Remember the TV jingle, “Countrywide Is On Your Side” or the other slogans about how great Countrywide was? I liked the one, “NOBODY can do what COUNTRYWIDE CAN!”

Well, it turns out that it was about the truth, but not in a good way. Recently Countrywide (now part of Bank of America) has had to fork over $108 Million in refunds to consumers that it allegedly cheated through fraudulent practices. If you were a customer of Countrywide from 2005 through mid-2008, you may be entitled to a refund.

“It’s astonishing that a single company could be responsible for overcharging more than 450,000 homeowners,” FTC Chairman Jon Leibowitz said. “Countrywide’s unconscionable behavior harmed American consumers on a massive scale and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money.”

The FTC’s June 2010 settlement order required Countrywide, which is now owned by Bank of America, to pay $108 million to be used for refunds and barred the company from taking advantage of borrowers who have fallen behind on their payments. The refunds are being distributed to consumers whose loans were serviced by Countrywide between January 1, 2005, and July 1, 2008, and who were subject to the company’s allegedly unlawful practices.

According to the FTC, homeowners who were in default on their loans were charged excessive fees for services such as property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property. Rather than simply hire third-party vendors to perform the services, Countrywide used subsidiaries to hire the vendors. The subsidiaries allegedly marked up the price of the services charged by the vendors – often by 100 percent or more – and Countrywide then charged the homeowners the marked-up fees. The FTC complaint alleges that the company’s strategy was to increase profits from default-related service fees in bad economic times.

Also, in servicing loans for borrowers trying to save their homes in Chapter 13 bankruptcy proceedings, the FTC alleged that Countrywide made false or unsupported claims to borrowers about amounts owed or the status of their loans, and added fees and escrow charges to their mortgage accounts without notice.

Some People Need to Consider Short Sale or Walkaway From Underwater House

Here at my law office in west Houston, we help a lot of people save their homes by filing Chapter 13 bankruptcy. We can stop a foreclosure from taking place, and then set up a plan whereby the client pays a chapter 13 trustee, who pays their regular payments to the mortgage company and also an extra amount to catch them up over a long period of time, usually 5 years. The plan payments are deducted from my clients’ paychecks. For the cases that I handled in 2005 (the last full year for which I have numbers), 66% of my clients that filed a Chapter 13, completed the case and received a discharge (or converted to chapter 7 and received a discharge).

But not all of my clients can afford their house. Particularly during the “real estate boom” if you want to call it that, mortgage lenders were lending money to people to buy more house than the people could afford. In some cases, people were buying houses, when they should not have been allowed to buy any house. Either they just didn’t have the income to do so, or they were just not responsible enough to be ready for home ownership.

Or in other cases, people bought a house that they could afford at the time, but something happened. Perhaps they were in the real estate business, or some other business that has become depressed, and they just cannot now afford to keep the house. Or they became ill, disable, or divorced, or their business failed, the reasons are infinite, but some people can just no longer afford a house, if they ever could.

Anyway, for some of our clients, we counsel them that in their particular case, it is not worth it, and to give it up. If you can’t sell your house in the usual way because it is “underwater,” i.e. you owe more than it is worth, it may be possible to do a “short sale” whereby you sell the house for the best price you can, and negotiate with the mortgage company to accept that amount in full satisfaction of the debt. You will probably need help doing that, many real estate professionals can help you with that.

For other people, just walking away from the house and letting it foreclose can be the best thing.  There is even a website devoted just to that, www.youwalkaway.com, that seems to have good information about it. There is a calculator on the site where you can see how much money you can save (or lose) by giving up the house. And I hate to counsel people to break their contract, their promise that they made when they signed the mortgage to buy their house.

But in some cases, there is just no way. I had an older lady that had just bought a house before she retired (does that make a lot of sense?). In her case, some family members were going to stay with her and help her pay the mortgage. Well they had a falling out, and the family members left. So here she is, with a total of only $2600 per month or so in retirement income, and the house payment alone is $2000 per month! But a house is not just a payment, there are taxes, insurance, maintenance, mowing the lawn, etc., etc. And as we get older, it is harder to keep a house up.

Anyway, we finally talked her into letting the house go, and moving into a subsidized rent apartment, that is set up for senior citizens. She is much happier, has friends and activities, and her stress level is way down. She has much more disposable income each month, and can actually afford to eat a good diet, buy clothes and have recreational activities.

So while I encourage clients to try to save their house if is practicable, income some cases it just doesn’t make sense. If it doesn’t in you case, make the decision and let the bank have the place. Of course talk to an experienced consumer lawyer or consumer bankruptcy lawyer first, to be sure you know what consequences that you face if you give it up. My clients are typically already in bankruptcy, so they will face little or no further consequences by walking away. If you live in the Houston Texas area or surrounding counties, contact my law office at 713-772-8037 or online at www.jthomasblack.com.

Filing Chapter 13 bankruptcy brings into effect the “automatic stay” which is a federal court order that temporarily at least, stops all collection actions against the person that filed the case. So, repossessions, foreclosures, collection calls, lawsuits, garnishments, etc. are all stopped. In Chapter 13, the debtor (the person that filed the case) with the assistance of their attorney, files a plan that usually includes catching up any past due mortgage payments over as long as 5 years.

Many people who were out of work for a period of time, or ill, etc. are able to catch up their mortgages, while maintaining their regular mortgage payments through a Chapter 13 plan. Chapter 13 can also let you pay your vehicle loan out over time, and deal with your unsecured debt in a manner that you can afford.

If you are interested in seeing how Chapter 13 can help you reorganize your finances, and potentially save your house, vehicles or other property, and you live in the Houston, Texas area, give my office a call at 713-772-8037, or visit my main web site at www.jthomasblack.com. I offer a free first consultation to evaluate your situation and see if Chapter 13 or some other remedy would be best for you.

She actually had not missed any house payments. She claimed that she had been paying them online, but that her mortgage company raised the payments, without telling her. By the time she realized it, she was $2500 behind, and Wells Fargo told her she was about to be put into foreclosure status.

The thing that really upset her, was that Wells wouldn’t tell her why her payments went up, and in fact gave her conflicting stories. One time she called, they told her that her property taxes had increased. But she called the tax authorities, and they said no, your taxes are the same as last year.

Then she called Wells Fargo, and was told that her homeowner’s insurance had increased, and that is what made her payments increase. So she called her insurance company, and they said yes, your insurance went up all of $200 per year, but that wouldn’t account for such a big increase in your payments.

Then she called again, and was told something else, which also turned out to be bogus.

So she asked Wells Fargo for some loss mitigation options; mind you, this lady is less than two payments delinquent. The letter from Wells Fargo says “it is not in the investor’s best interest” to offer her loss mitigation, such as a plan to catch up.

It turns out, she should be able to catch it up, by borrowing from mom if necessary, and not have to resort to filing a Chapter 13 bankruptcy, which can help homeowners save their homes, if they have gotten behind.

And, I explained to her how to get information from her mortgage servicer Wells Fargo, by sending them a letter that can constitute a “Qualified Written Request” under the federal Real Estate Settlement and Procedures Act” or RESPA.

It’s just a doggone shame, if you ask my humble opinion, that it has come to this in this country, that a mortgage lender is going to threaten to put a whole houseful of good people, including minor children,  out on the street, when they can’t even explain why the payments increased, and won’t give the homeowner a chance to catch up.

If you are facing a foreclosure, and need help to stop the foreclosure and catch up, and you are a resident of the Houston Texas area, call my office at 713-772-8037 to set up a free first visit to meet with me. We can file a Chapter 13 bankruptcy to stop the foreclosure and let you catch up over as long as a 5 year period of time. You can also make an appointment directly on my law firm website at www.jthomasblack.com.

If you qualify, we also help clients apply for loan modifications, which can greatly reduce your monthly payments and sometimes make it more affordable to live in the home.



In my experience, that is not real common here in Texas, but it wouldn’t surprise me if it begins to increase. Particularly where there are second mortgages, or so-called “80-20″ financing.

Like you don’t have enough to worry about, if you are losing your house, to have the lender or a collection agency coming after you trying to collect. They could file a lawsuit against you for the rest of the money, the money that they did not recover from the foreclosure process. If they got a judgment, they could seize your non-exempt assets such as bank accounts, investments or possibly other property.

But one cause of the lenders beginning to pursue people, is the “strategic” foreclosures, where people are letting their houses go back, even though they could afford them if they want to do so.

Not so much here in Houston, but in other areas of the country, home prices have fallen precipitously in the past few years. And if you owe $50,000 or $100,000 more on your house than it is worth, it is understandable that some people would choose to just “walk away” from the house, rather than struggle to continue to pay it.

Particularly so if they have an adjustable rate mortgage or ARM, and their payments are high. That would be another reason for some people to just give up and walk away.

If you are considering walking away from your home, and letting the bank or mortgage company have it, you should consult with an attorney experienced in these matter such as myself. It could be that your lender will try to pursue you for the debt.

If so, filing bankruptcy is one option to eliminate any chance that they can collect a foreclosure deficiency from you. There may be other options in your situation. To call my office for an appointment, call 713-772-8037. Free first visits are available for residents of the Houston Texas metropolitan area and surrounding counties.

The article explains that even though it is not a must to be out of debt at retirement, it is an excellent idea. I have had a number of older folks come in recently that have a lot of equity in their home, but no money to pay the mortgage.

While I’m not usually a fan of “reverse mortgages,” that is one option if you are over 62, have a lot of home equity and either can’t pay the mortgage anymore, or just need the money, and don’t want to move.

I’m shocked by the number of people that come in that are in their 60′s and have just taken out a mortgage. And they are about to retire, or they’ve already retired. What are they thinking? In some cases, the folks had sizable retirement plans until the recent stock collapse changed their plans.

I think home ownership is overrated, particularly if you are older. Who needs the headache of lawn care, pest control, things breaking, having to clean a larger place, etc. I’m for renting after you reach a certain age, and not worrying about things. You can’t take it with you!

But a lot of the debt older folks get into is credit card debt. Some borrow it to help their children. Some use it for necessary medical bills or prescriptions. Others were working, but lost their jobs and have been using the credit cards to live on, until they find that new job.

Unfortunately, for some older folks, there may not be a new job, at least one like they had. And they’ll be lucky to get health insurance. They way the health care system is now, older workers just cost too much to insure.

My advice to older folks that find themselves in debt over their head: if there is no other reasonable option, go ahead and file bankruptcy.

What the heck is a “strip off”? Well, let’s say that you have two mortgages on your house. When you bought the house, you used “80-20″ financing that has been so prevalent in recent years.

Let’s also say that the first mortgage is $80,000, and the second is $20,000. When you bought the house, it was $100,000 purchase price, so you financed 100% of the purchase price.

After buying the house, the value of your house fell. And fell a lot, to where it was only worth $75,000. If you file Chapter 13 bankruptcy, it is possible to “strip off” the second mortgage, but having the Bankruptcy Judge declare that there is “absolutely no” equity to support it.

This turns the second mortgage into an “unsecured debt” which is usually paid very little and discharged or cancelled, when you complete your Chapter 13 plan.

So now, instead of owing $100,000 on a $75,000 house, and being tempted to walk away (hurting home prices even more), you owe only $80,000 on it, and will more likely stay. Your other creditors would also likely receive a larger distribution during your Chapter 13 case because of the strip off; that is the real reason it is permitted.

If you live in the Houston metropolitan area or surrounding counties, are having financial troubles, and think you may qualify for a strip off, make an appointment to see me by calling 713-772-8037.