May 2008

31 May Texas Attorney General Reached Settlement Agreement with Universal Underwriters to Refund $2.4 Million to Auto Credit Insurance Policyholders

Texas Attorney General, Greg Abbott, reached a settlement last month with Universal Underwriters Life Insurance Company who unlawfully withheld insurance premiums from more than 12,000 Texans who paid off their vehicle loans early. Under the terms of the settlement, Universal Underwriters agreed to refund insurance premiums worth $2.4 million to Texas policyholders whose loans terminated between 2002 and 2006.  The company will also pay $125,000 in attorneys' fees to the state.
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31 May Louisiana Bankruptcy Judge Sets Parameters for Calculation of Escrow Amounts Due When Bankrupcy Case is Filed

Judge Elizabeth Magner, a United States Bankruptcy Judge for the Eastern District of Louisiana, has set out parameters for the calculation of escrow amounts due as of the petition date and how they should be reflected on proofs of claim.  The issue arose in the Irby Fitch case, case number 07-11319, pending in the Eastern District of Louisiana.  The parameters are as follows: 

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31 May Missouri, a non-judicial foreclosure state.

Make no mistake, in the State of Missouri when a foreclosure sale is cried on the courthouse steps your house will be gone. Do not ignore the letters from the mortgage company or the certified letters from attorneys. You only have the following options to stop a foreclosure: 1) Sell the property, 2) Bring the account current, 3) Redeem the property under the guidelines of Missouri Law, or 4) File a Chapter 13 Bankruptcy which in turn will give you up to 60 months to bring the account current and regain financial control. For the majority of homes in the State of Missouri a mortgage company may proceed with a foreclosure proceeding without going to court. The only time a mortgage company in the State of Missouri would foreclose in court is when the mortgage or deed of trust does not provide the lender with the "right to sell" when the borrower defaults or there is some other defect in the loan paperwork. This is very rare. Normally you only see a judge when you are being evicted and your house is already sold out from under you.
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31 May “Liar Loans”: Who’s the Real Liar?

A recent article in The Wall Street Journal, Are Borrowers Free to Lie?, talks about a recent Bankruptcy Court decision in the Northern District of California. In re Hill dealt with an attempt by National City Bank to hold the Hills' mortgage loan non-dischargeable, meaning that, despite the loss of their home due to foreclosure and their subsequent bankruptcy, they would have to pay it back. How did the Hills get in this situation? They did what many borrowers were urged to do over the past several years: take out a "stated income" loan. Stated Income loans, also called "liar loans" or NINJA (No Income, No Job, No Assets) loans, were mortgage loans in which no proof of income, employment or assets was required. Rather, the borrower simply "states" on the loan application what his or her income is, and the bank does no checking. No pay stubs, no tax returns, nothing. Ask for a mortgage, in virtually any amount, and get it without any investigation of ability to pay, examination, or common sense. Common sense would have disclosed that something was very wrong in the Hills' case.
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