Last week we talked about a NYT article about a bankruptcy professor who has been looking at fees loan services are charging and how she found many of them to be dubious and/or inexplicable. For example, by looking at all the defaulted loans being paid off under chapter 13 bankruptcy, she found millions of dollars of difference between what the debtor thought they owed and what the loan service said was owed. Some of that was due to the insertion of questionable fees, like “fax fees” and “demand fees.” There was a front-page NYT article on it, and now you can download the paper that started it all, Misbehavior and Mistake in Bankruptcy Mortgage Claims (PDF).
The New York Times today took a look at the work of Katherine M. Porter, associate professor of law at the University of Iowa, and bankruptcy specialist. She’s been taking a closer look at the fees that some loan servicers are charging homeowners who are in foreclosure. She’s determined that some of the fees are “questionable.”
In what BusinessWeek calls “financial Night of the Living Dead” credit card companies are refusing to stop reporting legally discharged debt to credit reporting agencies—illegally forcing consumers to pay debts that they no longer owe in order to get approved for mortgages.
Several Democrats proposed a bill last week in the House of Representatives that would allow bankruptcy courts to alter mortgages written by so-called “predatory lenders.” The bill would save around 600,000 Americans from foreclosure, says its author, Representative Brad Miller from North Carolina.
All this talk about OJ Simpson being arrested and charged with a felony reminded us that his memoir went on sale Sep. 13. After the book and tv special were canceled following unprecedented consumer backlash, the rights to the manuscript were transferred to the Goldman family by a Florida bankruptcy court.
The Truth About Mortgage has been compiling a list of mortgage lending layoffs and closures since the end of February and the effect is staggering. The list, last updated today, now has over 250 entries. Anyone looking for a quick and easy way to freak out about the mortgage market need look no further than this list.
Missouri florists have bankrupted a New Jersey telemarketer accused in a class action suit of tampering with phone book listings to siphon callers away from local businesses. The telemarketer, TTP, purchased phone book listings under the same names as local florists, but did not provide an address; the listings appeared side-by-side, but when local callers dialed the number without an address, they were directed to an out-of-state call center that tacked on a handling fee and submitted the order to a different area florist.
“The primary objective of both lawsuits is to get TTP out of Missouri,” said Gregory Leyh of Gladstone, the attorney for both class-action lawsuits. “TTP cheats by pretending to be a local florist so it can fool consumers and steal the legitimate business of Missouri florists. At least for now, TTP is no longer in the floral business in Missouri.”
CBS 13 has the story of a 13-year old kid who saved up his money and bought a pre-paid Amp’d mobile phone from Circuit City. The phone was $100 with a $120 rebate.
Panic! Burn down your house! Ha ha, just kidding. Actually, you shouldn’t let your mortgage lender’s death pangs interfere with your payments, says Gerri Willis of CNNMoney, because your loan will just be sold to another lender. However, make sure you review the details of your mortgage agreement; the terms should remain the same no matter who buys your loan, and you have a 60 day grace period to get your payments to your new mortgage lender.
Amp’d Mobile will shutter its ailing service on July 24th at 12:01 am, meaning that today is the final day to port your number to another carrier. The mobile virtual network operator has worn a giant “Kick Me!” sign ever since it filed for bankruptcy after half of its 175,000 customers failed to pay their bills; securing its fate, Amp’d costs Verizon $370,000 per day and owes the telecommunications behemoth over $56 million. The goodbye text Amp’d sent its customers, and information on porting your number, after the jump.
Verizon Wireless said that as of June 23, Amp’d Mobile had incurred $15.6 million in post-bankruptcy charges and is costing the carrier $370,000 a day, but still has not obtained debtor-in-possession financing that would assure the carrier that its bills will be paid. Verizon Wireless said it has received one payment of $2.5 million, which was supposed to placate the operator and allow Amp’d Mobile to have continued access to its network.
At the time of the bankruptcy filing, Amp’d had already run up $41 million in unpaid bills to Verizon, in addition to the aforementioned $15.6 million.The Pioneer Press reports that Amp’d has about $9,000 in cash. This means that you are likely richer than Amp’d mobile.
Collecting payments from these subscribers proved to be a challenge, however. “Approximately 90% of the debtor’s customers were on 18-month service contracts,” according to the filing. “The debtor began to find a host of credit and collections problems (that) contributed ultimately to a liquidity crisis.” By May, the number of nonpaying customers reached 80,000. That’s nearly half of Amp’d's current customer base of 175,000 subscribers.
Northwest has escaped from bankruptcy, and to celebrate, they are showering their executives with cash. The AP wryly notes that though the airline is shedding court protection from its creditors, it returns “into an industry besieged by higher fuel costs and crowded with competitors.”
Get ready for the rebranding, Delta Airlines has exited bankruptcy and they’ve got $10 million set aside towards making you believe they don’t suck. They’re probably going to paint the planes and do some new advertising. Woohoo! It’s a brand new day! —MEGHANN MARCO
Several plot points in the crash of Comair Flight 5191 point to a staffing shortage at the regional airports that may contributed to the tragedy.
A Delta aircraft crashed yesterday shortly after trying to take off from the wrong, shorter runway. Of the plane’s 50 occupants, only one, the pilot, lived.