Making a Federal Case of It: NJ Couple Fight Foreclosure in Federal Court

November 6th, 2015 by

Making a Federal Case of It: NJ Couple Fight Foreclosure in Federal Court

Click here for a free download from Denbeaux and Denbeaux to learn more on how federal laws help homeowners.

Jerome and Sandra Barnes’ house in Paterson Fed up with the slow pace – and what many people see as unjust actions — of foreclosures, some victims of the crisis are looking to go on the offensive, opt out of the New Jersey court system, and seek justice from federal courts. Jerome and Sandra Barnes of…

Op-Ed: New Jersey must cut links to unscrupulous payday-loan company

April 30th, 2015 by


APRIL 30, 2015 for NJ Spotlight. News Issues and Insight for New Jersey.

State’s public pension fund has $50 million stake in high-interest lending firm that’s banned in NJ

New Jersey maintains a statute that prohibits payday-lending companies from operating within the state. Despite this prohibition, a recent article published revealed that New Jersey’s public pension fund has invested $50 million in a private equity fund that owns Ace Cash Express Inc., a company that is prohibited from conducting business in New Jersey.

It is unethical for the state to fund its pensions from the profits of an unscrupulous company that is prohibited from conducting business within the state. The Division of Investments should immediately divest from the private fund managed by JLL Partners and instead invest in companies that reflect the social and moral landscape of the state.

By virtue of the investment, the New Jersey State Investment Counsel is part owner of Ace, the second-largest payday lending company in the United States.

Lenders in New Jersey are prohibited from charging an APR in excess of 30 percent. According to Fortune, Ace’s loans typically carry an APR ranging from 65.35 percent to 1,409.36 percent, in addition to an origination fee.

The company operates in 36 states, choosing not to do business in states that impose interest rate caps below 50 percentage points. The high interest rate leads to profits for investors, but a cost for the public and consumers doing business with companies like ACE.

The Consumer Financial Protection Bureau (CFPB) investigated Ace’s lending practices. In July 2014, Ace entered into a consent order acknowledging that it had acted in violation of the Consumer Financial Protection Act of 2010.

According to the settlement, loans issued by Ace have a two-week repayment period and consumers are typically forced into a cycle of refinancing loans to avoid default.

Ace also acknowledged using inappropriate collection techniques including repeated calls to non-debtors demanding payments, calling third-party references and disclosing information about debtors, and encouraging its collectors to make illegal threats if debtors did not pay immediately.

Ace also admitted training its collectors to push borrowers into a debt spiral by convincing borrowers to refinance existing debt and pay new fees instead of paying off existing loans.

It is inappropriate for the state to own an equity share of a company that is prohibited from doing business in New Jersey and has acknowledged violating federal law. New Jersey’s return on investment of approximately 11 percent does not justify profiting from a company that the state views as morally irresponsible.

The state should immediately withdraw its investment from the JLL Partners fund that owns Ace.

The money should instead be invested in funds that exclude interests in companies that are prohibited from doing business in New Jersey. This move is essential to show that New Jersey believes in its own future enough to invest in companies that flourish within the state.

For more discussion on other issues related to consumer financial litigation please visit the Financial Consumer Rights Talk podcasts.

Discussion: Notice of Error, a New Tool Under Federal Law to Fix Mortgage Account Errors.

April 27th, 2015 by

Notice of Error, a New Tool Under Federal Law to Fix Mortgage Account Errors

In January 2014 homeowners with mortgage loans obtained a significant tool for disputing errors in the collection and application of their mortgage loans.  The tool in question is known as a Notice of Error, which was made part of the Real Estate Settlement Procedures Act (RESPA), originally enacted in 1974.  Drafted by the Consumer Financial Protection Bureau, Regulation X which includes the Notice of Error rule is a great tool that should be utilized by aggrieved homeowners seeking to fix errors on their mortgage loan accounts.

A Notice of Error is merely a written letter sent to the loan servicing company that sets forth an explanation of the alleged error and includes sufficient identifying information for the servicing company to determine what account the problem relates to.  Errors covered by the rule are those having to do with loan servicing.  By way of example this includes monthly payments that are not properly credited to the account, a modification agreement that is not honored following a change in loan servicing company, errors with tax and insurance disbursements and fees that are inappropriately assessed to an account.  A notice of error does not include claims of errors that occurred at the time the loan was originated.

By issuing a Notice of Error, a homeowner can compel a loan servicing company to conduct an investigation of the error.  The loan servicer must complete its investigation within 30-45 business days and provide the homeowner with a written response.  In responding to a Notice of Error the loan servicer must correct the error or provide the homeowner with a detailed letter explaining the reasons why no error was found.  Thus, if the servicing company disagrees with the homeowners allegations, they must explain what research was done in finding that no error occurred.  The loan servicer must also make available upon request and at no cost, documents reviewed by the servicing company during its investigation.  This allows a homeowner to obtain a level of transparency that was not previously available.

If the loan servicer fails to respond to the Notice of Error or otherwise fails to conduct an investigation in the manner and time required by the rule, a homeowner can seek relief in court.  RESPA provides that a successful plaintiff homeowner will be entitled to the Notice of Error investigation and will recover attorney fees and costs incurred pursuing the case.  In some circumstances the homeowner might also be entitled to damages of up to $2,000 per violation of the RESPA requirements by the loan servicing company.

Homeowners who have been subject to an error by their loan servicer may have found themselves in financial trouble as a result of the error, or even worse, facing a foreclosure.  Using the Notice of Error early on can prevent the snowball effect of an error.  For more information including an in-depth discussion regarding notices of error, listen to Episode 6 of the Financial Consumer Rights Talk which can be found in the podcast section of

Attorney Liability in Lien Enforcement: The Untapped Potential of The FDCPA

April 22nd, 2015 by

42 Rutgers L. Rec. 205 (2015)

Debt is an American epidemic. The total sum of consumer debt in the United States (U.S.) is approximately $11.4 trillion dollars. From 1985 to 2007, an average households’ debt increased from roughly 60% of post-tax annual income to more than 125%. During that same period, debt-to-income ratios nearly doubled. Furthermore, roughly 35% of all adults, more than 77 million Americans, hold debt that is delinquent and in collection. As a result, debt collection companies have found a viable and rapidly expanding market in debt collection.Currently, the debt-collecting industry employs nearly 500,000 people (debt purchasers) in the U.S. alone. In a study conducted by the Federal Trade Commission (FTC) between 2009 and 2012, nine of the largest buyers of defaulted debt on the secondary market acquired $143 billion in defaulted loans but paid only $6.5 billion for defaulted loan’s acquisition. This acquisition cost is equal to only four cents per dollar of defaulted debt. It is debt purchaser’s goal to collect as much of the remaining debt value as possible.

Read all of the article : Attorney Liability in Lien Enforcement: The Untapped Potential of The FDCPA

The Lawyer Who Went from Fighting for Guant

February 26th, 2015 by