About Us
The Institute of Student Loan Advisors Corporation (TISLA) was founded to ensure that all student loan borrowers have access to free, neutral and clear student loan advice and dispute resolution assistance. We are a 501(c)(3) non-profit who believes that these borrowers have a right to a trusted resource with industry experience to mentor, educate and advocate for them. Student loan borrowers have a right to such a resource without being charged a fee, barraged with advertisements or forced to provide personal information that may later be sold.

Our goal is to help you help yourself. We are not here to manage your student loans for you, but to give you expert advice and help you to manage them successfully. We will offer fair, neutral advice that outlines what you are eligible for that is in line with current regulation and statute.

What We Can Do For You

• Offer expert advice on your student loans
• Help you decide which repayment plan make the most sense for you
• Determine if you are eligible for loan forgiveness or discharge
• Offer guidance in any dispute you may have regarding your student loans
• Guide you through completing required forms and applications
• Help you get out of a default or delinquency status
  
• 
  

What We Cannot Do For you

• Offer legal advice
• Offer opinions on a particular company or servicer
• Fill out or submit your forms for you
• Pay your loans
• Change the law or regulations
• Manage your loan accounts for you
  
• 
  

Testimonials
From James D. August 1, 2018

“I am very happy that I found freestudentloanadvice.org. I was very frustrated with trying to solve my student loan issues on my own and Betsy was such a great help with advice and follow up. Thank you so much!”

How We Are Funded

At the core of TISLA’s values is the promise of free, neutral and transparent student loan advice. For that reason, we do not accept advertising funds from any businesses nor fees from consumers. TISLA is funded through grants, donations and our fee for service products we offer to employers, schools and associations with constituencies concerned with student debt. 

Such donations and partnerships will be listed on this page to ensure continued transparency. If you are interested in helping to fund TISLA, a 501(c)(3) non-profit organization, please contact betsy “at” freestudentloanadvice.org or donate through donorbox online.

TISLA 2018 Annual Report

Partnership Opportunities

TISLA offers several affordable and customizable packages to suit your constituencies needs for expert student loan repayment education and assistance.  These offerings are suitable for employers looking to attract and retain valuable employees or schools who wish to provide student loan assistance to their alumni, students and employees.  Our services can also be a way for associations to provide additional value to their members.  Please contact betsy “at” freestudentloanadvice.org for more information on partnering with TISLA.

Our Leadership

TISLA is currently completing its board roster. If you, or someone you know, has a passion for the issue of student debt, can contribute their business, non-profit or other expertise and influence, and would like to consider serving, please contact betsy “at” freestudentloanadvice.org

Our Mission

To make certain that all student loan borrowers have access to free, neutral and accurate resources and mentoring to ensure they can successfully manage their student loan debt.

Our Values

• Accuracy
• Clarity
• Integrity
• Professionalism
• Approachable
• Respect
• Neutrality
• Transparency
• To be of service to others

Bankruptcy Exemption Limits (what you can keep) Amounts Going Up

Bankruptcy Code § 104(b) provides that the exemption amounts and other dollar figures in the Code are automatically adjusted for inflation every three years. The adjustments are based on changes to the Consumer Price Index for All Urban Consumers published by the Department of Labor, rounded to the nearest $25.


New dollar amounts take effect on April 1, 2019, and will apply to all cases filed on or after that date. Consumer debtors who may benefit from the higher dollar amounts, particularly with respect to exemptions, the means test, and chapter 13 debt limitations, may wish to delay a bankruptcy filing until the new amounts take effect on April 1, 2019.


Despite popular belief, many lower-income bankruptcy filers can retain all or almost all of their assets in a chapter 7 bankruptcy. The new higher exemption limits means that it is even more likely that consumers can protect their assets in a chapter 7 filing.

New Exemption Amounts Protect More Consumer Property

Consumers in states that have not opted out of the federal exemptions may claim the bankruptcy exemptions under Bankruptcy Code § 522(d), as discussed in NCLC’s Consumer Bankruptcy Law and Practice § 10.2.1.1.

The federal bankruptcy exemptions may also be claimed if the “safe harbor” in Bankruptcy Code § 522(b)(3)(A) applies due to the consumer’s domicile for exemption purposes, even if the state in which the consumer’s domicile is located is otherwise an opt-out state, as discussed in id. § 10.2.1.2.

Exemption amounts refer not to the value of property, but to the consumer’s equity in the property after deducting outstanding credit secured by that property. The exemption amounts in Bankruptcy Code § 522(d) are doubled when a married couple files a joint case. 11 U.S.C. § 522(m).

For a state-by-state summary of state exemption amounts that apply to bankruptcies in certain states and that also protect property from seizure by judgment creditors, see NCLC’s Consumer Bankruptcy Law and Practice Appendix J. The same state-by-state survey is found in NCLC’s Collection Actions Appendix G.

As of April 1, the digital version of NCLC’s Consumer Bankruptcy Law and Practice will be updated throughout showing the new higher dollar amounts, both in the chapters and the Bankruptcy Code appendix (with footnotes showing the old dollar amounts). The following are the new exemption amounts:


Homestead - § 522(d)(1)                                      $25,150
Motor Vehicle - § 522(d)(2)                                   $ 4,000
Household Goods - § 522(d)(3) Per Item Limit        $ 625
Aggregate Limit Household goods                       $13,400
Jewelry - § 522(d)(4)                                             $ 1,700
Wild Card - § 522(d)(5) Any property                    $ 1,325
Wild Card Unused homestead § 522(d)(1)          $12,575
Tools of the Trade - § 522(d)(6)                            $ 2,525
Unmatured Life Insurance - § 522(d)(8)               $13,400
Personal Injury Claims - § 522(d)(11)(D)              $25,150

Exemption for Retirement Accounts

As discussed in NCLC’s Consumer Bankruptcy Law and Practice § 10.2.3.3, the federal bankruptcy exemption for retirement funds in pension plans and individual retirement accounts is available to all debtors, even those in “opt-out” states who would not otherwise be permitted to claim the federal exemptions. 11 U.S.C. § 522(d)(12) and § 522(b)(3)(C). The maximum dollar amount for this exemption also adjusts every three years. 11 U.S.C. § 522(n). The new maximum aggregate value of funds in retirement accounts that may be exempted will be $1,362,800.

Other Dollar Amount Adjustments in the Code

The inflation adjustment also applies to other dollar amounts in the Code, including:

• • Priority for wages and employee benefits under Bankruptcy Code § 507(a)(4) will now be $13,650, and the priority for consumer deposits under Bankruptcy Code § 507(a)(7) will be $3,025. Distribution to priority creditors is discussed in NCLC’s Consumer Bankruptcy Law and Practice § 3.5.4 and § 18.5.5.


• • Debt limits for eligibility for chapter 13 under Bankruptcy Code § 109(e) will also go up—to $419,275 in unsecured debt and to $1,257,850 in secured debt. The chapter 13 debt limitations are discussed at id. § 4.2.1.3.


• • Threshold for the presumption of nondischargeability under Bankruptcy Code § 523(a)(2)(C) for purchases of luxury goods or services incurred within 90 days prior to filing will be $725 and for cash advances within 70 days prior to filing will be $1,000. A discussion of when these presumptions arise can be found at id. § 15.4.3.2.3.2.


• • Dollar amounts under the means test for determining whether a presumption of abuse exists, based on the debtor’s income after expenses over a 60-month period, will now be: (i) $8,175 ($136.25 per month based on 60 period) or 25% of nonpriority unsecured debt, whichever is greater, or (ii) $13,650 ($227.50 per month). 11 U.S.C. § 707(b)(2)(A)(i). These dollar amounts are discussed at id. § 13.4.6.1.


• • The cap on homestead property acquired within 1215 days before the bankruptcy filing under Bankruptcy Code § 522(p) or based on the commission of certain bad acts by the debtor under Bankruptcy Code § 522 (q) will be $170,350. These limitations on state homestead exemptions are discussed at id. § 10.2.3.4.


• • The minimum aggregate amount of property that a trustee may seek to recover as preference in a case filed by a debtor whose debts are primarily consumer debts will now be $6,825. 11 U.S.C. § 547(c)(9). This limitation on a trustee’s ability to avoid transfers as a preference is discussed at id. § 10.4.2.6.4.2.


• • The amount in an education IRA, a section 529 tuition savings program, and a qualified ABLE account that is excluded from property of the estate, if placed in such an account between 365 and 720 days before the petition was filed, will now be $6,825. 11 U.S.C. §§ 541(b)(5)(C), 541(b)(6)(C), 541(b)(10)(C). This exclusion from the bankruptcy estate is discussed at id. § 2.5.3.
  

 We are launching a new “Tell YOUR Story” tool that will enable residents, families, ombudsmen, and those who work with them tell their story about nursing home or assisted living care.

The form is available on our website at https://nursinghome411.org/tell-your-story/.
 
One can fill out the form on the website, download it to fill out on a computer or phone, or print out a hard copy to mail in. All personal identifying information is kept confidential unless the individual provides specific permission otherwise.
 
Stories about resident care can have an enormous impact on advocacy for better care and dignity. We would appreciate any help you can provide in getting the word out and passing this along!
 
Other news from LTCCC…

1. Dementia Care & Antipsychotic Drugging.
   
2. We have just published the latest antipsychotic drugging rates for all U.S. nursing homes and citations for inappropriate drugging. Sadly, recent data indicate that drugging rates are no longer going down! https://nursinghome411.org/learning-center/dementia-care-antipsychotic-drugging/  [Please note that some facilities with a low resident population are not included in these data.]
   
3. Safe Staffing.
   
4. We recently published the staffing levels for all U.S. nursing homes in easy-to-use files. Staffing is critical to quality, yet too many nursing homes have insufficient staffing. For the first time, these files include city and county information, to make searching for your nursing home, or those in your community, even easier. https://nursinghome411.org/nursing-home-data-information/staffing/
   
5. Resident & Family Councils.
   
6. We have issued a new Issue Alert on family and resident council rights, https://nursinghome411.org/ltccc-issue-alert-resident-family-councils/ and have launched our new Family & Ombudsman Resource Center, https://nursinghome411.org/families-ombudsmen/.
   
7. Webinars on Quality of Care & Resident-Centered Advocacy.
   
8. Please join us for our next free “lunch-and-learn” program on November 20 at 1pm Eastern. Topic: Making Your Voice Heard in the Nursing Home… and Beyond. https://nursinghome411.org/upcoming-webinars-nursing-home-care-resident-centered-advocacy/
   
9. New Report on Assisted Living: Promising Policies and Practices. https://nursinghome411.org/ltccc-report-assisted-living-promising-policies-and-practices/
   

All of these resources are free to use and share. If you would like to sign up for future updates and alerts, please email info@LTCCC.org.
 
Sincerely yours, Richard
 
Richard J. Mollot, Executive Director
The Long Term Care Community Coalition
One Penn Plaza, Suite 6252
New York, NY 10119
Phone: 212-385-0355
www.nursinghome411.org

library.nclc.org
Defending a Home from Foreclosure: Consumer Debt Advice from NCLC
by Geoff Walsh, National Consumer Law Center (NCLC)

This is also the third in a series of three articles dealing with home mortgages. This article explains a homeowner’s general rights to defend or delay a pending home foreclosure, how a chapter 13 bankruptcy can avoid foreclosure, the homeowner’s rights after the foreclosure sale, and additional rights to deal with nine special types of foreclosures.

The first article dealing with home foreclosures covered how to obtain information about your mortgage payments, what happens if you make only a partial payment, disputing the amount due, and key information about escrow, property taxes, and insurance. The second article set out options to lower or delay mortgage payments for Fannie Mae, Freddie Mac, FHA, VA, and RHS mortgages.

You are not powerless when you face with a foreclosure sale, but you need to be realistic in defining your objectives.

You often have a good chance of achieving one of the following two objectives:

1. If you have the financial resources, you can keep your home by paying back delinquent payments and legitimate fees or costs. It also is possible to prevent foreclosure by “redeeming” your home.


2. If you do not have the financial resources, you can delay the foreclosure sale to give you enough time to find a long-term solution to the underlying problem that caused you to fall behind on your mortgage payments.

This article also has special advice for nine particular types of foreclosures:

• • If your mortgage is backed by three different government agencies—FHA, VA, or RHS;
• • If you or your spouse are now on active duty in the military;
• • If you have a land installment sale contract;
• • If your mortgage resulted from a home improvement scam;
• • If your mortgage is for a manufactured home;
• • If your manufactured home is facing eviction from a manufacture home park; and
• • If your condominium faces foreclosure for unpaid condominium fees.

Your Rights in the Mortgage Foreclosure Process

Preliminary Notices.

To protect your rights, you need to be informed about what is happening—the worst thing you can do is ignore everything. If you are behind on your mortgage payments, stay on top of things: carefully read the notices you receive, keep track of deadlines, and contact the servicer or foreclosure attorney at regular intervals.


In every state, you are entitled to notice of a pending foreclosure on your home. But do not rely on the fact that you will get this notice—either because of servicer negligence or problems with mail delivery. Always pick up any certified or registered mail, even if returned to the post office. Keep all the notices that you receive from the servicer, lender, or foreclosure attorney in one place, like a folder or notebook. Also document all related phone calls with the date, time, name of person that you spoke with, and the substance of your conversation.


Notice of Default.

You will almost always get a “notice of default” or “notice of delinquency” from the loan servicer that says that you have fallen behind on your payments. It may look like any other collection letter. It tells you how many payments you are behind and the payment amount to catch up and get out of default, often called “the arrears.” It will also give you a deadline to make this payment to avoid foreclosure.


Typically, your payment of the total amount of the arrears will stop any foreclosure. Partial payments are often rejected unless they are made as part of a workout agreement or loan modification.


If you cannot pay the total arrears, review the prior article in this series about seeking a workout agreement or loan modification. Otherwise, do not delay, but review immediately your other rights to deal with the foreclosure. The deeper you get into the foreclosure process, the harder it will be to stop it. A big advantage to paying off an arrearage when you get the initial notice is that you will not yet be responsible for major foreclosure fees and costs that come due after the case is referred to an attorney for foreclosure.


Notice of Acceleration.

After notice of default, or sometimes combined with the notice of default, you typically receive a notice of acceleration. It says that now you don’t just owe the past due installments, but you owe the full mortgage balance, payable either immediately or by a certain date. Receipt of a notice of acceleration indicates that the foreclosure process is moving quickly and that you must act immediately to deal with the pending foreclosure.


The Right to Reinstate.

Many states and mortgage contracts allow you a second chance even after the servicer demands the full balance on the loan, by “reinstating” the mortgage. Usually, this means getting caught up on your missed payments together with foreclosure fees and costs. Many mortgage contracts give you this “right to reinstate” up until five days before the foreclosure sale, and some servicers accept payment right up to the sale date. Your servicer may require that the payment be by certified or bank check and sent to the law firm handling the foreclosure.


Occasionally, servicers claim you did not meet your obligations in some other way, such as failing to keep the property insured. These defaults can also be “cured” by taking care of the problem.


Even where you do not have a legal right to reinstate your mortgage, servicers often will agree to reinstate voluntarily, although others will not. When the servicer will not allow reinstatement, you can often force the lender to allow a reinstatement by taking the matter to court. Most judges will not want to put your family on the street when you have money to pay the arrears, and even in states where judges do not have this power, offering to pay in front of a judge sometimes embarrasses the lender into accepting the payment.


Using Bankruptcy to Cure the Default.

Even where the servicer will not accept payment of your arrears to reinstate the mortgage, if you file for bankruptcy before a foreclosure sale is completed, you then have a right to cure any default by paying the amount overdue. In a chapter 7 bankruptcy, you have to pay the arrearage immediately if you want to avoid foreclosure. If you file under chapter 13, you can make those payments in installments over a period of years.


The Right to Redeem.

You also can “redeem” your home up to the time of a foreclosure sale (and in a few states for a limited number of days after the foreclosure sale). To redeem, you must pay the servicer the whole mortgage balance in one payment plus the lender’s foreclosure fees and costs. Some states allow a second type of redemption where, after the foreclosure sale, you pay the person who bought your home at the foreclosure sale the amount that person paid to purchase the home plus the person’s related costs. Unless you can obtain a new loan to do so, either type of redemption is clearly impractical for you if you are having trouble even making your monthly payments.


How Long Does Foreclosure Take?

A foreclosure can take from three months to a year or more. Much depends on your state, the servicer, and your own actions. Check local practice and stay on top of all foreclosure-related notices. But no matter how long the foreclosure takes, your own delay in developing a plan always will make matters worse for you.


How a Lender Gets Permission to Foreclose.

Foreclosure procedures are established by state law and by local practice. In some states, the lender first files suit in a court, usually in the county where your home is located. You receive a summons or a similar notice usually brought to the house by a sheriff, constable, marshal, or process server. This notice gives you a period of time to respond to the foreclosure lawsuit and to raise your defenses. Your answer must be in writing and filed with the court. If you do not respond at all, a default judgment will be entered against you. If you file a response the court may only enter a judgment against you if it finds your defenses have no merit. A court judgment for the lender gives the lender permission to sell your home unless you can work out an agreement or take some other action (such as bankruptcy) to prevent the sale.


[NOTE: OREGON LENDERS TYPICALLY USE NON-JUDICIAL IF THEY CAN SO YOU MUST GET HELP AS SOON AS YOU KNOW YOU ARE THREATENED WITH FORECLOSURE -- Don't wait for a summons that may never come!]

Other states use “non-judicial foreclosures.” Servicers are allowed to hold a foreclosure sale without a court or other official permission to go forward. They advertise the home for sale, using a legal notice in a newspaper. The servicer sends you a notice of the time and place for the sale. If you want to challenge this type of foreclosure, you must either file for bankruptcy or file a lawsuit and ask the court to stop the sale. With a lawsuit, you may have to file a bond protecting the lender.


The Foreclosure Sale.

Servicers must send you notice of the date and time your home will be sold. In some states, this notice is combined with the notice of acceleration, discussed above. The sale date is a key date because that is when you lose your rights as the owner to obtain a workout or to use the bankruptcy process to prevent foreclosure.


Generally, a foreclosure sale is a poorly advertised and poorly attended auction, either at your home or at a local courthouse or government building. Where a court ordered the foreclosure, the auctioneer will be a sheriff or court official. Otherwise, it will be conducted by someone hired by the servicer. Often only the foreclosing lender attends, who bids no more than the balance of the debt. You can bid at the auction, but you will have to make an immediate down-payment and pay the balance within a short period of time. After a foreclosure sale you will receive notices about eviction. In most states the servicer must go through a separate court procedure to get permission to evict you. Only a government official can carry out an eviction. The eviction consists of a supervised change of locks and removal of your personal property from the house.


The Mortgage Deficiency or Surplus.

Once a foreclosure sale is completed, pay careful attention to all notices you receive. These may include notices of who bought the property and how much they paid. Always ask on your own who bought the property and the sale price because sometimes this information is not sent to you.


[IN OREGON, YOU ARE NOT GENERALLY LIABLE FOR A DEFICIENCY ARISING FROM FORECLOSURE ON YOUR PRIMARY RESIDENCE, BUT YOU NEED TO SEE A LAWYER TO BE SURE.]


If the sale does not bring in enough to pay off the amount due on the loan, in many, but not all states, you will remain responsible for the balance, called a “deficiency”—the remainder due on the loan plus costs, minus the amount the lender was paid from the sale proceeds. You may also receive notices about the deficiency, including collection letters and court papers. In some states your deficiency can be limited if you act to protect your legal rights by responding to these notices or court papers. If you do have to pay a deficiency, this will be an unsecured debt like credit card or medical debt and it is thus low priority debt, until the lender sues you for that debt. Because deficiency claims are unsecured debts, they can be discharged in bankruptcy.


An exception is if your loan is insured, guaranteed, or made by the VA or the Rural Housing Service (RHS). When these agencies seek a deficiency, they can seize your federal tax refund. Also they can seize a portion of your Social Security and certain other federal benefits, although the first $750 a month is protected from seizure. But, even though the debt is owed to the federal government, you can also discharge it in bankruptcy.


On the other hand, if the sale brings in enough to pay off the amount due including all foreclosure costs, you are entitled to any amount by which the sale price exceeds that, called a “surplus.” Although consumers are rarely owed a surplus, if your home sells for more than the outstanding balance, contact the servicer or its foreclosure attorney. If they say you are entitled to a surplus, be sure to give them your new address when you move, so they can send you a check.


If the servicer does not tell you whether you are entitled to a surplus, send a Qualified Written Request to the servicer, as described in a prior article in this series. If fees and costs eat up your surplus, and they seem unreasonable, dispute them or even challenge them in court.


Getting Legal Advice to Stop a Foreclosure; Advice to Avoid

When threatened with foreclosure, immediately seek legal help. It is better to get this help too soon rather than too late. Free help may be available at a neighborhood legal services office (go to www.lawhelp to find a legal services office) or a bar association panel of pro bono attorneys. A small number of lawyers in your area may handle foreclosure defense cases for a fee and many lawyers will help you file a bankruptcy. Exercise care in hiring a lawyer. The highest priced lawyer may not be the best. Find someone you feel comfortable with, at a price you can afford. Also try to get a referral for the lawyer from someone you trust.


Another good source of help is nonprofit foreclosure prevention counseling (sometimes called “default counseling”). Contact a local nonprofit housing organization to find out where this service is offered in your community or call 800-569-4287 (TDD 800-877-8339) or visit www.hud.gov to find a HUD-approved housing counseling agency near you.


Scams to Avoid.

Some businesses offer help to people facing foreclosure in order to rip them off. A pending foreclosure of your home is public information and scam artists will find that information and then contact you. Scammers may ask for thousands of dollars, saying they are offering you a loan or have arranged a payment plan or loan modification. In reality they will do nothing. Even worse, these scammers may (even without you realizing it) have you sign your deed over to them, with a bogus option to buy it back.


If someone seeks you out to save your home, odds are the offer is bogus and will only get you deeper into debt and prevent you from taking the steps that will save your home or improve your situation. Requests for high fees or for money to pay the mortgage are another sign of a scam. An offer of a new mortgage as a way out of foreclosure will be on terrible terms and will just make your situation impossible to resolve. If you do sign a new mortgage under pressure of foreclosure, you have three business days to cancel.


Delaying the Foreclosure Process

Foreclosure can move very quickly, but you can exercise your legal rights to slow down the process. Delay gives you time to put in place a long-term solution, such as to refinance your mortgage, sell your home privately, arrange a workout agreement or loan modification, or save up money to get you caught up on your payments. You cannot properly delay foreclosure just because you need more time. The actions you take must be based on some underlying legal claim or defense that is raised in good faith.


Procedural Defenses May Delay the Process.

Foreclosures are rarely contested by homeowners, and lenders’ attorneys may be sloppy in their procedures and sometimes do not comply with pre-foreclosure requirements. Lender errors can be to your benefit when you are contesting foreclosure, forcing the lender to start over or at least to comply with procedural requirements.


You are likely to need the help of a lawyer or other professional to determine lender compliance with required procedures. Examples are failure to give you proper notice, failure to give you a fair chance to correct the default, failure to properly advertise the sale, failure to introduce the original documents in the foreclosure proceeding, failure to sue all the proper parties, failure to bring the foreclosure proceeding in the name of the real mortgage owner, or discouraging bids at the foreclosure sale. There may also be procedural requirements that involve considering you for loss mitigation options. Under certain state laws you may be able to defend against a foreclosure if the servicer seriously violated these procedures.


In states where foreclosure actions are brought in court, raise defenses in that action. In states where lenders use the non-judicial foreclosure process, you have to bring a legal case of your own, asking the court to stop the foreclosure.


Servicer’s Past Acceptance of Late or Partial Payments As Grounds for Foreclosure Delay.

Courts may refuse to allow foreclosure if the servicer surprises you by suddenly calling the whole loan due when the servicer has been lenient in the past in accepting late or partial payments. It instead must warn you that late or partial payments are no longer acceptable before it calls the whole loan due and attempts a foreclosure. If the servicer accepts a payment after the foreclosure has started, you can argue that there is no longer a default, and the servicer must restart the foreclosure process. This may involve giving a new notice of acceleration.


Asking the Court for More Time.

A judge may give you a delay if foreclosure will cause serious hardship. The hardship should be documented and involve more than just the loss of your home, such as that a family member has a serious illness. The hardship must be temporary as well; if permanent, the judge may feel that now is as good a time as any to allow the foreclosure.


If you have a great deal of equity in your home, a judge may allow you a short period of time to sell the home without foreclosure, allowing you to get the best possible price and recover your home equity. Even if you are unable to make payments during this time, the lender is not hurt because there is enough value in the property to eventually pay the lender’s full claim.


A Chapter 7 Bankruptcy May Create a Temporary Delay.

A chapter 7 bankruptcy case cannot address a foreclosure in the long term but filing the bankruptcy typically delays the foreclosure at least 60 days, as long as you have not recently filed another bankruptcy case. While the bankruptcy is pending, the lender cannot continue foreclosure without permission of the court.


You cannot file a chapter 7 bankruptcy solely to delay foreclosure. You must have some other legitimate purpose for filing bankruptcy. For most homeowners in financial distress, this is hardly a problem because there are lots of other debts outstanding.


A Chapter 13 Bankruptcy May Stop a Foreclosure Permanently

Unlike a chapter 7 bankruptcy that only delays a foreclosure, a chapter 13 bankruptcy filing may eliminate the threat of foreclosure by letting you slowly get caught up on past due payments over a period of years, while at the same time, you must continue to make your regular monthly payment. Do not file the chapter 13 bankruptcy too soon, and instead pursue options to modify your payments discussed in a prior article in this series. But you definitely do not want to wait too long and certainly should file the chapter 13 bankruptcy before the foreclosure sale.


You also need to leave yourself enough time to participate in required credit counseling with an approved credit counseling agency before filing bankruptcy. Fortunately you can do this over the Internet or by telephone.


Curing Delinquent Payments and Reinstating the Mortgage.

Chapter 13 bankruptcy works best where you fell behind in your mortgage payments because of a temporary financial setback and you have resolved the problem that caused your setback. Filing the chapter 13 bankruptcy (the same as in chapter 7) automatically stops the foreclosure—at least temporarily. In addition you can pay back your delinquent payments in installments over a period of three to five years, but you must also make your regular monthly payments as they come due. You may have to pay interest on the back-due amount, a commission to the bankruptcy trustee for handling your payments, and certain fees the servicer has already charged, if they are legitimate.


For example, assume you are six months behind on $800 monthly mortgage payments so that you owe $4,800 and also assume the servicer has charged $600 in various fees. In a five-year chapter 13 case, you cure by making future $800 payments as they come due and catching up on the past due $5,400 in sixty monthly payments of $90 each, plus interest and the trustee’s commission, so you pay $890 a month plus interest and the commission.


As long as there has not been a foreclosure sale, you can cure delinquent payments in a chapter 13 bankruptcy even if the servicer has already demanded you pay at once the full loan amount or even if a court has ordered a foreclosure sale. The bankruptcy process also gives you an opportunity to raise defenses to the lenders’ claim, including defenses that fees are excessive. These defenses can be raised as part of the determination as to how much you have to pay under your chapter 13 bankruptcy plan. Chapter 13 bankruptcy may also permit you to get rid of other liens and mortgages on your property.


Sale of a Home in a Chapter 13 Bankruptcy.

If you can no longer afford your future mortgage payments, you will not benefit from bankruptcy’s ability to cure past delinquencies. You can, however, use the bankruptcy process to sell the home on your own in an orderly fashion, thereby keeping your equity and avoiding the problems of a foreclosure sale. This is likely to work only if the home’s sale price is enough pay both the mortgage lender and at least something to your other creditors.


Request that the court approve your realtor. When a sale is arranged, many title insurance companies require that you obtain an order from the bankruptcy court approving the sale and allowing the property to be sold free of liens.


State Temporary Bans on Foreclosure;
Conference and Mediation Programs

Several states and local court systems have created programs that offer settlement conferences and mediations for foreclosures. These programs are designed to encourage the servicer to agree to alternatives to foreclosure. Even though how these programs work will vary, they all give you the the opportunity to discuss your situation with a live person as opposed to leaving messages in the servicer’s voicemail system. Often the programs refer you to housing counselors and other advocates who can help you through the process.


Carefully review any notices you receive about mediation programs. Sometimes a mediation session is scheduled automatically when a servicer starts a foreclosure. In other programs, you have to request mediation and you may have only a limited time to make the request.


State and local governments also have at various times authorized stays of foreclosures limited to the duration of a particular economic crisis or natural disaster. Check for any restrictions on foreclosures in your state. State bans are only temporary, but they may give you an opportunity to get back on your feet.


Your Options After the Foreclosure Sale

Redemption and Setting Aside the Sale.

Some states, for a very limited number of days after the foreclosure sale, allow you to “redeem” the home back from the lender—in other words, they allow you to pay off the full mortgage and related fees and charges. This way, you end up with clear title to the property. Another option in some states is to redeem your home from the person purchasing it at the foreclosure sale, paying that person the total purchase price plus interest and allowable costs. State law may provide you only a very limited number of days after a foreclosure sale to redeem in this manner, but other states give you up to a year to redeem from the purchaser. Even if you do not have a right to redeem after the sale, you may be able to buy the home back from the purchaser, particularly if the buyer was your mortgage lender.


In some areas there are local non-profit agencies that help borrowers with financing to purchase their homes back after foreclosures. Another option is to find another purchaser for your home willing to pay more than the redemption amount. You still lose your home, but you get to keep the difference between what you sell the home for and the redemption amount. Those funds may be very helpful in your search for new housing. Redemption has strict time deadlines and strict procedures, so it is best to try to have an attorney to assist you in redeeming the home.


You can also ask a court to set aside the foreclosure sale because proper procedures were not followed or because the price was unconscionably low. This is a long shot and you must act quickly, almost always with an attorney’s help.


Rights As a Tenant in Your Own House.

After the foreclosures sale, you are a tenant at will in your own home, now owned by someone else. To evict you, the new owner must comply with your state’s landlord-tenant eviction law. This usually means filing a lawsuit in court. You can save the new owner from dealing with the difficulty and time involved in an eviction processes by vacating voluntarily if the new owner gives you cash to help in the move and to find new housing. This option is called “cash for keys.” You can also offer the new owner that you will pay rent if you are allowed to stay in the home. Even a short extension can help you find a new place to live.


Special Protections Against Foreclosure for
FHA, VA, and RHS Mortgages

FHA Loans.

Lenders cannot begin legal foreclosure proceedings on an FHA-insured loan if your only default is an inability to pay an escrow shortage in a lump sum. They also cannot foreclose for missed payments until at least three monthly payments are overdue. After the President declares a disaster affecting your home, the lender may not start or continue a foreclosure on your home for 90 days.


You also may be able to delay a foreclosure if the servicer has failed to comply with servicer requirements for an FHA-insured mortgage loan. Key requirements are that the servicer must:

• • Consider whether you qualify for FHA loss mitigation options before initiating a foreclosure.
• • Give you notice of your default by the end of the second month of your delinquency, explaining what you must do to get reinstated.
• • Make reasonable efforts to arrange face-to-face or telephone interviews with you before three full monthly installments are overdue.

If you have an FHA mortgage and are threatened with foreclosure, and you do not have an attorney, you should at least contact a HUD-approved counselor. To find a HUD-approved counselor, call 800-569-4287 (TDD 800-877-8339) or check www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm Sometimes a counselor can convince a lender to give you a second chance. Alternatively you can call HUD for help at 877-622-8525. Stay on the line until a HUD field officer picks up.


VA Mortgages.

If you have a VA mortgage, the lender cannot foreclose unless you fail to make three full monthly payments. The lender must give the VA thirty days’ warning of its intent to foreclose and must make all reasonable efforts at forbearance before actually foreclosing on the property. The lender must consider temporary suspension of payments, extension of the loan, and acceptance of partial payments. If the lender still intends to foreclose, you can stop the foreclosure by paying all overdue payments, all late charges, and any of the lender’s foreclosure expenses to date.


The lender’s failure to meet its obligations in this area can be a defense to foreclosure. For example, send a letter to the lender asking it to consider foreclosure avoidance strategies. The lender’s failure to respond appropriately is evidence of its failure to meet its responsibilities. Another option is to contact the regional VA office serving your state, explain the reasons for your default, and ask about the best plan for getting your mortgage payments back on track.


RHS Mortgages.

For private loans guaranteed by the Rural Housing Service (RHS), the lender must follow RHS guidelines when they foreclose. For example, you can assert a defense to foreclosure that the lender failed to consider RHS loss mitigation options before foreclosing.


Other loans come directly from the RHS. Before it forecloses, RHS must notify you about loss mitigation options, consider you for them if you ask, and implement the options you qualify for. RHS’s failure to perform any of these obligations can be raised as a defense to foreclosure. You can also appeal the RHS’s loss mitigation decisions with the Department of Agriculture (RHS’s parent agency), and a foreclosure should not proceed until an appeal has been resolved.


Special Protections for Active Duty Military

If you are on active duty in the military or left within the past nine months, or you are the spouse or dependent of someone on active duty, you have special protections from foreclosure under the Servicemembers Civil Relief Act. This Act applies to all types of mortgage loans, but only applies if you entered into the loan before your current period of active duty.


Even if you are in a state that allows non-judicial foreclosures, the lender must obtain a court order or your written permission to foreclose on your home. You can also ask make a written request with the court for a ninety day (or even longer) delay in any court foreclosure case brought against you. The request must explain why your military duties affect your ability to appear in court, give the date when you will be able to appear, and include a statement by your commanding officer that your military duties prevent you from appearing in court and that leave is not authorized.


Make sure you get in writing that the case against you has been delayed. The court also can lower your mortgage payments or add your back payments to your loan balance if your military service affects your ability to make your payments.


Foreclosure of Land Installment Sales

Your foreclosure rights are very different if you have a special type of home mortgage called an “installment land contact,” “land sale contract,” “contract for deed,” or “bond for deed.” This article calls them “land installment sales.” In a land installment sale scenario, you do not take title to your home until you have made all the monthly payments that are due, often for more than 10 or even more than 20 years. You pay property taxes and are responsible for repairs, but you do not yet have title to your home.


Land installment sales have far fewer protections from foreclosure than do other types of home mortgages because state foreclosure laws often do not apply. You may not have the right to certain notices, and may not have the right to reinstate or cure delinquent payments or to redeem your home.


In fact, if you miss a payment, the lender may try to evict you under your state’s rules for landlords and tenants, which offer you less protection than state laws dealing with foreclosures. Fortunately, this is not always the case—for example, in Illinois, Maryland, Ohio, Oklahoma, and Texas, your rights are closer to those that apply in a normal home foreclosure.


Some (but not all) bankruptcy courts treat land installment sales like mortgage loans, so that a chapter 13 bankruptcy plan can cure back-payments over a three-year to five-year period. When bankruptcy courts do not treat land installment sales like mortgages, you still have important rights in bankruptcy to keep your home.


Foreclosure Protections
Where Mortgage Resulted from a Home Improvement Scam

You have special rights if your foreclosure results from a home improvement loan and the contractor deceived you or performed shoddy work, and the contractor was the one who initiated the loan or referred you to the lender. In this scenario, you can argue in court that you do not have to pay the loan because of the contractor’s performance.


The loan agreement may even say that you can raise the seller’s conduct as a defense on the loan. Because you do not owe on the loan, they cannot foreclose. On the other hand, small errors or minor problems with the work probably will not be enough to be a foreclosure defense.


You will have to raise this issue either in the judicial foreclosure action or in your own court action where the lender seeks to foreclose without a judge’s order. You may fare best where you get the help of an attorney. Ask the attorney to refer to NCLC’s Federal Deception Law Chapter 4.


Foreclosures of Manufactured (Mobile) Homes

The law often is unclear as to whether a manufactured home is considered real estate. If the manufactured home is treated as real estate, the foreclosure rules are similar to any other home. If the manufactured home is treated as personal property, the foreclosure rules then are similar to car repossessions discussed in a prior article in this series. The answer will vary from state to state and often will depend on where the home was when the loan documents were signed. Was it on the dealer’s lot or was it attached semi-permanently to your own land or at a manufactured home park? Is there a title to the home or are the ownership documents recorded in the local land records?


You should consider seeking a loan modification (as discussed in a prior article in this series) if you are behind on payments, whether your manufactured home is classified as real estate or as personal property. Similarly, no matter how your state law treats manufactured homes, filing bankruptcy can stop its seizure and provide options for curing the default. In addition, manufactured home loan documents often state that you have the right to “cure” your delinquent payments. You can stop the seizure if within 30 days of the notice date you pay past-due amounts, late charges, and related fees.


If your manufactured home is treated as personal property, a lender may send a representative to repossess your manufactured home; more likely, however, your lender will take you to court and try to have the court order a sheriff to seize your manufactured home. Like other court actions, you should get legal help as soon as possible to defend against the lender’s claims.


Manufactured Home Evictions from Parks.

If you rent park space for your manufactured home, failure to make your lot rent payments can result in your eviction. Typically, the park owner must first file a legal action to evict you. In some states, this legal action will be similar to other landlord and tenant actions. Other states have special legislation dealing with manufactured home park evictions, and these may even allow a park owner to seize your home.


You will need to check with a specialist who is knowledgeable about these issues in your state, such as a lawyer, manufactured home park tenants’ association, or manufactured home owners’ association. You should deal with your lot rent as a priority debt just as high as your manufactured home loan payment.


Foreclosure for Unpaid Condominium Fees

If you do not pay your condominium fees, in many states the condo association has a priority lien on your home, meaning that it can foreclose on your unit to collect the amount due. Such a lien can also complicate your ability to obtain a loan modification from your mortgage lender, unless you first get caught up on your condo fees. Other times the condo association may just sue you in court for the fees.


Communicate with the condo association’s trustees or property manager if you cannot pay your condominium fees. Let them know the reason and see what kind of payment plan you can work out. As the other owners are your neighbors, they may be willing to work out an agreement that helps you through difficult times.

DannLaw launches "Scoundrels, Scams and Cheats" database to ensure public access to CFPB consumer complaint reports

On April 25, Mick Mulvaney, the head of the Consumer Financial Protection Bureau told a group of financial services lobbyists and executives that he would soon hide the Bureau's consumer complaint database from the American people and the media. They applauded.

Today that applause stopped as DannLaw founder and former Ohio Attorney General Marc Dann outlined his law firm's plan to undo Mulvaney's betrayal of the public trust. "I am pleased to announce that DannLaw has downloaded all the information in the CFPB database and uploaded it into one that will remain accessible to the public and the media once Mulvaney carries out his threat," Dann said. "Mulvaney, who is owned by the financial services industry, doesn't own the material in the CFPB's files, the public does. From this day forward, consumers will always be able to review and assess it by logging onto www.dannlaw.com/complaint-database/

Dann said his firm would update the database monthly by lodging Freedom of Information Act requests for any new complaints lodged with the Bureau. "If Mulvaney won't turn the reports over voluntarily we're prepared to take him to court, monthly if need be," Dann said. "No matter how hard he may try, we're not going to allow them to hide this information from the American people."

Dann noted that although Mulvaney has the authority to shut down the public-facing side of the database, the Bureau must, by law, continue to accept complaints. "We've placed links to the CFPB's complaint form on www.dannlaw.com and we will encourage people to continue to report abuses and illegal behavior," he said. "We're sure the director is going to bury the
complaint form on an obscure page on the Bureau's website. We want to make it easy for consumers to find and use it."

Set up in 2012, the database, which contains more than 1,000,000 complaints lodged against financial firms, has become a critically important resource for Americans who want to avoid being cheated or scammed, the media, academics, and regulators who have used it to gather evidence against companies that violate consumer protection laws. It's also become a major source of embarrassment for Equifax, Wells Fargo and other companies that have been the subject of thousands of complaints in recent years.

Dann said he's not surprised that those companies have been attempting to shut down the database since it was set up or that Mulvaney is about to answer their prayers. "Mulvaney opposed the creation of the CFPB when he was a member of Congress which also isn't surprising when you consider that he's accepted hundreds of thousands of dollars in campaign contributions from banks, credit card companies, payday lenders, and other financial services companies during his career," he said. "I'm sure they're pleased that they've gotten exactly what they paid for: a guy who puts Wall Street's interests above those of the American people at the drop of a check-laden hat."

Along with the searchable database, the firm created a "Hall of Shame" list of the companies consumers have complained about most and instructions for accessing and reviewing reports.

The Hall of Shame is posted at www.dannlaw.com/scoundrels-scams-and-cheats-hall-of-shame/