This bulletin courtesy of Thordsen Law Offices:
CONSUMER FINANCIAL PROTECTION BUREAU AUDITS WILL NOW START LOOKING A LOT CLOSER AT FOUR AREAS
1. cfpb examiners will spend “a lot of time” looking at loan officer compensation plans, compliance with ability-to-repay rules and Truth-in-Lending Act/Real Estate Procedure Settlement Act integrated disclosure requirements, as well as the structure of marketing services agreements.
2. Calvin Hagins, the Consumer Financial Protection Bureau‘s deputy assistant director for originations went on to say: “We’re going to spend a very long time evaluating compensation schemes at every exam at every entity.”
3. He also said the CFPB has “been informed through various sources” that some mortgage lenders have “folks who perform duties of loan originators” but who may not be licensed.
4. Hagins warned that examiners would pore over how lenders have paid loan officers historically, not just their current practices. He implied the auditors would be looking at compensation packages that were paid as far back as 2012 and 2013.
5. Notwithstanding the new laws, some mortgage banks have paid steep fines this year for allegedly paying bonuses and higher commissions to loan originators for steering consumers into higher-cost mortgages. Mortgage brokers and loan officers are prohibited from being paid based on a loan’s terms, including if a consumer takes out a loan with a higher interest rate or higher fees.
6. Hagins also has stated that the CFPB will not make any exceptions for lenders to comply with TRID, which took effect on Oct. 3.
This was all brought out in a lecture by Mr. Hagins given in Costa Mesa, California on December 7, 2015.
Get your “ducks in order” before CFPB does it for you with a stiff fine.
SALINAS INC., OF SANTA ANA, CALIFORNIA OWES 22 WORKERS FOR OVERTIME TO THE TUNE OF $343,000.00
On December 7, 2015 the U.S. Department of Labor stated that Salinas Inc., a construction company failed to pay 22 workers $342,856 in back wages including damages over a period of two years. In California a worker can go back three years to get any overtimes and wages not paid.)
The employees (carpet installers, painters, janitors and plumbers) worked as much as 70 hours a week without being paid the legal required time-and-a-half for weekly hours exceeding 40. (In California law it is an additional penalty if you fail to pay overtime for all hours worked in excess of 8 in one day or 40 in one week). (ocreg12715p15)
I have noticed that liquor stores seem to do this on a regular basis by not paying overtime. A person can sue for the latest three years for wages. If you have questions call us for a free consultation.
OPERATOR OF INLAND EMPIRE LOAN MODIFICATION SCAM THAT TARGETED DISTRESSED HOMEOWNERS SENTENCED TO 18 YEARS IN TOTAL 11 PEOPLE CONVICTED. DO YOU RECOGNIZE ANY NAMES
On December 7, 2015 ANDREA RAMIREZ, 47, of Rancho Cucamonga, California founder and co-owner of a Rancho Cucamonga business was sentenced to 18 years in federal prison for orchestrating a scheme that offered bogus loan modification programs to thousands of financially distressed homeowners who lost more than $7 million when they paid for services that were never provided. She was also ordered to pay $6,764,743 in restitution.
Ramirez was the organizer of a telemarketing operation known under a series of names – including 21st Century Legal Services, Inc. – that bilked more than 4,000 homeowners across the nation, many of whom lost their homes to foreclosure. Ramirez was sentenced after pleading guilty to one count of conspiracy to commit mail fraud and wire fraud.
Previously in this case, the other co-owner of 21st Century – Christopher Paul George, 45, of Rancho Cucamonga, was sentenced to 20 years in federal prison.
A total of 11 defendants linked to 21st Century have been convicted of federal fraud charges as a result of an investigation conducted by the Federal Bureau of Investigation; IRS – Criminal Investigation; the United States Postal Inspection Service; the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Federal Housing Finance Agency, Office of Inspector General.
During a 15-month period that began in the middle of 2008, Ramirez operated 21st Century, which defrauded financially distressed homeowners by making false promises and guarantees regarding 21st Century’s ability to negotiate loan modifications for homeowners. Employees of 21st Century made numerous misrepresentations to victims during the course of the scheme, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the United States government. Victims were generally instructed to stop communicating with their mortgage lenders and to cease making their mortgage payments.
21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings. The company also controlled websites that advertised loan modification services. Once they contacted the distressed homeowners, 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, 21st Century employees told homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when Ramirez, George and their co-defendants simply were pocketing the homeowners’ money.
After federal authorities executed a search warrant at 21st Century, Ramirez relocated 21st Century’s offices, renamed the company and made it appear it was operating out of Las Vegas, Nevada.
In addition to Ramirez and George, nine other defendants have been convicted for their roles in the 21st Century scam. They are:
• CRYSTAL TAIWANA BUCK, 40, OF LONG BEACH, who persuaded numerous victims to pay fees to 21st Century, was sentenced to five years in prison;
• ALBERT DIROBERTO, 62, OF FULLERTON, who handled both sales and marketing – which included making a commercial for 21st Century – was sentenced to five years in prison;
• YADIRA GARCIA PADILLA, 38, OF RANCHO CUCAMONGA – who, among other things, posted bogus positive reviews about 21st Century on the Internet – was sentenced to four years in prison;
• MICHAEL BRUCE BATES, OF MORENO VALLEY, WAS SENTENCED TO ONE YEAR AND ONE DAY in prison;
• MICHAEL LEWIS PARKER, OF POMONA, WAS SENTENCED TO SIX YEARS IN PRISON;
• CATALINA DELEON, OF GLENDORA, IS SCHEDULED TO BE SENTENCED on December 14;
• HAMID REZA SHALVIRI, OF MONTEBELLO, IS SCHEDULED TO BE SENTENCED on Thursday, December 10;
• MINDY SUE HOLT, OF SAN BERNARDINO, WAS SENTENCED TO 18 MONTHS IN PRISON; and
• IRIS MELISSA PELAYO, OF UPLAND, WAS SENTENCED TO FOUR YEARS IN PRISON. (usatty release no. 15-144)
That is over 44 years in federal prison and counting. Anyone looking to have a discussion?
CONSUMER FINANCIAL PROTECTION BUREAU SUES MASSACHUSETTS DEBT COLLECTOR FOR PURSUING DISPUTED AND UNVERIFIED CELL PHONE DEBTS-
EOS to Pay More than $2.5 Million in Refunds and Penalties
On December 7, 2015 the Consumer Financial Protection Bureau (CFPB) filed a federal complaint against EOS CCA (EOS), a MASSACHUSETTS DEBT COLLECTION FIRM, for reporting and collecting on old cell phone debt that consumers disputed and EOS did not verify. The company also provided inaccurate information to credit reporting companies about the debt and failed to correct reported information that it had determined was inaccurate. The CFPB filed a proposed consent order that, if entered by the court, would require EOS to overhaul its debt collection practices, refund at least $743,000 to consumers, and pay a $1.85 million civil money penalty.
“After buying a portfolio of debt, EOS soon learned of several red flags that raised doubts about the debt’s validity. Even so, EOS still proceeded to collect certain disputed and unverified debts,” said CFPB Director Richard Cordray.
EOS is a debt collection company headquartered in Norwell, Mass. that also has a debt-purchasing arm. Like many other debt collectors, EOS collects delinquent or charged-off accounts that were purchased for a fraction of the value of the debt. Although EOS typically pays only pennies on the dollar for the debt, it may attempt to collect the full amount claimed by the original lender. In 2012, EOS paid AT&T $35.4 million for a portfolio of more than three million cell phone accounts with a total face value of $2.3 billion. Many of these debts were old accounts that had been previously sent to multiple collection agencies.
EOS learned of significant problems with the portfolio a few months after acquiring it. Among other things, the portfolio contained fraudulent, already paid, or already settled debts. Despite this, EOS continued to collect and report on the debts, including debts that consumers disputed, without verifying that those debts remained outstanding. In addition, EOS initially reported all the debts to the credit reporting companies as disputed even though it had no basis to believe that all the debts had in fact been disputed by consumers.
These practices violated the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, the CFPB’s investigation found that EOS:
Collected debts that it did not substantiate: EOS learned in January 2013 that, contrary to the sales agreement with AT&T, the portfolio it purchased contained fraudulent debts, debts that consumers had paid or settled, and debts that were so old that they could no longer be legally collected. When consumers disputed the debts, EOS had difficulty getting AT&T to provide sufficient, and in some cases, any documentation to verify the debts. Notwithstanding those issues, EOS continued to report and collect on certain disputed debts that EOS did not verify.
Reported inaccurate dispute information to the credit reporting companies: Shortly after it started collecting on the portfolio, EOS reported to the credit reporting companies that all three million of the debts were disputed by consumers, when EOS knew not all of the accounts had been disputed. EOS flip flopped on this twice, removing the dispute flags and then reinserting the dispute flags a month later.
These unlawful collection and reporting practices resulted in consumers paying debts they did not owe or had no obligation to pay. In the end, EOS collected about $743,000 on more than 2,000 accounts that consumers disputed and that EOS did not verify.
Under the terms of the proposed consent order, EOS would be required to:
Refund at least $743,000 to consumers: EOS would be required to provide full refunds of payments made on debts that were disputed but that EOS did not verify.
Cease collecting and reporting on disputed AT&T debt: If a consumer has disputed the debt and EOS is unable to substantiate it, EOS would be required to ask the credit reporting companies to remove any information about the debt from the consumer’s file. It would also be barred from collecting on the debt or accepting payment for it.
Stop collecting unverified debts: EOS would not be able collect unsubstantiated debt if it has reason to believe the portfolio contains inaccurate information. Under the order, for five years the company would be required to review original account-level documents verifying a debt before collecting on it when, for example, a consumer has disputed it, the seller didn’t promise it was accurate or valid, or the debt was part of a portfolio EOS knew included unsupportable or inaccurate information.
Ensure accuracy when providing information to credit reporting companies: EOS would only be permitted to report a debt with a credit reporting company if the debt is accurate.
Stop reselling debts: EOS would be prohibited for five years from reselling the debts it buys to other debt collectors. This would protect consumers from the potential harm that results when debt collectors continue to sell and resell debts that may be inaccurate or lack the business records and information needed to collect them.
Pay civil money penalties: EOS would be required to pay a penalty of $1.85 million to the CFPB’s Civil Penalty Fund.
The EOS complaint can be found at:
The proposed EOS consent order can be found at:
The proposed consent order is not a finding or ruling that EOS has actually violated the law. The EOS consent order was filed in the U.S. District Court in Massachusetts. The order would have the force of law only if approved by the court.(CFPB12715)
If you are being “chased” by a debt collector, please call us. We may be able to assist you by determining the validity of the debt and what if any money you should pay. For example some debts are extinguished because the law has a statute of limitations on when you must file a lawsuit. E.g. It is two years for oral debts no in writing. Call and see if we can assist.
THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. THE AUTHOR MAKES NO CLAIMS ABOUT ITS ACCURACY, COMPLETENESS, OR UP-TO-DATE CHARACTER. NO AUTHOR OR OWNER OF THIS DOCUMENT AND ITS WEBSITE IS ACTING AS YOUR ATTORNEY. LEGAL RULES AND TAX RULES CHANGE FREQUENTLY, THEREFORE, WE CANNOT GUARANTEE THAT ANY INFORMATION CONTAINED HEREIN OR ON A WEBSITE IS ACCURATE OR UP TO DATE. FOR LEGAL ADVICE PLEASE CONSULT AN ATTORNEY.
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THORDSEN LAW / (888) 667-8529
Herman Thordsen, Esq.*
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Sean Thordsen, Esq.**
* Licensed in California State and Federal Courts
** Licensed in California and Nevada State and Federal Courts
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