Saturday, May 31, 2008

House and Senate Reach Agreement on Immigration Reform

One of the major issues that confronted legislators this session has been illegal immigration reform; work on that legislation was completed this week when both the House and Senate signed off on amendments to H.4400 (Harrell). H.4400 has been ratified and sent to the Governor for his signature. As amended the bill includes the E-verify provision and violations for willingly and knowingly employing illegals, for employers.

Friday, May 30, 2008

mortgage-rescue company crack down

For people about to lose their homes to foreclosure, the advertisements are like a lifeline: “WE BUY HOUSES FOR CA$H,” or “Refinance Your Mortgage! And Receive a 7 Day Vacation.”

These so-called mortgage-rescue companies promise that for fees of about $1,000 to $2,500, they can negotiate loans with providers to get owners lower monthly payments. Or they offer deals that suggest homeowners temporarily deed their homes to the company or a third party, theoretically to allow the homeowners time to get back on their feet financially.

But in some cases, these “solutions” have turned out to be far worse than the problem.

At a time when the subprime mortgage crisis has caused a record number of homeowners to enter foreclosure, scam artists have made a bustling industry of preying on people’s desperation to save their homes.

States are leading the effort to help homeowners avoid these scams; at least 18 states have laws banning foreclosure-rescue scams by limiting some of practices that lead to them, and six of them-Idaho, Maine, Nebraska, Oregon, Virginia and Washington- enacted laws just this year, according to the National Conference of State Legislatures. A similar bill is now on the desk of Florida Gov. Charlie Crist (R).

The measures include giving homeowners a few days to cancel their contracts with these companies without penalty, requiring that a homeowner receives at least 80 to 82% of a house’s fair market value if it’s sold and requiring a written contract, which may even designate the size of type it contains.

“You’ve got to let the word get out there that we’re not going to tolerate preying on people who are at the bottom of despair,” said Washington state Rep. Patricia Lantz (D), who sponsored her state’s bill. “This is a deterrent to the worst of the worst.”

Before this year, Maryland already had a law that targeted foreclosure scams, but during the recent legislative session, the state enacted the country’s toughest statute: a ban on all rescue transactions that involve homeowners signing away the deeds to their homes.

Only Washington, D.C., which acted this year, and Massachusetts have similarly stringent rules. The Bay State permanently banned for-profit foreclosure-rescue transactions through a regulation issued by the attorney general.

Legitimate foreclosure rescue services are often nonprofits and don’t normally charge upfront fees; also, homeowners usually come to them seeking help.

The scammers, on the other hand, find potential victims by combing through public records to see who is in danger of being foreclosed. Then they bombard them with calls or direct-mail solicitations that sometimes look like letters from a government agency. One company that operated in Idaho sent out notices to homeowners falsely claiming that their homes were “scheduled to be sold at auction” and instructing them to call the company. In some cases, consultants have even shown up on owners’ doorsteps to drum up business.

In one type of scam, a consultant demands an upfront fee of $1,000 or more to negotiate with the loan provider on the owner’s behalf for a more affordable loan, but then the company does little or nothing. Besides being $1,000 poorer, the owner also has lost valuable time he or she could have used to work out a plan with the provider.

April Charney, an attorney at Jacksonville Area Legal Aid in Florida, said she has a client who paid $1,200 to HomeSavers USA to help her work out a deal with her loan provider. The company-which in February reached an agreement with the Illinois attorney general to stop operating in that state-took the money and then did little to help the client. Now Charney is trying to negotiate to get the $1,200 applied to her client’s mortgage.

“Instead of having that money applied to her mortgage arrears, which might have brought her current, it just sunk her further in the hole,” Charney said.

In another common rescue scheme, the foreclosure consultant convinces a homeowner to sign over the home’s title, either to the consultant or a third party. The homeowner remains in the house and pays rent, believing that he is buying time to get back on track and that the consultant will eventually sell the home back to him again.

But in some cases, the rent charged to the homeowner is even higher than the mortgage payments. If the homeowner can’t pay, he’s evicted. Or the consultant refinances the house, often multiple times, draining the equity.

Sometimes, property owners don’t even know they have given away their homes. In Florida, many of the victims of this scam are elderly, uneducated or don’t speak English, said Carolina Lombardi, a staff attorney at Legal Services of Greater Miami Inc.

“They’re literally tricked. They sign a stack of papers with no concept they’re signing a deed. They think they’re refinancing,” she said. “Or they know they’re signing their deed, but they’re told, ‘we’re just holding this for you until you establish you can improve your credit.’ They’re desperate, and it seems reasonable.”

Without laws against rescue scams, prosecutors can go after the perpetrators by claiming they violated deceptive-advertising statutes, but the threshold for proving fraud is high. Additionally, when the scammer produces a stack of contracts the victims have signed _ even if the owners were deceived about what they were signing _ prosecutors have no case against the rescue consultants.

State attorneys general are often the driving force pushing for their states’ laws. Massachusetts Attorney General Martha Coakley’s (D) in September bypassed the Legislature and issue a regulation banning for-profit rescue transactions under the state’s consumer protection act. An attorney at Florida Legal Services said her group had futilely tried to get a law enacted for years, and this year’s bill passed only because it was proposed by Attorney General Bill McCollum (R).

Illinois Attorney General Lisa Madigan (D) saw early on the looming problem posed by rescue scams. The Legislature there passed a bill she drafted in 2006, which gives homeowners five days to cancel a rescue contract and requires rescue firms to pay the homeowner at least 82% of the fair market value if he or she cannot buy back a home after signing the deed away.

“These people are parasites, and they are attacking the people who are already desperate and who are vulnerable,” she told Stateline.org. “It’s the worst financial scam that we’ve seen perpetuated against homeowners.”

Since the law’s enactment, Madigan has reached a settlement with at least one company, HomeSavers USA, that bans it from operating in the state, and her office has 12 current lawsuits against rescue schemes.

At the same time, she has seen a drop in activity. “A lot of these individuals and companies that were running these scams have left Illinois. It’s not beneficial for them,” Madigan said.

Other states’ attorneys general have also been targeting the foreclosure rescue consultants.

In March, Idaho’s attorney general reached an agreement with one company to stop doing business in the state. The Washington state attorney general got Foreclosure Assistance LLC to agree to refund about $75,125 to 200 customers, though the $300 to $500 each victim will get is far less than the $1,200 to $1,500 each one paid the company.

Thursday, May 29, 2008

FTC Nabs Company for Credit Repair Violations

A home-buying consulting business that offers credit repair and home-buying consulting services has agreed to settle with the Federal Trade Commission for alleged federal law violations, including illegally charging an advance fee for credit repair and falsely claiming that they can remove negative information from consumers’ credit reports, even if the information is accurate and timely. At the Commission’s request, the U.S. Department of Justice (DOJ) filed the FTC’s complaint and proposed settlement in federal court.

According to the complaint, consumers are led to Home Buyers Consulting Network, Inc. (HBCN), which is based in Raleigh, North Carolina, through its Web sites and by a company that sells lists of foreclosed properties and suggests that its customers call HBCN if they need credit repair or access to zero or low down-payment home financing. In sales pitches for its credit repair services alone, and in conjunction with pitches for its home-buying consulting services, HBCN makes claims such as: “Our program offers the ability to REPAIR, RESTORE, or ESTABLISH your credit so that you may be able to qualify for 100 % home financing, lower interest rates and better quality credit.” HBCN also offers a “money back guarantee . . . to increase your credit score by 50 to 100 points or delete six derogatory items (from a consumer’s credit report).” HBCN also promises consumers help with finding a home to buy, through a referral to its purported network of realtors and lenders, the complaint stated.

Before performing the promised credit repair services, HBCN’s representatives typically require advance payment of at least $99 for those services, and $399 for bundled credit repair and home-buying consulting services. They also require additional advance payments for credit repair services, typically ranging from $19 per week to $49 per month, and promise to refund all but a $99 fee if consumers do not receive the promised results, provided that the consumers work with them for a period ranging from six months to a year.

HBCN, d/b/a Home Buyers Network, Good Credit Company, GoodCredit.com, and 0downhomebuyers.com, and Douglas Andersen Moore a/k/a Douglas A. Moore, HBCN’s president, CEO, and majority shareholder, are charged with violating the Credit Repair Organizations Act (CROA) and the FTC Act by falsely representing that they can obtain permanent removal of derogatory information from consumers’ credit reports, including bankruptcies, even where the information is accurate and not obsolete. They also are charged with violating CROA by requiring advance payment for their credit repair services; not including on their consumer contracts conspicuous statements about the consumer’s right to cancel the contract without penalty or obligation at any time before the third business day after the consumer signed the contract; and not providing, before the contract was signed, the written statement of consumer credit file rights under state and federal law, and the written “Notice of Cancellation,” both required by CROA.

Under the proposed settlement, the defendants are barred from further CROA violations, and from further misrepresentations affecting a consumer’s decision to buy anything from them, including credit repair services. They also are barred from selling, renting, or otherwise disclosing personal information about anyone who was a client before the order is entered, and from using or benefitting from that information.

The settlement contains a $573,000 civil penalty that will be suspended, and, for consumer restitution, a $40,000 monetary judgment that will be suspended upon payment of $10,000. The full civil penalty and judgment amounts will be imposed if the defendants are found to have misrepresented their financial condition. The settlement also contains standard record-keeping provisions to allow the FTC to monitor compliance with its order.

This case was brought with assistance from the North Carolina Department of Justice, Office of the Attorney General, and the Better Business Bureau Serving Eastern North Carolina.

The FTC advises that only time, a conscious effort, and a personal debt repayment plan can improve your credit report. The first step is to learn what information is in your credit report. If you find errors or mistakes, federal law gives you the right to have them corrected – free of charge. Federal law requires that the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – provide you with a free copy of your credit report once every 12 months, if you ask for it. To order your free report, visit annualcreditreport.com, call 1-877-322-8228, or complete and mail the Annual Credit Report Request Form. Other credit repair information is available at http://www.ftc.gov.

Wednesday, May 28, 2008

SC lets motorcycles run red lights

South Carolina has joined six other states that let motorcyclists, mo-ped drivers and bicyclists run red lights that don't change within a couple minutes of their stopping.

Gov. Mark Sanford signed the bill into law Tuesday.

It requires motorcyclists, mo-peds and bicycles to stop for two minutes before entering an intersection if a traffic signal has not turned green.

Motorcyclists pushed the legislation because they said automatic signal controls using sensor embedded in roads don't always detect their bikes.

The American Motorcyclist Association says Arkansas, Idaho, Minnesota, North Carolina, Tennessee and Wisconsin have similar laws.

Tuesday, May 27, 2008

Home sales post unexpected April increase

Sales of new homes rose in April for the first time in six months although the unexpected increase still left activity near the lowest level in 17 years.

The Commerce Department reported Tuesday that sales of new homes rose 3.3 percent in April to a seasonally adjusted annual rate of 526,000 units.

The Commerce report showed that the median price of a new home sold in April rose to $246,100 in April, up 1.5 percent from April 2007. Analysts were not impressed with the small price increase, noting that the numbers tend to be volatile.

Robert Kavcic, an economist at BMO Capital Markets, said that the price changes in the Commerce report do not take into account the various incentives major builders are offering to move their glut of unsold homes.

A separate report showed home prices falling during the first three months of this year at the sharpest rate in two decades. The Standard & Poor's/Case-Shiller index fell 14.1 percent in the first quarter compared with a year earlier, the biggest year-over-year decline since the index began in 1988.

The Commerce report on new home sales showed the April rebound was led by a huge 41.7 percent surge in sales in the Northeast. Sales were up 8.3 percent in the West and 5.8 percent in the Midwest. The only region which saw a decline in sales in April was the South, where sales fell by 2.4 percent.

The inventory of unsold new homes edged down slightly to 10.6 months' supply at the April sales pace, compared with 11.1 months in March. However, the April level was still about double the inventory level that was normal during the five-year housing boom.

That boom ended in 2005 and since that time the housing industry has been struggling in a tough environment with falling sales and prices and rising mortgage defaults.

tax on cigarettes sent to the Governor

The House spent Wednesday afternoon debating H.3567 (Rice), legislation increasing the tax on cigarettes, which the Senate had sent back to them with amendments on May 8. The House adopted only one amendment to the bill, which provides one million dollars to the Department of Agriculture for the "Grown in SC" program. On Thursday, the Senate concurred in the House amendment to H.3567.
H.3567 increases the tax on cigarettes by 50 cents per pack, generating approximately $159 million in new revenue. Funds will go to expanding components of the state's Medicaid program, health insurance assistance for low income residents, to the Smoking Cessation and Prevention Trust Fund, and one million dollars to the Department of Agriculture. The bill was ratified on Thursday and sent to the Governor who has until 12:00 midnight on Wednesday, May 28th, to act on the bill.

Monday, May 26, 2008

Water at former Air Force base still contaminated

Environmental tests over the past three years show high levels of contamination still exist in groundwater at the former Myrtle Beach Air Force Base.

The findings come more than 15 years after the military left the site.

The chemicals in groundwater are at levels far above what the Environmental Protection Agency considers safe for drinking water.

Regulators require the military to reduce pollution on the site so that the groundwater is safe for drinking, even though the water hasn't been used for consumption since 1999.

Tests show the contamination is largely contained and government agencies say the toxicity likely does not pose a threat to people who live in the area.

Sunday, May 25, 2008

Bikefest - police arrested 25 people, Last year was 12

Police: Arrests up during Bikefest

Saturday night was a busy one along the Grand Strand as thousands of bikers and other tourists enjoyed the Memorial Day Weekend.

As the number of bikers swells this weekend, so do the number of arrests, police in North Myrtle Beach tell us.

"Our numbers are up as far as arrests, tickets written. Our calls are up but you really wouldn't notice it. I mean, I don't know if it's the crowd's thinner, and we're able to get the violaters easier. Not sure what the reason is but our numbers are up," said Lt. Phil Webster with NMB Police Department.

Webster tells us as of midnight on Friday, police had arrested 25 people, mostly for traffic violations. Last year at the same time, the number was around 12.

Webster says while the number of bikers appears to be higher than last year, the crowd still seems smaller than in years past.

He says he's happy to report they haven't dealt with any violent crimes as of Saturday around 9:00pm.

The Atlantic Beach Memorial Day Bikefest wraps up Sunday.