A recent story in the Minneapolis Star Tribune shows the unfortunate truth that individuals seeking to get out of a difficult financial situation can oftentimes find themselves the victims of fraud.
According to the story, Edward Jonak operates a business called Affordable Law Center, advertises under “attorneys” in the Yellow Pages but he is not a lawyer, nor does he employ any lawyers. Instead, for a fee, he will provide forms, referrals to lawyers and typists or find a bail bondsman. The actions skirt close enough to the practice of law that four states have initiated legal action alleging Jonak provided legal advice or illegally prepared bankruptcy documents. In addition to the claims, the Better Business Bureau of Minnesota and North Dakota put out a clear public warning about the business describing a “clear pattern of deception on the part of this company.”
As a result of court actions, Jonak has been banned from preparing bankruptcy documents in Colorado; selling legal plans, giving legal advice and preparing bankruptcy documents in the Western District of Wisconsin; providing “any bankruptcy-related services” in the Western district of Missouri or accepting any fees from its residents.
Jonak maintains his innocence and counters that he’s providing a needed and valuable service. His clients can’t afford traditional legal services and Jonak believes the complaints are fueled by attorneys who feel threatened by his business model.
Whether or not Jonak is providing a valuable service or defrauding unwitting customers will be resolved in the litigation, but the warning in the story is clear. Not every business that advertises legal expertise has that expertise and to avoid being fleeced a consumer needs to ask for clear boundaries in the relationship and work to be performed. Bankruptcy proceedings are complicated, technical proceedings that require the skill and training lawyers posses.
According to reports, a Texas community bank will file what lawyers say is the first suit directly challenging the constitutionality of the Dodd-Frank Act and the creation of the Consumer Financial Protection Bureau.
Represented by former White House counsel C. Boyden Gray, the State National Bank of Big Spring, Tex., along with The Competitive Enterprise Institute and the 60 Plus Association allege that the law lacks effective checks and balances to assure the public of accountability.
The suit, to be filed in U.S. District Court for the District of Columbia, targets Title 1 and Title 10 of Dodd-Frank, Gray said in an interview. Title 1 focuses on the government’s designation of systemically risky enterprises, while Title 10 covers the creation of the CFPB. The suit also challenges the January recess appointment of CFPB head Richard Cordray on the grounds that the Senate was not in recess, Gray said.
According to a news release detailing the complaint, which is not yet available, the plaintiffs complain that Congress “exercises no ‘power of the purse’ over the CFPB, because the agency’s budget — administered essentially by one person — comes from the Federal Reserve, amounting to approximately $400 million that Congress cannot touch or regulate.”
Courts have held the president lacks the power to remove the leaders of all independent agencies on policy grounds (as opposed to gross wrongdoing) based on the U.S. Supreme Court’s 1935 decision that President Franklin Roosevelt acted unconstitutionally when he fired a member of the Federal Trade Commission. Gray said the suit seeks to give the president authority to fire the head of the CFPB, much like cabinet members can be fired. The lawsuit is likely the first in a series of challenges to the new agency from conservatives and business groups opposed to heightened scrutiny.
By <a href=”mailto:firstname.lastname@example.org “>Priscilla Lord Faris</a>
It is literally impossible to scan the news and avoid a story of some homeowner being taken advantage of or being treated very poorly in connection with the housing crisis and foreclosure fraud scandal. So far the reports have focused primarily on the lenders and those working on the behalf of such lenders, but now comes news of attorneys acting poorly and looking to capitalize on the crisis rather than help struggling homeowners. If this has happened to you or someone you love, contact our Minneapolis Foreclosure Law Firm as you may have a claim.
A Los Angeles-area law firm was sued this week for allegedly collecting illegal fees for a “forensic loan audit” from a California couple as part of a promise to stop the foreclosure of their property–a promise that was quickly broken. According to the suit, the attorneys promised that the audit would induce the couple’s lender to modify their loans, another promise that never materialized. And according to the complaint, the attorneys making these promises never had any intent to try and stop the foreclosure process and were just interested in collecting fees.
Many think this suit is a sign of many more to come. As we learn more about the depth of the bad behavior it is hard to imagine that more claims against attorneys, accountants and real estate agents won’t follow. Real estate transactions are complicated transactions, even if there are some people who, at the height of the boom, argued the opposite. Furthermore, the foreclosure process as it currently stands offers only limited protections for struggling homeowners, leaving open the possibility that homeowners can be taken advantage of at many points in the process.
As the foreclosure crisis deepens both beleaguered homeowners and frustrated members of Congress have turned toward the banking industry for answers as to just how the situation has gotten so bad. Predictably, as the calls for accountability increase, the lawsuits have begun to appear. Our Minneapolis foreclosure attorneys at Lord and Faris are appalled by the behavior of those involved in these foreclosure cases. Attorneys do not have the option of obeying the laws and procedures, especially for something as serious as taking someone’s home away from them. As this story continues to unfold we hope that those who did flout the law are held fully accountable and that the result is a serious and long-lasting change that once and for all protects American consumers.
The most recent is a class action against banking giant Bank of America. The suit was filed on behalf of homeowners and accuses the bank of disregarding foreclosure process rules. The lawsuit, filed in a federal court in New Jersey, says the bank and two subsidiaries followed an “undisciplined rush to seize homes” through “pervasive and willful disregard of knowledge, facts and statutes.”
In support of the suit the plaintiffs cite a recent and well-publicized admission by a Bank of America official in a Massachusetts foreclosure case that she signed thousands of foreclosure complaints without reviewing them. They also point to the bank’s self-imposed foreclosure moratorium as another admission that literally thousands of homeowners lost their homes without regard to the facts or the laws.
The foreclosure crisis has hit Minnesota hard, but in many ways our state is lucky in that while it has certainly affected our area, we have not been utterly devastated by it the way states like California, Florida and Nevada have been. And while the news reports focusing on the falsified affidavits and robo-signers have cooled as other stories grab our attention, the reality is the crisis still affects hundreds of thousands of Americans on a daily basis.
For those struggling in the depths of the foreclosure crisis it may seem at times like nothing short of the most drastic measures can help salvage homes and personal finances. Even for the Minneapolis foreclosure attorneys at Lord & Faris we understand the sense of desperation many of our clients feel. That may be what was going on after a California judge held a lawyer in contempt after he advised his clients to go an reclaim their foreclosed property.
The attorney was fined $2000 and will have to pay more than $34,00 in legal fees incurred by the investment company that bought his clients’ home. The judge did not fine the attorney’s clients who had moved back into their home and, after an eviction, threatened to break in again.
This case is a perfect example of why the foreclosure crisis is just so difficult to deal with. People have their emotional lives wrapped up in their home and to lose it, perhaps in part because of fraud by the lenders, is unacceptable. While we would never endorse the actions described above, we can empathize with the sense of frustration that led these people to take such drastic measures.
A Minnesota soldier is taking on Citibank in federal court, accusing the bank of penalizing military personnel by placing student loans into “mandatory forbearance” which can add hundreds of dollars in interest over the life of a loan. The suit claims the bank illegally altered the terms of her loan as she was preparing for deployment to Iraq. The suit seeks class action status and, if certified, could affect thousands of U.S. military personnel who took out loans before deployments to combat zones. The suit also comes on the heels of reports of banks and other lenders violating federal law designed to protect military personnel.
Citibank denies it has done anything wrong and insists that forbearance is a benefit because it relieves soldiers from making payments while on active duty. The bank claims that the unilateral decision to move loans into mandatory forbearance gives service members “additional time and flexibility to repay their debts.”
Forbearance may be a benefit, but it is a benefit that lenders and borrowers should have the ability to negotiate. And the issue in the Citibank case is just that–whether a lender can unilaterally change the terms of a loan when a service member is called up to active duty. In the case of the Minnesotan, she was forced to arrange loan payments from a combat zone and returned from Iraq with a larger debt burden than before she left.
The Minneapolis MN injury attorneys at Lord & Faris support our military personnel and believe every consumer should be given an opportunity to negotiate for the best deal possible, whether for student loans or home mortgages. If you or someone you love has been placed in mandatory forbearance after being called for active duty, contact our offices for a free consultation.
A Minnesota non-profit, the Minnesota Home Ownership Center, is partnering with mortgage lender Fannie Mae in an attempt to help troubled homeowners modify existing mortgages. Fannie Mae will have staff in Minnesota work directly with Minnesota Home Ownership Center to get the application process down to under 30 days for those seeking help.
The move comes in response to the stories of thousands of homeowners who have faced the uncertain prospect of potential foreclosure while they tried to modify their home loans.
The move is also designed to streamline a process that has been criticized as unnecessarily cumbersome and confusing. In so doing they hope to reduce homeowner frustration and confusion, and hopefully the number of people forced out of their homes.
While this is great news for many homeowners, the program will only apply to those loans owned by Fannie Mae. That means that thousands more remain in the challenging and frustrating position of trying to work out a modification with their lender.
The Minneapolis St Paul Foreclosure Lawyers at Lord & Faris have witnessed many Minnesotans struggle to stay in their homes. While the news suggests the economy is improving slowly, for many, this is just too little too late. But if even a handful of homeowners have the opportunity to stay in their homes then at the very least this project deserves our support.
Homeowners who are interested in scheduling an appointment should call the Minnesota Home Ownership Center at 866-462-6466. Assistance is free of charge. Or contact the attorneys at Lord & Faris and let us help you through the foreclosure process.
Just starting out in life, no one imagines themselves having to go through the process of declaring bankruptcy. Yet, as we’ve heard in the the thousands of stories to come out of the recession, bankruptcy is exactly where so many Americans find themselves.
Bankruptcy is always the last resort option when a person can no longer pay their obligations with their current assets. And with so many people just barely getting by, the question of whether or not a person should declare bankruptcy is one the attorneys at Lord & Faris get asked frequently.
Sometimes the answer is obvious: a person is getting notices that their mortgages or other loans are in default and being foreclosed on, they’ve lost their job or been out of work for a long time. Or, just as tragic, they’ve faced a medical emergency and cannot pay for their care and their bills. In those situations bankruptcy is often the only realistic resolution.
But it is important to remember that bankruptcy won’t get rid of all your debts. For example, you can’t avoid alimony and child support payments through a bankruptcy proceeding. Nor can you avoid paying on most student loans and any back taxes by declaring bankruptcy. And while it will give you the option of clearing up most of your financial troubles, it will make accessing credit much more difficult in the future.
At Lord & Faris, we understand that no one dreams of declaring bankruptcy one day and will help counsel you through the difficult legal and emotional process of doing so.
Our thoughts and prayers are with the residents of North Minneapolis and the surrounding area as a deadly tornado ripped through the area leaving hundreds without power and seeking shelter. The devastation was so bad that the city called for a curfew so emergency crews could go out and tend to downed power lines, leaking gas mains and checking on residents.
The damage from the storms is significant and hit an area already devastated from the foreclosure crisis. As we begin to sift through the rubble it is a good time to take stock of what measures can be done to protect yourself in the future from the kind of financial devastation losses associated with large storms can bring.
For starters, if you are a homeowner, make sure your homeowner’s insurance policy is up-to-date. That includes keeping an inventory of all assets and valuables, with pictures, somewhere like a lock-box that can survive significant trauma. Make sure and have copies of other important documents such as birth certificates and passports as well.
These kinds of steps can’t stop a tornado from tearing through a neighborhood and flattening your home, but they can make the unthinkable process of rebuilding after a loss a little less chaotic. Insurance companies are less likely to challenge home-owners claims if the assets of the home are well-inventoried in advance.
When facing the kind of devastation like the kind some of our friends in North Minneapolis are dealing with the last thing you want to do is fight with an insurance company over a claim. Contact the attorneys at Lord & Faris and we can advocate for you while you focus on putting your life back together.
Over the past two years we’ve heard a lot about the drag housing foreclosures have played on economic recovery and the impact of foreclosures not only for individual homeowners but for entire communities. As the economy starts to pick up the last thing we would want to hear is that housing once again threatens to drag the recovery back down.
But according to The New York Times, that may be exactly what happens as banks sit on massive amounts of foreclosed properties and continue to be reluctant to lend to consumers again, despite raking in record profits yet again.
This growing inventory of distressed homes threatens to keep housing prices low which then results in more homeowners ending underwater in their homes and forcing more distressed sales. It’s a downward spiral with only one actor seemingly able to stop the slide: the banks.
Right now experts predict it would take the banks about three years to sell off the glut of their inventory. Given the depth of that inventory homeowners could expect to see property values drop by another 5% at least before the housing market truly stabilizes.
This latest insult really illustrates the depth and the reach of the foreclosure crisis. Many innocent homeowners have found themselves upside down in their home through no fault of their own while bankers did very little to help solve the problem.
Foreclosures can happen to anyone. If you or a loved one is struggling to keep your home, or if you are trying to navigate the foreclosure process, contact the attorneys at Lord & Faris and let us work through that process with you.
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The Law Firm of Lord & Faris is a Minneapolis and St. Paul based personal injury law office that works for individuals and families throughout Minnesota including the following cities: Minneapolis, St. Paul, Plymouth, Burnsville, St. Louis Park, Golden Valley, Edina, Bloomington, Eden Prairie, Eagan, Richfield, Maplewood, Roseville, Brooklyn Park, Maple Grove, Blaine, Lakeville, Woodbury, Duluth, Coon Rapids, Lino Lakes, North Oaks, Stillwater, White Bear Lake, Minnetonka, Apple Valley, St. Cloud, Plymouth, Rochester, Wayzata, Excelsior, Chanhassen, Chaska, Mankato, Marshall, Hibbing, Brainerd.