November 2010

How to Win Customers and Alienate People

Christina Latta Henry |  | Credit, Current Events

“Hello, My name is Stanley with DecorMyEyes.com,” the post began. “I just wanted to let you guys know that the more replies you people post, the more business and the more hits and sales I get. My goal is NEGATIVE advertisement.”

It’s all part of a sales strategy, he said. Online chatter about DecorMyEyes, even furious online chatter, pushed the site higher in Google search results, which led to greater sales. He closed with a sardonic expression of gratitude: “I never had the amount of traffic I have now since my 1st complaint. I am in heaven.”

Interesting New York Times article about a Brooklyn scammer who makes money by exploiting a structural loophole in Google’s page-ranking algorithm. (You will not be surprised to learn that Citibank is wholly uninterested in helping its customers who get taken by this guy.)

Debt Settlement Companies Can No Longer Take Advanced Fees

Christina Latta Henry |  | Bankruptcy, Credit

Over the past few years, “debt settlement” companies have proliferated to the point that one in three potential new bankruptcy clients that we see have already attempted to settle their debts with one of these companies. Most ask for exorbitant upfront fees and show little to no results.  By the time most of these clients find me they have already spent several thousand dollars in an effort to settle their debts, only to be sued in state court anyway by their credit card company.

We work hard to get back all the fees that our clients have paid debt settlement companies; when we succeed, the refund is often enough to cover what the client owes us and more. Unfortunately, it’s not always easy to recover these funds, and I can see that I will be forced to sue one of these companies in the near future. We believe that our clients should not have to pay for a solution to their debt problems twice,  and we do everything in our power to aid clients who find themselves into this situation.

On October 27, a new FTC regulation went into effect that makes it illegal for debt settlement companies to collect non-refundable advance fees before doing any work. This is actually a bit of a double-edged sword for us and our clients, as it may result in a number of these companies going out of business and make it more difficult for us to recover funds from them. Overall, though, the new regulation is great news for consumers, and we applaud the FTC for enacting it.

If you’ve already been taken advantage of by one of these unscrupulous companies and want to try to recover the funds you’ve paid them, contact us today so we can set the process in motion while the company is still around to sue.

HAMP and Chapter 13 Bankruptcy

Christina Latta Henry |  | Bankruptcy, Current Events, Foreclosure, Uncategorized

Yet more proof that HAMP alone may not be enough to save your home from foreclosure:

Some struggling homeowners say they’re being unfairly foreclosed on despite making all their payments under trial mortgage modification programs.They equate that to mistreatment by banks who agreed to help borrowers when they took part in the government’s $700 billion Wall Street rescue.

If you’re lucky enough to have gotten through the HAMP application process and have been given a trial modification program, as this article makes clear, it doesn’t mean you’re out of the woods.

Your HAMP trial modification is based on a formula that requires you to make a payment based on your income and suggests that your mortgage debt-to-income ratio should be 31% of your gross (pre-tax) monthly income.  The trial modification will give you a reduction if you qualify for a modification. (See the calculator at http://www.makinghomeaffordable.gov/payment_reduction_estimator.html).

However, if your trial payment is less than what your current payoff of the loan would be at a 3.0% fixed interest rate over 30 years, it is unlikely you will be approved for a permanent loan modification and you could be headed for foreclosure.

Don’t take that risk!  If you have received a foreclosure notice from your bank, regardless of your process in the loan modification you should consider filing a Chapter 13 bankruptcy.  A Chapter 13 cannot change the terms of the loan you already have–it can only cure existing arrears over time and strip off wholly unsecured second mortgages. But a HAMP loan mod combined with bankruptcy may be the ticket to solve your problems. You have the security to know that the bank cannot foreclose on you because you have filed a bankruptcy, which gives you that assurance and protection, and you can still pursue the HAMP loan modification process while in BK.

Also, Seattle Debt Law, LLC has just recently agreed to assist in the HAMP loan modification process through the use of a special computer portal that cuts through the hassle of spending hours on the phone with the bank counselors, better known as the “Burger King Kids,” and you will have the piece of mind that your situation is being taken care of.

For more info on the “Burger King Kids” issue, see this October 13 New York Times article.