The US Home Ownership
Equity Protection Act (HOEPA), part of the Truth in Lending Act,
is intended to fight predatory mortgage lending. But HOEPA did
not apply, unless the homeowner was being exploited by interest
ten points above a Treasury rate, or by points and fees equal
to eight percent of the loan amount. Hence predatory lenders
charged points and fees of almost 8% of the loan. For example,
$7,990 of fees to get a $100,000 mortgage.
November 28, 2001
was a dark day in the U.S. House of Representatives with a 20-4
vote in a Financial Services Subcommittee to release a bill written
by the rent to own industry.
Most Americans take for granted our precious system of justice. For hundreds of years, any person who has been wronged could sue in state or federal court. For a small filing fee, ranging from $20 to $200, any person could sue any person or corporation. "Equal justice under law." "No man is above the law." "A jury of twelve peers." "Congress writes law and Judges enforce laws as written by Congress and the state legislatures." Unlike Congress which takes contributions, Judges are not allowed to accept one dollar from litigants, because that's bribery. The American system of justice is the envy of the world.
Or used to be. Did you read the fine print which arrived with your credit card lately? That fine print says in many cases that you waived all your rights to use the Courts which your tax dollars support. Instead you are deemed to "agree" to arbitrate disputes with your bank, or car dealer or mortgage company, or telephone company.
The bank picks the association of arbitrators. You and the bank split the cost of the arbitration. In a serious suit, the arbitrator will charge about $2,000 per day! That will put a serious damper on consumers who wish to sue banks and car dealers. Who are these arbitrators? While in some cases, the arbitrators are retired judges, which is not so bad, in other cases, the arbitrators are attorneys whose main business is representing banks. One Arbitration group, started by a credit industry man, has startled advocates by sending ads to banks which seem to suggest that hiring this arbitration group will protect the banks from consumer suits. Bias?? The arbitration clause is being used by banks to try to stop class action suits, another benefit touted by the arbitration group in their appeal to have the banks hire them as arbitrators. Contrast that with the judicial ethics in the state and federal courts: the judges are not allowed to accept money from litigants, and solicitations promising certain results would certainly lead to the disqualification of that judge. Some judges have been disqualified just for making statements to reporters (like Judge Jackson in the Microsoft case). Consumers sent to compulsory arbitration justifiably feel that they will not get a fair trial with an unbiased judge.
Paul Bland of the
Trial Lawyers for Public Justice, www.tlpj.org, spoke about how attorneys can fight compulsory
arbitration, in an address to the National Consumer Law Center's
recent Consumer Litigation Conference in Baltimore. The TLPJ
has assisted attorneys around the country with amicus briefs.
The National Consumer Law Center www.consumerlaw.org, also recently published
a book, Consumer Arbitration Agreements with CD-ROM, for
Have you ever received a letter from a collection agency? While most people pay their debts on time, some medical labs seem very quick to send your bill to collections while you are waiting for the HMO to pay it. Or perhaps you have been laid off in the current recession. Or perhaps you are a victim of theft of identity, and are being dunned for a bill you do not owe.
The Fair Debt Collection Practices Act is a federal law which limits what debt collectors may do. When you get the first dunning letter, the collector must tell you that it is from a debt collector, that any information will be used to collect a debt, and that you have the right to "validate" the debt, i.e, make a written demand for more proof that you owe the debt and the amount the collector claims. Consumers have the right to tell the collector to "cease communication." The FDCPA applies to persons who regularly collect the debts of consumers, or who buy such debts after default. There are many companies which buy consumer debt these days.
The FDCPA prohibits debt collectors from contacting or calling
third parties. Congress wished to protect a consumer's right
to privacy. The collector in general may not call your
relatives, employer, friends and neighbors and may never tell
them about your debt. The Act prohibits repetitive phone calls.
Which attorneys do such suits? You might try the National Association of Consumer Advocates, www.naca.net, or your local bar association.
www.carfax.com This site has a database
of millions of used cars. Use it to find the history of a particular
car, perhaps finding it was wrecked or had the odometer turned
back. Sometimes cars slip through, however. Back this up with
DMV title histories.
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