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Jean Braucher
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Two very different responses to the Times story were published in the letters section today--one from a credit industry lobbyist and the other by former U.S. Solicitor General and Massachusetts Chief Justice Charles Fried, now back at Harvard Law. http://www.nytimes.com/2014/07/26/opinion/two-perspectives-on-subprime-auto-loans.html?partner=rssnyt&emc=rss&_r=0
In a long story in today's edition, the New York Times is reporting a bubble in often deceptive and abusive subprime auto lending on unaffordable terms, including very high rates of interest. Although not quite the threat to the overall... Continue reading
Posted Jul 20, 2014 at Credit Slips
The U.S. Supreme Court has denied a petition for writ of certiorari in Bank of America v. Sinkfield, an 11th Circuit case raising the issue whether a junior lien wholly unsupported by collateral value can be stripped off in chapter... Continue reading
Posted Mar 31, 2014 at Credit Slips
It’s time for us to pick up this story again. Late last week, the U.S. Department of Education finally released an 841-page notice of a new proposed final Gainful Employment Rule (GER) aimed at predatory, debt-laden higher education, particularly at... Continue reading
Posted Mar 18, 2014 at Credit Slips
If you want to understand credit and its abuses, you have to delve into the human heart, in all its weakness and strength, and literature and film are powerful ways to do so. In this observation, I join the growing... Continue reading
Posted Dec 23, 2013 at Credit Slips
Prof. Jonathan Lipson of Temple University School of Law has an interesting post today on the idea of “Relational Reorganization.” Find it over at the ContractsProf blog. He advocates more attention by scholars and lawyers working on debtor-creditor issues to... Continue reading
Posted Aug 28, 2013 at Credit Slips
Prospects do not look good for President Obama’s vastly ambitious initiative (not yet really a plan) to take on growing college debt. Consider that the U.S. Department of Education (DOE) is going into its fifth year, and counting, of efforts... Continue reading
Posted Aug 24, 2013 at Credit Slips
On May 1, President Obama nominated Rep. Mel Watt (D-N.C.) to be the director of the Federal Housing Finance Agency, the conservator for the mortgage giants Fannie Mae and Freddie Mac. These two entities together currently back a large majority... Continue reading
Posted May 8, 2013 at Credit Slips
Congrats to Credit Slip’s Adam Levitin for winning a prestigious honor! Of course, this award is well deserved. The American Law Institute announced today that Adam Levitin of Georgetown Law Center has been awarded its Young Scholar’s Medal. ALI says... Continue reading
Posted Apr 22, 2013 at Credit Slips
It’s National Consumer Protection Week (NCPW)! Federal, state, local, and nonprofit consumer protection agencies and organizations are making extra efforts to promote consumer awareness. First I have to get out of my system thoughts of Tom Lehrer’s song, National Brotherhood... Continue reading
Posted Mar 6, 2013 at Credit Slips
The Consumer Financial Protection Bureau is doing something promising with its anti-abuse authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It is going after credit industry exploitation of consumers, particularly when business models involve using... Continue reading
Posted Nov 21, 2012 at Credit Slips
This is a race discrimination lawsuit. I don't think privity of contract is an element of a cause of action under the relevant federal statutes (and there is also a theory under a Michigan civil rights statute). Even if it were, theories of close connectedness or lender liability might be apt. The allegations are that Morgan Stanley financed New Century, dictated the terms it offered, and then was its leading customer. Also that the terms were worse on a racially disparate basis, controlling for financial characteristics.
Toggle Commented Nov 19, 2012 on Race and the Housing Bubble at Credit Slips
After the robo-signing scandal broke in the fall of 2010, followed by a huge bureaucratic in-fight, a federal interagency review produced the Independent Foreclosure Review Program, announced with great fanfare in April 2011. See here and, here. The program contemplated... Continue reading
Posted Nov 18, 2012 at Credit Slips
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While we wait to see if the second Obama administration will do anything new to help homeowners hit by the lingering mortgage crisis (finally replace Bush-holdover Ed DeMarco at FHFA to make way for debt relief?), there’s time to review... Continue reading
Posted Nov 16, 2012 at Credit Slips
Good times in the economy mean goods times a few years later for bankruptcy professionals who deal with consumer cases. We saw this from the mid-1990s through the 2000s. The last big party in the bankruptcy world was in 2010... Continue reading
Posted Nov 2, 2012 at Credit Slips
Sometimes we forget that, with all its flaws, consumer bankruptcy is still a remarkable institution, providing meaningful relief to more than two million Americans a year (counting co-debtors and dependents). The system’s singular feature is that most individuals can find... Continue reading
Posted Sep 10, 2012 at Credit Slips
The International Monetary Fund has focused its critical gaze on us. Just in time for the holiday marking the end of our colonial period, the IMF has completed its "Mission to the United States of America." See here. The IMF... Continue reading
Posted Jul 3, 2012 at Credit Slips
Mortgage investors and related financial market actors are taking the eminent domain fix seriously. See http://in.reuters.com/article/2012/06/29/mortgage-investors-eminentdomain-idINL2E8HTGIM20120629
Toggle Commented Jun 30, 2012 on Fighting Foreclosure Fatigue at Credit Slips
Folks in Washington tell me there is a general sense of “foreclosure fatigue” in our nation’s capital. It’s just so boring to keep thinking about all the people losing their homes year after year. Can’t we move on to something... Continue reading
Posted Jun 27, 2012 at Credit Slips
I don't think this is about lawyers drafting affidavits as an abuse. Rather it is about lawyers preparing affidavits for line employees to attest under penalty of perjury that they (the employees or "officers") had made investigation and had personal knowledge of facts stated in the affidavits, when the lawyers knew or should have known that the employees had no knowledge and had made no investigation of the facts and were signing hundreds or in some cases thousands of affidavits a day without checking facts to which they were attesting to have personal knowledge.
California Attorney General Kamala Harris has appointed Credit Slip's own Katie Porter as independent monitor for California's part of the national mortgage settlement. The five financial institutions involved in the settlement have committed to provide California homeowners with up to... Continue reading
Posted Mar 16, 2012 at Credit Slips
For those without enough reading after the legal document dump on Monday in the national mortgage settlement (see http://www.creditslips.org/creditslips/2012/03/national-mortgage-settlement-details-posted-on-the-web.html), there's more. Also released Monday were five audit reports about the robo-signing and other abuses in the foreclosure processes of the... Continue reading
Posted Mar 14, 2012 at Credit Slips
HUD denies that borrowers are giving up any direct rights that they have in litigation or under restitution programs run by federal banking regulators. It even says that borrowers can get payments under the settlement and additional compensation if they were hurt more. http://blog.hud.gov/2012/03/12/myth-vs-fact-setting-the-record-straight-about-historic-mortgage-servicing-settlement/ My reading of the B of A consent judgment suggests that private rights of action (rights to sue) have been preserved. Haven't slogged through all five proposed consent judgments yet, but probably the language on this is standard.
So maybe there is a settlement after all. Details have been posted on the National Mortgage Settlement web page today. http://www.nationalmortgagesettlement.com/ I won't try to summarize all this here immediately, but stay tuned for analysis of the good, the bad... Continue reading
Posted Mar 12, 2012 at Credit Slips
I think DBY means to refer to the comparison of credit card debt and student loan debt. In late 2010, student loan debt first exceeded credit card debt outstanding. As for IRB, it isn't available to borrowers under private student loans. These are part of how for-profit schools stay within the 90 percent cap on use of federal higher ed funds for revenue. See http://ssrn.com/abstract=1971735 for more discussion of the for-profit sector. Dischargeability of private student loans needs to be restored to force better evaluation of these loans to begin with. The Department of Education has various programs for struggling debtors under federal loan programs, but once you make the mistake of defaulting, you may not be able to qualify. It is good that we have IRB and other programs, but some people fall through the cracks. Back when student loans were dischargeable after five years, there was no evidence of an abuse problem. Most people prefer paying their debts to bankruptcy if at all possible.