Milwaukee County Bankruptcy Law Firm

Wisconsin Attorney General J.B. Van Hollen recently announced that the Wisconsin Department of Justice obtained a judgment against a company for violations of the state's consumer protection laws. The default judgment for nearly $112,000 was obtained against Relief Law Center, Inc., a California company going by the name USA Loan Auditors, which had been soliciting for loan modification services.

The AG's lawsuit claimed that USA Loan Auditors used deception and misleading representations to entice individuals into hiring them. It was alleged that solicitations from the company were designed to deceive homeowners into thinking that USA Loan Auditors was a company seeking to "audit" or investigate the homeowner's mortgage lender. In reality, the company was trying to sell loan modification services.

In our previous posts, we discussed mortgage modifications and answered some common questions you may have about obtaining a modification and about the trial modification period that most programs require. Here, we will discuss a few final concerns you may have about the process.

What happens to my credit during a mortgage modification trial? The way in which your mortgage servicer reports your modification may depend on the status of your mortgage payments before you entered the program. If you were current on your payments before you began your trial period, it is most likely that you will still be reported as current on your mortgage. However, if you were behind on your payments, your lender or loan servicer may continue to report that you are delinquent on payments. If you are concerned about how the matter is reported to the credit agencies, you should discuss this with your loan servicer.

In our last post, we provided some answers to a few common questions asked about mortgage modifications and the trial period that typically accompanies them. Here, we will discuss a few more concerns for those looking to mortgage modification before they contemplate other potential solutions such as Chapter 13 or Chapter 7 bankruptcy.

Are the terms of the trial modification going to be the same as the terms of the finalized modification? It is possible that the terms of the modification may change once you have completed the trial period. However, if the loan servicer has all of the needed documentation before the trial period begins, there shouldn't be any need to change the agreement.

If it seems like the terms of your agreement are changing in a way that is going to make it difficult for you to keep up with the mortgage, you should discuss this with the loan servicer, and you may want to speak to an attorney about your options.

In our last post, we briefly discussed options for those facing foreclosure on their home due to falling behind on their mortgage. Of course, Chapter 7 bankruptcy and Chapter 13 bankruptcy will be options for most people, but if you aren't ready to take advantage of those options yet, mortgage modification may be an option to pursue.

Below are some common questions that may come up in pursuing a trial modification as part of a mortgage modification program. Remember, these programs can be confusing and complex. If you have questions or are unsure about the process, seeking legal guidance might be a good way to put your mind at ease.

One of the major financial problems people have run into over the last few years is the decline of home values combined with rising mortgage payments. Many took advantage of the low initial interest rates of adjustable rate mortgages thinking that within three to five years they could sell their house or refinance before the mortgage payments readjusted and became unmanageable.

Now, with the home values sinking, it has made selling a home difficult and refinancing a home nearly impossible for most. When we also add in the general sluggishness of the economy and the fact that so many people have lost jobs, we end up with a number of people falling behind on their mortgages and in danger of losing their homes to foreclosure.

In our last post, we discussed the growing practice of employers using credit reports and a job applicant's debts to evaluate them as a potential employee. In this post, we will discuss some of the criticism of this practice and what some state governments are doing to control the practice.

Opponents of using credit reports for hiring practices point to the fact that these measures can easily be misinterpreted. According to Ben Woolsey, direct or marketing and research for CreditCards.com, some employers could easily fall into the practice of using this credit and debt information as a sort of  financial character reference, when in reality, that information might not really say as much about the individual as it does about an unfortunate event that befell him or her.

The last few years have seen a rise in unemployment as well as increasing numbers of people having a hard time keeping up with their bills. Now it seems that the combination of those two factors may make things even worse for some people. The growing trend of employers using credit checks on potential job applicants makes a healthy credit report and sound debt management skills more important than ever.

A recent study by the Society of Human Resource Management indicated that as many as 60% of employers may be using credit checks when making hiring decisions for some positions. That represents a large increase over the 35% that reported the practice in 2003 and the 13% that followed that path in 1996.

Unfortunately for job seekers, many have seen their credit ratings plummet in recent years as they lost jobs and found themselves struggling to keep up with mortgages and other bills. Some workers have found themselves in a vicious circle finding that they can't pay their bills because they have lost their job, now they can't get a new job because they can't pay their bills.

As economic growth remains slow and unemployment remains high, the number of bankruptcy filings brought in the state of Wisconsin rose to their highest levels since the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed in 2005. According to some observers, the increase is most likely tied to unemployment and under employment, which has put more financial strain on individuals who may now have reached the point where they can no longer make ends meet.

The number of bankruptcies reported in Wisconsin for the period from January to June of this year totaled 16,021. That number represents a large increase in filings over the same period a year ago when there were 13,802 filings with the U.S. Bankruptcy Court. The number of filings were the most since just before the BAPCPA, which toughened the Chapter 7 "means test" and made it more difficult for some debtors to seek that type of bankruptcy relief.