Articles Posted in Foreclosure

Could this be the beginning of the end of the Consumer Financial Protection Bureau as we know it?

fair lending enforcementThis month The Trump administration, through acting CFPB Director Mick Mulvaney, announced sizeable restrictions to CFPB’s enforcement and day-to-day oversight of the financial industry’s fair lending practices. The move comes shortly after Mulvaney was installed as Acting Director following the departure of Richard Cordray.

Speculation of the CFPB’s impending dismantlement under the Trump Administration has been swirling since the election and this is just one of the latest in a series of moves pertaining to the CFPB that lends some credence to that speculation.

CFPBThis week, Richard Cordray handed in his resignation as head of the Consumer Financial Protection Bureau (CFPB). The early resignation comes at a time of increased criticism over current financial regulations and an uncertain outlook for many regulatory bodies. The CFPB especially, has been subject of intense criticism from the financial industry as overbearing and stifling.

As Director, Cordray was very much the face and voice of the bureau. Under Cordray, the Consumer Bureau held very close to the guiding tenets under which it was created: to protect financial consumers from unethical behavior. His departure leaves senior officials in the bureau and supporting lawmakers scrambling to secure the future of the CFPB against a regulatory overhaul.

What exactly is the CFPB?

financial deregulationOut of Sight, Out of Mind?

Is 2008 far enough in our rear-view that we’ve already forgotten the same mistakes that brought the financial industry-and U.S. economy-to the brink of collapse? Evidently, it is for banks and policymakers.

You have probably been hearing a lot of talk about impending “reviews” of current financial regulation measures; the very regulations put in place immediately following the aftermath of the 2008 collapse; the very measures that are meant to ensure that kind of thing doesn’t happen anymore. However, these calls for review signal a clear intention for some of a desire for wide-scale financial deregulation.

By Alfred Villoch, III, Esquire, with Savage, Combs & Villoch, PLLC

On November 17, 2014, the United States Supreme Court granted a petition for writ of certiorari in two cases: Bank of America, N.A. v. Caulkett (In re Caulkett), 566 Fed. Appx. 879, 2014 U.S. App. LEXIS 9407 (11th Cir. Fla., 2014) and Bank of Am., NA v. Toledo-Cardona (In re Toledo-Cardona), 556 Fed. Appx. 911, 2014 U.S. App. LEXIS 9035 (11th Cir. Fla., 2014).  In both cases, the United States Court of Appeals for the Eleventh Circuit ruled that a Chapter 7 debtor could strip off a second mortgage when the home’s value fell below the amount owed on the first mortgage.

What that ruling means is, if you file bankruptcy and the second mortgage on your home is completely “underwater,” like many second mortgages after the recent housing bust, then you could keep your house subject to the first mortgage and strip off the second mortgage completely leaving the debt secured by that second mortgage to be discharged in the bankruptcy.  In the Toledo-Cardona case, the debtor kept his home and stripped off the second mortgage that had a value of over $100,000.00.  That is why Bank of America and other lenders are not pleased with the decision.

By Alfred Villoch, III, Esquire, at Savage, Combs & Villoch, PLLC

If you’re a few months behind on your mortgage payments, the bank that loaned you the money to purchase your home (or alternatively, the company that services the loan) will likely file a lawsuit with the intent to sell your house and use that money to pay down your loan.  If the money achieved from the sale is not enough to pay down the entire loan, the bank can still pursue you for the remainder owed or the deficiency.  This process is commonly called foreclosure and the pursuit of a deficiency judgment.

If you file bankruptcy before the foreclosure sale, however, you will get temporary relief from the foreclosure.  Specifically, upon the bankruptcy filing, you will get the benefit of the “automatic stay,” which stays all actions of your creditors not brought before the federal bankruptcy court, and this will include the foreclosure action.  It is important to understand that this stay is often times only temporary and will depend on how active your bank is in pursuing the foreclosure.

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