Wells Fargo Settles Fraud Claims with Government

The New York Times today reports that Wells Fargo has settled claims that it defrauded the government by processing mortgage loans for certain low income individuals whom Wells knew did not qualify for particular programs and then failing to advise the government that these people did not qualify. When the borrowers defaulted and the mortgages failed, Wells Fargo then demanded that the government reimburse it under these programs. The Times further notes that Wells is the last of the big banks to settle these types of claims with the government. Wells will have to pay $1.2 Billion to settle. It is not clear if these funds will make their way into the programs to help homeowners save their homes.

The Complaint alleged Wells poorly trained it employees, failed to properly underwrite the loans and failed to advise the government when it discovered that certain borrowers were ineligible for the program. Although 1.2 Billion is a large sum, it is miniscule when compare with the chaos which Wells and the other big banks caused the entire world economy and the terrible suffering of millions of Americans caught up in the financial disaster who faced foreclosure on their homes. The article makes no mention of jail time for any of the Wells executives.

If you are still struggling with mortgage debt, please feel free to contact us to speak about a mortgage modification or a possible Chapter 13 Bankruptcy to try to get some relief. To see the full article follow this link: NY Times-Wells to Pay 1.2 Billion

Bank of America Mortgage Modifications

The United States Department of Justice recently anounced that it had reached a new settlement with Bank of America. As a result of this settlement, Bank of America is resolving many outstanding claims against it which were made by the various Departments of the US government and also matters outstanding with several State Governments.

The settlement is valued at 16.65 billion dollars. Of greatest interest to consumers is the fact that of the 16.65 billion, 7 billion is earmarked for relief to consumers. Those eligible for relief include consumers who had mortgages with Bank of America, Countrywide and Merrill Lynch. The relief may come in the form Mortgage Modifications and possibly may include Principal Loan reduction for some homeowners.

If you have a mortgage which was with Bank of America, Countrywide and/or Merrill Lynch, now is the time to seriously consider filing for a mortgage modification.

Our office stands ready to assist you should you choose to apply for a mortgage modification. Do NOT let this opportunity pass. If you would like to schedule an appointment to meet with us call us at 732-752-8834

For more information click here


New Jersey Foreclosure Future Bleak

Foreclosure levels in New Jersey are the second highest in the nation, according to a report by the Wall Street Journal. New Jersey’s 7% of homes in foreclosure just barely rank behind Florida’s 7.1% of homes in foreclosure. New Jersey also has the second highest level of mortgage delinquencies of more than 90 days.

While most states appear to be on track to get caught up with foreclosures by spring of 2014, New Jersey will likely require at least another year to clear its backlog. This means that the frustration of New Jersey homeowners who are stuck in foreclosure will likely continue for another 18 months, if not more.

There are many options available for struggling homeowners. Among these are loan modifications, debt reorganizations, and bankruptcy. We have over 50 years of combined experience dealing with troubling financial situations. We are glad to talk to anyone free of charge regarding their situation and options for the future.

To read the Wall Street Journal article about foreclosures, please click here.

If you want to speak to an experienced professional about your financial situation, please feel free to contact us using the form on this website or by calling the office at 732-752-8834.

Bank of America Fined by Bankruptcy Judge

Many people today enter bankruptcy as a result of intolerable mortgage obligations. Too many homeowners owe multiple mortgages on their homes. For those with a first mortgage that is already worth more than the value of their home, a second or third mortgage can be crushing.

Bankruptcy can discharge a borrower’s obligation to pay a mortgage. However, the mortgage issuer in such a situation retains the right to foreclose on the home and recover the property. The mortgage issuer has the right to continue contacting the borrower with respect to the foreclosure process, but is forbidden from attempting to collect the debt.

New York couple Edwin and Michelle Ramos took advantage of this process in their bankruptcy, and their obligation to pay their Bank of America mortgage was discharged. Bank of America, though, continued trying to collect the mortgage debt from the couple after the bankruptcy was completed. The Ramoses contacted their lawyer, who advised Bank of America to stop contacting the couple.

Bank of America never ceased their collection efforts on the mortgage. Recently, however, a bankruptcy judge took his own action to stop the big bank. For each month that Bank of America continues to bother the Ramoses, the bank must pay $10,000 plus attorney’s fees to the court. The judge pointed out that his ruling, though it may seem insignificant to Bank of America, was meant to send a message to creditors looking to collect on discharged debts.

To read more about this ruling, please click here.

If you have a creditor trying to collect money from you after you have obtained a bankruptcy discharge, or you want to file bankruptcy to discharge your personal obligations, please contact us to discuss your options. Contact us using the form on this website or by calling the office at 732-752-8834.

Foreclosure… the End of the Line?

All too many homeowners know personally the horrors of the foreclosure process. During the recent economic downturn, record numbers of foreclosures were filed. What many foreclosed homeowners do not know is that they may soon hear from the very banks that foreclosed on them months or years ago.

The process is called a deficiency judgment, and through it the bank is entitled to get a judgment against foreclosed homeowners for the underwater amount of the mortgage. Thus, if the home was worth $300,000 and the bank could only sell it for $200,000, the bank can get a judgment against the foreclosed homeowner for the $100,000 difference.

Many mortgage lenders are targeting people who they think are “strategic defaulters,” or those who could afford their mortgage but chose not to pay it, for deficiency judgments. They are trying the process to recoup some of their losses on mortgages over the past few years.

For many foreclosed homeowners, the world is just beginning to right itself. Many are just getting their feet back under them. These judgments can be devastating for a person who has just gotten himself to a place where he thought he was debt free. Worse still, mortgage lenders have a total of 56 years in New Jersey to collect deficiency judgments. That means the debt will follow many borrowers into retirement, when they can least afford to pay.

If this is happening to you, the good news is that in most cases these judgments can be discharged – leaving you free from obligation – in a Chapter 7 bankruptcy. There are, however, income limits and other regulations for filing a Chapter 7.

To read more about deficiency judgments, click here.

If you would like to discuss deficiency judgments and your options, including Chapter 7 bankruptcy, please contact the office at 732-752-8834 or by using the contact form on this website. Your first consultation is free.

Payday Loans: Relief Now, Trouble for Years to Come

They’re known as Payday Loans, Short-Term Loans, or simply “Get Cash Now!,” but they tend to cause more problems than they solve. These loans can be obtained by borrowers usually without putting up collateral or going through a credit check. The loans often seem like a good idea to people trying to cover a week’s expenses between paychecks, and for some people in extreme circumstances, they are. For the vast majority of people interested in payday loans, however, the reality is that they’re more trouble than they’re worth.

Many payday loan companies operate through the internet today, for good reason. There are several states that cap interest rates on loans, and the payday loans almost always exceed these caps. The companies set up shop either in states that allow the exorbitantly high rates – sometimes up to 1500% interest or more – or go overseas. They then lend to people across the nation, even those in states with interest rate caps, without worrying about violating local laws.

Since many payday loan borrowers can’t pay the high interest rates on the loans on time, the payday loan companies often roll loans over and continue to charge interest. Over time, a $200 payday loan that was supposed to be paid back in two weeks at $250 can balloon and the borrower can end up owing over $1000.

Banking institutions are simply adding to the problem. Often, the banks will partner with the lenders to allow the lenders to automatically deduct payments from borrowers’ checking accounts – all with the borrower’s permission. However, the problem arises when the borrower can’t pay and the banks won’t cancel the payments when the borrower asks. On top of the ballooning loan, then, the borrower owes the bank overdraft fees, service fees, and insufficient funds fees.

These loans give borrowers money in their times of need, only to often create more need for months or years following the loan. Ultimately, they are more trouble than they are worth. To read more about payday loans, click here and here. There is also legislation relating to payday loans pending in the Senate. The SAFE Lending Act was proposed in the Senate in January 2013 and would force online lenders of small amounts ($5,000 or less) to follow local state laws with respect to interest amounts. To read more about the SAFE Lending Act, click here.

If you want more information about payday loans, or if you took out a payday loan and asked your bank not to allow payments and they disregarded your request, or if you have any other questions about the contents of this article, please contact the office at 732-752-8834.



We are writing to remind all of our friend and clients that the deadline to file a Request for an Independent Foreclosure Review is December 31, 2012.

If you had a foreclosure in process(initiated, pending or completed) between January 1, 2009 and December 31, 2010; and the property securing the loan was your principal residence and the mortgage was serviced by one of the lenders identified on the following link, we urge you to request an Independent review.

Link to list of lenders who must offer the Independent Foreclosure Review is at the Federal Reserve Governors website explanation of the program, listing of lenders informative video


These reviews were ordered by the Federal Reserve and the Office of the Comptroller of the Currency in a effort to give homeowners who were unfairly treated and financially harmed by the actions of the listed banks and opportunity to make a financial recovery from the banks for the errors, misrepresentation or other deficiencies that may have occurred during the foreclosure process.

A very informative short video which further explains the program is noted above.  If you think you are eligible, we urge you to apply for a Review.

The deadline is December 31, 2012.  You can make the request over the internet.

An Independent Foreclosure Review process has been set up by Order of the Board of Governors of the Federal Reserve System and by the Office of the Comptroller of the Currency.

Additional information can be obtained from the Borrowers Quick Reference at the website below:


Before you complete your application be sure to review the on the  Request for Review Help Sheet on following website:


To submit an application go to:


Once again, we urge everyone who believes that they are eligible request a review.  There is no fee for the review.


Recent articles in both the financial press and the consumer press note that student loan debt in the United States is increasing at a dizzying rate.  It is estimated that the aggregate Student Loan Debt nationally now exceeds the aggregate credit card debt.

In many cases well meaning parents co-signed for these debts along with their children.   There does not appear to be any easy relief on the horizon for parents and students trapped under the enormous burden.

For many young people the debt load means that they will have to forego full participation in todays financial world.  They will be unable to afford to purchase a home or a new car form many years, if ever.  Many of them are unable to  afford to live on their own and will have to  continue to live with their parents for many years as they try  to work down these debts.

For may parents who co-signed these loans these crushing debts will mean a delay in the start of a retirement or  a need to scale back their own living standards.

For those parents and students who are trapped in Private student loans, the lenders are offering little or no  relief and without Congressional action it appears that the future will bring not much change.

For those parents and students who are in Government student loans recent changes in the regulations may offer some opportunities to make their situations more rational.  Income Contingent and Income Based repayment programs may  offer  some relief.

If you would like  to learn more about these programs and the relief which might be available to you, please call the office and make an appointment to speak with us.




Treatment of Cigarettes in Chapter 13 Bankruptcy Plans

If you are considering a bankruptcy discharge, you may be familiar with the detail that the Bankruptcy court looks at your spending habits and budget.  It is especially important to look at the treatment of what you consider a regular expense and the Bankruptcy court may scrutinize.

One such expense is that associated with cigarettes.  While many people understand that cigarettes are harmful to one’s health, due to its addictive nature, they may find it too hard to quit the habit.  With cigarettes costing consumers well above $7 per pack in New Jersey, cigarettes are a hard habit to fund.  Also, the expense associated with many products used to quit smoking can be as costly as the cigarettes themselves.

How does the bankruptcy court treat tobacco addiction?  On one hand, the court is unwilling to make a judgment on a consumer’s choices with their money.  On the other hand, that money set aside in a plan for cigarettes could be used towards funding the plan, and go towards creditors.  The Bankruptcy Court may examine the amount of money set aside to fund a cigarette addiction and request adjustments if it appears to be too high.  Ultimately, the discretion lies with the judge, but the judge will hesitate before making sweeping changes to the plan if it logically fits into the debtor’s plan.

If you are interested in reading more about the legal implications of this issue, please click here to read a Harvard Law Review Note.

If you are facing financial issues and even considering bankruptcy or any other debt relief, please contact the Stephen M. Goldberg, P.C. Law Office in Green Brook, NJ at 732-752-8834.  We are happy to answer any questions for you and will even meet with you for free.  Please call at any time to set up an appointment.

New Jersey Still Waiting for a Glut of Foreclosures to Close

New Jersey is second in the country for the rate of homeowners with seriously deliquent loans.  These are mortgages 90 days late or in forclosure.  This means that, while some parts of the country are starting to recover from this mortgage debacle, other states, like New Jersey are still waiting for solutions.  Homeowners and banks are still waiting for foreclosure.  This means that NJ home prices are still falling, which is a burden on the New Jersey economy. 

Unfortunately, the bad news does not end there.  What is also burdening New Jersians is that there is a greater quantity of shadow inventory.  Shadow inventory is real estate properties that are either in foreclosure and have not yet been sold or homes that owners are delaying putting on the market until prices improve. Shadow inventory can create uncertainty about the best time to sell (for owners) and when a local market can expect full recovery. Also, shadow inventory typically causes reported data on housing inventory to understate the actual number of inventory in the market. You can read more about shadow inventory here

New Jersey has about 60,000 foreclosures that were started in January 2008 and are still waiting for resolution.  THe hold up is partly because of the robosigning scandal.  The NJ state courts became alerted to the robo-signing scandal and were concerned that there was no good process in place for foreclosures that would maintain fairness for homeowners.  As the state has worked out the process, the foreclosures are starting to come through the system, with banks beefing up foreclosure departments to push them through faster. 

One may think if foreclosure is such a slow option, banks would turn to short sales.  Banks are happy to short sell and get some money for the mortgage right away but homeowners are hesitant to do so, not wanting to uproot their families and hoping for a different solution.  One solution is to wait and see, which many homeowners are doing.  Why move out if you don’t have to do so? 

If you are facing foreclosure, we encourage you to contact us at the Stephen M. Goldberg, P.C. law office.  We have helped many clients  who are facing financial peril and can help you make sense of it all.  Please call us at 732-752-8834 to discuss your situation or even schedule a free consultation.   We are here to help you.