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LATEST NEWS

May 31, 2010

Your request is being processed... Bank Of America To Start Reducing Principal On 'Underwater' Mortgages

The bank, the largest mortgage servicer in the country, said Wednesday it will forgive up to 30 percent of some customers' total mortgage balances. The homeowners must have missed at least two months of mortgage payments and owe at least 20 percent more than their home is currently worth. The plan is the newest provision of an agreement the Charlotte, N.C.-based bank reached 18 months ago with state attorneys general to settle charges over high-risk loans made by Countrywide Financial Corp.

Source: Bank of America
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Apr 30, 2010

Debt settlement companies could face tighter rules

NEW YORK - Debt settlement companies that charge high fees and mislead consumers would be more tightly regulated under new legislation introduced Wednesday. The proposed law, put forward by Sens. Charles E. Schumer, D-N.Y., and Claire McCaskill, D-Mo., comes as complaints about the debt settlement industry have soared amid the economic downturn. Under the legislation, companies wouldn't be able to collect fees until a settlement was reached. Consumers also would get clearer upfront disclosures, including a detailed list of all costs and promised services. Typically, the settlement firms promise to negotiate with credit card companies to reduce the amount that consumers owe. Costs vary, but a company might charge up to 20 percent of the total debt. Fees are usually demanded upfront, even though a settlement may never be secured. Hiring a debt settlement company doesn't stop the collection calls either. Interest and financing charges continue racking up too, and lenders may even decide to sue in the meantime. Consumer groups note that individuals can negotiate directly with lenders, and that credit card companies often refuse to negotiate with debt settlement companies. Even if a settlement is reached - either independently or through a third party - it can severely hurt the consumer's credit score. Under the Schumer-McCaskill bill, consumers would have the right to cancel a debt settlement contract and get a full refund. The legislation would provide for enforcement through state attorneys general and the Federal Trade Commission. The federal agency also would be given authority to regulate the industry's advertising and marketing practices.

Source: AP
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Apr 05, 2010

How the Credit CARD Act will affect types of credit cards

How will the CARD act affect you? That depends in part on which type of credit card you've got in your wallet. The combined impact of the economic downturn and the restrictions placed on credit card companies by the Credit CARD Act mean card issuers will be changing how they do business in ways that will affect every credit card -- but the impact will vary depending on the type.

Source: creditcards.com
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Mar 26, 2010

Program Will Pay Homeowners to Sell at a Loss

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave. This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration's most aggressive attempts to grapple with a problem that has defied solutions...

Source: The New York Times
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Mar 02, 2010

New Credit Card Laws

A new set of credit card rules takes effect February 22, 2010 and you should be aware of the new rules. The new credit card laws are positive for consumers and offer consumers a new set of protections. The credit card rules include new rules on what credit card companies have to tell you, new rules on credit card rates, credit card fees and credit card limits. Some of the most helpful rules for consumers is that credit card companies have to tell you how long it will take to pay off a credit card if you only make the minimum credit card payments. In addition, if you make more than the minimum credit card payment any month, your credit card company must apply the excess amount to the balance with the highest credit card interest rate.

Source: monitorbankrates.com
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Jun 26, 2009

Chase to Increase Minimum Payment On Credit Card Balances

Effective August 2009, many Chase credit cardholders will see their monthly minimum payment more than doubled. Chase recently made the announcement via mail that minimum payments would increase from 2% to 5% of the current balance. That means if your current minimum payment is $250, your new payment would be $625. It seems that the minimum payment increase is targeted at cardholders with low interest rate balance transfers. Chase couldn't raise interest rates on these balances because it previously promised cardholders low rates for the life of their loans. So Chase found another way to make money off these cardholders, in the short run at least. Assuming customers were actually able to afford the payment increase, Chase would only have an increased cashflow for the few years or so until these balance transfers are repaid. In the end, they lose out on a lot of interest that would have been paid under the lower minimum payment.

Source: about.com
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May 22, 2009

Obama signs credit card reforms into law

President Barack Obama signed new credit card rules into law Friday, starting the clock ticking on the advent of a host of consumer protections slated to start as early as August. Consumer protections will be phased in over the next 15 months with the earliest starting Aug. 20, 2009. By that date, all card issuers must begin giving 45-day advance notice of significant changes in card terms. That is also the deadline for giving consumers at least 21 days (instead of the current 14) to pay their monthly credit card bills. (See an interactive timeline of how the bill became law and when its provisions take effect.) The bulk of the consumer protections -- limiting when interest rates can be increased, banning universal default and double-cycle billing, and restricting credit cards for minors, among others -- take effect Feb. 22, 2010. The timing of the law was a major point of contention during Congressional debate on the bill. Consumer advocates argued families struggling in the recession needed help sooner while banking lobbyists pushed for more time to implement changes in billing, operations and computer systems required by the law. Provisions for restoring interest rates to previous levels if cardholders show six months of good behavior do not start until Aug. 22, 2010. Making gift cards valid for at least five years and requiring that fees are reasonable also take effect by August 2010.

Source: www.CreditCards.com
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Apr 30, 2009

Mortgage Bankruptcy Bill fails in the Senate

WASHINGTON - The Democratic-controlled Senate on Thursday defeated a plan to spare hundreds of thousands of homeowners from foreclosure through bankruptcy, a bill President Barack Obama embraced but did little to see it through. A dozen Democrats joined Republicans in the 45-51 vote to scuttle the bill, which Obama had said was important to saving the economy and promised to push through Congress. But facing stiff opposition from banks, Obama did little to pressure lawmakers who worried it would encourage Bankruptcy filings and spike interest rates. “The vote today was a bipartisan rejection of an interest-rate hike, which is exactly the wrong solution for jobs, homeowners and the economy,” said Senate Republican Leader Mitch McConnell of Kentucky.

Source: Source: MSNBC
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Apr 20, 2005

President Bush signs 2005 Bankruptcy Reform Bill

So, experts say, if you were thinking about filing for bankruptcy, you might think twice -- or act twice as quickly, since major provisions of the law will go into effect six months from the day the law is signed. Individuals filing for bankruptcy usually do so either under Chapter 7 or under Chapter 13. In a Chapter 7 bankruptcy, your assets (minus those exempted by your state) are liquidated and given to creditors, and many of your remaining debts are cancelled, giving you what's known as a "fresh start." In 2004, over 1.1 million people filed for Chapter 7, accounting for roughly 72 percent of non-business bankruptcies. Since many Chapter 7 filers don't have assets that qualify for liquidation, credit card companies and other creditors sometimes get nothing. In a Chapter 13 bankruptcy, you're put on a repayment plan of up to five years. Any debts not addressed by the repayment plan don't have to be paid. Last year, there were 445,574 Chapter 13 filings. Under the new law, fewer people will be allowed to file under Chapter 7; more will be forced to file under Chapter 13.

Source: CNN Money
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