SC Bankruptcy & Consumer Law Blog

You Renting a House That’s In Foreclosure? Now You Have Some Protection

Dana Wilkinson, Attorney at Law — Fri, 12 Jun 2009 14:16:50 +0000

The Protecting Tenants At Foreclosure Act of 2009 went into effect on May 20, 2009, offering some protection, and at least a little time, for those renters who find themselves drawn into foreclosure despite paying their rent. In short, the act allows such tenants to stay in their rental homes for 90 days following foreclosure, at the very least, and allows some tenants to stay until the end of the lease term.

Of course, the act won’t protect you if you’ve not rented at arms length:

One important point: leases have to be “bona fide” in order for the tenant to qualify for this protection. If you’re living in the house for a dollar a month because your cousin really likes you (or because he lost a bet), you’re probably not protected by this Act.

Oh, and you still have to pay the rent.

Making Home Affordable Web Portal

Dana Wilkinson, Attorney at Law — Thu, 14 May 2009 20:35:42 +0000

Here’s a good starting place for the Making Home Affordable programs, the so-called HAMP and HARP mortgage modifications or refinancing, respectivly. Go to the Making Home Affordable web site, and look up your lender to see whether they’ve signed on to participate, or look up your loan to see if it’s a Fannie Mae or Freddie Mac loan. You can also view eligibility requirements and general information about the programs.

SC Supreme Court Blocks Utah Credit Counselor

Dana Wilkinson, Attorney at Law — Thu, 14 May 2009 20:09:14 +0000

For the second time in a couple of weeks, the South Carolina Supreme Court has acted to support the rights of consumers. This time, the court unanimously decided in favor of the South Carolina Department of Consumer Affiairs, ruling that a Utah law firm operating as a credit counseling service in South Carolina cannot continue to offer those services without being licensed by the SCDCA.

South Carolina has one of the most stringent licensing procedures for credit counselors in the country, enacted in 2005. The Lexington Law Firm, of Salt Lake City, Utah, argued that the law’s exception for lawyers applied, and no licensing was required. The Court found, however, that the exception for lawyers was meant to apply to lawyers licensed in the state of South Carolina, and who provided credit counseling services incedental to their law practice (like a bankruptcy lawyer), not to out-of-state credit counseling services who happen to be run by lawyers.

SCDCA Press Release

South Carolina Supreme Court Steps Into Foreclosure Fray

Dana Wilkinson, Attorney at Law — Wed, 06 May 2009 12:50:08 +0000

Late Monday afternoon, the Chief Justice of the South Carolina Supreme Court took the unusual step of issuing a temporary restraining order stopping foreclosure sales where the underlying mortgage is owned by either Fannie Mae or Freddie Mac, or where the lender has signed on to the Home Affordable Modification Program [HAMP], a federal mortgage modification program. The order restrains sales and, where a foreclosure sale took place on May 4, 2009, can retroactively invalidate the sale. Plaintiffs (i.e., lenders) in the affected cases must send a notice to the homeowners by May 15, 2009, indicating whether the lender believes the loan is subject to modification. If so, the foreclosure sale is stayed indefinitely until an application can be processed. If the lender’s notice indicates that the loan is not subject to modification, the homeowner or another party can file an affidavit alleging that the loan is a candidate for modification, and the foreclosure sale will be stayed until a judge can determine the matter.

If you get one of these notices, it is important to act quickly. If you’re not sure what to do next, or if you think your mortgage is subject to modification and you don’t receive a notice, contact a lawyer in your area. Don’t wait–the effective timing of this restraining order is very short. If your home is in foreclosure, it may be tempting to ignore correspondence from your lender, but this time there could actually be a bit of good news in the mail.

If you are interested, the entire order is here. sc-supreme-court-tro-may-4-20092

Mortgage Modification Bill Dies in Senate

Dana Wilkinson, Attorney at Law — Wed, 06 May 2009 12:35:12 +0000

The mortgage modification bill, which would have allowed bankruptcy judges to force lenders to re-write mortgages in certain circumstances has been defeated by a wide margin in the Senate. The vote was 45 in favor, 51 against, making me wonder who really controls the Senate.

How to Contact Your Mortgage Company

Dana Wilkinson, Attorney at Law — Fri, 24 Apr 2009 14:00:04 +0000

Here’s a great resource–a list of contact numbers for mortgage companies and mortgage servicers. When you are behind on mortgage payments or are looking to try and modify your mortgage, one of the most frustrating issues to deal with is trying to get to someone who can really help (as opposed to the person whose job is to call you and try to get you to make a payment). This list was compiled by my friend and fellow blogger (and hopefully soon a guest blogger here) Russ DeMott. Russ (or his paralegals) have a great deal more patience than I to put this together, but I’m really glad he (or they) did.

Who You Gonna Call–Your ATTORNEY!

Dana Wilkinson, Attorney at Law — Wed, 25 Mar 2009 13:36:14 +0000

Recently I got an e-mail from one of our Chapter 13 trustees, asking that I express her condolences to my client on the death of his wife. That was very nice, but the problem is that this was news to me. My client called the Chapter 13 office to ask what he should do about some insurance issues, and never called me. A while back another client did the same thing when he got an offer to purchase his home. He said he didn’t want to bother me. And those are not the only examples.

My friend and colleage Peter Orville has written an excellent piece considering whether your Chapter 13 trustee is your friend. Our trustees loved the piece, because it does an excellent job of explaining the relationship between debtors, creditors, and the Chapter 13 trustee. In a nutshell, the trustee’s job is to look after the interests of your creditors, and your attorney’s job is to look after your interests. So, when something changes, when a problem arises, when a car is wrecked, a job is lost, you lose a loved one, or a new baby comes along, don’t call the trustee, call your attorney.

Mortgage Modification Measure Passes House

Dana Wilkinson, Attorney at Law — Tue, 10 Mar 2009 16:01:55 +0000

A bill which will allow mortgages to modified by bankruptcy judges has passed the U.S. House of Representatives. One piece of the puzzle which will help to stem the tide of foreclosures, leading to a stronger economy overall, the fight now moves to the Senate. We’ll post further developments as the Senate debate heats up.

Credit Crisis Visualized

Dana Wilkinson, Attorney at Law — Sat, 28 Feb 2009 18:12:47 +0000

This is just too good not to share. Creative, funny and not too technical, it’s a good way to gain a better understanding of why we are where we are. Hat tip to David Liebowitz for this one.

Crisis of Credit Visualized

Vote Postponed on Help for Homeowners Act

Dana Wilkinson, Attorney at Law — Sat, 28 Feb 2009 17:42:23 +0000

The U.S. House of Representatives has postponed a vote on the Help for Homeowners Act, apparently because of fears there weren’t enough votes to pass. Clearly, mortgage industry lobbyists are having an effect. My colleague David Liebowitz expressed the frustration of many proponents of the legislation:

I am extremely disappointed with the Democratic House leadership. They did not lead [on foreclosure relief] and they allowed their members to be led by special interests. I don’t think that any banks voted any of these representatives into office.

Check out David’s explanation of the proposed changes to the law on Fox Business News. As he points out, the legislation provides an efficient way of recognizing the realities of the market without costing homeowners their homes. It has a natural sunset, since it affects only existing loans. Best of all, it won’t cost taxpayers–it’s not another bailout. Supporters of the legislation include AARP, realtors, and of course, consumer advocates. Even Citi Group supports the legislation.

Who is your Congressman listening to? You might want to ask.