Las Vegas Bankruptcy Law Blog

With so many homes in foreclosure, Nevada is familiar with the frustration borrowers felt with the federal government's response. Lawmakers passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in an attempt to address some of the major complaints. A key provision of Dodd-Frank was the creation of the Consumer Financial Protection Bureau; the new agency would help us avoid another foreclosure disaster.

Since its inception, critics -- for the most part from the financial services industry -- have warned that the CFPB will duplicate the consumer protection and regulatory enforcement activities of the Federal Trade Commission. The authors of Dodd-Frank addressed these concerns in the law by requiring the two agencies to collaborate on enforcement and to promote "consistent regulatory treatment of consumer financial products and services."

We are picking up the discussion about JPMorgan Chase & Co. from our Jan. 14 post. The bank quietly stopped filing collection lawsuits against credit card customers in 2011. For cardholders in Nevada, the decision could mean a chance to catch up on payments and bring accounts current.

Chase has not explained the reason for the moratorium. Industry insiders speculate that the robo-signing scandal on the foreclosure side of the lending business has wound its way into credit card operations. Some consumer advocates say that documentation issues were much worse in the credit card industry; the press just never picked up on it.

Real estate professionals say that home values in Nevada are lower than they should be. In past posts, we have discussed the negative effect of foreclosed and vacant properties on neighborhood home values. At the same time, cities around the country are reporting a shortage of rental properties. The two problems may have one answer, according to the federal government.

Last summer the Obama administration floated the idea of a program that would turn government-owned foreclosure properties into rental properties. The Federal Reserve announced recently that the program should launch early this year.

We talk a lot about the Credit CARD Act and the protections it affords card-carrying consumers. For some Las Vegas residents, though, the act can't help. Having fallen behind on their payments, their unmanageable credit card debt has turned into a collection lawsuit. They are headed for court.

As we've said before, banks want their money back -- be it a credit card, a mortgage or a car loan, banks will find ways to collect what consumers owe. That is why the recent decision by JPMorgan & Chase Co. to drop more than a thousand consumer collection lawsuits surprised both industry insiders and consumer advocates.

A federal court took action last month against two payday loan companies and their owner. The court's order addresses many aspects of a complaint filed by the Federal Trade Commission in March 2010 regarding the companies' collection practices. The companies had included an illegal clause in their loan documents that gave them permission to collect delinquent payments through wage garnishment.

As we said in our last post, the problem went beyond the clause being buried in the loan agreement. Wage garnishment, or "wage assignment," is actually illegal under the FTC's Credit Practices Rule.

When Nevadans are strapped for cash, they may turn to a payday loan company for help. These companies make short-term loans with high interest rates and steep fees, but sometimes the high cost of the loan is easier to live with than the harassment from creditors. More than a few payday lenders have become notorious for unethical or illegal practices, though, and the Federal Trade Commission has worked to put an end to them.

A federal court issued an order in December that will stop two companies and their owner from illegally garnishing borrowers' wages, among other things. The order should resolve a Federal Trade Commission complaint filed in March 2010. The court also fined the defendants almost $295,000 for the rule violations.

We often write about lenders, and it's a safe bet that most of those posts aren't flattering. But today, in the last few hours of 2011, we thought we would share a feel-good story about the miserable housing market. Yes, Las Vegas, there is an upside to the foreclosure crisis, and lenders are the good guys.

Lenders are donating foreclosed properties to charities at a record pace. Bank of America, for example, reported donating 150 homes in 2011; the lender expects to donate 1,200 in 2012. Wells Fargo gave 295 homes to charity last year and more than 1,120 this year.

The term "robosigning" has been discussed in this blog before and the fraudulent action has been cited in a class-action lawsuit by homeowners in Henderson and Las Vegas against the foreclosure company Lender Processing Services, Inc.

In simple terms, robosigning means someone forged a signature - may it be using a false title or a fake name - and then swore to the document's accuracy without verifying the information. In this case it means that foreclosure documents were forged, wherein documents were signed without the proper notaries or witnesses ever being present. The robotic, mass-produced process of these forged documents is where the phrase "robosigning" comes from.