Tuesday, June 26, 2012

Collections & Credit Risk - Minnesota AG Expands Complaint Against Accretive - PaymentsSource Article

Collections & Credit Risk - Minnesota AG Expands Complaint Against Accretive - PaymentsSource Article

Debt Settlement Rises in ARM Industry as Operations Become Automated

Debt Settlement Rises in ARM Industry as Operations Become Automated

Collections & Credit Risk - Texas Bank Takes Lead In CFPB Lawsuit - PaymentsSource Article

Collections & Credit Risk - Texas Bank Takes Lead In CFPB Lawsuit - PaymentsSource Article

Collections & Credit Risk - Fair Isaac To Consolidate Two Sites - PaymentsSource Article

Collections & Credit Risk - Fair Isaac To Consolidate Two Sites - PaymentsSource Article

Collections & Credit Risk - Massachusetts Ruling Clarifies Foreclosure Protections - PaymentsSource Article

Collections & Credit Risk - Massachusetts Ruling Clarifies Foreclosure Protections - PaymentsSource Article

Wednesday, March 14, 2012

More Collectors Working with Debt Settlement Companies

by Teresa Dodson (Inside Arm)

In the recent insideARM.com Debt Settlement survey, over 53% of the ARM industry company respondents indicated that they were now working with debt settlement companies to increase their collections. While this number appears to demonstrate a clear adoption of this channel by the industry, insideARM.com wanted to know why roughly half of the collection industry was still not utilizing debt settlement companies to improve recoveries.

Reasons Provided for not Working with Debt Settlement Companies

When asked to provide the reason or reasons why they did not currently work with debt settlement compa­nies, respondents gave the following justifications.

Reason
Percent

Settlement Percentages too low
16%

Legal concerns about dealing with third parties
15%

Security/Compliance Concerns
14%

Industry Perceived as not reputable
13%

Prohibited by agency agreement with creditor
10%

Limited resources to dedicate to this channel
8%

Break rates too high
5%

Too hard to locate and manage multiple debt settlement providers
5%

Not enough knowledge of the industry to make this channel effective
4%

Other
10%

The top three reasons given for not working with the debt settlement industry are related to the economics of the settlements derived through this channel, as well as the specific security, compliance, and legal concerns regarding sharing data with debt settlement companies. Given the largest group of companies that answered NO to working with the industry were collections agencies, who many times work on contingency agreements with thin margins, this would seem logical.

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Ironically, reputational credibility of the industry registered only the fourth highest out of nine possible rea­sons provided, indicating that collectors and creditors may now be warming up to the idea of a regulated debt settlement industry.

The last group of reasons provided primarily dealt with a lack of understanding of the industry as a whole, and inability to effectively locate and manage a large group of debt settlement companies or a specific lack of inter­nal resources in order to effectively develop a strategy or manage a strategy in order to leverage this industry as an effective collections channel.

With increasing regulatory scrutiny of the debt collection industry by the FTC and the newly formed CFPB, it is no wonder that collectors today place a greater emphasis on risk controls in favor of increased profits. Clearly consumers enrolled in debt settlement programs are motivated to settle their accounts, and many times have money saved and available in a trust account for this purpose; however, agencies and buyers alike, conscious of the laws and regulations relating to data security, privacy, and third-party communications, have yet to fully embrace an industry which, to date, has not been held to the same standards of PCI compliance, data security, privacy regulations, and the FDCPA.
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Also visit www.justusdebt.com

Tuesday, February 28, 2012

One Stop Shop - Debt Relief: Americans Owe Less on Their Credit Cards

One Stop Shop - Debt Relief: Americans Owe Less on Their Credit Cards: Consumer debt has declined 11 percent since its peak in October 2008. Nearly 60 percent of the top 100 metropolitan statistical areas ha...

Americans Owe Less on Their Credit Cards

Consumer debt has declined 11 percent since its peak in October 2008.



Nearly 60 percent of the top 100 metropolitan statistical areas hardest hit by credit card debt realized double-digit declines in the percentage of income owed to credit card companies, according to a new Equifax report.

The cities with the most sizable reductions are clustered in four states across the country: Florida, Louisiana, Washington and California. According to the report, Florida tops the list as the state with the most cities—five—realizing the largest declines.

Comparing percentage of income owed to credit card companies between the fourth quarter of 2010 and the fourth quarter of 2011, the following MSAs realized the largest year-over-year declines for the country.
  • Port St. Lucie, Fla.—23.59 percent
  • Ocala, Fla.—20.97 percent
  • Bremerton-Silverdale, Wash.—20.62 percent
  • Shreveport-Bossier City. La.—20.10 percent
  • Bakersfield-Delano, Calif.—19.05 percent
  • Northport-Bradenton-Sarasota, Fla.—18.44 percent
  • Tampa-St. Petersburg-Clearwater, Fla.—18.43 percent
  • Lakeland-Winter Haven, Fla.—18.32 percent
  • Salinas, Calif.—17.85 percent
The reduction in U.S. consumer credit card debt began a steady decline in the fourth quarter of 2010 that continued through the end of 2011, as consumers remained cautious of their spending and focused on deleveraging debt. According to Equifax’s analysis, consumers owed up to 17 percent of their income to credit card companies in 2010.
Equifax reports that while total consumer debt (mortgage, auto, credit card, etc.) has declined nearly 11 percent from its peak of $12.4 trillion in October of 2008, American households still owe more than $800 billion in debt to credit card companies alone—irrespective of other debts such as mortgages or student loans.


http://www.acainternational.org/


www.justusdebt.com



Wednesday, February 22, 2012

Americans Still Paying Down Card Debt, But A Trend Reversal May Be Near

Collections & Credit Risk | Wednesday, February 22, 2012
Americans across the country continue to slash away at their credit card debt, but a return to card borrowing may be around the corner.

In 60 of the top 100 metropolitan statistical areas most plagued by credit card debt, the percentage of income owed to credit card companies last year dropped by double digits. Four states–Florida, Louisiana, Washington, and California–boasted the cities with the largest declines, according to recent research from Equifax Inc., an Atlanta-based credit bureau.

Among the cities that showed the steepest drop in percentage of income owed to credit card companies between the fourth quarter of 2010 and the fourth quarter of 2011 were Port St. Lucie, Fla (23.59%); Ocala, Fla. (20.97%); Bremerton-Silverdale, Wash. (20.62%); Shreveport-Bossier City, La. (20.10%); Bakersfield-Delano, Calif. (19.05%); Northport-Bradenton-Sarasota, Fla. (18.44%); Tampa-St. Petersburg-Clearwater, Fla. (18.43%); Lakeland-Winter Haven, Fla. (18.32%); and Salinas, Ca. (17.85%).

Some of the states hardest hit by the recession showed some of the biggest reductions in credit card debt. “This suggests that consumers from these hardest-hit areas have been especially cautious in their spending and diligence in paying down their credit card debt,” Trey Loughran, president of Equifax's personal solutions business, said in a news release.

Equifax representatives were not immediately available for comment.

The reductions in card debt likely won’t adversely affect card companies for much longer, one analyst says.
“I consider this a temporary phenomenon as consumers adjust to a new level of consumption and savings,” Gil B. Luria, a managing director at Los Angeles-based Wedbush Securities, tells PaymentsSource. “Once consumers feel more secure, I would expect them to grow their spending as their income grows.”

Indeed, the data show U.S. consumers continue to de-lever their personal balance sheets, says Luria. “On one hand, savings rates are increasing as consumers come out of the recession more cautious about their finances, and on the other hand as unemployment rates decline, more people are able to reduce their outstanding credit card balances.”

While total consumer debt, including mortgages, auto loans and credit cards, has fallen by close to 11% from its peak of $12.4 trillion in October 2008, U.S. households still owe more than $800 billion to credit card companies alone, according to the Equifax report.

Monday, February 20, 2012

Credit Card Debt Continues to Rise

The latest report from the Federal Reserve shows that consumers used their credit cards quite extensively to fund their holiday shopping.
Revolving credit, which is made up primarily of credit card debt, increased at an annual rate of 4.1 percent in December. It rose nearly $3 billion to $801.0 billion.
This follows a jump of $5.5 billion in November which was an annual rate increase of 8.4 percent.
December was the fourth straight month of increases in revolving credit.
Analysts are a bit torn on what this means. This could be a positive sign that consumers are more confident in the economy. On the other hand, it could mean that people are struggling and have to rely on using their credit card to make ends meet.
But this much is clear: consumers are going into 2012 with higher credit card debt, but the same wages. If consumers have a hard time paying down this debt, then we might see delinquencies and defaults start to increase by spring.
Provided by LowCards.com
Visit:  www.justusdebt.com


Friday, February 17, 2012

Citigroup Settles Mortgage Fraud Woes For $158.3 Million

Collections & Credit Risk | Wednesday, February 15, 2012


Citigroup Inc. has agreed to pay $158.3 million to settle civil claims that it defrauded the government into insuring thousands of risky home loans made by its CitiMortgage unit.

CitiMortgage "admits, acknowledges and accepts responsibility" for misleading the government into insuring risky home loans, according to settlement papers. Investigators said the misconduct continued for more than six years.

The settlement resolves claims under the federal False Claims Act against the third-largest U.S. bank.

The civil fraud case arose from a "whistleblower" lawsuit brought by Sherry Hunt, a CitiMortgage employee in Missouri. Whistleblowers can receive up to 25% of settlements reached with the government in such cases, depending on how much work they contributed. It was not immediately clear how much Hunt, a quality control manager at CitiMortgage, might recover. Neither she nor her lawyer, Finley Gibbs, responded to requests for comment.

Citigroup spokesperson Mark Rodgers said the bank has set aside the money to cover the payout. The bank had said last week it was taking a $125 million after-tax charge against results for its just-completed fourth quarter in connection with mortgage litigation.

The government accused Citigroup of falsely certifying that many of its loans qualified for insurance from the Federal Housing Agency, which is part of the U.S. Department of Housing and Urban Development.

Investigators said 9,636, or more than 30%, of nearly 30,000 HUD-insured mortgage loans that CitiMortgage made or underwrote since 2004 have defaulted, costing the agency nearly $200 million in insurance claims. The government also contended that even after a 2008 HUD audit found "numerous defects" in CitiMortgage's oversight of loans in default, quality control deteriorated.

It said this was partly because the unit pressured workers to encourage quality control personnel to ignore problems, rewarding them with higher salaries if they succeeded.

Wednesday, February 15, 2012

Mortgage Loan Delinquencies Rise For Second Time Since 2009

Collections & Credit Risk | Wednesday, February 15, 2012


More homeowners were late with their loan payments in the last three months of 2011, the second quarter in a row that defaults increased, according to credit data giant TransUnion.

Serious mortgage delinquencies, loans on which borrowers were at least 60 days behind on payments, rose to 6.01% in the fourth quarter from 5.88% in the previous quarter.

The increases in those two quarters followed nearly two years of decline.

"To see that, quarter over quarter, fewer homeowners were able to make their mortgage payments is not welcome news," said Tim Martin, group vice president of U.S. housing in TransUnion's financial services business unit.

Between the third and fourth quarters of 2011, all but 13 states experienced increases in their mortgage delinquency rates. On a more granular level, 64% of metropolitan areas saw increases in their mortgage delinquency rates in Q4 2011. This is the same percentage as found in Q3 2011, but up from Q2 2011 when only 21% of MSAs experienced an increase.

Martin said seasonal factors were partly responsible for the increase “perhaps explained by borrowers balancing holiday spending versus debt payments.” In addition, falling housing prices exacerbated negative equity, where homeowners owe more than their houses are worth, while high unemployment and reduced income “can affect borrowers’ ability and willingness to pay their mortgages,” he said.

Delinquencies were down compared with the fourth quarter of 2010, when the rate was 6.41%.

“While it is certainly good to see the rate dropping, at this pace it will take a very long time for mortgage delinquencies to get back to normal," Martin said. 

California’s delinquency rate was 7.14%, ranking fifth among states after Florida (14.27%), Nevada (12.08%), New Jersey (8.32%) and Arizona (7.5%).

TransUnion said mortgage delinquencies probably will increase for the next quarter or two “as some consumers are not able to, or decide not to, repay their mortgage debt obligations in light of the uncertain economic outlook.”

Tuesday, February 14, 2012

49 Attorney General's Win Against 5 Banks & So Will Some Of You!




BUT NOT IF YOU WAIT---The money will not go far.
SO—ON YOUR WAY TO A MODIFICATION TO REDUCE YOU PAYMENTS YOU MAY

ALSO RECEIVE A REDUCTION ON THE BALANCE OF YOUR LOAN.


At least $10 billion of the settlement will go toward reducing the principal loans balance for borrowers

who, as of the date of the settlement are delinquent and imminent risk of default

and owe more on their mortgages than their homes are worth.


The Obama administration has estimated that up to 1 million homeowners could benefit from

the deal through mortgage write downs [loan balance reductions] and other forms of relief.



[Note ---I do not believe anything the feds say----but this is a court order.]



The core group of banks involved in settlement talks are

Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co,

Citigroup Inc and Ally [GMAC] Financial Inc
.
Under the terms of the agreement, the above banks/servicers are required to collectively dedicate

$20 billion toward various forms of financial relief to borrowers.



We think other banks/servicers will also agree to reduce loan amounts or they will sue by the 50 state attorneys generals.



Up to $7 billion will go towards other forms of relief, including forbearance of principal for
unemployed borrowers and benefits for service members who are forced to sell their home
at a loss as a result of a Permanent Change in Station order, and other programs.


The Office of the Comptroller of the Currency also said on Thursday that

Bank of America, Citigroup, JPMorgan and Wells Fargo have agreed to pay a penalty of
$394 million as part of a settlement they reached in April 2011 with regulators over foreclosure abuses.-[-translation--crimes]



Dean’s Notes: 
Hmmmm If you did any of the illegal things those 5 lenders did they would throw you in jail but they are free and making millions and one days profit will more then cover the fines.


Let’s talk
Dean 877-244-0612 or 877-824-8724 x103