worked in 2007, some of which work now, some that work in other states, and some that never had a shot.  The key to asserting a proper defense is understanding your rights, your lender’s obligations, how the court system works, and the rules, statutes, and case law that control everything.

The following pamphlet attempts to summarize that information based on our representation of hundreds of foreclosure clients in New Jersey over the course of the last eight years.  The pamphlet outlines the anticipated foreclosure process when you retain the attorneys at Denbeaux & Denbeaux for your foreclosure defense.  This outline does not hold true in every case, nor are the timelines suggested guaranteed.  Rather, we offer this information to hopefully provide some clarity as your case progresses.

CFPB Compliance Bulletin Reminds Debt Collectors that In Person Collection Attempts Often Violation of Federal Law

December 21st, 2015 by

CFPB Compliance Bulletin Reminds Debt Collectors that In Person Collection Attempts Often Violation of Federal Law

By Adam Deutsch

Adam Deutsch, Esq.

Debt collection is big business.  According to the Federal Reserve Bank of New York, 15% of consumers have at least one debt in collections.  Third party debt collectors are constantly trying to come up with new ways to improve the rate of collections both in volume and in dollars recovered.  On December 16, 2015 the Consumer Financial Protection Bureau (“CFPB”) Compliance Bulletin 2015-07 reminding debt collectors that visiting a debtor in person at their home or place of employment is likely to be a violation of the Fair Debt Collection Practices Act.

The CFPB bulletin explains that under the Fair Debt Collection Practices Act (“FDCPA”), debt collectors are prohibited “from engaging in unfair, deceptive, or abusive acts or practices while collecting or attempting to collect consumer debts.”  Prohibited collection tactics include “communicating with a consumer at any time or place that is known or which should be known to be inconvenient to the consumer, or at the consumer’s place of business.”  Collectors are also prohibited from communicating with persons other than the debtor about information relating to the debt in question.

When a debt collector visits a debtor at place of employment, the risk of actual injury and damages to the debtor is greatly heightened.  Despite the fact that such a high percentage of Americans are in collections, there remains a stigma that could cause discrimination at work, and in some industries could be cause for termination of employment.  Visitations to a debtor’s home pose a different set of problems.  A home visitation can be a significant violation of privacy and goes against one of the Congressionally enumerated goals of the FDCPA, which is to protect consumers from collection practices that lead to invasions of individual privacy and marital instability.

Consumer debtors who are facing aggressive debt collection tactics should be aware of their rights.  If a debt collector has visited your place of business or home, your rights may have been violated and you may be entitled to monetary compensation.  Be proactive and meet with an attorney who has experience with consumer rights litigation and the FDCPA.  You can also take advantage of the services provided by the CFPB by filing a consumer complaint through the governmental agency.  It remains rare that consumers received financial compensation through the CFPB, but often times the offending conduct will stop once a complaint has been filed.

Mortgage Debt Relief Act Extended Through 2016

December 21st, 2015 by

The $1.1 trillion omnibus appropriations bill includes a two-year extension to the Mortgage Debt Relief Act.

The act waives the federal tax on the forgiven home-loan amounts in short sales and some loan modifications.

The extension covers the 2015 year retroactively, and all of 2016 until 2017.

The following is an excerpt from a 12/18/15 news release from the website of the National Association of Realtors. National Association of Realtors Applauds Passage of Tax Extenders Package.

Tom Salomone, National Association of Realtors® president and broker-owner of Real Estate II Inc. in Coral Springs, Florida, praised Congressional leaders today after the House and Senate passed a tax extenders package that includes many provisions supported by NAR.

“These tax extenders offer critical support for consumers, homeowners, commercial property investors and small businesses alike,” said Salomone. “A strong economy requires certainty, and this proposal gives a healthy dose of it to millions of American taxpayers.”

Salomone highlighted the decision to extend tax relief for mortgage debt forgiveness as a win for Realtors®. This provision protects underwater homeowners from incurring a large tax bill on phantom income in connection with a workout or a short-sale. Since 2007, this tax relief has strengthened individual communities and the broader economy as more distressed homeowners were offered the flexibility to responsibly address an underwater mortgage. The tax extenders deal offers an additional two years of protection covering tax years 2015 and 2016



Good News for NJ Homeowners $1.1 Trillion Bill Adds $2 Billion to Hardest Hit Fund , HAMP Extended Through 2016

December 20th, 2015 by

The $1.1 trillion omnibus appropriations bill that will keep the federal government running until September 16, 2016 will also help homeowners fighting foreclosure by increasing the Hardest Hit Fund and extending the Home Affordable Modification Program through next year, December 31, 2016,

The program that is extended is the Hardest Hit Fund, which Congress is allocating another $2 billion to help homeowners who couldn’t keep up mortgage payments. The program has been used in 18 states in the past including New Jersey, Ohio and Michigan, hit hardest by the mortgage foreclosure crisis.

The New Jersey HomeSaver program uses the Hardest Hit Fund allocation to facilitate a refinance, recast, or permanent modification of the first mortgage loan, and offers eligible homeowners impacted by unemployment and underemployment up to $50,000 in financial assistance to help bring their household monthly payment to an affordable level.

In New Jersey, the allocation of funds is currently tagged at $300,548,144 according the U.S. Department of Treasury website for information about the Hardest Hit Fund program. The New Jersey Housing and Mortgage Finance Agency (NJHMFA) is the official administrator of the program for the State of New Jersey.


Pages 1,983-1,984

7 (a) EXTENSION OF HARDEST HIT FUND.—Section 8 120(b) of the Emergency Economic Stabilization Act of 9 2008 (12 U.S.C. 5230(b)) is amended by inserting after 10 the period at the end the following: ‘‘Notwithstanding the foregoing, the Secretary may further extend the authority provided under this Act to expire on December 31, 2017, provided that (1) any such extension shall apply only with respect to current program participants in the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, and (2) funds obligated following such extension shall not exceed $2,000,000,000.’’

The program that is being terminated is the Home Affordable Modification Program or HAMP, which will end at the end of next December 31, 2016.

Page 1,983 (b) TERMINATION. (1) IN GENERAL.—The Making Home Affordable initiative of the Secretary of the Treasury, as authorized under the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et seq.), shall terminate on December 31, 2016. (2) APPLICABILITY.—Paragraph (1) shall not apply to any loan modification application made under the Home Affordable Modification Program under the Making Home Affordable initiative of the Secretary of the Treasury, as authorized under the Emergency Economic Stabilization Act of 2008 (12 4 U.S.C. 5201 et seq.), before December 31, 2016.

NJ and MD Lead U.S. in Foreclosures Says November Realty Trac Report

December 13th, 2015 by

Realty Trac Nov NJ Foreclosure Report 2015

There are still pockets of real-estate distress around the country, with rates of foreclosure highest (by rank) in Maryland, New Jersey, Florida, Nevada and Illinois. Atlantic City and Trenton, New Jersey, rank No. 1 and No. 2 for foreclosures by metro area.

According to RealtyTrac’s November 2015 foreclosure report, the rate of foreclosures continues to decline in the United States,  The total number of foreclosure filings — default notices, scheduled auctions, and bank repossessions — fell 10 percent from October 2015, and 7 percent from November 2014.

One in every 553 homes in New Jersey is in foreclosure, according to the Realty Trac data for November 2015. The top five counties in New jersey with foreclosures are: Camden County 1 in every 302 properties, Atlantic County 1 in every  307 properties, Sussex 1 in every 330 properties, Cumberland County 1 in every 331 properties, and Mercer County 1 in every 346 properties

In November, the number of properties that received aforeclosure filing in NJ was 15% lower than the previous month and 13% lower than the same time last year.

Home sales for October 2015 were down 41% compared with the previous month, and down 99%compared with a year ago. The median sales price of a non-distressed home was $220,000. The median sales price of a foreclosure home was $160,000, or 27% lower than non-distressed home sales.

Realty Trac Nov Foreclosure Report 2015