Loans: To Modify or Not to Modfy

As a result of the mortgage and foreclosure crisis, there is a sprouting of a new type of business which that tout “loss mitigation consulting,” “foreclosure prevention,” “mortgage loan modification,” and similar services. According to the Department of Banking and Insurance, there is a rising number of advertisements, direct-mail solicitations and other marketing materials offering New Jersey consumers assistance in negotiating resolutions of their delinquent residential mortgage loans with lenders and servicers in exchange for up-front fees.

The Department has also seen solicitations to licensees and to attorneys to partner with companies that purport to offer such services. These companies offer help to delinquent borrowers by obtaining payment plans, loan modifications, short sales and deeds in lieu of foreclosure. Mortgage bankers, brokers and solicitors have been targeted by these businesses for the purpose of gaining referrals.

What is a Loan Modification?

“A loan modification involves modifying the terms of an existing loan, typically to make it more immediately affordable for a borrower in default or in imminent danger of default, for instance because of a scheduled rate increase. The terms commonly modified are the interest rate and/or the term of loan. A loan modification is not a form of mortgage loan refinance or second mortgage activity,” per the Department of Banking and Insurance.

The New Jersey’s Debt Adjuster Act labels loan modification as “debt adjustment.”

A "debt adjuster" is a person who either (a) acts or offers to act for a consideration as an intermediary between a debtor and his creditors for the purpose of settling, compounding, or otherwise altering the terms of payment of any debts of the debtor, or (b) who, to that end, receives money or other property from the debtor, or on behalf of the debtor, for payment to, or distribution among, the creditors of the debtor. [N.J.S.A. 17:16G-1c(1)].

If you have a business, you may enter into a loan modification if you are:

a) The lender or owner of the loan; or

b) The mortgage servicing company, acting as an agent for the loan’s owner; or

c) An entity licensed by the Department as a Debt Adjuster under the Debt Adjuster Act; and

d) Other entities that are exempt from Debt Adjuster licensure, as set forth at N.J.S.A. 17:16G-1c(2):

The following persons shall not be deemed debt adjusters: (a) an attorney-at-law of this State who is not principally engaged as a debt adjuster; (b) a person who is a regular, full-time employee of a debtor, and who acts as an adjuster of his employer's debts; (c) a person acting pursuant to any order or judgment of court, or pursuant to authority conferred by any law of this State or the United States; (d) a person who is a creditor of the debtor, or an agent of one or more creditors of the debtor, and whose services in adjusting the debtor's debts are rendered without cost to the debtor; or (e) a person who, at the request of a debtor, arranges for or makes a loan to the debtor, and who, at the authorization of the debtor, acts as an adjuster of the debtor's debts in the disbursement of the proceeds of the loan, without compensation for the services rendered in adjusting those debts.

For Consumers, be wary of:

a) Payment of exorbitant upfront fees for services available from a proper source for free or at minimal cost;

b) Loss of fees paid, with no services rendered, and/or no protection from financial loss under a surety bond (Debt Adjuster licensees are required to be bonded in the minimum amount of $50,000.);

c) Loss of precious time in the midst of a default or foreclosure process;

d) Loss of title to the home without any real benefit, under certain scams; and

e) Further damage to credit profile.

The Department will investigate complaints relating to unlicensed persons offering loss mitigation consulting, foreclosure prevention, loan modification and similar services and will pursue appropriate remedies.

WHAT IS A DURABLE POWER OF ATTORNEY ?

One of the most important documents a person can ever have is a Durable Power of Attorney.  A Durable Power of Attorney permits a person to clearly define ahead of time your wants and wishes regarding financial and/or healthcare treatment in the event a person becomes incapacitated or disabled.  A Durable Power of Attorney can provide peace of mind knowing that a person of your choice has been chosen to carry out your affairs when you are unable to do so.  The person to whom the individual delegates power, known as the attorney in fact, is required to use the individual’s money only for the individual’s benefit.  The fact that the individual has signed the Power of Attorney does not interfere with that person’s right to handle matters for him or herself, as long as you are able to do so.

 

            A Durable Power of Attorney is extremely helpful if a person is temporarily hospitalized or traveling and will be away from home for some period of time or for any other reason a person is unable to perform their own payment of bills or banking.  Furthermore, a Durable Power of Attorney may be a better alternative than adding someone’s name to an individual’s bank account because with the Power of Attorney, another person can handle a persons money without having an interest in it. 

 

            An attorney in fact can help a person obtain all the benefits he or she is entitled to by making claims and applications on their behalf.  More importantly, a Power of Attorney can be revoked quickly. In all, a Power of Attorney is a very inexpensive tool that has extremely valuable benefits.  

NEW JERSEY MOTOR VEHICLE POINTS

Traffic tickets are given when violations occur. Here is a list of some violations and their points associated with them:

(note: Insurance companies have an additional point system, in addition to the points below for such events as accidents, DWI, and driving without insurance. Insurance companies can surcharge you for MVC points and for “insurance points”).

39:3-20 Operating constructor vehicle in excess of 45 mph 3
39:3-38.1 Keep or exhibit forged, altered or counterfeited insurance registration or license card 2
39:4-14.3 Operating motorized bicycle on a restricted highway 2
39:4-14.3d More than one person on a motorized bicycle 2
39:4-35 Failure to yield to pedestrian in crosswalk 2
39:4-36 Failure to yield to pedestrian in crosswalk; passing a vehicle yielding to pedestrian in crosswalk 2
39:4-41 Driving through safety zone 2
39:4-52 Racing on highway 5
39:4-55 Improper action or omission on grades and curves 2
39:4-57 Failure to observe direction of officer 2
39:4-66 Failure to stop vehicle before crossing sidewalk 2
39:4-66.1 Failure to yield to pedestrians or vehicles while entering or leaving highway 2
39:4-66.2 Driving on public or private property to avoid a traffic sign or signal 2
39:4-71 Operating a motor vehicle on a sidewalk 2 39:4-80 Failure to obey direction of officer 2 39:4-81 Failure to observe traffic signals 2
39:4-82 Failure to keep right 2
39:4-82.1 Improper operating of vehicle on divided highway or divider 2
39:4-83 Failure to keep right at intersection 2
39:4-84 Failure to pass to right of vehicle proceeding in opposite direction 5
39:4-85 Improper passing on right or off roadway 4
39:4-85.1 Wrong way on a one-way street 2
39:4-86 Improper passing in no passing zone 4
39:4-87 Failure to yield to overtaking vehicle 2
39:4-88 Failure to observe traffic lanes 2
39:4-89 Tailgating 5
39:4-90 Failure to yield at intersection 2
39:4-90.1 Failure to use proper entrances to limited access highways 2
39:4-91 and 39:4-92 Failure to yield to emergency vehicles 2
39:4-96 Reckless driving 5
39:4-97 Careless driving 2
39:4-97a Destruction of agricultural or recreational property 2
39:4-97.1 Slow speed blocking traffic 2
39:4-98 and Exceeding maximum speed 1-14 mph over limit 2
39:4-99 Exceeding maximum speed 15-29 mph over limit 4
Exceeding maximum speed 30 mph or more over limit 5
39:4-105 Failure to stop for traffic light 2
39:4-115 Improper turn at traffic light 3
39:4-119 Failure to stop at flashing red signal 2
39:4-122 Failure to stop for police whistle 2
39:4-123 Improper right or left turn 3
39:4-124 Improper turn from approved turning course 3
39:4-125 Improper U-turn 3
39:4-126 Failure to give proper signal 2
39:4-127 Improper backing or turning in street 2
39:4-127.1 Improper crossing of railroad grade crossing 2
39:4-127.2 Improper crossing of bridge 2
39:4-128 Improper crossing of railroad grade crossing by certain vehicles 2
39:4-128.1 Improper passing of school bus 5
39:4-128.4 Improper passing of a frozen dessert truck 4
39:4-129 Leaving the scene of an accident No personal injury 2 Personal injury 8
39:4-144 Failure to observe stop or yield signs 2
39:5C-1 Racing on highway 5
39:5D-4 Moving violation out-of-state 2

Which is better: A Will or a Trust?

By now, many of you know the importance of having a will drawn up. But recently, there have been more than one occasion where a question arises about whether a “trust” should be drafted instead.

There is a great a article by Jodee Redmod on Lovetoknow.com, where she writes:

"By way of a reminder, a will is a legal document that sets out how a person's estate will be dealt with upon his or her death. The estate includes the deceased's real and personal property

If a person dies intestate, without having made a will, his or her estate will be distributed according to the law set out in the state of residence. The way to ensure that your money and property go to the person(s), organization, or charity that you want is to have your instructions clearly noted in a will.

After a person dies, his or her estate needs to be settled. This process is known as probate. Before assets can be distributed to the beneficiaries under the provisions of the will, the deceased's debts must be paid out of the estate. Factors that can make this process both lengthy and expensive include:
-The deceased died without a valid will
-No will was drawn up at all
-Multiple wills are discovered
-The will is contested by one or more persons making a claim against the estate

Even in the case of a relatively-simple estate, probate fees will need to be paid. The probate fees are calculated based on the gross value of the estate, not on the net value after any debts are paid.
Once a person's will goes into probate, the contents of the will are a matter of public record. Anyone can appeal the courthouse and request a copy of the document.

A living trust, or you may see the term inter vivos trust, serves a different function than a will. A living trust is a created during a person's, know as the grantor, lifetime. The grantor transfers ownership of his or her assets into the living trust. These assets can take the form of real property, such as real estate, stocks, personal property, or cash in the bank. The main advantage to placing assets into a living trust is a financial one. Assets held in the trust do not have to be probated after the grantor's death. They pass directly to those people named as beneficiaries immediately without having to wait for an extended period for the probate process to be completed. Since a typical probate process can last as long as one year, a living trust is a benefit to heirs to the estate.

Another advantage to a living trust is that the terms of the trust are kept private; unlike a will, they are not made public after the grantor's death. Putting assets in a living trust may also help to lessen the burden of estate taxes. People may also avoid probate by purchasing a life insurance policy, or by putting money into a joint savings account with another person A person interested in estate planning doesn't necessarily need to choose a will versus a living trust. Both of these items have a place in estate planning."

Filing an Action in Small Claims

You can find this at http://www.judiciary.state.nj.us/ocean/vic14d1.htm

The Small Claims Section is a court in which you may sue someone (the defendant) to collect a small amount of money that you believe is owed to you. Because procedures in Small Claims are simpler than in other courts, persons usually can file and present their cases relatively quickly and inexpensively, and often without an attorney.

Small Claims handles cases in which the demand is not more than $3,000.00. If the amount of money you are trying to recover is more than $3,000.00, but less that $15,000.00 your case should be filed in the regular Special Civil Part. Cases in which damages are more that $15,000.00 must be filed in the Law Division of the Superior Court.

If you believe you are entitled to damages greater than $3,000.00 but still wish to sue in Small Claims, you give up you right to recover damages over $3,000.00. The additional money cannot be claimed later in a separate lawsuit.

A complaint must be filed in the of Office the Special Civil Part of the county where at least one defendant lives or where the defendant business is located.

Types of Claims Handled in the Small Claims Section
Typical Claims Filed
Following is a general list of claims which can be filed in Small Claims:
Breach of written or oral contract. Return of money used as a down payment.Property damage caused by a motor vehicle accident. Damage or loss to property. Consumer complaints for defective merchandise or faulty workmanship. Payment for work performed. Claims based on bad checks. Claims for back rent. Return of a tenant's security deposit.

Please remember that is you believe you are entitled to damages greater than $3,000.00 and sue in Small Claims, you can only recover damages up to $3,000.00.

CLAIMS THAT CANNOT BE FILED
The following is a general list of claims that cannot be filed in Small Claims:
Claims arising from professional malpractice (for example; alleged malpractice by a doctor, dentist or lawyer). Claims for support or alimony from a marital or a domestic dispute.Claims arising from a probate matter.

Credit Cards Woes

Have you ever been contacted by a credit card company? Chances are you have or may be contacted in the near future, considering the reason downturn in the economy. At one of the fastest rates in recent memory, Americans are falling behind on their credit card payments, receiving delinquencies and defaults in double-digit percentages compared to last year and prompting warnings of worse to come.

If you find yourself in debt, the Fair Debt Collection Act (FDCA) provides protection. This is a federal law that shields consumers from abusive and harassing creditors. It applies to third party creditors who have purchased accounts or hired by the original creditor to collect a debt.
Once a creditor contacts you, they must advise that they are a collection agency. They must notify you who the original creditor is, and the amount owed. This permits you to determine if the bill is actually yours or if you dispute this bill. Always request a copy of the bill in writing and check if they advise you that you have 30 days to dispute the bill.

There are several rules that Debt Collectors must abide by. For example, a Debt Collector CANNOT:
1. Continue to contact you at your place of employment once you notify a collector that you do not want calls at work,;
2. Use abusive and intimidating language;
3. Call you several times a day;
4. Publish your name and nature of the debt;
5. Contact you before 8:00 a.m. and after 9 p.m.;
6. Communicate with any other person such as a spouse, family member, or even your attorney, without written permission from you;
7. Deposit a postdated check prior to the date written on the check;
8. Cannot collect any amount greater than the amount owed.

These are several more laws of conduct for creditors in the FDCA.

If you find that a third party creditor’s behavior violates the FDCA, you may send, via certified mail, a Cease and Desist Letter to the collection agency. They are then required to stop communicating with you. Once a third party debt collector receives a Cease and Desist letter, they can only contact you to notify you that their efforts will be terminated; they may utilize other alternatives they have used with similar debtors.

Foreclosure Resources

With foreclosures on the rise, it may seem that there is no where to turn. But there is a great website http://www.hud.gov/foreclosure/foreclosuretips.cfm from the U.S. Department of Housing and Development. They list tips for avoiding foreclosure and toll free phone numbers for people to call. It also lists resources for out of state persons.