Monthly Archives: July 2007

Foreclosure News for Lawyers

Countrywide is one of the largest, if not the largest, mortgage companies in the country. They started backing out of sub-prime loans before a lot of companies, and they have plenty of prime loans in their inventory. Countrywide’s stock fell 10.5% earlier this week, and its Chairman says not to expect a reocovery in the housing market until at least 2009. (Most of these facts come from articles in the Wall Street Journal or New York Times. They aren’t linked to here, because I have seen several over the last few days.) Oh, and it isn’t just their subprime loans that are showing increasing delinquency rates either. The delinquency rates for their prime loans, although still much lower than for subprime loan, has more than doubled.

So, what does this have to do with lawyers? Simple. Lawyers who represent consumers need to be up to speed on foreclosure defenses, mandatory loss mitigation procedures, foreclosure accounting techniques — all the stuff you didn’t learn in law school. It is no longer true that there are no defenses to a foreclosure action.

I will be in St. Louis September 7 – 9 at the National Association of Consumer Advocates’ Mortgage Lending Litigation Conference: Representing Homeowners Facing Foreclosure with the Support of the AARP Foundation. Later this Fall, the National Association of Consumer Bankruptcy Attorneys is sponsoring a Members-Only Workshop with one day focused exclusively on mortgage issues.

If you reprsent consumers and are concerned about rising foreclosures, now might be the time to look at doing a little out of state CLE. It really is worth the money.


Arbitration Tide Turning?

Gradually over the last 15 years or more it seems there has been a swelling tidal wave in favor of mandatory arbitration agreeements. I’ve always been suspicious when people with money and power (like large corporations and legislatures) become in favor of keeping aggrieved people out of the court system. Why? Whatever happened to faith in the concept of just as much justice as you can afford?

Recently, however, it appears the tide is turning. In May the Pennslvania Supreme Court heard a case by referral from the Third Circuit on whether arbitration clauses in consumer contracts are unenforceable adhesion contracts. In June, the 8th Circuit refused to compel arbitration when requested by a mortgage company in a Bankruptcy Adversary Proceeding.  Later in June, the Oklahoma Supreme Court went to great lengths to call arbitration clauses in consumer contracts adhesion contracts that are neither freely negotiated nor understood by consumers. Oklahoma has a strong legislative history of favoring arbitration, but the Oklahoma Supreme Court still mentioned, in dicta, that the law was starting to take a more active role in protecting consumers from abuse. (Bilbrey v. Cingular Wireless, L.L.C., 2007 OK 54.)

Now in July, H.R. 3010 (Fairness in Arbitration Act) has been referred to the House Committee on the Judiciary; and S. 1782 has been referred to the Senate Committe on the Judiciary. The House bill has, as far as I can tell, 8 co-sponsers. The Senate bill is sponsored by Sen. Durbin.

Let’s hope that this is the first step in taking back rights that most of us take for granted — until we discover we don’t have them anymore.


Minimum Wage — a non-event?

Unless you live in a cave, you have probably heard that the Federal minimum wage increased to $5.85 an hour today.  The part you may not have heard is that 32 States and the District of Columbia already require a higher minimum wage — so, those areas will see no change.

The Department of Labor has a map showing the status of various States’ minimum wage laws.  No surprise, Oklahoma simply follows the Feds.  Here, at least, the minimum wage increased for the first time in almost ten years — and with more to come.  If you haven’t heard the details, today’s change is just the first step of a three-year process.  Next year the minimum wage will increase to $6.55, and then in 2009 it will increase to $7.25.