Mobile and Baldwin County Consumer Protection and Injury Law

2012-01-31T03:52:00.001-08:00

States to decide this week on mortgage deal

Reuters - ‎16 hours ago‎

In exchange for up to $25 billion, much in the form of cutting mortgage debt for distressed homeowners, the banks will resolve civil state and federal lawsuits about servicing misconduct and faulty foreclosures, and state lawsuits about how they made ...

2012-01-31T03:49:00.001-08:00

2012-01-07T06:49:00.000-08:00

Welcome to The Law Office of Underwood & Riemer, P.C.: Alabama's Consumer Attorneys: "We are currently reviewing cases of mortgage fraud involving loan modifications made under the Home Affordable Modification Program (HAMP), or any other type of modification with mortgage companies such as Bank of America, Wells Fargo and Chase. If you believe you are a victim, please contact us immediately to discuss your options."

'via Blog this'

2010-05-28T07:20:00.001-07:00

Woman Accuses Mortgage Companies of Predatory Lending

2008-09-04T13:51:00.000-07:00

A Texas woman has filed a lawsuit against two mortgage lenders who she claims engaged in predatory lending practices because of her race. According to the lawsuit, Alpha Mortgage USA Inc. and American Home Mortgage Servicing Inc. engaged in a practice known as reverse redlining in which minorities are targeted for poor mortgage terms. The case is believed to be the first of its kind in the state. Mary Flood, Houston Chronicle 09/04/2008
Read Article: Houston Chronicle

MORTGAGE CRISIS

2008-08-28T14:42:00.000-07:00

IN - Indiana Files Suit vs. Countrywide

"Indiana Attorney General Steve Carter has filed a lawsuit against Countrywide Financial Corp., accusing the mortgage lender of deceptive and misleading practices that led to borrowers obtaining potentially risky and costly loans. Countrywide is a division of Charlotte-based Bank of America Corp. 'A pattern of misleading and questionable practices has emerged from our investigation into home loans,' Carter says. 'These unfair lending practices may have harmed thousands of people and, in turn, negatively affected our communities and neighborhoods throughout the state.' Indiana is the sixth state to file such a suit against Countrywide. State attorneys general in Florida, Illinois, Connecticut, West Virginia and California have filed similar cases that contend California-based Countrywide made risky loans that exposed home buyers to foreclosures. The suits accuse Countrywide of using deceptive practices to make and service loans."

Charlotte Business Journal, 8-25-08
http://www.bizjournals.com/charlotte/stories/2008/08/25/daily6.html?b=1219636800^1690097

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VistaPrint Named in Four Federal Class-Action Lawsuits (8/28/2008)

2008-08-28T09:27:00.000-07:00

Four class-action lawsuits have been brought against VistaPrint, a small business marketing company with over 15 million customers worldwide, regarding unauthorized charges of the credit cards and bank accounts of customers who purchased items on the company's U.S. Web site. VistaPrint Limited and its U.S. subsidiary, along with Vertrue Inc. and its subsidiary Adaptive Marketing LLC, were named as defendants in all four cases. VistaPrint revealed on Thursday in a press release that pending cases were filed in New Jersey and Texas, but Counselor has learned that additional class-action suits were filed yesterday in both Massachusetts and Alabama.

Citibank Settles Accusations of Bilking Customers

2008-08-27T13:53:00.000-07:00

Citibank Inc. has agreed to pay $18 million to settle accusations that it surreptitiously moved money from credit card accounts to a company-controlled account without the knowledge of its customers. The deal comes after a sweeping investigation by the California Attorney General’s Office regarding the company’s handling of dormant credit card accounts between 1992 and 2003. The settlement is expected to affect as many as 53,000 cardholders. Cheryl Miller, Law.com 08/27/2008

Read Article: Law.com

Lawsuits Filed In Brain Tumor Cases - Most Popular News Story - KMBC Kansas City

2008-08-27T09:24:00.000-07:00

Lawsuits Filed In Brain Tumor Cases - Most Popular News Story - KMBC Kansas City: "awsuits Filed In Brain Tumor Cases
Attorney Files Class-Action Suits On Behalf Of Cameron

POSTED: 6:29 pm CDT August 26, 2008
UPDATED: 6:55 pm CDT August 26, 2008
[NEWSVINE: Lawsuits Filed In Brain Tumor Cases] [DELICIOUS: Lawsuits Filed In Brain Tumor Cases] [DIGG: Lawsuits Filed In Brain Tumor Cases] [FACEBOOK: Lawsuits Filed In Brain Tumor Cases] [REDDIT: Lawsuits Filed In Brain Tumor Cases] [RSS] [PRINT: Lawsuits Filed In Brain Tumor Cases] [EMAIL: Lawsuits Filed In Brain Tumor Cases]
KANSAS CITY, Mo. -- An attorney has filed two lawsuit on behalf of the people of Cameron, a Missouri town hit by a series of brain tumors.

Testing on environmental samples collected in Cameron revealed the presence of arsenic and lead at the old Rockwood Industries plant, but experts said they can't definitively link that to the tumors.

Attorney Grant L. Davis filed class-action lawsuits naming companies that operated on the sites where chemicals turned up. One lawsuit request medical monitoring.

'The people who are responsible for illegally dumping these materials, they need to come forward and do medical monitoring and help,' Davis told KMBC's Maria Antonia.

Another lawsuit is for property damage. Davis said the value of the property owned by people in Cameron"

Realty Times - Major Federal Crackdown On Realty Fee Kickbacks Underway "In Every State."

2008-08-27T09:19:00.000-07:00

Realty Times - Major Federal Crackdown On Realty Fee Kickbacks Underway "In Every State.": "Major Federal Crackdown On Realty Fee Kickbacks Underway 'In Every State.'
by Kenneth R. Harney

The federal government has issued a warning to realty agents, builders, title agencies, mortgage brokers and other industry participants: Get ready for a wave of RESPA crackdowns, and financial penalties that could make your head spin.
Get Your Free Summer SALES Kit NOW!

In remarks last week, the federal government's top Real Estate Settlement Procedures Act (RESPA) investigator, Ivy Jackson, said that a recent $450,000 settlement with Tulsa realty agents and builders is just the tip of the iceberg. Potentially dozens of additional crackdowns are in the wings.

Jackson heads HUD's RESPA enforcement unit, and has unleashed dozens of on-staff and contract investigators -- often ex-FBI, Customs Bureau or financial regulatory agency sleuths -- to break up what she called 'blatant violations' of federal anti-kickback rules among realty agents, title companies, lenders and others nationwide.

'We are doing investigations in every state,' she said, and 'we anticipate a very busy (enforcement) year.' Jackson's office gets hundreds of tips a year about alleged payoff arrangements involving realty agents, brokers, lenders, mortgage brokers, builders and title and escrow agencies every year. The tip"

Troy King on Skip Tucker

2008-06-02T18:48:00.000-07:00

Speak Out ... King won't back down

By our readers

06-02-2008

Re "King and Kingpin" (Speak Out, May 25):

Letter writer Skip Tucker (Alabama Voters Against Lawsuit Abuse) is an able mouthpiece for those who pay him — the big pharmaceutical companies. It clearly upsets him that I strive to be an equally effective advocate for those who pay me — the people of Alabama.

Tucker rhetorically asked whether I am switching parties. Let me emphatically answer "no!" I am a Republican because I believe government has a responsibility to protect its citizens. I am a Republican because I believe no one is above the law, no matter how rich or powerful he may be.

And, as a Republican, I will not sit by and allow the single mothers working two jobs in this state in order to buy medicine for their kids to have their burdens increased because greedy corporations took more than their share of our Medicaid dollars.

Tucker and I can agree on one thing — there is a veil of secrecy in Alabama. It is the one behind which those who stole hundreds of millions of dollars from Alabama's most vulnerable citizens acted. A Montgomery County jury saw what occurred behind that veil and responded with a $215 million verdict.

Wrong is wrong, and I will seek to correct it. Alabamians can be sure of this — I will not back down in my pursuit of justice, no matter how often or how loudly Tucker complains.

Troy King
Attorney General
Montgomery

__._,_.___

2008-05-29T10:11:00.000-07:00

Poll: Americans Overwhelmingly Dislike Binding Arbitration, South Leads in Disapproval

MONTGOMERY | Americans generally disapprove of mandatory binding arbitration provisions in consumer contracts as an alternative to civil legal proceedings with a judge and jury, a recent national poll found.

“Consumers don’t have a choice when it comes to mandatory binding arbitration and are at the mercy of CEOs and the large corporations who choose the arbitrators,” Bob Prince, president of the Alabama Association for Justice (ALAJ), formerly the Alabama Trial Lawyers Association, said.

The poll, conducted by Peter D. Hart Research Associates, found that when those polled learned that consumers surrender their right to a jury trial when an arbitration provision is in place, the company picks the arbitrator and that binding arbitration can apply even if someone is seriously injured, 81 percent disapproved of binding arbitration provisions.

Consumers often must sign contracts containing binding arbitration provisions, and these range from cell phone contracts to cable TV service and nursing home care. These contracts state consumers waive their right to trial by jury over a dispute and instead agree to have any disputes settled by an arbitrator (usually chosen by the company).

Across regions, the South tied with the Midwest for the highest rate of disapproval for binding arbitration provisions in the poll.

“Southerners don’t want to sign their right to a jury trial away in favor of arbitration,” Prince said. “Arbitration only works when both sides agree to it voluntarily, and that is not a choice consumers are given with mandatory binding arbitration provisions.”

Real Estate Overcharges: Others Get Rich on Your Money

2008-05-05T07:14:00.000-07:00

May 5, 2008. By Gordon Gibb

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Montgomery, AL: You know what they say—look after the pennies, and the dollars will look after themselves. So it stands to reason that unscrupulous agents and officials involved with various real estate transactions are doing quite nicely pocketing extra money from real estate overcharges. Money that is rightfully yours.

There is little doubt that a real estate transaction is a complicated process, and to the average Joe it can be overwhelming. Not so, however, for the various officials and agents we hire to steer us through the process. They do this every day of the week, vs. a handful of times in a lifetime for us. As a result, it's not hard to pull the wool over our eyes.

And it may not even be all that much. A hundred bucks, maybe—or even less. As part of a transaction that encompasses a myriad of calculations and stipulations, and reflects sometimes hundreds of thousands of dollars in overall value, you could be forgiven for (a not noticing a discrepancy, or b) clueing in to the possibility but 'just letting it go.' Maybe it's $10, maybe $50 or even $100. Given the overwhelming documentation you have to wade through, and the overall price tag, $100 may seem like nothing.

But consider...

It's YOUR money. And SOMEBODY ELSE is profiting handsomely from that money, especially when you consider the number of transactions that occur in any given day. Over the course of a year, somebody is making a handsome profit on real estate overcharges.

Here's how it works: in any real estate transaction, title or mortgage registration, there are various recording fees and other costs that are often estimated, purportedly because it is next to impossible to determine the actual fee. Or so it is claimed, but this is debatable. Nonetheless, a range is established and a recording fee is charged based on an estimate, rounded up, it is alleged, to ensure there are sufficient funds available to pay the necessary fee(s).

Okay, so what happens when that fee is paid, and it comes in less than the amount you were originally charged? Do you get the difference back?

You should.

Take the case of Arthur Boudin; a homebuyer who obtained a residential mortgage with Ameriquest Mortgage Co. ATM Holdings served as the closing agent. At the end of the day, Boudin noted on his statement of settlement that $120 was charged as a recording fee, although actual court fees were only $48. So what happened to the difference? Boudin didn't see it. Rather, ATM allegedly pocketed that $72.

And so the homeowner sued, alleging that the withheld fee amount of $72 represented a violation of the Real Estate Settlement Procedures Act (RESPA) as an impermissible markup. The US District Court, Southern District of Alabama saw it Boudin's way.

To be sure, $72 is not a lot of money. But principle is at stake, and that $72 spread across thousands of borrowers can add up, and the problem is NOT new. In 1989, for example, a former federal bank auditor blew the whistle on adjustable-rate mortgage overcharging, estimated at more than $8 billion. In 2003, audits found that half of adjustable-rate mortgages reflected errors, which translated to overcharges for homeowners. A year later US Mortgage Reduction estimated those overcharges at $60 billion.

Think those amounts are niggly now?

Public Citizen, the advocacy group founded by Ralph Nader, agrees that real estate transactions are so complicated, and with so many parties involved, it's relatively easy to sneak inflated charges into the mix, resulting in the pocketing the difference. There are legal fees, title search and registration fees, mortgage registration fees, and so on. Given the complexity, one can imagine the temptation for overcharging and bill-padding—even kickbacks, which are done on the backs of the hard-working homeowner, often with finances wire-tight in order to qualify for the mortgage, and to make it all work.

Maybe it's just $72, but that's $72 of YOUR money that you can put towards new curtains, instead of lining the pockets of someone else making thousands, upon thousands of dollars every year, improperly and illegally from well-meaning clients just like you.
Of course you can, and should be forgiven for not knowing all the complexities of a real estate transaction. However, that's what you pay agents for, and your own lack of experience does not give someone with greater expertise the right to take advantage of you.

How can you avoid such a pitfall, or discover that it's happening to you? Ask if the recording charges are indeed estimates, and ask why. Then demand to see the actual recording fee(s) once actuals are established, and compare them with the estimates. At the very least, insist that you are re-imbursed for the difference once actuals are determined, and demand to see the paperwork after the fact.

And if you note a discrepancy that shouldn't be, call them on it, or pursue the matter in court. It might be just a small amount to you, but it can quickly add up to thousands, hundreds of thousands, and even millions of dollars over the long term.

They do it, because they can get away with it. Because we simply allow them to. We either don't know any better, we're hesitant to ask, or we're reluctant to chase a discrepancy when discovered. 'Oh well, it's only a few dollars,' you might say.

Indeed. It's more like millions. Don't give it to them. Bloody well fight back...

[MORE NEWS ARTICLES]

New Consumer Victory

2008-01-19T07:35:00.000-08:00

In an important new case VICKI v. BUSBY v. JRHBW REALTY, INC. the Eleventh Circuit Court of Appeals reversed the denial of class certification in an important RESPA (Real Estate Settlement Procedures Act) case. This will be a boon to consumers who are routinely charged junk fees incident to their loan closings. RESPA prohibits the charging of any fee to a consumer incident to a federally related real estate loan unless there are services or goods provided in exchange for the fee. Consumers and practitioners alike should examine settlement documents closely for RESPA violations.
- posted by Earl P. Underwood, Jr. @ 4:34 AM

Important Information for Consumers Facing Foreclosure

2008-01-19T07:28:00.000-08:00

Recession Rights Under the Truth-in-Lending Act.

Cancel your mortgage.

http://epunderwood.googlepages.com/resissionunderthetruth-in-lendingact

Ameriquest

2008-01-19T07:23:00.000-08:00

Michigan Borrowers Awarded $14 Million in Ameriquest Settlement

Category: Ameriquest Lawsuits

Over $14 million dollars in checks are being mailed to 18, 481 Michigan loan borrowers as part of a settlement with Ameriquest Mortgage, once the nation's largest sub-prime lender.

The payments are part of a $295 million national settlement stemming from a predatory lending lawsuit against them.

Continue reading "Michigan Borrowers Awarded $14 Million in Ameriquest Settlement"

RESCISSION RIGHTS UNDER

2007-09-20T18:03:00.000-07:00

THE TRUTH-IN LENDING ACT

Earl P. Underwood, Jr.
21 South Section Street
Fairhope, Alabama 36532
epunderwood@alalaw.com
251-990-5558

1. RESCISSION UNDER TILA
The right to rescind a mortgage under the Truth-in-Lending Act (TILA) is found at 15 U.S.C. § 1635. Only “Consumer Credit Transactions” or non-purchase money mortgages are covered. We are all familiar with the three day right to rescind these loans but the following “material disclosures” must be properly and accurately made for covered loans or the mortgage continues to be rescindable for up to three years: 1) the annual percentage rate, including applicable variable rate disclosures; 2) the finance charge; 3) the amount financed; 4) the total of payments; 5) the payment schedule.
Under TILA a mortgage loan that is covered may be rescinded if the finance charge and other disclosures affected by the finance charge such as the amount financed are understated by an amount more than one half of 1% of the face value of the note or $100.00, whichever is greater. 15 U.S.C. § 1605(f)(a). However, in the refinancing of a residential mortgage transaction with a new creditor if there is no new advance and no consolidation of the existing loans the tolerance for accuracy is 1% of the face amount of the note or $100.00, whichever is greater.
If the “finance charge” is understated by ½ of 1% of the note amount or the APR is understated by 1/8th of 1% (0.125%) then the consumer’s rescission rights are extended for up to three years. 15 U.S.C. § 1635(f). In the example below, a loan in the amount of $62,500, 1% equals $625, divided by 2 gives us $337.50.
2. CHECKING THE DISCLOSURES
“Finance Charge” is defined at 15 U.S.C. § 1605. Basically it is “the sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit.” The statute and regulations list exceptions to this general rule. Pertinent here are the so called “real estate related fees.”
Assume a loan with a note amount of amount of $62,500.00 and the following points and fees:
1) loan origination fee, $2,989.00;
2) appraisal fee, $300.00;
3) processing/underwriter fee, $390.00;
4) funding fee, $365.00;
5) administration fee, $295.00;
6) document preparation fee, $195.00,
7) tax service fee, $63.00;
8) settlement or closing fee, $200.00;
9) abstract or title search, $375.00;
10) title examination, $225.00;
11) title insurance, $200.00;
12) title service fee, $75.00;
13) recording fee, $120.00;
14) recording tax, $93.75;
15) property insurance, $1,226.30.
A. Checking the disclosed “finance charge” and “amount financed.”
Items 1, 3, 4, 5, 6, 7, 8 and 12 are included in the disclosed pre-paid finance charge when added together equal $4,572.00.
To calculate the “amount financed” the pre-paid finance charge is subtracted from the note amount. In our example we subtract $4,572.00 from $62,500.00 to get the disclosed “amount financed” of $57,928.00. The amounts included by the creditor in the “amount financed” should be carefully scrutinized. Oftentimes, especially in sub-prime loans, charges that are otherwise excludable from the finance charge have been marked-up or padded. This can be and is usually a violation of the Real Estate Settlement Procedures Act (RESPA). Be sure to check such things as recording fees and title insurance as these charges may also be inflated.
To be excluded from the finance charge calculation, real estate related fees must be “bona fide and reasonable in amount.” See 12 CFR § 226.4(c)(7). The Real Estate Settlement Procedures Act (RESPA) Section 8(b), (12 U.S.C. § 2607(b)) prohibits the markup of a real estate settlement service in a covered loan. Since RESPA covers all “federally related” consumer mortgage loans, practically all mortgage lending is covered. Obviously, if an otherwise excludable charge is marked up in violation of RESPA, it is no longer “bona fide” or “reasonable.”
Items 9 through 11 (real estate related fees) are excluded from the calculation of the “finance charge” only to the extent that they are “bona fide” and reasonable. Furthermore recording fees are excluded only if they are actually paid to public officials for recording. 15 U.S.C. § 1605(d)(1). A dead give away that something may be amiss is a recording fee that is a round number such as the $120.00 figure listed above. The actual recording fee in this transaction was only $63.00. In other words the recording fee was marked up $57.00. In the example the consumers were charged $375.00 for “Abstract or title search.” Discovery has shown that the abstract was performed by a third party and that the fee for this was only $120.00 indicating another markup of $255.00. Marking up of fees of others is prohibited by RESPA Section 8(b), 12 U.S.C. § 2601(b). Also the charges for Title Insurance should be examined. In this example the title insurance charge was $200.00. Title insurance rates are filed with the Alabama Department of Insurance and the legal amount for a lender’s policy for $62,500.00 is $154.25. The difference is $45.75. These charges should therefore, at least to the marked up portion, be included in the finance change calculation. 45.75 + 63.00 + 255.00 = $363.75, so in this example the “Amount Financed” includes at least $363.75 that should have been included in the “Finance Charge” calculation. Conversely the “Finance Charge” is understated by $363.73. We only needed $312.05 to be out of tolerance, that is, .5% of the note amount of $62,500.00.
Including these charges in the “finance charge” changes the amount financed from $57,928.00 to $57,610.00, APR to 12.667% and the finance charge to $171,096.77. The TILA disclosure (Figure 2) disclosed the APR as 12.592% and the finance charge as $170,778.77. To double check, take our calculated finance charge of $171,142.52 and subtract $170,778.77 (the disclosed finance charge). This also reveals an understatement of the finance charge of $363.75. This loan is therefore rescindable.
I. HOEPA Coverage another ground for rescission.
HOEPA, or the Home Ownership and Equity Protection Act, was passed almost unanimously by Congress in September of 1994 as part of the Riegle Community Development and Regulation Improvement Act, Pub. L. No. 103-325 (September 23, 1994). It is codified at 15 USC § 1639 “Requirements for certain mortgages.” Shortly thereafter regulations implementing the Act were published at 60 Fed. Reg. 15463 (March 24, 1995). These regulations have been revised twice, once in 1996 and again in 2001 .
The purpose of HOEPA is to require certain discloses by the lender to a mortgage borrower in a consumer credit transaction when the interest rate and other closing costs cross a threshold where the act deems the loan to be one of “high costs.” For example HOEPA requires a specal advance three days before the closing. Failure to give this notice also gives rise to a right to rescind the loan. 15 U.S.C. § 1602(u). It also regulates various practices that increase the costs of loans and regulates disclosures, the timing of the disclosures, prepayment penalties, limitations after default, balloon payments, negative amortization, prepaid payments, extending credit without regard to the ability of the consumer to repay, requirements for payments under home employment contracts among other things.
HOEPA covers loans that are defined at 15 U.S.C. § 1602(aa) of the Truth and Lending Act. The definition of mortgages and loans that are covered is fairly long and convoluted. First HOEPA applies only to Mortgage loans that are closed end non-purchase loans secured by the consumer’s principal dwelling. In addition there are two “triggers” that are used to determine HOEPA coverage. If either one of them are met the loan is covered. First the loan must have an annual percentage rate (APR) of more than 8 percentage points over the yield of treasury securities having a comparable period of maturity on the 15th of the month immediately preceding the month in which the application for the credit was received by the creditor. This is the APR trigger. The second trigger is the “points and fees” trigger. This is met if the total points and fees paid by the consumer at or before the closing will exceed the greater of 8% of the “total loan amount” or $400.00, whichever is greater. Please see Figure 6--HOEPA coverage for graphic representation. Each of these triggers are described in more detail below. Open-ended loans such as home equity lines of credit are not covered.
a. The APR “trigger”
HOEPA regulations were amended in December of 2001 and the amendments became mandatory and effective on October 1, 2002. One of the amendments lowered the APR trigger from 10% above the treasury securities rate to 8% above the treasury securities rate. The “trigger” for junior mortgages remains at 10%. The applicable date for comparable treasury securities is not the date of the loan but instead is the 15th of the month immediately preceding the month in which the loan was applied for. “Comparable treasury securities” means U.S. treasury bonds that are of the same duration as the loan and if there are no comparable bonds, bonds that have the closest duration would be used. For example if the Federal Reserve Board was not issuing 30-year T-bills during the applicable time period, T-bills with a 20-year maturity period would be used. The relevant federal securities rate may be determined by going to the Fed’s website at: http://www.federalreserve.gov/RELEASES/H15/data.htm . One should scroll down to the section entitled “Treasury constant maturities” and select the applicable bond. The column entitled “daily” should be used.
To determine the applicable APR trigger add the Treasury Securities rate to the applicable trigger rate and then compare to the consumer’s actual APR. For example:
Assume a 30-year Mortgage that is a first lien and consummated after October 1, 2001.

Loan date: December 1, 2004
APR (Disclosed): 12.592%
Application date: November 15, 2004
Term of loan: 360 Months
20 yr. T-Bill rate on October 15th 2004: 5.36%
Adding: 8%
APR Trigger 13.36%

In this example the APR trigger is not met. You should always check the creditor’s calculation of the APR. Often items that should be included in the APR calculation are left out as shown below.
b. The points and fees trigger
As stated above and illustrated in Figure 6, if the points and fees paid by consumers in a covered mortgage transaction exceed 8% of the “total loan amount”, the loan is a high cost or HOEPA loan. The term “total loan amount” is defined by HOEPA at 15 U.S.C. § 1602(aa)(1)(b) and at Reg. Z. § 226.32(a)(ii). Essentially, it is the “amount financed” minus fees which are part of the amount financed only because they are excluded from the definition of the finance charge by 15 U.S.C. § 1605(e) or Reg. Z § 226.4(c)(7). In other words, if the “amount financed” contains any of the charges listed in the Reg. Z § 226.4(c)(7) which are not “bona fide and reasonable”, or credit insurance premiums or debt cancellation fees, those count toward the points and fees trigger and must be subtracted from the “amount financed” to get the “total loan amount.” A charge cannot be included in both the points and fees trigger and in the “total loan amount.”
Subtracting from $62,500 leaves $57,928. Dividing $4,572 by $57,928 yields 7.9%. The loan does not appear to meet the “points and fees” trigger either and does not appear to by covered by HOEPA.
HOEPA points and fees generally include all items included in the “finance charge.” Real Estate Charges are exempted from inclusion in the finance charge only if they are bona fide and reasonable. 15 U.S.C. § 1605(e), 12 C.F.R. 226.4(c)(7). If not then § 1602(aa)(4)(C) requires their inclusion in the finance charge for the purpose of determining the APR and “points and fees.” The inclusion of these fees yields the following: Items 1, 3, 4, 5, 6, 7, 8 and 12 were included above and added together equaled $4,572.00 . Add to $4,572.00 item #9 ($375.00), item #11 ($200.00) item #13 ($120.00) gives us total points and fees of $5,267. Subtracting from $62,500 leaves $57,233. Dividing $5267 by $57,433 yields 9.17%. The loan meets “points and fees” trigger after all and is by covered by HOEPA.
c. HOEPA Required Disclosures and Prohibited Acts
Once it has been determined that a loan meets the requirements of HOEPA coverage certain acts are prohibited and certain disclosures are required. Under HOEPA, in addition to the other disclosures provided for by the Truth-in-Lending Act, the creditor is to provide what is known as a Section 32 notice. See Figure 5. The notice must have in conspicuous type size the following: “you are not required to complete this agreement merely because you have received these documents or have signed a loan application. If you obtain this loan the lender will have a mortgage on your home you could lose your home, and any money you have put into it, if you do not meet your obligations under the loan.” The Section 32 notice must also contain the following information: (a) in the case of a credit transaction with a fixed rate of interest, the annual percentage rate and the amount of the regular monthly payment or in the case of another type of credit transaction the annual percentage rate of the loan, the amount of the regular monthly payment, a statement that the interest rate and monthly payment may increase, and the maximum amount of monthly payment based on the maximum interest rate allowed. 15 U.S.C. §1639(a). These disclosures must be given to the consumer not less than three business days prior to the consummation of the loan. 15 U.S.C. § 1639(b)(1). If the advance disclosures are not given the loan is rescindable. See 15 U.S.C. § 1602(u).
HOEPA prohibits prepayment penalties unless the following conditions are met: (1) At the time the loan is consummated the consumer is not liable for an amount of monthly payments including the amount of the credit extended or being extended under the mortgage transaction that is greater than 50% of the gross income of the consumer and the income and expenses of the consumer are verified by a credit report, (2) The penalty must apply only to a prepayment made with amounts obtained by the consumer by means other than a refinancing by the creditor under the mortgage of an affiliate that creditor, (3) The penalty may not apply until after the end of a five-year period beginning on the date on which the mortgage is consummated, and (4) The penalty must be not prohibited under other applicable (state) law. 15 U.S.C. § 1639(c).
A HOEPA loan cannot require an increase in the applicable interest rate that is higher than the interest rate that applies before a default. 15 U.S.C. § 1639(d). Balloon payments are prohibited if they have a term less than five years. 15 U.S.C. § 1639(e). Negative amortization is also prohibited. 15 U.S.C. § 1639(f) .The loan can call for no more than two advance payments. 15 U.S.C. § 1639(g). Creditors are prohibited from extending credit to a debtor without regard to the ability of the consumer to repay the credit. 15 U.S.C. § 1639(h). Creditors cannot make payments to home improvement contractors under a HOEPA loan other than in the form of a check that is payable to the consumer or payable jointly to the consumer and the contractor or at the election of the consumer or by a third party escrow agent in accordance with terms and written agreement signed by the consumer, the creditor and the contractor before the date of the payment. 15 U.S.C. § 1639(i). A violation of any of the above to be deemed a failure to deliver the required material disclosures for the purpose of the civil liability section of this Title (15 U.S.C. §1635)(j).
d. “Regular” TILA and HOEPA and Damages and Remedies
All of the standard truth-in-lending remedies found under 15 U.S.C. §1640(a) for actual damages, statutory damages, attorney’s fees and costs are available under HOEPA. Under § 1640(a)(2)(iii) a consumer can recover actual damages, attorney’s fees and between $200 and $2,000 for statutory damages. In addition rescission and rescission damages are also available under § 1635.
Under HOEPA special enhanced damages are called for pursuant to 15 U.S.C. § 1640(a)(4) which says:
“[and]
(4) in the case of a failure to comply with any requirement under Section 1639 of this title, an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material.”

These damages include all finance charges and fees paid by the consumer See Newton v. United Companies Financial Corporation, 24 F.Supp.2d 444 (Eastern District of Pennsylvania 1998) “Violations of HOEPA give rise to rescission and awards of Section 1640(a)(2) and Section 1640(a)(4) statutory damages.”

2. Any violation of HOEPA gives rise to a claim for statutory damages under the Truth-in-Lending Act. The consumer will be entitled to an award of statutory, actual damages for the disclosure violation and is able to rescind the transaction. 15 U.S.C. §§1635(g), 1640(g).
Under “regular” TILA and HOEPA rescission requires a lender or assignee of a mortgage loan to return the consumer to the position he was in if the loan had never been made. This means that mortgage lien must be released and all interest and fees by the consumer must be refunded. 15 U.S.C. § 1635.
When the HOEPA violation is “material” consumers are entitled to enhanced damages in addition to statutory damages for disclosure and rescission violations. The requirement that the violation be material is only under Section 1640(a)(4) for the enhanced damages. Under “regular” TILA pursuant to § 1640(g) the consumer is only entitled to a single recovery even if there are multiple violations in one transaction. This is not true under HOEPA. Subsection 1640(d) limits the recovery under Subsection (a)(2) only. The HOEPA cause of action is found at Section 1640(a)(4) and is therefore not limited by the restrictions found in Subsection (d).
15 U.S.C. § 1541(d)(1) makes assignees liable for “all claims and defenses the consumer could assert against the creditor of the mortgage.” This means that the consumer can make any claim against an assignee that he could have asserted against the original lender. Any failure of a lender to give the HOEPA disclosure or the failure to make any of the other material disclosures required by the Truth-in-Lending Act gives the consumer the right to resend the mortgage loan. 15 U.S.C. § 1681(j), 1635; 12 C.F.R. §§ 226.32(c and d), 226.3(a) “HOEPA explicitly provides that violations of any of its notice provisions entitles consumers to rescind mortgage loans and to recover TILA and HOEPA statutory penalties. 15 U.S.C. § 1639(j). In addition, the statutory damages provision was amended to increase the total award to the consumer in case of HOEPA violations. Besides the standard $2,000.00 TILA penalty, the consumer may also recover an amount equal to the total finance charges and fees paid. 15 U.S.C. § 1640(a)(4). Newton v. United Companies Financial Corporation, 24 F. Supp. 2d 444, 451.
Conclusion
TILA and HOEPA are challenging statutes to litigate under. They can be used however to afford powerful remedies for consumers and satisfaction for consumer attorneys.

Cingular Wireless Sued for Violating Consumer Protection Laws

2006-07-09T06:34:00.000-07:00

Cingular Wireless Corp. is facing a lawsuit alleging the company "nickel-and-dimed" AT&T's wireless customers in order to get them to sign new contracts. Cingular acquired AT&T but degraded their network service and then required their customers to pay fees and buy new phones before they could switch to Cingular. The lawsuit seeks class-action status on behalf of the 20 million customers AT&T wireless had during the merger. Gene Johnson, The Washington Post 07/07/2006

Read Article: The http://www.washingtonpost.com/wp-dyn/content/article/2006/07/07/AR2006070700217.html

Probe examines fatal docks accident

2006-03-06T05:00:00.000-08:00

(Saturday, 3/04/2006, Mobile Register )
Determining whether a local bar pilot or the ship's captain was calling the shots when a container vessel struck a crane at the Alabama state docks has become a key part of the U.S. Coast Guard investigation into a Thursday incident in which a man was killed, authorities said Friday. Click Here For Whole Story

Baldwin and Mobile County Personal Injury Law

2006-03-01T05:51:00.000-08:00

Earl P. Underwood, Jr.

Public Citizen | Health Research Group | Health Research Group - Hot Issue Feb. 28 - Public Citizen petitions FDA to ban Darvon products

2006-03-01T05:22:00.000-08:00

Public Citizen | Health Research Group | Health Research Group - Hot Issue Feb. 28 - Public Citizen petitions FDA to ban Darvon products

AXcessNews.com - Study Finds Frogs Heading for Extinction

2006-01-15T12:20:00.000-08:00

AXcessNews.com - Study Finds Frogs Heading for Extinction

Guidant Documents Indicate Knowledge of Defect

2005-12-27T14:48:00.000-08:00

Documents produced in discovery for an upcoming lawsuit against medical product manufacturer Guidant indicate officials in the company were aware of defects associated with the Prizm 2 DR defibrillator. The lawsuit is one of many wrongful suits that claim the device contains faulty wiring that has led to the death of at least eight patients. Memos from 2002 meetings indicate that officials were aware of the problem, yet allowed the products to go to market after finding the failure rates acceptable. Barry Meier, The New York Times 12/24/2005
Read Article: The New York Times