The FTC Settles Dispute -- $108 Million Bound for Cheated Homeowners

Posted on June 15, 2010 by Steven Berk

Here is a Federal Agency willing to walk the walk.  The FTC recently announced that Countrywide, one of the nation’s largest mortgage lenders and now a member of the Bank of America family was fined $108 million for improperly pursuing foreclosures and charging excessive and unfair fees to lenders being thrown out on the street.  Where is the pity?  How bout showing a little humanity. Nope.  Instead, Countrywide took advantage of folks that who had no resources to fight back.  As just an example or two, Countrywide’s egregious action included fees for  a $300 lawn mowing and the approval of a trustee’s fee that exceeded the going rate by more than 400%.   Shocking ... Not.

But no need to dwell on Countrywide’s disgraceful, dishonest, shameful (insert your own sentiment here) behavior.  There is a bright side.  The fighting and fit FTC; going to bat for the American public. As Gretchen Morgenson rightly pointed out in her column on Monday, the wheels of justice have been turning painfully slowly but we at Berk Law are delighted to see justice any time – even when it shows up late to the party.

So, three cheers for the FTC for reaching this settlement.   No doubt thousands of aggrieved homeowners will be made whole. The United States Trustee, the investigative arm of the Department of Justice that assisted the FTC in this matter plans to look into similar predatory practices committed by other now-defunct mortgage-lending banks.

There are undoubtedly scores of lenders whose predatory actions, despite harming thousands of citizens, have gone undetected and unpunished. We hope that investigations and results such as this recent settlement with Countrywide scare some sense into banks and other financial institutions who are in a position to make mischief for homeowners while lining their own pockets.

 

Assisted by Zachary Kady

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Sadly, Unscrupulous Debt Collectors Prey on the Dead

Posted on October 21, 2009 by Steven Berk

Generally, you are NOT responsible for the debts of the deceased

Jed Sorokin-Altmann is an Associate at Berklaw who specializes in consumer protection. He provides insightful and helpful tips to vulnerable consumers who are too often preyed upon by professional con artists and even reputable corporations. Jed's message is thoughtful and concrete. We welcome his new voice.

Let's say the phone rings, and it's a debt collector saying that you aren't the debtor, you are not responsible for the debt, but because they can't collect from the debtor, would you mind being a sport and paying off the debt for them? Unless you're the softest touch around, you'd say no, if not issuing a few choice four letter words at the audacity of the request before slamming down the phone. And yet there is a segment of the debt collection market that specializes in just this sort of behavior by preying on the grieving relatives of those who have died.

Now, these debt collectors don't tell the families that they are not responsible for the debt, although they claim that if asked, they don't lie about it. According to David Streitfeld's New York Times article "You're Dead? That Won't Stop the Debt Collector" from March 3, 2009, collecting from the dead involves training in "empathic active listening," mixing "the comforting air of a funeral director with the nonjudgmental tones of a friend."

Here's what you need to know: the law on this varies from state to state, so, if you are in this sort of situation, you should consult with an attorney licensed in your state, but generally speaking, relatives are not required to pay a deceased relatives' debts from their own personal funds. Property and money inherited from the deceased is theoretically fair game, but beyond that, generally, you are NOT responsible for the debts of the deceased.

Even though you are not responsible for the debt, some collection agencies specialize in getting you to pay anyway. According to Streitfeld's article, "Some relatives are loyal to the credit card or bank in question. Some feel a strong sense of morality, that all debts should be paid. Most of all, people feel they are honoring the wishes of their loved ones." Collection agencies train their employees to play on all of these sentiments to try convincing people to pay debts that they have no obligation to pay. Some even hire grief counselors to work the phones.

The bottom line: when a loved one passes away, be wary of creditors asking you to pay for their debts. Instead of giving money to those who prey upon the bereaved, perhaps a donation to your loved one's favorite charity is a better way to honor their memory.

 

 

Assisted by: Jed Sorokin-Altmann

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