Wednesday, May 18, 2011

Harvey Warren, consumer credit activist and author of recently released, Drop Debt: Surviving Credit Card Hell without Bankruptcy, is closely following a couple of major lawsuits which he feels might give consumers much needed relief against large financial institutions. Warren has been watching as government regulations and voracious banks strangle and stomp on consumers every time they turn around.



One of the lawsuits in question is being adjudicated right now in Salt Lake City, here is Harvey Warren's May 18 article, Murdering Consumer Rights, about what is going on with these cases and what it means for consumers.

I don't care if you lean way left or lean hard right, you have to worry about the murdering of consumer rights by big banking. Several important lawsuits are coming to trial that may finally start to tip the scale of justice back toward the consumer. Both mortgage holders and credit cards users are getting a beating from the banks with hijacked homes and aggressive collection. At the same time that banks are abusing consumers they are savaging the credit counseling system; the only reliable and accessible source of information and consumer help still operating in America.

A hearing in federal court in Salt Lake City today is a case study of American banking at its worst. But illegally foreclosing on people's homes is only the appetizer from Bank of America, they are now trying to strip consumers of their advisors by bullying Utah's leading credit counseling agency.

Today in federal court, attorneys fighting for consumer rights will argue that the Mortgage Electronic Registration Systems ("MERS") – the pretender-lender shell company with zero employees, but 22,000 "Vice Presidents" and "Assistant Secretaries," which claims to own more than 60 million mortgages nationwide – has authority to prosecute non-judicial foreclosures in Utah by claiming to be the "beneficiary" of a mortgage (which is normally the original lender, not a computer database).

Plain English, the banks have gone so beserk selling mortgages and been so reckless in extending credit that they have no "wet ink" paperwork to establish they own the mortgage. No paperwork. No problem. We will just make some up with MERS.

It is impossible to measure the harm that consumers have endured at the hands of big banking. But, if the litigation costs of defending their misdeeds is any indication, there's been a world of hurt put on millions of people for no reason.

Bank of America reported $940 million in litigation costs during the first quarter, which increased from $588 million one year ago. Costs associated with mortgage-related assessments and waivers were $874 million, including $548 million for compensatory fees resulting from foreclosure delays.

JPMorgan Chase reported $1.1 billion in litigation expense during the first quarter.

Citigroup estimates approximately $4 billion as of Dec. 31, 2010.

Wells Fargo told investors operating expenses jumped to $472 million in the first quarter from $193 million one year ago. Higher "first quarter litigation accruals for foreclosure-related matters" pushed the increase, the bank said.

Each of the big-four signed consent orders with federal regulators in April as a result of an investigation into how bank employees were mishandling foreclosure cases. The banks will likely face millions in compliance costs and potentially billions in penalties from the scandal going forward.

Now, here's the most amazing part in Utah. AAA Fair Credit Foundation announced last year (February 17, 2010) that their legitimate non profit credit counseling agency was embarking on a radical new program offering less than full balance services through credit counseling. These services, prior to their announcement last year, were only available from bankruptcy attorneys or scandalous debt settlement companies. Great, you might think, finally I can get debt help from a credit counseling agency and be safe from debt settlement companies. But wait a second, the banks are treating the credit counseling agencies, their trusted colleagues, like criminal debt settlement companies and resisting this desperately needed service expansion. Why?

Both Bank of America and JP Morgan Chase are trying to scuttle this consumer assistance movement for the same reason they invented MERS, they have no regard for consumer rights and will take any means necessary to maximize profits including denying consumers access to desperately needed financial services information. They want amateur consumers to have no chance against their professional collectors. Uninformed and unsupported consumers are road kill for any collection department.

Several credit counseling agencies that take servicing the community seriously, are resisting the interference of Bank of America in particular at the peril of their funding and standing.

Some within credit counseling see the development of less than full balance operations as a challenge that banking will never tolerate. Others see the development of those same services as the only chance the credit counseling industry has to survive during the current economic calamity. Simply, 80% of consumers seeking service from legitimate credit counseling cannot benefit from their traditional services.

And what happens to those consumers who can obtain no counseling, just like homeowners, they get raked over the coals of cluelessness and generally end up in bankruptcy after the collection department has stripped them of as many of their assets as they can by fear mongering.

Class action lawsuits by abused consumers and prosecutions by State's Attorneys General, like the action in Utah, will certainly become weekly occurrences until these widespread and focused abuses abate. Until then, consumers are encouraged to make their voices heard in federal court and credit counseling agencies are encouraged to honor their commitment to the public interest and resist the pre-meditated murder of consumer rights by big banking.



About Harvey Warren:



Harvey Z. Warren is actively fostering a powerful national coalition of consumer advocates, lawyers, banking and collection leadership to establish guidelines for non-adversarial debt relief through non-profit credit counseling. A graduate of Ithaca College with a Master of Science degree from Syracuse University, Warren has worked with tens of thousands of debt-crushed consumers and appears frequently on radio and television commenting on the consumer debt crisis in America. For more on Harvey Warren go to www.dropdebtbook.com

For media interviews contact Promotion in Motion at 323-461-3921 or brad@promotioninmotion.net