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New Consumer Bureau Taking Mortgage Complaints; Chapter 13 Bankruptcy in L.A. Stops Foreclosure

Blogs from December, 2011


A federally created consumer bureau that previously took consumer complaints about credit card issues is now taking complaints about foreclosure and mortgage fraud issues‚ The New York Times reports.

While this may be a helpful tool for consumers‚ it can’t eliminate the problems caused by foreclosure in Woodland Hills. The mounds of foreclosures have led to widespread fraud by bank officials and the companies they hire and has resulted in people losing their homes and being left to deal with unmanageable debt levels. Some have chosen strategic defaults‚ short sales and other ways to try to avoid problems caused by the real estate market collapse.

What some people don’t consider‚ however‚ is that Chapter 13 bankruptcy in Woodland Hills can help them avoid foreclosure altogether. Our Woodland Hills bankruptcy lawyers have been able to help many people through this process.

Chapter 13 bankruptcy has gained popularity in recent years. It is a form of bankruptcy for consumers who may have a desire to keep large assets‚ such as a house‚ and still get the protections offered by bankruptcy.

The way it typically works is a consumer is allowed to set up a payment plan‚ usually with monthly payments‚ over a period of 3 to 5 years. If all the payments are made on time‚ at the end of the period‚ the remaining debt is typically voided.

And filing for bankruptcy immediately stops the foreclosure process. Whether the person is one or two payments behind or negotiating with the bank after half a year or more of missed mortgage payments‚ bankruptcy halts the process. This allows the homeowner to likely stay in their home during the bankruptcy process and come to a solution after the fact that allows them to continue making payments.

And while the Consumer Financial Protection Bureau will now take complaints via its website‚ it won’t stop a foreclosure from happening. If anything‚ it may help people who have been victimized by bank actions.

The new filing system allows people to choose from a drop-down list of problems with lenders‚ such as problems making payments‚ issues in the loan application process or other issues. People are allowed to list‚ in their own words‚ the solution they seek and borrowers can uphold documents.

The agency was just created in July and seeks to take all consumer complaints next year. The complaints are forwarded to lenders with a tracking number so consumers can see what progress has been made on their issue.

It’s unclear from the article if this agency has any power or is just in a position to be a voice for consumers. If so‚ nothing likely will change. If banks are under no obligation to help borrowers‚ they likely will continue doing what’s in their best interests. It’s like the federal-backed loan modification programs that failed — banks aren’t required to participate‚ so they typically didn’t.

Yet‚ bankruptcy will help banks change their tune in dealing with a homeowner. Filing for bankruptcy gets banks officials’ attention and allows the borrower to discharge debts‚ which can help them figure out a plan to pay for their house.

If you are dealing with debt or foreclosure issues‚ make 2012 the year you take your life back!

Cal West Law will provide a free consultation to help guide you in making a decision that works for you. In Encino‚ Glendale‚ and Woodland Hills‚ just call (800) 568-0707.

Additional Resources:

Consumer Bureau Is Taking Your Mortgage Complaints‚ by Ann Carrins‚ The New York Times

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