Category:

Sued by Pressler? Read this.

March 23rd, 2019 by

If you were sued by Pressler & Pressler you may have the opportunity to sue them for up to $1,000, plus any actual damages you have suffered.

Denbeaux Will Help Consumers Sue Pressler for FDCPA Violations

For a free evaluation of your case, click here now.

Your responses will allow us to identify all potential claims and quickly evaluate your case.  This evaluation is at no cost to you, of course, and if we can identify an actionable violation, we will be able to take your case.

Federal law penalizes debt collectors such as Pressler & Pressler for violations of the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace.

On April 25, 2016, the law firm Pressler & Pressler, LLP and debt buyer New Century Financial Services, Inc. were fined by the Consumer Finance Protection Bureau, a federal agency, for sending out deceptive, intimidating, and illegal collections lawsuits to collect money from people in New Jersey.

You may be able to collect up to $1,000 at no cost to you if a debt collector violated the FDCPA while trying to collect a debt from you.


RESOURCES

CFPB Takes Action to Halt Illegal Debt Collection Practices and Lawsuit Mill and Debt Buyer – CFPB Press Release April 25, 2016

So Sue Them. What We’ve Learned About the Debt Collection Lawsuit Machine – by Paul Kiel Pro Publica May 5, 2016

$2.5 Million CFPB Action Ratchets Pressure on Debt Collection Suit – by Chris Bruce Bloomberg BNA April 26, 2015

CFPB Announces Consent Orders Against Law Firm and Debt Buyer – by Tim Bauer insideARM.com accounts receivable management April 26, 2016

Feds Take Action to Stop Illegal Debt Collection Practices bu Morris County “Lawsuit Mill” by Dave Schatz New Brunswick Today April 26, 2016

New Jersey Lawsuit Mill Fined $2.5 Million by Teresa Lo JD Journal April 26, 2015


Category:Press Release

CFPB Takes Action to Halt Illegal Debt Collection Practices By Lawsuit Mill and Debt Buyer

CFPB Bars Law Firm, Debt Buyer from Churning Out Illegal Collections Lawsuits and Imposes $2.5 Million in Penalties

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today ordered the debt collection law firm Pressler & Pressler, LLP, two principal partners, and New Century Financial Services, Inc., a debt buyer, to stop churning out unfair and deceptive debt collection lawsuits based on flimsy or nonexistent evidence. The consent orders bar the companies and individuals from illegal practices that can deceive or intimidate consumers, such as filing lawsuits without determining if debts in question are valid. The orders also require the firm and the named partners to pay $1 million, and New Century to pay $1.5 million to the Bureau’s Civil Penalty Fund.

“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”

Pressler & Pressler is a New Jersey-based law firm that collects consumers’ debts for creditors through lawsuits and other means. New Century Financial Services, also based in New Jersey, buys and collects defaulted consumer debts and hands off those accounts to Pressler & Pressler for collection. To collect alleged debts on behalf of New Century and others, Pressler & Pressler filed hundreds of thousands of lawsuits against consumers.  Sheldon H. Pressler and Gerard J. Felt, partners of the firm, each participated in the firm’s debt collection litigation practices.

The CFPB found that to mass-produce these lawsuits, Pressler & Pressler used an automated claim-preparation system and non-attorney support staff to determine which consumers to sue. Attorneys generally spent less than a few minutes, sometimes less than 30 seconds, reviewing each case before initiating a lawsuit. This process allowed the firm to generate and file hundreds of thousands of lawsuits against consumers in New Jersey, New York, and Pennsylvania between 2009 and 2014. The CFPB found that the respondents violated the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace. Specifically, the CFPB found that Pressler & Pressler, the firm’s named partners, and New Century Financial Services:

  • Made false or empty allegations about consumer debts: The CFPB found that the firm, the named partners, and New Century filed lawsuits against consumers without sufficient basis. Neither the firm nor New Century reviewed documents supporting the validity of debts.
  • Filed lawsuits based on unreliable or false information: Some consumers had previously challenged the validity or accuracy of the debts, but the firm or New Century did not obtain or review information to justify their claims. The firm and New Century also filed suits and collected debt knowing that some account portfolios targeted for lawsuits contained unreliable or false information.
  • Harassed consumers with unsubstantiated court filings: The CFPB found that the firm, the named partners, and New Century filed collection suits generated mainly by automated processes that relied on summary data. The firm won the vast majority of the lawsuits by default when consumers did not defend themselves, even though neither Pressler & Pressler nor New Century had verified that the debts were actually owed.

Enforcement Action

Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals that engage in unfair, deceptive, or abusive acts or practices. The CFPB also has authority over debt collection practices under the Fair Debt Collection Practices Act. The CFPB orders require that Pressler & Pressler, the firm’s named partners, and New Century Financial Services must:

  • Stop filing lawsuits with unsubstantiated claims: Pressler & Pressler, the named partners, and New Century cannot file lawsuits or threaten to sue to collect debts unless they obtain and review specific account-level documents and information showing the debt is accurate and enforceable.
  • Ensure accurate court filings: The firm, the named partners, and New Century may not use affidavits as evidence to collect debts unless they accurately describe relevant facts including that the individual executing the affidavit has personal knowledge of the debt, or, if not, has reviewed documentation related to the debt. The firm must also keep an electronic record showing it is following proper procedures.
  • Pay civil penalties: The firm and the named partners must pay a penalty of $1 million to the CFPB’s Civil Penalty Fund. New Century must pay a penalty of $1.5 million.

The CFPB’s order against Pressler & Pressler and the named partners is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order-pressler-pressler-llp-sheldon-h-pressler-and-gerard-j-felt.pdf 

The CFPB’s order against New Century Financial Services is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order_new-century-financial-services-inc.pdf 

This action continues the Bureau’s work to address illegal debt collection practices across the consumer financial marketplace, including companies that sell, buy, and collect debt. In recent separate enforcement actions, the CFPB has ordered large banks, credit card issuers, debt buyers, and firms to overhaul their debt collection practices and refund millions to harmed consumers. The Bureau will continue working to ensure all players in the collections market treat consumers fairly.

###
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Are all lawsuits by Pressler fraudulent?

March 7th, 2019 by

No. That said, in 2014, Pressler obtained over 50,000 judgments in New Jersey Courts. Please get us all communications you still have from Pressler and the docket number of the lawsuit that Pressler filed against you.

How Do I Know if I Have a Claim Against Pressler?

In order for us to review your case, we will need your address, the docket number of the complaint filed by Pressler and as much of the communication you sent to and received from Pressler as you saved.

What is the DEBT was more than six years old?

Please reach out to my firm right away.  The statute of limitations on most debts is only six years after default.

What if there is an Existing Judgement?

Existing judgments might be actionable. You should contact us so we can guide you as to best how to do this.

Please let us know if you receive any other communications from Pressler or any other collection outfit and we will review your potential case at that time

In the future, no matter what happens with this potential claim, please keep careful track of all documents you receive from any debt collector.

What is Pressler is harassing me on the phone or with letters related to collecting a debt?

Harassment by any means can violates federal law.  If Pressler harassed you, or is still harassing you, then you may have a claim. What records of these communications have you kept? It is strongly advised that you retain all records from all collection companies. Please give my office a call and get us your communications to and from Pressler.

Is Pressler actively Garnishing wages or Paid a Judgement on a Debt that was old or not owed?

We are interested in speaking with you about your possible claim.  Please be able to get us certain information when we speak, including: your contact information, the docket numbers of all suits that Pressler has filed against you and any documentation to or from Pressler that you have kept.

Pressler Sue You?

March 1st, 2019 by

If you were sued by Pressler & Pressler you may have the opportunity to sue them for up to $1,000, plus any actual damages you have suffered.

Federal law penalizes debt collectors such as Pressler & Pressler for violations of the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace.

On April 25, 2016, the law firm Pressler & Pressler, LLP and debt buyer New Century Financial Services, Inc. were fined by the Consumer Finance Protection Bureau, a federal agency, for sending out deceptive, intimidating, and illegal collections lawsuits to collect money from people in New Jersey.

After being sued by the CFPB the firm agreed to pay a $1,000,000 penalty. It also admitted to violating a key federal consumer protection law known as the Fair Debt Collection Practices Act.

You may be able to collect up to $1,000 at no cost to you if a debt collector violated the FDCPA while trying to collect a debt from you. Contact us below now to learn more.

According to a May 5, 2016 article in ProPublica by Paul Kiel,  “So Sue Them: What We’ve Learned About the Debt Collection Lawsuit Machine”, in recent years Pressler & Pressler obtained debt collection judgments against 76,000 New Jersey residents annually. In 99% of these collection actions, the defendants being sued by did not have attorneys and could not often adequately stand up for their rights.

In fact, the firm admitted that many of the lawsuits were filed without having proof that the debt was owed by the consumer or that the amount owed and terms were accurate.  They admitted filing lawsuits based on false information.

Even if a judgment has already been entered against you, you may be entitled to a statutory recovery of up to $1,000.00.  This time, stand up for your rights with an attorney.

Pressler & Pressler already agreed to pay $1,000,000 to the Federal Government, but none of that will be distributed to you.  Your relief requires you take action now.

Category:Press Release

CFPB Takes Action to Halt Illegal Debt Collection Practices By Lawsuit Mill and Debt Buyer

CFPB Bars Law Firm, Debt Buyer from Churning Out Illegal Collections Lawsuits and Imposes $2.5 Million in Penalties

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today ordered the debt collection law firm Pressler & Pressler, LLP, two principal partners, and New Century Financial Services, Inc., a debt buyer, to stop churning out unfair and deceptive debt collection lawsuits based on flimsy or nonexistent evidence. The consent orders bar the companies and individuals from illegal practices that can deceive or intimidate consumers, such as filing lawsuits without determining if debts in question are valid. The orders also require the firm and the named partners to pay $1 million, and New Century to pay $1.5 million to the Bureau’s Civil Penalty Fund.

“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”

Pressler & Pressler is a New Jersey-based law firm that collects consumers’ debts for creditors through lawsuits and other means. New Century Financial Services, also based in New Jersey, buys and collects defaulted consumer debts and hands off those accounts to Pressler & Pressler for collection. To collect alleged debts on behalf of New Century and others, Pressler & Pressler filed hundreds of thousands of lawsuits against consumers.  Sheldon H. Pressler and Gerard J. Felt, partners of the firm, each participated in the firm’s debt collection litigation practices.

The CFPB found that to mass-produce these lawsuits, Pressler & Pressler used an automated claim-preparation system and non-attorney support staff to determine which consumers to sue. Attorneys generally spent less than a few minutes, sometimes less than 30 seconds, reviewing each case before initiating a lawsuit. This process allowed the firm to generate and file hundreds of thousands of lawsuits against consumers in New Jersey, New York, and Pennsylvania between 2009 and 2014. The CFPB found that the respondents violated the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace. Specifically, the CFPB found that Pressler & Pressler, the firm’s named partners, and New Century Financial Services:

  • Made false or empty allegations about consumer debts: The CFPB found that the firm, the named partners, and New Century filed lawsuits against consumers without sufficient basis. Neither the firm nor New Century reviewed documents supporting the validity of debts.
  • Filed lawsuits based on unreliable or false information: Some consumers had previously challenged the validity or accuracy of the debts, but the firm or New Century did not obtain or review information to justify their claims. The firm and New Century also filed suits and collected debt knowing that some account portfolios targeted for lawsuits contained unreliable or false information.
  • Harassed consumers with unsubstantiated court filings: The CFPB found that the firm, the named partners, and New Century filed collection suits generated mainly by automated processes that relied on summary data. The firm won the vast majority of the lawsuits by default when consumers did not defend themselves, even though neither Pressler & Pressler nor New Century had verified that the debts were actually owed.

Enforcement Action

Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals that engage in unfair, deceptive, or abusive acts or practices. The CFPB also has authority over debt collection practices under the Fair Debt Collection Practices Act. The CFPB orders require that Pressler & Pressler, the firm’s named partners, and New Century Financial Services must:

  • Stop filing lawsuits with unsubstantiated claims: Pressler & Pressler, the named partners, and New Century cannot file lawsuits or threaten to sue to collect debts unless they obtain and review specific account-level documents and information showing the debt is accurate and enforceable.
  • Ensure accurate court filings: The firm, the named partners, and New Century may not use affidavits as evidence to collect debts unless they accurately describe relevant facts including that the individual executing the affidavit has personal knowledge of the debt, or, if not, has reviewed documentation related to the debt. The firm must also keep an electronic record showing it is following proper procedures.
  • Pay civil penalties: The firm and the named partners must pay a penalty of $1 million to the CFPB’s Civil Penalty Fund. New Century must pay a penalty of $1.5 million.

The CFPB’s order against Pressler & Pressler and the named partners is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order-pressler-pressler-llp-sheldon-h-pressler-and-gerard-j-felt.pdf 

The CFPB’s order against New Century Financial Services is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order_new-century-financial-services-inc.pdf 

This action continues the Bureau’s work to address illegal debt collection practices across the consumer financial marketplace, including companies that sell, buy, and collect debt. In recent separate enforcement actions, the CFPB has ordered large banks, credit card issuers, debt buyers, and firms to overhaul their debt collection practices and refund millions to harmed consumers. The Bureau will continue working to ensure all players in the collections market treat consumers fairly.

###
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Sued by Pressler? Read this.

February 28th, 2019 by

If you were sued by Pressler & Pressler you may have the opportunity to sue them for up to $1,000, plus any actual damages you have suffered.

Denbeaux Will Help Consumers Sue Pressler for FDCPA Violations

For a free evaluation of your case, click here now.

Your responses will allow us to identify all potential claims and quickly evaluate your case.  This evaluation is at no cost to you, of course, and if we can identify an actionable violation, we will be able to take your case.

Federal law penalizes debt collectors such as Pressler & Pressler for violations of the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace.

On April 25, 2016, the law firm Pressler & Pressler, LLP and debt buyer New Century Financial Services, Inc. were fined by the Consumer Finance Protection Bureau,

a federal agency, for sending out deceptive, intimidating, and illegal collections lawsuits to collect money from people in New Jersey.

You may be able to collect up to $1,000 at no cost to you if a debt collector violated the FDCPA while trying to collect a debt from you.

How the Repeal of Dodd Frank Can Hurt Your Money

June 27th, 2017 by

Published June 7, 2017 by James Dennin The House of Representatives voted 233-186 on Thursday afternoon to pass the Financial Choice Act of 2017, a bill that would undo many provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

The bill — sponsored by Rep. Jeb Hensarling (R-Texas) — was touted by proponents as a way to help smaller community banks and credit unions that say they’ve struggled with regulatory controls imposed by Dodd-Frank, which was passed in the wake of the financial crisis to mitigate systemic risk and protect consumers from predatory lending.

There is a certainly a case to be made that a community bank shouldn’t have to play by the same rules as Goldman Sachs. The National Association of Federally Insured Credit Unions, for example, argues that Dodd-Frank encourages the “over-regulation of good actors.” Some 1,660 credit unions — often preferable to consumers because of lower fees and more generous interest payments — have gone out of business since the second quarter of 2010.

But experts consulted by Mic warned that a Dodd-Frank repeal could do far more harm than good for the financial system, leaving Americans without several important consumer protections and policy makers without the tools needed to confront the next crisis. Even if the Choice Act helps institutions unfairly punished by Dodd-Frank, it is tantamount to “throwing the baby out with the bath water,” said Amalgamated Bank CEO Keith Mestrich.

Other provisions in Hensarling’s bill could end up hitting Americans in the wallet. Here are three crucial ways the Dodd-Frank repeal bill could hurt yours….click here to read the full story

Episode 21 (10/14/16) FCRT Podcast: Adam Deutsch Esq., Views on the CFPB Decision

October 14th, 2016 by

Adam Deutsch, Esq.

In this episode of the Financial Consumer Rights Talk, attorney Adam Deutsch reviews the issue of the recent decision regarding the CFPB.

Adam Deutsch, Esq. host of the FCRT first reviews the October 11, 2016 ruling handed down by the Circuit Court of Appeals for the District of Columbia which involved fines that the Consumer Financial Protection Bureau (CFPB) levied on NJ mortgage lender and loan servicing company, PHH, in 2014.

In 2014, PHH was fined $109 million dollars by the CFPB for violating the Real Estate Procedures and Settlement Act (RESPA) by accepting illegal and undisclosed kickbacks from mortgage insurers. The fine came after the case against PHH was ruled on by an administrative judge who assessed a damage award of a paltry $6.4 million.

Next, Adam Deutsch discusses the decision to restructure the leadership of the CFPB, the origins of the current structure and how the change still gives homeowners access to private rights of action under federal law.

Senior Associate Adam Deutsch provides legal representation to help consumers who have been harmed financially, as well prosecuting cases related to predatory lending, false credit reporting, and illegal debt collection practices.

CFPB Proposes New Requirement on Debt Collectors

September 13th, 2016 by

CFPB Proposes New Requirement on Debt Collectors Targeted to Educate Consumers of the Risks in Debt Collection Litigation, by Adam Deutsch, Esq.

Adam Deutsch, Esq.

Recently, the Consumer Financial Protection Bureau(CFPB) released a report of proposed rules intended to clarify the scope of the Fair Debt Collection Practices Act, which in part governs the conduct of third party debt collectors.  Buried in among the proposals is a potential game changing disclosure requirement mandating collectors to educate their consumer targets of the consequences that can result from debt collection litigation.

The CFPB cites a now outdated 2010 report from the Federal Trade Commission, showing that as much as 95% of all debt collection lawsuits are not contested by the consumer.  The consequences of these judgments run deep.  ProPublica reported in May 2016 that well over 4 million Americans are subjected to wage garnishmentsresulting from judgments to enforce consumer debts.

The volume of debt collection cases is truly staggering.  The same ProPublica report shows that in New Jersey an astonishing 48% of all civil court judgments in 2011 were entered in debt collection cases.  The numbers continue to go up.

Under the proposed rule, debt collectors would be required to provide a written litigation disclosure in all written and oral communications with the debtor, that set forth the (1) collectors intention to sue, (2) a court could rule against the consumer if they fail to defend a lawsuit, (3) and that additional information about defending collection lawsuits is available on the CFPB website.

These disclosures can be viewed as part of a debtors “bill of rights.”  There is potential for the disclosures to lower the number of uncontested judgments, which is a good thing.  Today, many consumers do not contest debt collection actions because they believe they are in the process of negotiating an out of court settlement with the collector.  A debtor may trust that the collector is working with them, only to later find that no agreement is reached and wages are being garnished.  The disclosures should help combat this problem.

The disclosures could be made stronger however.  For example, the disclosures could (1) advise the debtors that they have a legal right to contest the collection action; (2) that the process of negotiating an agreement with the collector outside of court does not necessarily prevent the collector from simultaneously pursuing a lawsuit or obtaining a judgment; and (3) if a collection lawsuit is successfully defended, the debtor’s legal fees may be paid for by the collector.  The third additional proposal is key.  For many debtors, the belief that legal fees are insurmountable prevents them from making any effort to defend a collection action.  Where a debt collector uses any false information, fails to provide required disclosures to the debtor, or otherwise fails to comply with a section of the Fair Debt Collection Practices Act, the debt collector becomes liable to the debtor for actual damages, a statutory fine of up to $1,000.00 and the debt collector must pay the debtor’s legal fees and court costs.

Proposed rules from the CFPB are a great start, but should be strengthened even more.  Too often, the information used by third party debt collectors is inaccurate as to the interest rates, amounts owed or even identity of the debtor.  Yet, because of basic system wide hurdles placed in front of the debtors up to 95% of all collection lawsuits result in uncontested judgments.  In these cases, the Courts not only rubber stamps the debt collector’s request for judgment without analyzing its right to collect, the Court acts as a broker and allows the judgment to be collected by garnishing wages directly from the consumer’s paycheck.  The new rules cannot come soon enough.  The rules to protect consumers are already in place, the new proposals will go a long way to educating consumers of their rights before the long lasting damage of a lawsuit judgment is obtained.

FCRT: CFPB Reveals Mortgage Servicing Problems

July 5th, 2016 by

In this episode of the FCRT Adam Deutsch discusses the CFPB supervisory report on the mortgage servicing industry. He reviews the report and provides additional insight for homeowners in relation to RESPA , the Real Estate Settlement and Procedures Act.

In this eleventh issue of Supervisory Highlights, (6/23/16) we share findings from recent supervisory examination observations in mortgage servicing.

To provide additional context for readers, we integrate these recent observations with observations from previous editions of Supervisory Highlights by subject matter – loss mitigation acknowledgement notices; loss mitigation offers and related communications; loan modification denial notices; policies and procedures; and servicing transfers.  The report also discusses Supervision’s approach mortgage to servicing exams, including a description of recent changes to the mortgage servicing chapter of the CFPB Supervision and Examination Manual.

CFPB Announcement of the Supervisory Report

Extract from the Introduction of the Report:

Mortgage servicers play a central role in homeowners’ lives by managing their mortgage loans. Servicers collect and apply payments, work out modifications to loan terms, and handle the difficult process of foreclosure. As the financial crisis made clear, weak customer support, lost paperwork, and mishandled accounts can lead to many wrongful foreclosures and other serious harm.

Since consumers do not choose their mortgage servicers they cannot take their business elsewhere. To improve practices in the servicing market, the Dodd-Frank Act Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) imposed new requirements on servicers and gave the Consumer Financial Protection Bureau (CFPB) the authority to implement those new requirements and adopt additional rules to protect consumers.

The CFPB released rules, effective January 10, 2014, to improve the information consumers receive from their servicers, to enhance the protections available to consumers to address servicer errors, and to establish baseline servicing requirements that provide additional protections for consumers who have fallen behind on their mortgage payments. Supervisory examinations of mortgage servicers now generally focus on reviewing for compliance with these servicing rules and for unfair, deceptive, and abusive acts or practices.

 

Download the full report here from this

Report: Some mortgage servicers not following rules

June 24th, 2016 by
JUNE 23, 2016, 6:39 PM LAST UPDATED: THURSDAY, JUNE 23, 2016, 6:39 PM

Report: Some mortgage servicers not following rules

Some mortgage servicers are not following post-financial-crisis rules that help struggling borrowers modify loans and avoid foreclosure, the Consumer Financial Protection Bureau says in a new report.

The agency charged with protecting consumers from unfair, abusive and deceptive practices in the financial services market, said that despite new rules that took effect in early 2014, servicers continue to give struggling homeowners wrong information about their loans, or no information at all, often because of technological shortcomings. The report did not name servicers that were noncompliant.

The report released Wednesday says that the agency’s mortgage loan servicer examinations, conducted between January 2014 and April of this year, revealed that information provided to borrowers about loan modifications is sometimes late, incorrect, or deceptive due to technological breakdowns or malfunctions. In addition, consumers tend to “get the runaround” when loans are transferred to another servicer with incompatible computer systems, the report said.

Struggling New Jersey homeowners and lawyers who represent them said Thursday that loan modification attempts still are stymied by mortgage servicing miscues. The stakes can be high for homeowners, said Adam Deutsch of the Westwood law firm, Denbeaux and Denbeaux, which represents homeowners in contested foreclosures.

“A lot of our problems happen when there is a transfer,” said Deutsch, who has represented clients in several recent cases where homeowners were offered loan modification agreements that would lower their payments and help them avoid foreclosure. But before the modifications were finalized the loans were transferred to other servicers, who refused to honor the agreements.

Florence Block of Bernards, who is represented by Deutsch, refinanced a loan in 2007 and has had five different mortgage servicers since then. She is suing three of them and a trust in the Virgin Islands that owns the loan for alleged breach of a loan modification contract.

The complaint filed in January in federal court in Trenton, alleges that one servicer, which agreed to a six-month trial loan modification, did not credit more than $20,000 in payments she had made, nor did it provide her with the required notice when the loan was transferred to another servicer. According to her complaint, the current servicer has refused to provide a permanent modification, even though she has qualified for the change under an agreement with a previous servicer.

READ THE REST OF THE STORY ON NJ.COM

Mortgage servicers “can’t hide behind their bad computer systems or outdated technology,” CFPB Director Richard Cordray said in a statement. “Mortgage servicers and their service providers must step up and make the investments necessary to do their jobs properly and legally,” he said.

The Mortgage Bankers Association, which represents large U.S. lenders and servicers, said the report identifies issues that “can be instructive as servicers execute and refine their compliance programs.” The group also said the report’s usefulness is limited by a failure “to give much of an idea of the scale of the problems or when the problems were identified.”

Large, highly automated mortgage servicing companies such as Bank of America, Wells Fargo and Chase, which send monthly statements to borrowers, collect payments and file foreclosure actions on behalf of the entities that own the loans, have been lightning rods for criticism since the financial crisis. In New Jersey, the state judiciary took steps in late 2010 to block potentially unfair foreclosure actions amid robo-signing and other transgressions by servicers, which prolonged the state’s foreclosure crisis.

Since then, servicers have been pressured by lawmakers to take steps to help keep people in their homes, which often means modifying loan terms to reduce monthly payments, either by lowering the interest rate, reducing the principal or extending the length of the loan, or through some combination of those.

According to Hope Now, an alliance of servicers, investors, mortgage insurers, and non-profit counselors, 2,115 non-government-sponsored loan modifications were made in New Jersey in the first quarter. Since mid-2007, 140,297 such modifications have been provided in New Jersey.

Email: [email protected]

Payday Loans Steep Hidden Cost

May 10th, 2016 by

CFPB Finds Half of Online Payday Borrowers Rack Up an Average of $185 in Bank Penalties

The Consumer Finance Protection Bureau (CFPB), issued a new report that examines online payday loan payments.

“The report found that online lenders’ attempts to debit payments from a consumer’s checking account add a steep hidden cost to online payday loans. Half of all accounts have at least one payment request that results in overdraft or failure due to non-sufficient funds during the 18 month observation period. These accounts are charged an average of $185 in overdraft and non-sufficient funds fees by their institution on attempted payment requests from online lenders during the 18 months.  And one third of those borrowers who get hit with a bank penalty wind up having their account closed involuntarily. The report also found that despite this high cost to consumers, lenders’ repeated debit attempts typically fail to collect payments.” – Desmond Brown

Read the report to learn more:
consumerfinance.gov/f/201604_cfpb_online-payday-loan-payments.pdf

Key findings of this report include:

  • During the 18 months we observe account activity, accounts with one or more loans from at least one of the identified online lenders make payments totaling on average $2,164. The data do not permit us to distinguish which portion of those payments went to cover fees or interest and which portion went to repay principal. Nor can we identify the number of loans the average consumer took out during this period from these lenders. These same accounts are charged an average of $92 in overdraft and NSF fees by their institution on payment requests from online lenders during the 18 months.
  • Half of all accounts have at least one payment request that results in overdraft or failure due to NSF during the 18 month observation period. These accounts are charged an average of $185 in overdraft and NSF fees by their institution on attempted payment requests from online lenders during the 18 months. We identify several different types of payment requests to determine which requests result in fees. Of the average of $185 in fees, $97 on average are charged on payment requests that are not preceded by a failed payment request, $50 on average are charged because lenders re-present a payment request after a prior request has failed, and $39 on average are charged because a lender submits multiple payment requests on the same day.
  • After a failed ACH payment request by an online lender, subsequent payment requests to the same consumer’s account are unlikely to succeed. If not preceded by a failed payment request, only 6% of payment requests fail. After a failed payment request, however, 70% of initial re-presentments fail, and subsequent re-presentments are even less likely to succeed.
  •  Of the 94% of initial payment requests that succeed, 7% succeed only because the borrower’s depository institution covers the payment as an overdraft. If an initial payment request fails and the lender makes a subsequent attempt, only 30% of the initial re-presentments succeed, and about a third of those succeed because they are paid as overdrafts. Subsequent re-presentments show a similar pattern of succeeding only because of overdraft.
  •  Many online lenders submit multiple payment requests on the same day. Thirty-four percent of online payday payment requests occur on the same day as another request by the same lender. When multiple payment requests are submitted to a single account on the same day by an online lender, the payment requests usually all succeed (76%) or all fail (21%). Only 3% of payment requests that occur on a day with multiple requests are on days when at least one payment fails and another succeeds.
  • Accounts of borrowers who use loans from online lenders are more likely to be closed by the end of the sample period than accounts generally (23% versus 6%, respectively). Accounts with any online payday loan payment request that fails are particularly likely to be closed, with 42% of such accounts closing by the end of the sample period.

Thank you,

Desmond Brown
Office of Financial Empowerment
Consumer Financial Protection Bureau

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