Current Events

 Written by Craig D. Robins, Esq.

 

 UPDATE:  Click here for Bankruptcy Judge Dennis E. Milton Funeral Service Information

 

Last night, Judge Milton passed away.  He had been battling cancer for several years.  He had served as a bankruptcy judge in the Eastern District of New York, in the Brooklyn Bankruptcy Court.

 

Upon recently becoming unable to continue regularly appear on the bench, visiting Judge Joel B. Rosenthal was recalled to serve in his place.  Judge Rosenthal has been sitting in Brooklyn since May 17, 2010 and, for now, will continue to do so until September 3, 2010.

 

Judge Dennis E. Milton became a bankruptcy judge on April 30, 2001.  Before his appointment, he practiced for more than 25 years as a litigator in a broad variety of areas, which included criminal defense, criminal prosecution, municipal law, bankruptcy, intellectual property and labor law. 

 

Judge Milton attended Regis High School in New York City, Columbia College and the Fordham University School of Law, where he served as Notes Editor on the Urban Law Journal. 

 

After graduating law school, Judge Milton joined the white collar criminal defense firm of McGuire & Lawler, which was counsel in many prominent cases, including the successful defense of two Warner-Lambert executives following an explosion at the American Chicle facility in Long Island City in 1977 and the representation of the co-defendant in the Reverend Moon federal tax evasion trial and appeal. 

 

Thereafter, Judge Milton served as an Assistant United States Attorney for the Eastern District of New York, where he was one of the three attorneys who founded the Long Island satellite office in 1985.

 

As an Assistant United States Attorney in the Criminal Division, Judge Milton obtained the indictment, extradition and conviction of defense contractors selling military helicopter parts to a European supplier for trans-shipment to Iran in violation of the Arms Export Control Act; and prosecuted matters such as tax evasion; bank frauds involving check kiting schemes, credit card fraud, false entries on bank records, money laundering, illegal transfers and sale of firearms; criminal trademark infringement; and crimes related to the obstruction of justice.  

 
From 1988 through 1991, Judge Milton served as Chief Deputy County Attorney for the County of Suffolk Department of Law. Judge Milton was the chief administrative officer for an office consisting of 57 municipal attorneys and was the chief liaison officer with county agencies in contract, labor and tax matters.  He argued several tax and bankruptcy appeals before the Second Circuit Court of Appeals, including In re Parr Meadows Racing Association, Inc.  and was trial counsel in the defense of several federal civil rights cases.  Judge Milton negotiated municipal contracts for county agencies, including a complete overhaul of the county health center hospital contracts. 

 
In 1992, Judge Milton became Special Counsel to Bryan Levitin Franzino & Rosenberg.  Judge Milton represented commercial clients as plaintiffs in commercial mortgage foreclosure proceedings and related litigation in bankruptcy court and in enforcement of contractual obligations in federal court.  In  criminal matters, Judge Milton represented professionals and business executives in federal and state investigations, as well as defendants in federal and state courts.  From November 1996 to his appointment, Judge Milton served as Special Counsel to the Chief Investigator of the Independent Review Board, which oversees the International Brotherhood of Teamsters pursuant to a Consent Order entered in the Southern District.

I am currently in San Francisco where I just attended the annual convention of the National Association of Consumer Bankruptcy Attorneys (NACBA).  I write this report from there on May 1, 2010.

 

[Note:  this article was previously published in the May 2010 edition of the Suffolk Lawyer].

 

[I will soon post a number of photos that I took at the NACBA convention}

  

Many years ago I discovered how exciting it is to travel across the country to interact with fellow bankruptcy practitioners and learn the latest about strategies for protecting consumer bankruptcy debtors, and tips for running a bankruptcy law office.

 

Over the course of three days, some of the country’s leading bankruptcy attorneys as well as a number of bankruptcy judges, provide valuable insight at daily programs and seminars.

 

What I find just as important is trading notes and war stories with other bankruptcy attorneys from across the country and learning about new products and services at the accompanying trade show.

  

  

 

 

In a half-day program which addressed the means test, the speakers concluded that both the United States Trustee and our country’s bankruptcy judges have become more lenient in interpreting the means test in Chapter 7 cases.  There are three reasons for this trend.

 
Apparently, the current recessionary climate and sentiment against large banking institutions is resulting in the U.S. Trustee bringing fewer Section 707 motions alleging that the debtor filed an abusive case. 

 

In addition, more and more debtors are providing information to the U.S. Trustee’s office in cases where there are means test issues.  This enables the U.S. Trustee to evaluate the issue of abuse and reach a conclusion that the U.S. Trustee should not object.

  

Finally, there seems to be a greater number of experienced bankruptcy attorneys who know what red flags to look out for and consequently these experienced attorneys refrain from filing abusive cases.

 

 

Judicial salaries are relatively low.  It appears that we are losing a large number of bankruptcy judges because the level of judicial pay is so low.  When there is a vacancy on the bench, this causes the bankruptcy court’s entire case load to slow down, which means unhappiness and dissatisfaction to litigants and all others involved.

 

This was indeed the case just two three years ago here, in the Eastern District of New York.  Our Chief Bankruptcy Judge for the district, Hon. Melanie L. Cyganowski, left the bench to pursue a much more profitable position as a partner in a leading bankruptcy firm. 

 

I interviewed Judge Cyganowski at that time and she clearly indicated that her reason for leaving the bench was because of her unreasonably low judicial salary.  See:  Chief Bankruptcy Judge Melanie Cyganowski Stepping Down.

 

 

There was ample discussion about President Obama’s Home Affordable Modification Program (HAMP) which seems to be rife with problems as an unusually small percentage of homeowners actually get permanent relief.

Here’s why: 

 

a) there is a major lack of communication on the part of the lender;

 

b) lenders are continuing to threaten homeowners with foreclosure even as the lender is evaluating the homeowner for a modification, and even if the homeowner has been approved for a trial term; and

 

c) lenders are arbitrary in granting relief.

 

On a positive note, however, a new law is going into effect on June 1, 2010 that, among other things, makes it illegal for a lender to discriminate against a bankruptcy debtor because he or she is in the HAMP program. 

 

The new law will also provide certain protections to Chapter 13 debtors as mortgagees will be precluded from objecting to discharge.

 

 

When the 2005 Bankruptcy Amendment Act first went into effect in 2005, there were only four approved credit counseling agencies in our jurisdiction (E.D.N.Y.), and they all charged the same rate – $50 per credit counseling session.

  

There must have been about 20 credit counseling companies exhibiting at the trade show and many now charge fees as low as $15 per session. 

 

In addition, they gave out so much shwag that my ten-year-old son, Max, will be delighted to receive from me upon my return a large number of squeeze toys, flashlights, keychains, fancy chocolates, playing cards, puzzles, T-shirts and what-not that I picked up from these exhibitors.

              

My hard-working office staff will also be the recipient of a good deal of this booty.

 

 

One of the most crowded exhibitor booths belonged to a OTB, an company that created BK Express, a comprehensive practice management system which is designed for consumer bankruptcy attorneys.

 

I actually just set up my office to use this software which is basically a special shell designed to work on top of LexisNexis’s Time Matters system. 

 

 

In a very dynamic session, we were told that 50% of all residential mortgages in this country are nominally owned by MERS, which is Mortgage Electronic Registration Systems, a privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States.

  
The problem with MERS-recorded mortgages is that MERS really does not own the mortgage, thereby creating an interesting argument that MERS does not have any standing in bankruptcy court. 

 

I previously wrote about special defenses that a homeowner can assert to defend a foreclosure action involving a MERS mortgage.  See:  A New Powerful Mortgage Foreclosure Defense — Compliments of MERS.

  
If your client has a MERS mortgage, consider looking at the pooling and service agreement to make sure that there was a true and valid assignment at every link of the chain, including delivery and acceptance of assignment documents.  If there was not, you may have a good objection to a MERS proof of claim or motion to lift the stay.

 

 

I was rather surprised the very small turn-out from our state.  Out of about 1,600 bankruptcy attorneys who attended the convention, there must have been fewer than 20 from New York, and only one other member, I believe, from the Suffolk County Bar Association.  That was Allison Shields, who was actually one of the speakers – she spoke on managing a successful bankruptcy practice.

 

 

 

The consumer public can be very gullible.  Long Island brokerage firm David Lerner Associates — exceptionally well known in the New York metro area for saturating the radio airwaves with advertising spots for its services — was just charged with ripping off consumers by charging excessive fees.

 

The Financial Industry Regulatory Authority (FINRA) has accused the Lerner firm of charging excessive markups on normally-safe municipal bonds and high-grade mortgage backed securities.

 

 

I remember hearing ads for Lerner’s financial services business on the radio for almost 20 years.  His ubiquitous spots seem to run nonstop night and day.

 

In the past decade, Lerner came up with a family-friendly advertising campaign in which he calls himself “Poppy”, referring to the grandfatherly nickname his grandkids call him. 

 

His radio spots created the impression that he was a fatherly figure, out to protect the retired consumer by selling them safe investments.

 

He also featured numerous spots from alleged customers providing testimonials, praising and thanking him.  New Yorkers have heard, “Take a tip from Poppy” a million times.

 

As it turned out, he generated so much trust that well over a thousand consumers, who I suspect are mostly senior citizens investing their retirement savings, were lulled into, what appears to be, a false sense of security, believing Lerner would treat them well and charge them reasonable fees.

 

However, Lerner totally ripped off these consumers by unreasonably jacking up the prices that his Long Island financial services business charged, according to the FINRA complaint.

 

FINRA is now seeking to obtain full restitution for the consumers and a stiff fine against David Lerner Associates and his top-level broker, William Mason.

 

Incidentally, this is not the first time Lerner has been in trouble.  He paid a hefty fine to NASD several years ago.

 

 

Just last night I met with a very nice couple that consulted me for a bankruptcy filing.  They, too, were taken advantage of by smooth-talking radio spokesmen. 

 

They fell for an out-of-state debt settlement program that ripped them off for thousands of dollars while promising them the moon.  The couple came to me after just being served with a collection law suit.

 

Every day I hear convincing radio spots and see slickly-produced television commercials touting debt settlement services.  Many of these companies pour big bucks into the commercial production and use quality actors.  The commercials boast (unrealistic) promises of curing debt problems.

 

Many of these spots claim that the debt settlement company is part of some federal debt settlement program, when there is no such thing.  Yet, an incredible number of consumers are falling for this.

 

Two weeks ago I discussed the problems created by debt settlement companies who heavily advertise on radio and TV, making false promises:  Debt-Settlement Firms Misled Consumers According to FTC . 

 

Consumers need to become more aware that slick advertising does not make a company reliable.  New York Commences Nationwide Investigation Into Debt Settlement Industry — Many Offers to Eliminate Credit Card Debt are False and Misleading. 

  

The bottom line is that consumers need to be much more vigilant.  Just because a radio or TV spokesperson appears trustworthy, does not mean that they are.

 

 

How easy is it to get credit after filing for bankruptcy?  This is a question that clients ask me every day.  It’s on almost every client’s mind who is considering filing for bankruptcy.

 

About three years ago I wrote an article that was published in the Suffolk Lawyer entitled, Life After Bankruptcy: Getting Credit Has Become Too Easy .  At the time I discussed how my bankruptcy clients were inundated with credit card offers and solicitations to open new credit card accounts, and that they received a flood of these offers immediately after emerging from bankruptcy.

 

I haven’t addressed this topic in a while.  Over the past few years, as a result of an economic change to recessionary times, such offers have not flowed as much — but times may be changing.

 

 

Just over two years ago when the we saw a mortgage meltdown, and banking institutions started to run into trouble, the credit market tightened.  This had an impact on almost everyone.  Banks became very reluctant to extend credit except to those in the highest echelons of good credit.

 

As a result, many individuals were no longer able to obtain credit and actually had to file for Chapte 7 bankruptcy as a result.

 

Up until this tumultuous economic time, credit card companies and banks extended credit cards to everyone like they were going out of style (and in fact, they were, for a period of time).  Lenders flooded the mailboxes of consumers who had filed for Chapter 7 bankruptcy and Chapter 13 bankruptcy, almost immediately after they received their bankruptcy discharges.

 

I used to regularly hear from my clients that they were amazed to receive offers for new credit cards just weeks after their bankruptcy cases were finished.  However, the tighter credit market changed that for everyone — at least until recently.

 

Banks Increasing Credit Card Offers Again      

 

According to a recent report by Synovate Inc., a company that provides market data research and monitors credit card solicitations, there was a 29% increase in credit card solicitations over last year’s levels.

 

Last year apparently produced a recession that was the worst we’ve seen in years, and as a result, credit card issuers pulled back dramatically on offers.  As a result, annual mail volume of credit card offers dropped to its lowest levels since 1993.

 

Now, however, banking institutions believe the economy is strengthening, and they are renewing their efforts to again flood the mail boxes of consumers with offers of new credit card accounts.

 

One major bank, HSBC, actually considered leaving the credit card industry entirely last year.  However, just tripled the number of credit card offers that they mail consumers.

 

Another bank, Capital One, had pulled out of the sub-prime market last year.  However, they recently announced their intention to re-enter it.  They, too, have started flooding mail boxes again.

 

 

— Legislation which placed stricter rules on interest rates and fees took effect in February.  Initially, banks were reluctant to extend additional credit after these new laws went effect.   However, the banks have worked out the kinks.  (You will note that as a result of the credit CARD Act, all Credit card statements now have additional disclosures).

 

— Banks lost a great deal of money last year.  Now that they have written off substantial losses, their account balances have stabilized, and they are in a better position to extend new credit.

 

— It appears that the economy is rebounding and consumer spending is increasing again.  With such signs of economic recovery, banks can look forward to better times again and go back to soliciting new customers.

 

 

Most of the matters that I discussed in my older article still apply.  Please see:  Life After Bankruptcy: Getting Credit Has Become Too Easy .

 

 

Although a bankruptcy filing is certainly a negative factor that creditors will consider in deciding whether to extend credit, this fact becomes less and less important over time.

 

Even though a bankruptcy can remain on one’s credit report for up to 10 years, its effect diminishes on a regular basis each month that goes by after the bankruptcy cases is closed.

 

 

It’s a generally accepted fact that a consumer needs two types of credit to quickly rebuild a credit score.  One is installment credit, which includes auto loans or leases, student loans, and mortgages.

 

The other is revolving credit, which includes credit cards and home equity lines of credit.

 

Since someone emerging from a recent bankruptcy may have a tougher time qualifying for a regular credit card, the best solution may be to obtain a “secured” credit card, which is one in which you place a deposit with the bank, and then get a line of credit for that amount, typically about $500.

 

 

Dan’s Papers, a venerable newspaper institution in the Hamptons for decades, filed for Chapter 11 protection last week on Long Island.

 

Often referred to as the “biggest paper in the Hamptons,” Dan’s Papers has graced the entryway of hundreds of East End establishments.

 

I’ve read Dan’s Papers as long as long as I can remember, every time I ventured to the Hamptons or Montauk.  The paper always had a unique quirky feel and I often read it on the sand at the beach.  It seemed to set the tone for the Hampton’s community.

 

 

On April 30, 2010, Brown Publishing Co., the publisher of Dan’s Papers, filed a Chapter 11 case in the Central Islip Bankruptcy Court which is in the Eastern District of New York.  The case number is 10-73295.  There are 14 other affiliated bankruptcy filings.

 

The debtor is being represented by Edward M. Fox, Esq. of the New York City office of K&L Gates LLP, an international law firm with 1,900 attorneys. 

 

The case is assigned to Central Islip Bankruptcy Court Judge Dorothy T. Eisenberg.

 

According to details reported in the bankruptcy filing, Brown Publishing is a closely-held Cincinnatii-based company.  The debtor and its 14 affiliates had assets of $94.1 million and debts of $104.6 million in the period just before filing.

 

The debtor’s attorneys filed a flurry of first-day orders.  Judge Eisenberg presided over hearings on these motions last week.  Some of them were adjourned to June 1, 2010.

 

 

 

The debtor stated that the paper lost a significant amount of advertising revenue.  This was due in large part because a large part of Dan’s advertising is for real estate, and the East End real estate market has suffered markedly.

 

 

Dan Rattiner, who is now in his seventies, began publishing East End papers 50 years ago.  He started while he was still in college, just before his senior year.  His first paper, the Montauk Pioneer, rolled off the press in 1960.

 

Until the he recently sold the Dan’s Papers, Mr. Rattiner controlled almost every aspect of its publication.

 

In a recent Dan’s Papers blog post, Mr. Rattiner proclaimed that the paper isn’t going anywhere. “Brown’s bankruptcy is not about shutting down and selling off the pieces.  In fact, everything will be proceeding as normal. 

 

 

At the height of the real estate boom, which was 2007 to 2008, Brown Publishing embarked on a debt-financed expansion strategy and bought the paper from Mr. Rattiner.  They also bought up dozens of other papers across the country.

 

Brown Publishing is one of the largest newspaper publishers in Ohio.

 

What makes Dan’s Papers very appealing is that the household income of its readers averages a whopping $381,000 per year.

 

Unfortunately, this newspaper bankruptcy filing is just one of many that we’ve seen in this country over the past two years — victims of the recession as well as a trend against advertising in print media.  The Los Angeles Times and Chicago Tribune (former owner of Newsday) — two behemoths of newspaper publshing — have both sought Chapter 11 bankruptcy protection.

 

 

In the bankruptcy filing, the petition indicates that the debtor owes its five largest secured creditors $70.5 million, and that there is collateral with a book value of $94.9 million covering this debt.

 

The largest unsecured creditors appear to be providers of newsprint.  These include Abitibi Consolidated Sales, a unit of AbitibiBowater Inc, who is owed $296,256; White Birch Paper Co, who is owed $219,150; and Page Cooperative, who is owed $195,680.

 

 

Brown has a number of affiliates including Delaware Gazette Co., Texas Business News LLC and Utah Business Publishers.  Brown publishes 15 paid daily papers, 32 paid weekly papers, 41 free publications, 11 paid business publications, and 51 newspapers.

 

Written by Craig D. Robins, Esq.
 
Steven J. Baum, P.C. is a foreclosure Factory.  It is Long Island’s largest foreclosing law firm.

 

If you live in New York, and you are in foreclosure, then there is a very high chance that the foreclosure law firm suing you is Steven J. Baum, P.C., located in Buffalo, New York.
 
Over the past several years, the Baum law firm has become one of the largest foreclosure factories in the country, representing dozens of banks in foreclosure cases.
 
Last year they filed a staggering 12,551 foreclosure lawsuits, which comes out to about 50 a day.  Many of the foreclosure cases we defend for our Long Island clients were brought by Steven J. Baum, P.C.
 
More Foreclosure Cases Mean More Complaints
 
It seems that as foreclosure firms expand and become literal foreclosure factories, they tend to do sloppy work and make frequent mistakes.
 
There have been a multitude of complaints against the Baum law firm.  Here are some complaints as revealed in a recent New York Post article:
 
Failing to Divulge Mortgage Payments
 
Blanca Garcia filed for bankruptcy In the White Plains Bankruptcy Court.  Baum’s firm filed papers claiming Garcia was in arrears.  However, Garcia demonstrated that she actually made payments and showed the court her receipts which had not been credited to her account.  Even though Garcia’s bankruptcy attorney provided this proof of payment, Baum’s firm still ignored the receipts and sent an attorney to bankruptcy court to argue that the mortgage was in arrears.
 
Creating Questionable Assignments

 

I’ve written extensively about mortgage companies that bring foreclosure proceedings when then they do not have proper legal standing to do so.  See Many New York Foreclosure Suits Are Dismissed Because They Are Defective.  Here, the Baum firm has brought numerous actions when their mortgage clients failed to have proper legal standing.    See also:  Mortgage Companies Entitlement to Bring Foreclosure Proceedings: Prove It or Lose It .
 
Judge Jeffrey Arlen Spinner, sitting in Suffolk County judge took it upon himself to investigate a filing by Baum’s firm when it attempted to foreclose on the home of Gloria E. Marsh. “A careful review,” the judge wrote in a four-page order, “reveals a number of glaring discrepancies and unexplained issues of substance.”
 
Judge Spinner determined that the Baum law firm filed the action before the date it claimed its client took ownership of the mortgage  To see a copy of the decision, click:  GMAC Mortgage v. Marsh — Decision of Judge Spinner Denying Order of Reference.

 

For another highly publicized decision written by Judge Spinner, see:   Judge Cancels Mortgage Due to Mortgagee’s Shocking Behavior in Long Island Foreclosure Action.

 

 

In the bankruptcy of Matthew Austin, Baum’s firm tried to prove that its client owned the mortgage to Austin’s house by filing an assignment of that mortgage from a Florida company signed by an executive of that company — but it was notarized in Buffalo, NY.

 

“To the extent assignor flew to upstate New York to appear before a notary in the law offices of Steven J. Baum, PC, defies all logic,” the lawyer said in court papers. “Clearly this is a manufactured document intended to defraud the Court.”

 

 

Earlier this year, a New York Bankruptcy Court judge said he has “probably cause” to believe that lawyers for the Baum law firm acted inappropriately.

 

 

In assisting clients with Long Island mortgage foreclosure defense, we routinely come across situations where the paperwork submitted by the foreclosing bank is not in order.

 

However homeowners have rights afforded by the law.  A bank cannot foreclose unless they do it the right way and all of their papers were prepared properly.  If they are not, then the homeowner has a meritorious defense to the foreclosure action.

 

Even if the bank eventually corrects the problems, a homeowner can usually add many additional months or years to the time that they can stay in their home.  It therefore pays to meet with an experienced Long Island foreclosure defense attorney.

 

 

Mr. Baum, only 41 years old, took over his father’s sleepy Buffalo law practice several years ago, moved it to Amherst, New York, and then super-sized it with a 500 employees — truly making it into a factory.

 

He also started his own legal document processing company — Pillar Processing.

 

 

The list goes on and on.  Bank of America, Chase, Wells Fargo, HSBC, US Bank, GMAC Mortgage, Deutsche Bank, Sovereign Bank, Citibank, OneWest, M&T Bank, Bank of New York Mellon, to name just a dozen, according to court records.

 

 

Steven J. Baum’s law firm filed 12,551 foreclosure actions in the New York area last year.

 

Long Island
Nassau 2,210
Suffolk 3,083

 

New York City Boroughs
Queens 2,231
Brooklyn 1,592
Staten Island 692
Bronx 678
Manhattan 119

 

Upstate Suburbs
Westchester 796
Rockland 444
Orange 706
  

Totals: 12,551 or 241/week or 48/day

 

That’s a lot of foreclosures!

 

 

The Bankruptcy Bill Song Contest has announced its winner.  First place goes to our very own Long Island Bankruptcy Court Judge Alan S. Trust.

 

  

The Judge’s entry, “Debts in Wrong Places,” is a humorous take-off of Garth Brooks’ country music hit song, “Friends in Low Places” — certainly a popular song in Texas, where Judge Trust practiced before ascending to the bench here in the Eastern District of New York.

 

Steven Horowitz and Gideon Kendall, creators of the Bankruptcy Bill cartoon strip, sponsored the contest and came up with a great new cartoon featuring the comic likeness of Judge Trust that you absolutely must see!!!  Click this link to see this new comic strip:  Bankruptcy Bill Song Contest Cartoon.

 

When I had told my wife, Arlene, of the contest last fall, she said she had to enter — just to poke fun at me.  Her song, “A Bankruptcy Wife’s Lament,” is about a bankruptcy attorney who is so busy that he ignores his wife and family (me???).

 

Her song won second place!  It is a hilarious take-off on “Sunrise Sunset” from Fiddler on the Roof.

 

My song, “Debt Free Girl,” a take-off on Billy Joel’s hit, “Uptown Girl,”didn’t win a prize, but I still think it’s great fun in any event.

 

I created the photo illustration from a photo I took of Judge Trust several weeks ago at a bankruptcy seminar.

 

 

 

Last April I posted an article about a Long Island process serving company that had been charged with engaging in “sewer service.”  Long Island Process Serving Company Owner Arrested Today for “Sewer Service” .

 

Last week the owner of that company, William Singler, pleaded guilty to fraud in Nassau County Supreme Court.  He admitted that his company failed to properly served thousands of consumers on Long Island and across New York with collection law suits, and then lied about it with false affidavits of service.

 

As a result of his actions, many thousands of New York consumers were denied their due process rights, and only learned that they had been sued when their bank accounts were restrained or their wages garnished.

 

William Singler was the owner of the legal service process serving company, American Legal Process, that had been located on Long Island, in Lynbrook, New York.

 

 

The New York State Attorney General, Andrew Cuomo, revealed various aspects of the fraudulent scheme which included documents saying that one process server personally served lawsuit papers to someone in Brooklyn at 8:19 a.m. one morning, only to serve a second lawsuit 400 miles away, just one minute later.

 

That would require traveling over 20,000 miles an hour, and New York highways currently don’t accommodate such speeds.

 

According to prosecutors, American Legal Process employees routinely made only a cursory attempt to locate debtors, then gave up and submitted false affidavits of service, claiming they had served the debtors with the lawsuit documents.

 

You can click here to read a copy of the actual complaint alleging fraud against New York process service company .

 

 

Attorney General Cuomo is still proceeding with a civil suit to dismiss about 100,000 lawsuits that contain affidavits of service prepared by William Singer’s company, American Legal Process.

The Attorney General accused 35 law firms and two debt collection companies of failing to ensure that servers were following the rules after hiring American Legal Process to serve summonses and complaints. See my post: Bill Collectors Slapped with Class Action Suit .

 

William Singler is expected to face some jail time for his fraudulent and illegal conduct.  He pleaded guilty to a single count of a Class E felony of scheming to defraud, which is punishable by a year in jail.  He is expected to sentenced on March 24, 2010.

 

In my opinion, a sentence of only a year in jail is hardly just punishment for someone who has defrauded a hundred thousand consumers, many of whom faced great difficulty when they were surprised by frozen bank accounts and garnished wages.

 

When Singler appeared before Nassau County Supreme Court Justice Alan L. Honorof, he admitted that he had signed phony affidavits of service, swearing that court papers had been served on defendants in debt collection suits even though he knew many of his employees had broken the law.

 

 

Even though many thousands of credit card collection lawsuits were started improperly, the fact remains that in most cases, the underlying debt is not disputed.  Nevertheless, many consumers who were improperly served now have extra leverage to negotiate a low settlement.

 

Our debt settlement practice has assisted many consumers with resolving such outstanding credit card debts for very beneficial amounts.  We have also helped other consumers totally eliminate their credit card bills with bankruptcy.

 

 

It’s no wonder that I’ve been especially busy helping Long Island homeowners save their homes from foreclosure.  

 

Some recent statistics show that the number of Long Island homes that fell into some stage of foreclosure climbed 37 percent last year, with Suffolk homeowners seeing more such activity than all but one county in the state, according to a newly released breakdown of the foreclosure crisis that was reported in Newsday yesterday.

 

 

 

Foreclosure on Long Island has been especially prevalent.  The data shows that 7,582 Suffolk County homes were in some stage of foreclosure last year.  This represents a 29 percent jump from the preceding year when 5,885 homes were in foreclosure proceedings.

 

Those homes equate to 1.39 percent of Suffolk households, including renters, which is second only to upstate Orange County’s 1.4 percent.

 

 

In Nassau, the number of homes directly affected by foreclosure last year shot up 48 percent to 6,064 properties, or 1.32 percent of households, up from 2008’s 4,099 homes.  That 1.32 percent put Nassau County fifth in the state for foreclosure activity. Only Queens had more homes directly affected than Suffolk County, 8,248 homes.

 

 

Initially there was much hope that Obama’s federal mortgage help program would do something to stem the tide of foreclosure.  Unfortunately, the help that many struggling homeowners had hoped would come from the program never came. Just last week I reported Obama’s “Making Homes Affordable” Mortgage Modification Program Failing . 

 

As it turned out, 2009 broke monthly records nationwide in foreclosure activity.  To make matters worse, the rescue system was strewn with problems. Loan modification and foreclosure prevention programs have been heavily criticized for being clunky and disorganized.

 

Even though I am quite busy defending foreclosures and helping other homeowners stop foreclosure and pay their mortgages back through a Chapter 13 bankruptcy on Long Island, I will not do mortgage modifications, except in the rarest of situations.  I even wrote about this last summer:  Why I Won’t Negotiate Loan Modifications .

 

 

The number of foreclosed homes in the U.S. last year increased to a record 2.8 million, a 21 percent rise over 2008 and 120 percent over 2007.

 

Half of the foreclosures in the U.S. last year occurred in Arizona, California, Florida and Illinois. California had the most, with 632,573 foreclosed properties (up 21 percent from 2008), Florida posted 516,711 (up 34 percent), Arizona had 163,210 (up nearly 40 percent) and Illinois reported 131,132 (up 32 percent).

 

 

 

 

Victims of debt collectors who cheat their way to getting judgments may be getting their due.

 

As reported in the New York Times last week, a class action lawsuit was just filed in U.S. District Court in Manhattan.  The suit alleges that a network of bill collectors engaged in the deceitful act of “sewer service.”  

 

This is when a debt collector fails to serve the legal lawsuit documents and then files a false affidavit claiming the notice has been properly served. When the debtor doesn’t show up in court or file an answer to the collection summons and complaint, the collection law firm then obtains a default judgment.