California Bankruptcy Attorney Blog

A report by a construction workers' union accuses the home building industry of contributing to the mortgage crisis with illegal practices that trapped thousands of buyers in mortgages they couldn't afford. Authored by the Alliance for Home Builder Justice, a project of the Laborers' International Union of North America, "Cruel Hope: The Abusive Practices of Corporate Homebuilders and Their Mortgage Subsidiaries in California" says home builders steered buyers toward lenders that the builders either owned or were affiliated with. Then, the report alleges, buyers were offered expensive loans that they could not afford in many cases. It also notes that lender Countrywide KB Home Loans has been accused in multiple lawsuits of inflating home prices.

The report describes practices at major home builders that put strong pressure on buyers to use the builders' own mortgage lending divisions. Two builders actually require buyers to apply to their own lenders; buyers are free to apply elsewhere, but if another lender does not meet their deadlines, the buyers lose thousands in deposit money. Another charges high late fees and bans the use of government homeowner assistance programs. The builders also entice customers by promising to pay closing costs and other fees, but many buyers seem to receive little of value in return, the report said. Meanwhile, the report said, at least one builder was pressuring appraisers and executives to inflate the value of homes, increasing profits but leaving homeowners "underwater."

Meanwhile, buyers were steered into adjustable-rate and subprime mortgages in record numbers. For example, subprime mortgages originated by lender Lennar made up 2 percent of all of its loans in San Bernardino and Riverside Counties in 2004; in 2006, that rate ballooned to 31 percent. Builder Pulte saw a 91 percent increase in prime loans between those two years, but a staggering 1,832 percent increase in subprimse loans. Even buyers who qualified for a prime loan were offered "piggyback" loans in which the second, smaller mortgage was adjustable-rate or subprime. When the subprime market collapsed, the lenders moved to Federal Housing Administration loans, which are federally insured. Now, the report says, the default rate for these FHA loans originated by builders is higher than average for seven of California's ten largest home builders.

The Alliance ends its report with a call to end builders' ability to issue their own mortgages, contending that this allows collusion, inflation of home values and ultimately contributed to the mortgage crisis. It called for passage of the federal bankruptcy "cramdown" provision and California's AB 1534, which would ban the practice of builders originating their own mortgages. As Fountain Valley loan modification lawyers, we agree on both counts. Mortgages are so complicated, and so rare an event in most people's lives, that most buyers simply aren't equipped to fully understand how the process works and what they are being offered. This puts lenders and others in a position to exploit them -- and it has become increasingly clear that some are more than happy to do so.

Anaheim-based Howard | Nassiri LLP has an active practice negotiating loan modifications on behalf of homeowners. More and more, our Costa Mesa loan modification attorneys are hearing from clients who have tried to negotiate a loan modification on their own, only to be ignored, endlessly transferred or offered a meaningless modification that wouldn't help protect their homes. Our Stanton mortgage loan modification lawyers can help by negotiating aggressively on your behalf, using any evidence of predatory lending practices as leverage to get the bank's attention fast. We have been successful at converting subprime and adjustable-rate mortgages to conventional structures, lowering interest rates and making other major changes that lowered our clients' monthly mortgage payments.

If you're facing default or foreclosure in Southern California and you're ready to take action, please contact Howard | Nassiri today for a free, confidential consultation on your case and your options.

The House of Representatives is considering a bill to ban yield spread premiums, a common mortgage industry practice that critics believe gives mortgage industry insiders an incentive to exploit borrowers. According to HousingWire.com, the bill would ban compensation for mortgage brokers, loan officers or other loan originators, when the payment is based on the terms of the loan other than the principal. The goal is to stop the practice of paying loan originators more for bringing in loans with higher interest rates; brokers and others could still earn other forms of compensation. Industry insiders differ on whether the bill bans all yield-spread premiums or just some, but agree that it would substantially drive down the number of loans originated by third parties.

A yield spread premium is, in short, money a lender pays to a loan originator for making deals at higher interest rates than the borrower might otherwise qualify for. This might be easiest to explain with an example. Let's say the lowest interest rate a couple qualifies for is 6.5% -- but a mortgage broker offers them a loan at 7%. Setting the higher rate earns the broker a yield spread premium payment, calculated using the 0.5% difference between that lowest rate (called a par rate in the industry) and the interest rate the borrowers actually agreed to pay.

Yield spread premiums are a standard industry practice, and they are not necessarily wasted money. Mortgage brokers exist to help inexperienced borrowers land better deals than they might be able to find on their own and guide them through the paperwork and requirements. However, because the system pays more to loan originators when the yield spread premium is higher, it gives them an incentive to steer borrowers to higher rates. A yield spread premium on a high-cost "subprime" loan can be four or more times the size of one on a conventional prime loan. And mortgage brokers have no fiduciary duty to their clients, which means unethical ones are free to lie or mislead.

Borrowers who have no special real estate knowledge may not even realize that the yield-spread premium exists, or that they might qualify for a lower rate than they're offered. As with so many other aspects of the mortgage lending industry -- ethical and unethical -- this practice depends on borrowers' lack of understanding of the mortgage lending system. That's why, as Orange predatory lending attorneys, we like this bill. If the system gives people a financial incentive to exploit their clients but no accountability, dishonest people are going to appear -- and have already.

Borrowers should not have to have the knowledge of mortgage industry insiders to protect themselves from fraud and predatory practices. But if you believe you were lied to or misled when you took out a mortgage or refinanced your home, Howard | Nassiri LLP can help. Our Anaheim predatory mortgage lending lawyers represent homeowners who were locked into loans with undisclosed terms or fees, pushed into loans they didn't need or outright lied to. We can help you negotiate with your lender for a mortgage loan modification or, if necessary, take a predatory lender to court to nullify your loan and recover all of the illegal payments. To set up a free, confidential consultation with our Santa Ana predatory lending lawyers, please contact Howard Nassiri online or call us toll-free at 1-800-872-5925.

Mortgage defaults are at a record high in California, but actual foreclosures are relatively low, the Los Angeles Times reported April 23. The Times reported numbers from MDM DataQuick, which said notices of default in California (the first step in a foreclosure) were up 80 percent in the first three months of 2009, as compared to the last three months of 2008. However, during those same periods, foreclosures dropped six percent for the first three months of 2009. Foreclosures dropped by 7.6 percent over the same period last year, the Times said, but defaults increased by 19 percent.

Experts in the article pointed to multiple reasons why these defaults are not proceeding shortly into foreclosure. Some of it has to do with legal action -- a California state law has delayed lenders' action on many defaults, while private lenders, Fannie Mae and Freddie Mac had temporarily suspended foreclosure actions during the early part of the year. (The latter two agencies began foreclosures again in April.) And lenders are so busy dealing with existing foreclosures that they may not have the time or personnel to take action on newly defaulted loans. Meanwhile, the bad economy and high unemployment may have contributed to the rise in defaults, the newspaper said.

Also a possible contributor is the fact that many lenders refuse to talk to homeowners about their financial problems until after the homeowner is in default, the article noted. One Southern California homeowner said her lender ignored her calls until she stopped making payments -- and was suddenly offered multiple options. This is a sad story that we hear all the time through our work as Buena Park mortgage loan modification lawyers. Again and again, we hear from clients who have been ignored by their lenders until they were forced into default -- or outright told by the bank to stop paying. This might get the bank's attention, but it also means unnecessary damage to the homeowner's credit -- and sometimes a risk of foreclosure.

Howard | Nassiri LLP offers an alternative. Our Hawaiian Gardens loan modification attorneys negotiate with lenders for substantial changes to our clients' loans -- no matter where in the default process our clients are. Because we are attorneys, we have both the negotiating expertise and the legal knowledge to effectively bargain with lenders. In fact, banks may pay more attention to our clients simply because they think the involvement of an attorney means a possible lawsuit -- and nobody likes to be sued. If appropriate, our Cypress loan modification lawyers can even use evidence of predatory lending or rights violations by the bank as leverage to get clients a meaningful loan modification that keeps them in their homes and out of financial trouble.

If you're frustrated after months of fruitless attempts to talk to your lender about a loan modification, Anaheim-based Howard | Nassiri would like to help. To set up a free, confidential consultation, please contact us online or call us toll-free at 1-800=872-5925.

The Los Angeles Times gave us relief from bad news about the mortgage crisis March 17 with an article on research suggesting that mortgage fraud is dropping in California and Nevada. The research said California's rank among states with the highest rate of mortgage fraud has dropped from fourth to eighth in the past year, and Nevada dropped out of the top 10 altogether. The study tied the drop to the establishment of an FBI task force to fight the fraud in Southern California. Released at the Mortgage Bankers Association's annual meeting in Las Vegas, the report was compiled by information broker LexisNexis.

The report's definition of mortgage fraud included lies on loan applications; falsified financial documents; and deceptions in other documentation like appraisals and income statements. In every case, the article said, a real estate professional such as a mortgage broker or a banker was involved in the fraud. As Irvine mortgage loan modification attorneys, we're pleased to hear this detail, because it helps to refute the common myth that bad decisions and irresponsibility by homeowners are chiefly responsible for the mortgage crisis. In reality, we believe people in every part of the mortgage lending industry have some responsibility.

Unfortunately, while the rate of mortgage fraud has gone down in California, there's still plenty left. The report notes that the "credit crunch," which makes loans hard to get, has driven many con artists away from purchase-related scams and into foreclosure prevention scams. Typically, foreclosure prevention scams involve taking a homeowner's money in exchange for a promise to help -- then disappearing, selling the home or draining the homeowner's equity. Banks may be more careful now that the economy is bad, but as Costa Mesa predatory lending attorneys, we know it still happens every day.

Howard | Nassiri's Placentia loan modification lawyers help homeowners at risk of foreclosure negotiate with their banks for changes to their mortgages. We have successfully changed the interest rates, loan length or even the principal owed for many homeowners, allowing them to catch up to payments and avoid foreclosure. And our Orange County predatory mortgage lending attorneys help clients sue lenders whose unfair and deceptive practices have locked them into loans they can't afford and never intended to agree to. If you're in this situation and you know you need help, Howard | Nassiri offers free, confidential consultations where you can learn more. To set one up, please contact us today.

As Orange loan modification attorneys, we were struck by two April 14 articles illustrating the difficulties that homeowners face in trying to negotiate a loan modification themselves. One, which appeared on CNN.com, revealed that many homeowners have called their banks, only to face hourlong hold times, runarounds from person to person, automated recordings or instructions to call back endlessly. Part of the problem is that lenders are swamped with loan modification calls, the article said -- but that's little comfort to people who have lost their homes and their good credit. One Los Angeles woman in the article ended up filing for bankruptcy after extended efforts to save her home did not help. Another, a single mother, is about to lose her home in an auction after six months of efforts to negotiate a loan modification.

The other story focuses on the bad communication between Escondido homeowner Elba Coronado and her lender, Countrywide Financial. According to the North (San Diego) County Times, Countrywide settled a predatory lending lawsuit last year with a promise to modify hundreds of thousands of alleged predatory loans. Coronado's was not such a loan, but it halted her foreclosure anyway -- and didn't call her or the real estate agent she was working with to save the home. Coronado had already moved out in hope of avoiding eviction, so even though she technically still owns the home, it has been empty for months. The real estate agent and a professor at the University of San Diego both told the paper that this miscommunication was the norm for loan modifications.

These sorts of basic communication problems are exactly why many clients turn to our Fallbrook loan modification lawyers for help. Over and over, we hear from clients that they're getting no help and little communication from their lenders, who might pass them from person to person, ignore multiple messages or even refuse to discuss changes to a loan until they're in default. We can get better results in part because we understand the law and your rights -- which means we can use lenders' legal violations and mistakes as leverage to open real negotiations. We believe another part of our success simply stems from the fact that we are Southern California mortgage loan modification lawyers, which reminds banks that we can and will sue them if that's what it takes to protect our clients' rights.

If you've faced months of silence, miscommunication or worse from your lender and you need to take action, Howard | Nassiri LLP can help. Based in Anaheim, our firm has an active practice negotiating with lenders to substantially change the terms of our clients' loans. With the goal of lowering monthly payments to a sustainable and reasonable amount, we negotiate aggressively to change interest rates, restructure non-traditional loans, extend the life of the loan and more. To set up a free, confidential consultation about how we can help you, please contact Howard | Nassiri online today or call us toll-free at 1-800-872-5925.

A deal brokered with mortgage lenders by California Gov. Arnold Schwarzenegger resulted in 136,785 mortgage loan modifications in 2008, the Sacramento Bee reported March 10. The loan workouts were reported by lenders who voluntarily agreed to increase their efforts to change home loans, in an effort to keep more Californians out of foreclosure. The governor said he was pleased with the number of modifications they reported, which was higher than his 100,000-workout goal. California still saw many more foreclosures in 2008 -- 237,131 -- than workouts, but the Bee said loan modifications gained on foreclosures by the end of the year, perhaps showing lenders' increased willingness to negotiate.

However, as Whittier mortgage loan modification attorneys, we can see that not all of the news here is good. The article says 58% of the loan workouts were cuts to homeowners' interest rates, while other heavily used tools were short sales and temporary forbearances. Fewer than 1% of the workouts involved reductions in the loans' principal, which experts believe is an essential tool for keeping substantial amounts of homeowners in their homes. Nearly a third of California homeowners are underwater, which means they owe more than their homes are worth, and can't refinance. Without reductions in principal, they may be truly unable to keep up payments.

At Howard | Nassiri, our La Mirada mortgage loan modification practice focuses on helping clients negotiate a meaningful loan workout that lowers their payments to an amount that keeps them out of foreclosure. Agreeing on a lowered interest rate is one of the tools in our arsenal -- but if the lower interest rate doesn't result in a substantially lower payment, it's not worth much. That's why we argue strongly for principal reductions in situations where they're appropriate, including many cases of "exotic" or subprime mortgages.

Howard | Nassiri LLP has had substantial success ending the most damaging provisions of adjustable-rate and negative amortization mortgages. In addition to negotiating for lowered principal and lower interest rates, our Tustin loan modification lawyers can help you extend the life of your loan or change the type of loan you have. We also file Orange County predatory lending lawsuits on behalf of clients who have been illegally trapped into mortgages they can't afford. If you're ready to talk to a lawyer about how you can fight for your home, we would like to help. To set up a free, confidential consultation today, please contact us online or call us toll-free at 1-800-872-5925.

Thanks to the bad economy, we have done a lot of work in loan modifications lately at Howard | Nassiri LLP. Our Buena Park loan modification attorneys have heard a lot of horror stories from clients who come to us after trying to negotiate their own loan modification without professional help. Many of them say they were ignored or given the runaround by their lenders, despite repeated calls. Others told us that they did get loan modifications -- but the proposed changes would actually have left them worse off than before. And some have even told us that one branch of the bank was foreclosing on their homes while another was negotiating a loan workout with them. It's only after they hire our Lakewood loan modification lawyers that they manage to cut through this bad communication and get changes to their loans that actually help them avoid foreclosure.

That's why CNNMoney's recent series of profiles on real-life homeowners facing foreclosure struck a chord with us. Entitled "Tough Workouts," the series details some of the difficulties faced by homeowners who took the bank's advice to try working out a loan modification themselves. It starts with the story of the Wright family in Las Vegas, who were told to go into default before they would be granted a workout. Sue Wright stopped paying the mortgage, then applied for and received a loan modification that lowered her interest rate -- only to have it rescinded because investors wouldn't approve it. Wright's mortgage had been securitized, but she didn't even know it until the workout was rejected. With home prices dropping and sales stagnant in Las Vegas, the bank stands to lose $200,000 if it forecloses on the Wrights, who have lived in their home for 15 years.

Another profiled homeowner was Raul Medina of New Jersey, a minister and former landscaper who was wheelchair-bound in an auto accident and can no longer work. Medina purchased his own home as well as another that his church uses as a homeless shelter. Friends trying to help Medina got bounced from department to department and given conflicting stories for nine months. When they offered the bank a short sale, it delayed its response for six months and the deal fell through. An offer from an insurer to modify his home to accommodate his wheelchair also fell through after the bank refused to offer any loan modification at all. With his income down, Medina is at risk of losing his home because he cannot get current on his mortgage payments.

A third profile focused on retirees Pati and Richard Kays of Florida. Richard Kays has a rental property in California with an adjustable-rate mortgage. When its interest rate reset, he could no longer make the payments. He contacted his lender to work out a loan modification -- only to be told he's not distressed enough to qualify. And because he lives off a pension and Social Security, he was told he didn't qualify for a refinancing either. He is now trying to sell the couple's Florida home to pay off the California mortgage, but the market there is so bad that even a $200,000 price drop has not attracted a buyer.

Lenders and many media outlets tell homeowners they don't need professional help getting a loan modified -- but as these three homeowners can testify, that's not quite true. Our Garden Grove loan modification attorneys specialize in helping homeowners break through that red tape and get modifications that allow them to stay in their homes. We understand your legal rights, and we understand how lenders may have violated those rights -- evidence we can use to get them to pay attention. And because we are lawyers, lenders that don't want to be sued frequently change their attitudes about negotiating a loan workout once we are on the job.

If you're trying to negotiate a loan workout with your lender and you've run out of options or patience, Howard | Nassiri can help. To set up a free, confidential consultation on your case, please contact us online today or call us toll-free at 1-800-872-5925.

Consumer bankruptcies were 29% higher in February of 2009 than they were in the same month in 2008, CNNMoney.com reported March 4. The numbers come from a study by the American Bankruptcy Institute, a nonpartisan group. The February rate of bankruptcies also surpassed the January rate by 11%, a sharp rise from the previous month. The ABI said it estimates about 1.4 million bankruptcy filings this year, which would be an increase over 2008's total of 1.06 million filings. And that projection could be even higher, a spokesman said, if Congress passes bankruptcy reform laws widely expected to increase consumer bankruptcies.

Interestingly, the report showed that Chapter 13 filings actually went down slightly between January and February, decreasing by 2.6%. Because the overall rate of bankruptcies was still high, that must mean an even greater spike in filings for the other major type of consumer bankruptcy, Chapter 7. Chapter 7 is a "liquidation" bankruptcy, in which debtors sell off all their assets under court supervision and have the remainder erased. By contrast, Chapter 13 is a "reorganization" requiring debtors to make payment plans with the court and stick to them over three to five years.

This is remarkable to La Habra bankruptcy lawyers like us because recent bankruptcy reform efforts encourage people to file for Chapter 13. The 2005 federal bankruptcy reform law bars people with higher incomes from filing for Chapter 7 unless their expenses are high, effectively pushing more filers into Chapter 13. The goal was to stop abuses by people who could afford to pay some of their debts -- but the effect, according to bankruptcy law experts, was to force people into payment plans they couldn't afford. The upswing in Chapter 7 filings suggests that recent bankruptcy filers have below-average incomes, above-average expenses, very high amounts of unsecured debt or some combination of those problems.

As Yorba Linda bankruptcy attorneys, we know how desperate our clients feel when they're in these situations. But there is an upside: Qualifying for Chapter 7 means you can finish your bankruptcy much more quickly than a Chapter 13 filer could. At Howard | Nassiri LLP, we start every bankruptcy case by helping our clients figure out which type of bankruptcy -- if any -- is right for their situations. If it's appropriate, our Stanton debt settlement lawyers may be able to help clients control their debt without taking the drastic step of bankruptcy.

If you feel like you're drowning in debt and you're ready to explore your legal options, Howard | Nassiri can help. To set up a free, confidential consultation on your case, please contact us online or call us toll-free at 1-800-872-5925.

Bank of America has changed its rules on short sales in an attempt to avoid financial losses on foreclosed homes. According to an April 21 article in financial-industry publication Financial Planning, BofA and its recently acquired Countrywide division once would not approve sales in which 10% of the price did not go toward paying off home equity lines of credit. That changed last month, a spokesperson said. The lenders will now accept payment of 5% of the purchase price when there is no equity available to lienholders. The goal is to save money on foreclosures, the article said, which can cost up to 30% more than short sales and have glutted the housing market already.

A spokesperson for the lenders, Terry Francisco, said the previous policy "set an arbitrary amount that did not take into account the savings derived from proceeding with a short sale." As Placentia loan modification lawyers, we believe this statement captures one of the biggest problems facing our clients who are at risk of foreclosure. Foreclosure is expensive for the lender and ruins the homeowner's credit, so it seems logical that both parties would be interested in alternatives. However, until recently, banks have resisted them because they mean a loss and can be difficult to negotiate with all lienholders. We hope this change leads the way for other banks to revise their own policies.

In a short sale, the lender agrees to sell the house for less than the homeowners owe on their mortgage. The lender still takes a loss, but it typically gets back more money than it would if it had to foreclose on the property. The homeowners, for their part, must give up the home but are freed of any further financial liability and avoid the serious credit consequences of a foreclosure. For those reasons, short sales are best when it's clear that the property will end up in foreclosure either way -- unfortunately, a situation that thousands of Americans are facing right now. For procedural reasons, this can take months -- but with lenders in a tight spot right now, we hope that will soon change.

Howard | Nassiri LLP's Stanton loan modification attorneys specialize in helping homeowners in these tight situations make the best possible financial move. If you've been trying to get a short sale or loan modification approved by your lender, only to run into endless red tape, we can help. Our Orange loan modification lawyers negotiate aggressively with lenders, using any evidence of predatory lending or other legal violations as leverage to get their complete attention. We have been successful changing the interest rate, repayment terms and sometimes even the structure of our clients' loans.

If you're at risk of default and you know you need help negotiating a meaningful change to your loan, you should call Howard | Nassiri as soon as possible for help. To learn more about us and your rights at a free, confidential consultation, please contact us online or call toll-free at 1-800-872-5925.

The New York Times recently ran an article exposing an unintended consequence of the federal bailouts of mortgage lenders -- extra problems for victims of mortgage fraud. People who were deceived into making bad mortgages are now facing roadblocks from federal regulators who took over their lenders, the article said, who don't always believe their claims that they were misled or outright lied to. As a result, some of these homeowners face default and repossession when they cannot make payments on the fraudulent mortgages.

The article centers on Brooklyn homeowner Waver Brickhouse, a retired mother of four. Brickhouse had trouble making her mortgage payment in 2005, so a neighbor connected her to an organization called Home Savers Consulting. Brickhouse said Home Savers told her it would refinance her mortgage and use the proceeds to make payments for a year, giving her time to catch up financially. Instead, it sold the house to a "straw buyer," who allowed Home Savers to draw out $150,000 in equity. The mortgage was provided by IndyMac bank, which was later taken over by the Federal Deposit Insurance Corporation.

IndyMac had an agent at a crucial meeting, Brickhouse's predatory mortgage lending lawyers argue, and knew it was helping commit mortgage fraud. The lawyers argue that the fraudulent contract is worthless, which means Brickhouse shouldn't be held responsible for payments on the refinancing deal. But the FDIC has not agreed, even though the straw buyer in this fraudulent deal has sworn to an affidavit saying Brickhouse had no idea what was really happening. The FDIC has even retained a defense lawyer in the case.

As Westminster mortgage loan modification lawyers, we are less surprised than we could be that the FDIC refuses to commit to helping Brickhouse. Thanks to many months of trying to help homeowners caught up in the foreclosure crisis, we know that each new layer of bureaucracy attached to a loan makes it harder to change that loan in a meaningful way. Each organization with a financial interest in the loan has a profit to protect -- and substantial changes to the loan could hurt that interest, or expose one part of the chain to lawsuits from another. Federal regulators are not supposed to have this profit motive, but banking bailouts make them the de facto leaders of a formerly private business, responsible to customers.

Howard | Nassiri's Southern California predatory mortgage lending attorneys are proud to help people like Brickhouse hold exploitive lenders responsible for their illegal actions. We represent homeowners in lawsuits over violations of the federal Truth in Lending Act and many other California and federal laws requiring honest dealing. If you believe you were lied to when you bought or refinanced your home, especially if you have an "exotic" or unnecessary loan, you may be a victim. To learn more, we invite you to schedule a free, confidential consultation with our Garden Grove predatory mortgage lending lawyers. To set one up, you can call us toll-free at 1-800-872-5925 or contact us online.

The financial industry is fighting with Senate Democrats over legislation that would authorize bankruptcy judges to "cram down" home loans, the Washington Post reported April 21. A similar bill passed in the House of Representatives in March, but has stalled in the Senate due in part to fierce resistance from the financial industry. According to the article, some of the nation's largest lenders were in talks with Sen. Dick Durbin (D-Ill.) throughout the recent two-week Congressional recess. President Obama has called the measure an important part of his foreclosure prevention efforts.

In a "cramdown," a bankruptcy judge handling a Chapter 13 individual bankruptcy reduces the principal homeowners owe on their primary home's loan -- not just their interest rate or other terms. Judges have not had that power since the late 1970s, although they may cram down the principal on many other kinds of debt, including mortgages on vacation homes, vehicles and boats. The financial industry strongly opposes this bill, in part because it would almost certainly reduce revenues for mortgage lenders. They also argue that the bill would harm the troubled housing market further and encourage homeowners to file for bankruptcy unnecessarily.

Observers expect the Senate bill to undergo major changes from the House version before it can be passed. Proposed changes mentioned in the article include an expiration date in 2014 and a requirement that homeowners consider a loan modification before a cramdown can be authorized. Democrats have already bundled it with an unrelated measure that would lift the cap on how much credit unions may lend to small businesses, and some are considering linking it to an increase in FDIC buying authority. Supporters hope to vote on the bill by late May, the article said.

As Westminster loan modification attorneys, we strongly support cramdowns because we believe they would encourage lenders to find voluntary loan workouts -- which would avoid the need for bankruptcy in the first place. Lenders say they want to modify loans, but when borrowers call, most of them are ignored or passed from person to unhelpful person. Those who do get modifications don't always end up with lowered mortgage payments; some actually end up paying more than before and wind up right back in default. With the possibility of a cramdown facing them, lenders have a strong incentive to offer loan modifications that could keep homeowners out of foreclosure.

Howard | Nassiri LLP has an active mortgage loan modification practice, negotiating with lenders for substantial, meaningful changes to our clients' mortgages. Our Cypress loan modification lawyers use negotiating skills, legal knowledge and any evidence of predatory lending to convince lenders that changing the terms of your loan is in their best interests as well as in yours. We have helped many clients win changes to the structure of their loans, their interest rates, repayment terms and other features. Our goal is always to leave you with a lowered monthly payment that enables you to stay in your home.

If you're behind on your mortgage payments, or will be soon, and you know you need help convincing your lender to listen, you should call Howard | Nassiri as soon as possible. Based in Anaheim, our Orange County loan modification attorneys represent people throughout Southern California. To set up a free, confidential consultation, you can contact us through our Web site or call 1-800-872-5925.

Home values in Orange County rose in March for the second month in a row, the Orange County Business Journal reported April 15. The median price of a home in our county is now $390,000, a 4% increase over February's numbers. The number is still down 23% from March of last year, the newspaper said, but sales rose -- up 45% from last year and 28% from February. A big part of the change was sales of homes that went into foreclosure, which made up 55% of all sales in Southern California.

On the same day, the Orange County Register's Mortgage Insider blog reported that foreclosures are down in OC and all of California. According to ForeclosureRadar.com, Orange County foreclosures in March were down by 40% from March of last year and 50% from February. However, notices of default -- the first step in the lengthy foreclosure process -- actually rose 58% from February to March, suggesting that more foreclosures are on their way. Blogger Mathew Padilla wrote about several laws and proposed laws that may be driving the drop in foreclosures and sharp rise in notices of default.

Our Westminster loan modification lawyers see the same sad cause behind both developments: the ongoing mortgage crisis. Home sales and home prices are up -- but more than half of those sales were foreclosure sales. Meanwhile, foreclosures are down. That sounds like a good thing, but part of that drop is probably attributable to the glut of foreclosed homes already on the market, which makes foreclosing on more homes even less attractive to lenders. As we have written here many times, foreclosure is expensive for banks, which lose money on their investments and must pay legal and maintenance fees. With home prices down and lots of foreclosed properties competing for buyers, it's getting even less attractive. It wouldn't be surprising to find that banks are more interested in finding a loan workout than ever.

As Anaheim loan modification attorneys, we hope so. A large part of our work is helping clients who are at risk of default -- or foreclosure -- negotiate with their lenders for loan modifications. Since the mortgage crisis began, it has become clear that some lenders are very reluctant to consider changing a loan, even when it could save them money in the long run. In addition to concerns about short-term profit, many of these banks have policies in place that forbid them from negotiating until the homeowner is in default. Others may have bundled mortgages and sold them as securities, which means the loan now has many owners who could sue the bank for reducing the value of their investment. The result is more foreclosures, less profit for the bank and shattered credit and dreams for the homeowners.

If you're one of the thousands of Southern Californians with this problem, Howard | Nassiri may be able to help. Our Placentia loan modification lawyers aggressively negotiate with lenders to get real changes to our clients' loans. We have successfully lowered interest rates; changed repayment periods and made other major structural changes to our clients' mortgage loans. Our goal is always to make your monthly mortgage payment affordable, so you can keep your home and stay out of serious financial trouble. To set up a free, confidential consultation with Howard | Nassiri today, please call us toll-free at 1-800-872-5925 or contact us online.

Obama Administration officials believe a lack of strong federal regulation in the financial industry helped create the financial crisis, the Los Angeles Times reported April 17. In a news analysis, the newspaper took the case of Orange-based mortgage lender Ameriquest as an example of the problems with leaving large parts of the financial industry without a watchdog. Ameriquest was the lead originator of "subprime" loans when, in 2006, it settled a national class-action lawsuit alleging that it preyed on consumers by falsifying loan documents and misleading borrowers. But the federal government was not involved in that $325 million settlement -- because Ameriquest hadn't broken any federal laws.

One problem was that Ameriquest, and mortgage lenders like it, were not banks or savings & loans -- and thus, they were not subject to federal banking laws. Federal regulators also left their partners, the Wall Street firms that "securitized" mortgages, almost completely unregulated. Insurance companies such as AIG then insured the mortgage-backed securities -- and as we now know, failed after waves of homeowners defaulted and made the mortgage-backed securities worthless.

In the absence of federal regulation, state regulators did have authority over mortgage lenders and insurance companies. However, the article says, state regulators generally focus their efforts on the consumer end of the mortgage lending business. This can do lot of good for victims of predatory lending -- but it doesn't do anything to police the "back end" of mortgage lending, where securitization takes place. The result, as our Santa Ana predatory lending lawyers can testify, was a strong incentive for lenders to pass on all of the risk to investors. With no risk, lenders were free to write as many risky loans as they wanted, creating short-term profit but ultimately triggering some of the financial problems we now face.

At Howard | Nassiri LLP, our La Mirada predatory lending attorneys start every case by looking for evidence that our client was lied to or misled during the original home-buying process or during a refinancing. Unfortunately, the complexity of the mortgage lending process makes this all too easy for an unscrupulous lender to do. Lenders and brokers may fail to disclose important terms of loans; inflate the values of homes; add massive fees; or mislead an inexperienced first-time buyer into agreeing to terms that he or she cannot possibly meet.

If you are a victim of this sort of deceptive mortgage lending practice, you have rights --and Howard | Nassiri can help you enforce them. In a Southern California predatory lending lawsuit, you can get the loan nullified and win back all of the payments you made on the deceptive loan. In many cases, we can also use evidence of predatory lending to help you negotiate a loan modification that allows you to stay in your home. And we offer free, confidential consultations, so there's no risk in speaking with us about your rights and your case. To set one up, please contact us online as soon as possible or call us at 1-800-872-5925.

In an editorial published March 7, the New York Times called for substantial changes in federal banking regulations. Most notably, the Times suggested a repeal of a 2004 decision by federal regulators that federal regulations pre-empt state laws for nationally chartered banks. As a result, those banks were freed from complying with state predatory lending laws stricter than their federal counterparts. The Times noted that the worst of the subprime and nontraditional loans" were issued in 2006 and 2007, after this decision. Banking law experts have already called for a repeal of the pre-emption decision.

The Times goes on to say that no part of the mortgage lending chain is blameless in the mortgage lending crisis, something we've certainly seen as Fountain Valley predatory mortgage lending attorneys. Rather than put all of the blame on homeowners, the editorial said, observers should understand that this is a systemic problem with the financial industry. Looking for a quick profit, lenders, mortgage brokers, appraisers and others colluded to sell people homes they couldn't really afford or set up situations requiring endless refinancing. In many cases, this led to outright deceptive lending -- something that tighter state laws could have prevented, at least in their own states.

Conservatives may be surprised to see the Times taking what could be described as a states' rights position, but as Orange predatory mortgage lending lawyers, we applaud. Events in the past several years have made it clear that federal law is insufficient to protect trusting people from mortgage fraud. Here in California, state consumer protection laws are generally stricter than their federal counterparts. If the federal government can't or won't strengthen its laws to catch up, we support using stricter state laws to ban unfair loan structures or lending practices.

Fortunately for victims, they may still sue over violations of federal and state lending fraud laws whenever they can show those laws have been violated. The Tustin predatory mortgage lending attorneys at Howard | Nassiri LLP represent clients like these in lawsuits over violations of the Truth in Lending Act, the Homeownership and Equity Protection Act and other laws. In many cases, we are able to stop foreclosure, have a predatory loan declared void or adjust our clients' payments to levels they can afford. If you're having trouble paying your mortgage and you believe you were lied to when you refinanced or bought your home, we can help. Contact Howard | Nassiri today to learn more at a free, confidential consultation on your case.

Our Anaheim Hills mortgage loan modification lawyers get far too many calls from homeowners who have fallen victim to foreclosure prevention scams. That's why we were pleased to see a San Francisco Chronicle article March 15 warning homeowners about the scams, some of which now rely on the name of President Barack Obama to make their case. As we've written here before, the president's foreclosure prevention plan includes provisions to help homeowners negotiate a loan modification with their lenders, as well as provisions to make refinancing more achievable. Scammers are using those features to pitch their services, which are mostly designed to separate desperate homeowners from their money.

The scammers generally tell homeowners that they will renegotiate mortgages on their behalf, lowering their monthly payments, in exchange for thousands of dollars in fees. At best, these organizations then perform services that homeowners could easily handle themselves or do forensic loan audits that don't help much. At worst, the scammers get legal access to the property and use it to steal the home outright or help themselves to the homeowners' equity. The newspaper cautioned readers not to trust any organization that requires up-front fees or suggests that you pay the mortgage to it rather than the lender.

As legitimate Yorba Linda loan modification attorneys, we help clients fight scammers whenever we can with predatory lending lawsuits. Unfortunately, this new foreclosure prevention industry is not regulated, so merely giving you nothing of value for your money is not illegal or actionable -- although taking homeowners' money and doing nothing at all is theft. As the newspaper noted, homeowners who want to check up on a company can check real estate professionals' licenses with the state Department of Real Estate, and make sure California loan modification attorneys are legitimate at the State Bar of California's site. Homeowners can also set up a free counseling session with a counselor approved by the federal government.

At Howard | Nassiri LLP, our Brea mortgage loan modification lawyers provide real help to our clients by bringing a lawyer's skills and experience to the negotiating table. Attorneys are professional negotiators who understand their clients' legal rights and are willing to enforce them, where appropriate, with legal action. Our Fountain Valley loan modification attorneys have helped many clients reach agreements that end costly "exotic" mortgage features such as an adjustable interest rate, and lower payments to a level that allows them to stay out of default. If your family is facing default on your mortgage and you believe changes to your loan can stop it, we would like to help. To set up a free, confidential consultation, please contact us online or call toll-free at 1-800-872-5925.

A new study from the University of North Carolina at Chapel Hill's Center for Community Capital shows that not all mortgage loan modifications equally effective. According to a press release from the center, the study analyzed data from 10,000 loans that were modified to prevent default and foreclosure; many of them were subprime or adjustable-rate loans made between 2005 and 2006, at the height of the housing bubble. Looking at their outcomes, the study concluded that homeowners who ended up with reduced payments were 13% less likely than people who got increased payments to default again. That was true even after looking only at homeowners with similar situations and risks. And people whose loan modifications included changes to the principal owed were 19% less likely to default.

Those conclusions may seem obvious from the outside -- after all, reducing payments makes them easier to afford. But the study (PDF) contradicts long-running practices by the lending industry. In a "traditional" loan modification, banks add the homeowners' late fees and past due amounts -- and the payment actually rises in many cases. As you might imagine, this doesn't help homeowners who got behind in payments for financial reasons. In the study, one-third of the homeowners who got modifications ended up with increased payments. And those who got traditional modifications had a 60% higher default rate than people who ended up with payment reductions. The press release called writing down the principal of loans a "crucial tool" to stop defaults.

As Fullerton mortgage loan modification attorneys, we think this is great news -- if policymakers and lenders are listening. We represent many homeowners who need mortgage loan modifications to stay in their homes -- and in some cases, we must represent them aggressively because banks are so reluctant to change the terms of their loans. Part of the problem is plain old fear of losing profits, but another part is that many loans aren't entirely owned by the lender who originally made them anymore. Instead, they've passed through third and fourth parties' hands or been "securitized" into investments owned by many people. Banks are reluctant to rock the boat with these other parties, not least because they could be sued if they do something to reduce the value of the investments.

Based in Anaheim, Howard | Nassiri LLP represents clients throughout Southern California who need help staying in their homes. Our Chino Hills mortgage loan modification lawyers have had substantial success renegotiating the length, interest or even the principal due. We also represent clients who are considering consumer bankruptcy and sue on behalf of victims of predatory mortgage lending. If you or someone you care about is struggling to make a mortgage payment, we may be able to help. To set up a free, confidential consultation with our Yorba Linda loan modification lawyers, please contact us online or call 1-800-872-5925.

The Senate will not consider legislation in this session that would allow bankruptcy judges to "cram down" mortgage debts, The Hill reported March 16. A spokesman for Senate Majority Leader Harry Reid (D-Nev.) told reporters that senators had already spent too much time on an earlier spending omnibus bill and a wilderness protection bill, and couldn't give the cramdown bill enough time before the Senate adjourns for its spring recess. The newspaper said Senate Democrats were having a tough time gathering support for the measure from their Republican counterparts and may be a tough sell even to centrists, meaning the Democrats wouldn't have the 60-vote majority they need to pass it.

The cramdown bill is controversial because it would make an important change in how judges handle Chapter 13 bankruptcies. In Chapter 13, the most common kind of consumer bankruptcy, consumers make a court-supervised payment plan to get control of their debt. Currently, bankruptcy judges may "cram down" -- change the principal owed on -- any loan in these cases except the mortgage loan on the debtor's primary residence. That includes mortgages on second homes and loans on luxury items such as boats. The proposed legislation would expand that to include primary home loans.

This bill would be great for homeowners who have mortgages they can no longer pay, for whom bankruptcy is a real possibility. Even homeowners who aren't headed for bankruptcy could benefit from the bill, because the possibility of a cramdown could inspire lenders to renegotiate mortgages before a judge does it for them. Currently, many lenders are reluctant to discuss significant changes to loans, in part because so many have been bundled into investments and sold. Orange County mortgage loan modification attorneys like us see this bill as an important part of any serious attempt to control the mortgage crisis. But the financial industry, which stands to lose money when judges reduce debt owed to them, vigorously opposes the measure.

As Anaheim mortgage loan modification lawyers, we prefer a late cramdown bill to no cramdown bill at all. Compromises take time; if the delay means Senators can pass the legislation in a usable form later, that's fine. And judging from the article, Senate Democrats are willing to go to bat on this. Sen. Chuck Schumer of New York has already publicly opposed efforts to "water down" the bill by limiting it to the minority of mortgages considered subprime, which would substantially reduce the number of homeowners it can help. But we also hope the bill passes, for the sake of our consumer bankruptcy and loan modification clients.

Howard | Nassiri LLP represents homeowners who need help negotiating changes to the terms of their loans, including changes to their principal. Our Newport Beach loan modification attorneys have helped many clients with subprime or "exotic" loans find an agreement with their lenders that allows them to stay in their homes. We also handle consumer bankruptcies and predatory lending litigation, when those are truly our clients' best options. If you're under water -- or just feel like you're drowning -- and you'd like to learn more about your legal options, you can contact us today for a free, confidential consultation on your case.

A monthly report (PDF) by the Congressional Oversight Panel watching the financial industry bailout says the Obama Administration's housing rescue plan has good points, but could do more to help homeowners. The COP is monitoring how well the government implements the Troubled Asset Relief Program, the bailout launched last fall in response to the failure of several major financial institutions and the subsequent financial crisis. Its newest monthly report, issued March 6, focuses on initial successes and failures of the retooled plan, which the Obama Administration modified to provide more help for homeowners caught in the financial crisis.

The report gives the housing plan points for making progress, but says it could do more to make a big difference. The administration's plan was praised for expanding access to mortgage refinancing through Fannie Mae and Freddie Mac, which could help an estimated 5 million homeowners, and for giving lenders financial incentives to allow loan modifications. However, the COP still saw substantial flaws. Chief among these was the lack of a "safe harbor" for loan servicers involved in loan modifications, who resist workouts because they are afraid of being sued by investors in mortgage-backed securities.

The report also called for laws allowing bankruptcy judges to "cram down" loans, or reduce the value of the loans' principal, for "underwater" homeowners who are in Chapter 13 bankruptcy. This is a very important provision to Buena Park loan modification attorneys because the vast majority of Southern California homeowners who need this help are deep "underwater" -- they owe substantially more than their homes are worth. The plan limits mortgage loan modifications to loans that are 105% of the home's current value, a provision intended to leave real estate investors out of the plan. But because home values in Southern California are so high to start with, many honest homeowners are underwater by far more than 105%, leaving them with few refinancing options. Orange County loan modification lawyers like us hope that a threat of cramdown in bankruptcy will give banks a motive to renegotiate now.

As we have written here before, Congress is currently considering legislation on cramdowns; Reuters notes that it is also considering a safe harbor provision for mortgage servicers. As Hawaiian Gardens loan modification attorneys, we hope those bills pass. They would give us powerful new tools in our work with struggling homeowners, helping them restructure their mortgages in a way that lowers payments to a livable amount and helps them avoid default. If you or someone you care about is in this situation, we can help. To set up a free, confidential consultation on your case, please contact us online today or call us toll-free at 1-800-872-5925.

With tax season fast approaching, the Internal Revenue Service has begun a campaign to help taxpayers deal with the tax consequences of the bad economy. The agency's Web site prominently features an article entitled "The 'What Ifs' of an Economic Downturn," which collects common questions from taxpayers dealing with job losses, high debt and other financial problems. Among those questions are several that are important to our La Habra mortgage loan modification clients -- questions dealing with foreclosure, short sales, debt forgiveness and bankruptcy.

As we've written before, the IRS considers canceled debt a type of income, which means you will be taxed if your mortgage lender agrees to forgive part of the principal of your home loan as part of a mortgage loan modification, refinancing or foreclosure. You'll know for sure if you get a 1099-C document from the lender showing the amount of the canceled debt. Luckily, Congress gave homeowners some relief in 2007 with the Mortgage Forgiveness Debt Relief Act, which allows homeowners to exempt cancellation of mortgage debt "income" from their taxable income. To qualify, the home must be your primary residence and the canceled debt can't go above $1 million to $2 million, depending on your filing status.

If you don't qualify under that law, you may still be able to exclude your canceled debt from your income by showing the IRS that you are insolvent. Insolvency means that your total assets (the money and property you own) are less than your total liabilities (debts and other legal obligations to pay, such as child support). This might be the right choice for people with certain farm or business debts, as well as people who use Southern California debt settlement services to end overwhelming debts. The bad news is that you can't claim any losses related to a foreclosure or short sale on your income taxes as a capital loss, because personal property is excluded from the capital gains tax rules.

These rules don't apply to people who have filed for bankruptcy -- in a consumer bankruptcy, the IRS doesn't consider forgiven debt part of your income. However, our Diamond Bar bankruptcy lawyers remind clients that bankruptcy creates lots of other special tax situations. Possibly the biggest is that your bankruptcy estate is technically a different person from you for tax purposes, which means it needs a separate tax return. And of course, tax debts from previous years aren't dischargeable in a bankruptcy.

At Howard | Nassiri, we help clients find the best way out of their overwhelming debts -- whether that means mortgage loan modification, debt settlement or even bankruptcy. We also help victims of predatory mortgage lending sue to stop their unfair contracts and protect people who are being harassed by debt collection agencies in violation of the Fair Debt Collection Practices Act. Our Anaheim mortgage loan modification lawyers work with clients' lenders to negotiate substantial changes to their mortgages, lowering payments and allowing clients to keep their homes. If you know you can't keep up with your mortgage payments and you're ready to get help, we offer free, confidential consultations. To set one up, please contact us online or call us toll-free at 1-800-872-5925.

Our Irvine bankruptcy attorneys recently discovered a blog post from December that caught our eye because it discusses a problem that's far too common: medical bill bankruptcy. The post, at the personal finance blog EconoWhiner, tells the story of how one couple was driven into bankruptcy after a series of medical problems combined with insufficient insurance coverage to produce nearly $80,000 in medical bills. Both halves of this couple had chronic pain disorders. The husband is unemployed because of his chronic pain; the wife is self-employed and thus at the mercy of the individual health insurance policy market. Both of their elderly parents live with them.

In short, the husband suffered a series of health problems, including complications from several surgeries as well as his congenital spinal condition. They had to fight with their health insurer to get most of it covered, and in the meantime, they racked up ten thousands of dollars in bills. To pay those bills, they first cashed out their IRA; then, they began using credit cards to cover their expenses. They carefully planned to keep their spending to no more than half of the limit of each card, but that plan failed when one card cut their credit limit to the balance due plus $100; the other cards quickly followed suit. Then all of their credit card companies raised their interest rates to 20%.

That was when they began to seriously consider bankruptcy. Here's what the wife has to say about the first meeting they had with their bankruptcy attorney:

Before we had even been there 10 minutes, part way through her intake interview with us, the lawyer set her pen down, folded her hands on top of her desk, and looked at my husband. "Listen to me, and listen very carefully," she said. "This is not your fault. Let me say that again: This is not your fault."

Even today, remembering that moment brings tears to my eyes. I think the last thing we had expected from a lawyer was heartfelt compassion and understanding. We had been fighting so hard to keep our heads above water, to keep up with the medical emergencies and paperwork, that we ourselves had only rarely talked about the guilt we felt over all of this.

As Orange County bankruptcy lawyers, we like the positive depiction of bankruptcy lawyers -- but even more than that, we like that the lawyer acknowledged that the bankruptcy was not this couple's fault. At Howard | Nassiri, we see a lot of clients who have put off facing their financial problems because they feel guilty, ashamed or overwhelmed. Our culture values personal responsibility, but sometimes, there truly is nothing you can do. Unfortunately, delaying doesn't help -- and in some cases, it can hurt because it allows debt to grow and deadlines to pass, limiting our ability to help.

Regardless of whether you believe bad decisions led you to consider bankruptcy, it's important to address the problem as soon as you know it's too much to handle alone. Our Fullerton bankruptcy lawyers specialize in helping consumers who are overwhelmed by debt, and we offer free, confidential consultations to potential clients. In addition to helping clients decide whether bankruptcy is right for them, we offer debt settlement without bankruptcy, protection from unfair and illegal debt collection practices and mortgage loan renegotiation. To set up a free, confidential consultation, please contact us as soon as possible.

Mortgage loan modifications remain a hot topic in the news lately, thanks in part to President Obama's housing plan. Unfortunately, one of the biggest problems we've run across as Garden Grove loan modification lawyers is that banks frequently won't even discuss changes to a mortgage loan until after the homeowner is behind on payments. This is extremely frustrating for clients who know they soon won't be able to pay and would like to avoid an interruption in payments and the corresponding hit to their credit.

That's the situation for homeowner Debbie Jameson of Dublin, New Hampshire, according to an article MSNBC picked up from the Manchester Union-Leader Feb. 21. Jameson took out an adjustable-rate mortgage five years ago, in part because she didn't qualify for a fixed-rate mortgage. At the time, she said, she was told she could refinance when she had at least 20% equity in her home. Thanks to the economic downturn, she wasn't able to build that much equity, and her income has also dropped. Knowing her payments would jump by $300 this April, she has been trying to modify her mortgage without luck, first through her mortgage loan servicer and then through the federal Hope for Homeowners program. She hopes Obama's new Homeowner Affordability and Stability Plan will bring her better luck.

The "mortgage meltdown" has changed lenders' attitudes somewhat, as they face more and more expensive foreclosures. But for the most part, lenders still don't want to discuss a loan workout with homeowners like Jameson who are still in the black. That's partly because they may not believe that the borrowers are really in trouble -- after all, they're still making their payments! Another problem arises when the mortgage has been bundled and sold as an investment, giving investors a stake in the value of the loan. Nervous about losing money, they may threaten the mortgage servicer with lawsuits, or the mortgage servicer may need investor permission it cannot get. The Obama plan may change this by splitting the costs and adding extra protections against default, giving lenders a financial incentive to renegotiate.

At Howard | Nassiri LLP, our Southern California mortgage loan modification lawyers have had substantial success negotiating loan modifications for clients with unconventional mortgages like Jameson's, including adjustable-rate mortgages and balloon mortgages. We represent homeowners in negotiations with their lenders to save their homes at all stages of the foreclosure process. We also counsel clients who are considering bankruptcy to help them control a large amount of debt, including mortgage debt. And we offer free, confidential consultations, so speaking to us costs nothing but time. If you're in a bind like Jameson's and you're ready to explore your legal options, you can contact us online or reach us toll-free at 1-800872-5925.

As Southern California debt settlement and bankruptcy attorneys, we know how important changes in credit cards' balances, interest rates and limits can be for clients' efforts to get out of debt and build a strong credit rating. That's why we are disappointed by a recent series of "clampdowns" by credit card companies that raised interest rates and monthly payments or lowered customers' credit limits. In many cases, these changes are applied to customers who don't have any payment problems. According to the San Jose Mercury-News, the changes are being applied to everyone because credit card companies are feeling the effects of the bad economy and trying to cut their losses.

Many consumers are upset about this, and not just because they can buy less with their credit cards. Because a consumer's credit score is tied to how much credit he or she has available, changes to credit limits and interest rates can have an immediate negative effect on credit scores. This effectively penalizes cardholders with good payment records for others' irresponsibility. And while a new Federal Reserve rule will make it illegal for credit card companies to change card terms arbitrarily, it won't take effect until July of next year, meaning that current changes are perfectly legal.

Experts interviewed by the Mercury-News pointed out things that cardholders can do to fight the changes, including transferring the balance to a card with better terms or politely negotiating for a return to the old terms. Credit card companies don't have to reverse their changes, but many will if you have a good argument. And American Express cardholders can get paid to close their accounts right now, although closing an account may also harm your credit. However, our Placentia debt settlement attorneys know that not every consumer feels comfortable negotiating directly with their cards, especially if they feel overwhelmed and stressed by the amount of debt they have.

Our debt settlement practice at Howard | Nassiri LLP helps consumers in just this situation. Our Orange debt settlement lawyers negotiate with credit card companies, debt collectors and other creditors to correct unfair or unauthorized charges and settle debts for a fair and realistic amount. We also protect clients from unfair debt collection practices and predatory lending. If you're in any of these situations and you know you need help from an experienced negotiator, our firm offers free, confidential consultations. To set one up, please contact us online as soon as possible or call us toll-free at 1-800-872-5925.