Check Your Credit Report After Bankruptcy

A Creditor May Continue to Report a Debt

The most common way in which credit reporting errors are discovered is at the most importune time, a new credit application rejection. Old debt discharged in bankruptcy may still be reported as delinquent when the debts should have been removed or a settled debt is still listed as owed to the creditor.

The Inaccurate Reporting Maybe the Result of Credit Reporting Agency Negligence
While the Fair Credit Reporting Act was designed to protect consumers from faulty credit reporting there are often allegations of negligence against the three main credit-reporting agencies. You will need to send demand letters to each agency to clear up the errors.  If they refuse a suit may be necessary.

The Bottom Line, Check your Credit Report After Bankruptcy or Debt Settlement
Do not wait until you hear from a lender that there is a problem with your credit report. While experienced counsel can resolve these issues, the time for resolution may be outside the time constraints of a real estate purchase or new car loan application.

Rebuilding Your Credit After Bankruptcy

Financial:


http://www.bankrate.com/ and http://www.hsh.com/- (free) sites offering information on interest rates for credit cards, autos, mortgages and links to the prime rate and the LIBOR rate. the site also lists offers for low interest credit cards.



Budgeting:

http://www.mint.com – (free) budget creator for managing household expenses

http://www.choosetosave.org/ (free) calculator designed to help folks save for retirement



Charity:

http://www.irs.gov – look up where your money is going (type in the search box “charities”); make sure your donations are going to the right place and then make sure you take the deduction on your tax return.



Continue to Learn:

http://www.sesameworkshop.org/ – site offers videos and basic money lessons from Elmo. It is never to early (or late) to learn the basics of money and simple budgeting. PNC Bank also gives out these DVD's for free.

http://www.careprogram.squarespace.com/ – program offered by bankruptcy courts around the country to educate elementary and high school children about money and budgets. If your school doesn’t offer the program, call the principal and ask why?



Credit Reports:
http://www.annualcreditreport.com/ – links to three credit reporting agencies, Experian, Equifax and Transunion. You are able to get one free report from each every year.

My clients are advised to get the three credit reports about 30 days after their bankruptcy is complete and to check the credit reports for outstanding balances and accuracy. If items are reported inaccurately, you should see your bankruptcy attorney.

http://www.chexsystems.com/  and – www.telecheck.com — both are another kind of credit reporting agency.

These provide service to banks and credit unions before a new account is opened. I advise my clients to get these two reports too.

Dunn & Bradstreet- business credit reports

Federal Reserve Must Face Bank Suit over Credit Card Fee Rules

Federal Reserve Chairman Ben S. Bernanke lost a bid to end a bank lawsuit challenging the legality of forthcoming rules limiting the amount of money the largest U.S. banks can collect for debit card transactions, Bloomberg New reported today. U.S. District Judge Lawrence L. Piersol in Sioux Falls, South Dakota, yesterday denied the U.S. government's request to throw out the case filed last year by TCF National Bank. He also rejected the bank's request to block the regulations and allowed the case to move forward while Congress debates the issue. TCF bank, a unit of Wayzata, Minnesota-based TCF Financial Corp., sued Bernanke and the Fed's Board of Governors in October challenging the legislation appended to last year's Dodd-Frank financial regulation overhaul bill. The provision, sponsored by Democratic U.S. Senator Richard Durbin of Illinois and known as the Durbin Amendment bars banks with more than $10 billion in assets from collecting from retailers more money per debit-card transaction than the actual cost of providing that service.

http://washpost.bloomberg.com/story?docId=1376-LJ3PXT07SXKX01-48EHHUQPFG0J5D1V26EGBPA3TJ

Consumer Spending Continues to Rise

U.S. consumer spending rose 0.7 percent in February, the largest increase since October and the eighth straight month of gains, the Wall Street Journal reported today. After adjusting for inflation--factoring out such things as the jump in gas prices--consumption rose 0.3 percent, the Commerce Department said yesterday. The pickup in spending came as personal income rose by 0.3 percent last month, though higher prices sapped the gains. The saving rate, meanwhile, slid to 5.8 percent.

Bernanke: Community Banks to be Spared of Debit Card Fee Limits

Federal Reserve Chairman Ben Bernanke said yesterday that the central bank will exercise "all the powers that we have" to ensure community banks are effectively spared from debit card fee limits dictated by last year's Dodd-Frank financial-overhaul law, the Wall Street Journal reported today. The Fed's draft rule would prohibit large banks from charging merchants more than 12 cents each time a customer pays with a debit card, down from the current average of 44 cents. The law included an exemption for small banks and credit unions, those with less than $10 billion in assets, but these small institutions say that the exemption will not work in practice and market forces will push them to accept the fee cap setfor large banks. Bernanke said that many community banks are rebounding, but they face substantial challenges due to a weak economy, continued uncertainties in real estate and other key markets, and the changing regulatory environment.

                                     So much for the purpose of the act- helping consumers!!!

Study Finds California Mortgage Applicants Have Highest Credit Scores

California mortgage applicants have the highest average credit scores in the nation, according to a state-by-state study conducted by Mortgage Marvel, a nationwide online mortgage-shopping service. The average credit score in California is 755, a full 20 points higher than the national average.


“When I first looked at the results, I was a bit surprised that the results did not more closely follow the most troubled real estate markets,” observed Allen. “After we looked closer, however, we found that per capita income levels for 2008 as reported by the U.S. Census Bureau show a similar landscape with the West and Northeast at the top of the list and the Southwest and Southeast at the bottom. This led us to conclude that there is a closer correlation between the strength of the credit score and the per capita income of the region.”


http://www.dsnews.com/articles/study-finds-california-mortgage-applicants-have-highest-credit-scores-2011-01-19

Report: Consumers Still Struggling with Loans

U.S. consumers continue to struggle to pay back home equity, auto and other loans as high unemployment drags on the economy, Reuters reported today. The American Bankers Association said in a report released today that the overall loan delinquency rate ticked up slightly for the second straight quarter. It had been dropping steadily since hitting 3.35 percent in the second quarter of 2009. The overall rate increased to 3.01 percent in the third quarter of 2010 from 3.00 in the second quarter. The ABA defines a delinquency as a payment that is 30 days or more overdue. The association attributed the lack of downward movement to the unemployment rate, which remains high, but said delinquency rates are likely to improve soon. Among the areas where consumers had a more difficult time repaying their debts was in auto loans. The delinquency rate for loans provided by a bank increased from 1.67 percent to 1.74 percent and delinquencies on loans arranged through a dealer or other third party increased from 3.01 percent to 3.02 percent. The delinquency rate on credit cards issued by banks also increased moving to 3.64 percent in the third quarter from 3.62 percent during the previous time period.

http://www.reuters.com/article/idUSTRE70A1U720110111

Home Ownership Gets Tougher as Lenders Restrict FHA Mortgages

Home ownership may be falling out of reach for more Americans as lenders toughen their standards for Federal Housing Administration-insured loans beyond what the agency itself requires, Bloomberg News reported today. Mortgage lenders including Wells Fargo & Co. and Bank of America Corp., the two largest, have raised the minimum credit score on FHA-insured loans that they will buy to 640 from 620. About 6.3 million people fall within that range, according to FICO, which created the formula for the ratings. The higher hurdles for FHA loans, used in about a fifth of U.S. home purchases, add to challenges for a housing market already struggling with record-low sales and surging foreclosures. The FHA, which previously didn’t have minimums for FICO scores, began in October to require grades of at least 500, and more than 580 for loans with down payments of as little as 3.5 percent. Borrowers with scores between those levels must put 10 percent down. Several lenders moved minimums to about 620 at the start of 2009, the companies said then.

http://www.bloomberg.com/news/print/2010-11-17/home-ownership-gets-harder-for-americans-as-lenders-restrict-fha-mortgages.html

FHA Loan Apps

MBA also reported that the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.25 percent last week, down from 4.38 percent. Rates for 15-year fixed-rate mortgages also fell, from 3.77 percent to 3.73 percent.

America is in Financial Distress

http://www.credability.org/en/about-credability/media-center/Consumer-Distress-Index/default.aspx


http://www.credability.org/en/about-credability/media-center/Consumer-Distress-Index/~/media/CDI-Map-2nd-Qtr-082610.ashx

For the quarter ended June 30, 2010, American households scored a 65.2 on the index’s 100-point scale, up from 65.0 in the first quarter of 2010, yet still below the score of 66.5 for the same period one year ago.

A score below 70 indicates a state of financial distress, and CredAbility’s index shows that the average U.S. consumer has been in financial distress for eight consecutive quarters.

For the first time, CredAbility is also releasing consumer distress scores for all 50 states and the District of Columbia. The agency says the second-quarter data reveals stark regional differences. Only nine states, primarily in the upper Midwest and Great Plains, achieved scores above the distress threshold of 70 points.

Among the states, Nevada posted the worst score on the index with at 59.23, while North Dakota had the best performance, with a score of 78.95.

Credit Report Agencies Liable if They Pass On Bad Watch List Data

Credit Report Agencies Liable if They Pass On Bad Watch List Data


Shannon P. Duffy



08-20-2010

In a significant setback for credit reporting agencies, the 3rd U.S. Circuit Court of Appeals has ruled that consumers have the right to sue if a credit report includes inaccurate information drawn from a government watch list.

The ruling in Cortez v. Trans Union comes in the case of a woman who claimed she was falsely branded as a Colombian drug dealer when she was confused with someone on the U.S. Treasury Department's watch list of known narcotics traffickers and terrorists.

The 91-page opinion marks the first time that a federal appellate court has held that such information is regulated by the federal Fair Credit Reporting Act, and could force Trans Union and other credit reporting agencies to overhaul their policies for handling such information in order to guarantee its accuracy.

But the ruling also includes a setback for plaintiffs because the appellate court refused to consider whether the trial judge was too harsh in slashing a punitive award of $750,000 down to $100,000 on the grounds that the plaintiff had opted to "accept" the trial judge's remittitur rather than opt for a new trial.

Although the appellate court said it was "troubled" by the severity of the trial judge's reduction, the unanimous three-judge panel concluded that such remittitur orders cannot be reviewed once the plaintiff accepts the reduced award.

Lawyers for Trans Union had argued that information gleaned from the Treasury Department's watch list of known terrorists and narcotics traffickers -- known as the OFAC List, for the Office of Foreign Assets Control -- simply wasn't covered by the Fair Credit Reporting Act.

But the 3rd Circuit disagreed, saying the statutory language was explicit, broad and clear, and showed that Trans Union's "OFAC Alert," which is added to some credit reports when customers pay an added subscriber fee, is subject to the FCRA.

"Trans Union's argument that the OFAC alert somehow manages to avoid the reach of the FCRA ignores the breadth of the language that Congress used in drafting that statute," Chief Judge Theodore A. McKee wrote.

"In order to conclude that the OFAC alert is not subject to that remedial statute even though the rest of the report clearly falls within the definition of 'consumer report,' we would have to conclude that Congress did not mean what it said when it unequivocally defined 'consumer report' to include 'any ... communication of any information by a consumer reporting agency,'" McKee wrote.

Trans Union argued that since the 3rd Circuit was the first court to address the question, it should recognize that the law was not settled and therefore decline to impose liability on the first offender.

McKee was unimpressed, saying: "The credit agency whose conduct is first examined under that section of the act should not receive a pass because the issue has never been decided. The statute is far too clear to support any such license."

In the suit, plaintiff Sandra Cortez, 64, claimed that Trans Union's error created humiliating ordeals when she was trying to buy a car and later when she was renting an apartment, but that Trans Union ignored her repeated pleas to have the erroneous information taken off her credit report.

After a three-day trial, a jury found that Trans Union had violated four provisions of the FCRA and awarded Cortez $50,000 in compensatory damages and $750,000 in punitive damages.

The jury also apparently wanted to make sure that its verdict sent a clear message. On the verdict form, below the monetary awards, the jury wrote: "The Trans Union business process needs to be completely revamped with much more focus on customer service and the consumer."

Senior U.S. District Judge John P. Fullam later slashed the verdict in a remittitur order, saying Cortez must accept a punitive award of $100,000 -- double the compensatory award -- or take a new trial.

Plaintiffs attorneys James A. Francis and John Soumilas of Francis & Mailman tried to take an immediate appeal of Fullam's ruling, but the 3rd Circuit dismissed that first appeal on the grounds that Fullam's remittitur order was not a final order.

Now, in a second appeal, the plaintiffs lawyers tried again to challenge Fullam's reduction of the punitive award, but the 3rd Circuit refused to consider the arguments on the grounds that the plaintiff had accepted the remittitur and therefore forfeited any right to challenge it.

Francis, in an interview, said the ruling on the scope of the statute is a major victory for consumers and will force the credit reporting agencies to modify their procedures in order to avoid false matches between drug dealers and terrorists on the watch list and innocent consumers whose lives are "turned upside down" by such mistakes.

Significantly, Francis said, companies like Trans Union will now be forced to disclose all such information to a consumer who lodges such a complaint. In Cortez's case, Francis said, the company repeatedly provided Cortez with copies of her credit report that did not include any OFAC alert, but nonetheless continued to include the alert when potential creditors asked for the report.

Francis said he was disappointed in the ruling on the remittitur issue and was hoping that the appellate court would recognize that such remittitur orders present the plaintiff with a Hobson's choice and effectively shield a trial judge's decision from any appellate review.

In the appeal, Francis argued that Fullam's ruling was premised on his view of a constitutional question, namely the upper limit, under the Due Process clause, for an award of punitive damages, and that Fullam was too stingy when limiting the award to double the compensatory award.

Since the ruling was constitutional, Francis said, the appellate court should have had jurisdiction to reach it.

But McKee found that the U.S. Supreme Court squarely addressed and rejected that argument in its 1977 decision in Donovan v. Penn Shipping Co.

"Cortez may be correct in claiming that she was on the horns of a dilemma and that the practical result of dismissing her challenge to the court's remittitur will be to place it beyond appellate review," McKee wrote in an opinion joined by Judges Thomas M. Hardiman and Franklin S. Van Antwerpen.

"Nevertheless, the court held in Donovan that a plaintiff cannot challenge a remittitur s/he has agreed to, even if the plaintiff has only agreed under protest or pursuant to a purported reservation of rights," McKee wrote.

Trans Union spokesman Steven Katz said the company never comments on pending litigation.

In the appeal, Trans Union was represented by attorneys Bruce S. Luckman, Mark E. Kogan and Timothy P. Creech of Kogan Trichon & Wertheimer in Philadelphia.

Credit Report Agencies Liable if They Pass On Bad Watch List Data

Credit Report Agencies Liable if They Pass On Bad Watch List Data


Shannon P. Duffy



08-20-2010

In a significant setback for credit reporting agencies, the 3rd U.S. Circuit Court of Appeals has ruled that consumers have the right to sue if a credit report includes inaccurate information drawn from a government watch list.

The ruling in Cortez v. Trans Union comes in the case of a woman who claimed she was falsely branded as a Colombian drug dealer when she was confused with someone on the U.S. Treasury Department's watch list of known narcotics traffickers and terrorists.

The 91-page opinion marks the first time that a federal appellate court has held that such information is regulated by the federal Fair Credit Reporting Act, and could force Trans Union and other credit reporting agencies to overhaul their policies for handling such information in order to guarantee its accuracy.

But the ruling also includes a setback for plaintiffs because the appellate court refused to consider whether the trial judge was too harsh in slashing a punitive award of $750,000 down to $100,000 on the grounds that the plaintiff had opted to "accept" the trial judge's remittitur rather than opt for a new trial.

Although the appellate court said it was "troubled" by the severity of the trial judge's reduction, the unanimous three-judge panel concluded that such remittitur orders cannot be reviewed once the plaintiff accepts the reduced award.

Lawyers for Trans Union had argued that information gleaned from the Treasury Department's watch list of known terrorists and narcotics traffickers -- known as the OFAC List, for the Office of Foreign Assets Control -- simply wasn't covered by the Fair Credit Reporting Act.

But the 3rd Circuit disagreed, saying the statutory language was explicit, broad and clear, and showed that Trans Union's "OFAC Alert," which is added to some credit reports when customers pay an added subscriber fee, is subject to the FCRA.

"Trans Union's argument that the OFAC alert somehow manages to avoid the reach of the FCRA ignores the breadth of the language that Congress used in drafting that statute," Chief Judge Theodore A. McKee wrote.

"In order to conclude that the OFAC alert is not subject to that remedial statute even though the rest of the report clearly falls within the definition of 'consumer report,' we would have to conclude that Congress did not mean what it said when it unequivocally defined 'consumer report' to include 'any ... communication of any information by a consumer reporting agency,'" McKee wrote.

Trans Union argued that since the 3rd Circuit was the first court to address the question, it should recognize that the law was not settled and therefore decline to impose liability on the first offender.

McKee was unimpressed, saying: "The credit agency whose conduct is first examined under that section of the act should not receive a pass because the issue has never been decided. The statute is far too clear to support any such license."

In the suit, plaintiff Sandra Cortez, 64, claimed that Trans Union's error created humiliating ordeals when she was trying to buy a car and later when she was renting an apartment, but that Trans Union ignored her repeated pleas to have the erroneous information taken off her credit report.

After a three-day trial, a jury found that Trans Union had violated four provisions of the FCRA and awarded Cortez $50,000 in compensatory damages and $750,000 in punitive damages.

The jury also apparently wanted to make sure that its verdict sent a clear message. On the verdict form, below the monetary awards, the jury wrote: "The Trans Union business process needs to be completely revamped with much more focus on customer service and the consumer."

Senior U.S. District Judge John P. Fullam later slashed the verdict in a remittitur order, saying Cortez must accept a punitive award of $100,000 -- double the compensatory award -- or take a new trial.

Plaintiffs attorneys James A. Francis and John Soumilas of Francis & Mailman tried to take an immediate appeal of Fullam's ruling, but the 3rd Circuit dismissed that first appeal on the grounds that Fullam's remittitur order was not a final order.

Now, in a second appeal, the plaintiffs lawyers tried again to challenge Fullam's reduction of the punitive award, but the 3rd Circuit refused to consider the arguments on the grounds that the plaintiff had accepted the remittitur and therefore forfeited any right to challenge it.

Francis, in an interview, said the ruling on the scope of the statute is a major victory for consumers and will force the credit reporting agencies to modify their procedures in order to avoid false matches between drug dealers and terrorists on the watch list and innocent consumers whose lives are "turned upside down" by such mistakes.

Significantly, Francis said, companies like Trans Union will now be forced to disclose all such information to a consumer who lodges such a complaint. In Cortez's case, Francis said, the company repeatedly provided Cortez with copies of her credit report that did not include any OFAC alert, but nonetheless continued to include the alert when potential creditors asked for the report.

Francis said he was disappointed in the ruling on the remittitur issue and was hoping that the appellate court would recognize that such remittitur orders present the plaintiff

Dodd-Frank Wall Street Reform and Consumer Protection Act)

Dodd-Frank Wall Street Reform and Consumer Protection Act) there were a few little acorns tucked away in the 848 pages of the act. One of them extended the Protecting Tenants at Foreclosure Act (PTFA) – instead of it vanishing at the end of 2012, it now is alive until the end of 2014. See Section 1484 of H.R. 4173 at page 829. This extension is a big deal for tenants of foreclosed properties. Thus far the industry and its vendors have ignored the Act (it became effective May 2009) because they would much rather evict everyone in the home and sell it vacant.


FHA has not considered the PTFA to be worthy of compliance when it comes to the implementation of the Neighborhood Stabilization Program (NSP). This program was established to stabilize communities that have suffered from foreclosures and abandonment. NSP authorizes recipients (states, nonprofits and others) to acquire foreclosed properties and then resell them to qualified buyers. Recipients target certain areas that have concentrations of foreclosures in order to stabilize the rest of the neighborhood using NSP funding. NSP funds may only be used to purchase foreclosed properties for which PTAF was complied with during the foreclosure. This is important, as reports have shown that PTAF is widely ignored by lenders.



Fannie claims to have addressed the NSP certification issue for some recipients (not Texas as mentioned in the original post below) by hedging the language of the certification:

Fannie Mae has established a due diligence process that attempts to identify any bona fide tenant (“Bona Fide Tenant”), as that term is defined under the Protecting Tenants at Foreclosure Act of 2009 (“the Act”), that occupies a property acquired by Fannie Mae through foreclosure on or after the date of the Act. Upon information and belief, any Bona Fide Tenant protected by the Act, occupying the Property after the date of the Act, received all notices required pursuant to the Act. Upon information and belief, Seller states that the Property was vacant at the time Buyer and Seller entered into negotiations for purchase of the property Upon information and belief, Fannie Mae became initial successor in interest to the Property after a foreclosure sale on __________________ (foreclosure sale date). Upon information and belief, Seller states that the Property was vacant as of ________ (Initial OSR Date).



http://foreclosurebuzz.org/2009/07/16/new-federal-law-protects-tenants/



http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h4173enr.txt.pdf



http://www.nlihc.org/doc/PTFA-Report-Final.pdf

S&P/Experian Index Shows Mortgage Defaults Down 45% from 2009

Data through June 2010, released Tuesday by Standard & Poor's and Experian points to a declining trend in consumer default rates, with a reduction in first mortgage past dues leading the drop. Based on data extracted from Experian's database of approximately $11 trillion in outstanding loans, first and second mortgage default rates were 3.3 percent and 2.4 percent, respectively, as of the end of last month. The companies say default rates on first mortgages are down 45 percent from a year ago; second mortgage defaults have dropped 44 percent. The S&P/Experian consumer credit default indices are calculated based on data extracted from Experian’s consumer credit database, which is populated with individual consumer loan and payment data submitted by lenders to Experian every month. Experian’s data repository covers approximately $11 trillion in outstanding loans sourced from 11,500 banks and mortgage companies.

Credit Score

The Senate yesterday approved by a voice vote an amendment by Sen. Mark Udall (D-Colo.) to require that credit reports include the numerical score, which by the most common measure ranges from 300 to 850, the New York Times reported yesterday. Obtaining the actual score from the major credit reporting bureaus that calculate them typically costs up to $15.95 for each score. Udall?s proposal was one of several amendments addressed yesterday in the financial regulations bill, which may be wrapped up later this week. By voice vote, the Senate also approved an amendment to ease proposed restrictions that critics said would cut off angel investing, in which individual investors provide start-up capital to small businesses that typically do not have access to more traditional financing. The original bill included provisions intended to root out fraud, including a 120-day waiting period for certain investors to allow for a review by the Securities and Exchange Commission, but supporters of the amendment said the restrictions would block crucial start-up capital. The Senate also approved an amendment by Senator John D. Rockefeller IV (D-W.V.) that preserves the existing authority of the Federal Trade Commission in enforcing consumer protection laws and requires the commission to coordinate with a new consumer financial protection bureau that would be created by the regulatory legislation.

Teenagers and Credit Cards

Teenagers that are given credit cards when they are in high school are more likely to have debts when they are seniors in college, before they have stable jobs. The American Bankruptcy Institute said that over 80% of college seniors have credit card debt. Add student loans and this can cause money issues for a lifetime. In 2007 the Institute also reported that 19% of those filing for bankruptcy were college students.

Even with these terrifying facts, parents give their teenagers credit cards for convenience. Most think it will teach them about finances and how to handle them. Yet this is not entirely true.

Credit cards don’t teach teenagers how to handle money, they teach them how not to handle money. When people are uneducated about money and budgeting they dig themselves a hole and it eventually gets deeper and deeper. This hole is debt and is sure to follow a teenager that is given a credit card, limiting their future.

The truth about credit cards is that they are marketed to teens and young adults most of the time. Credit card companies do not care about teaching young adults about money, no matter how much their catchy advertisements might say they do. What they do care about is getting paid.

Debt is the most aggressively marketed product in the U.S.A. today and by marketing debt to young generations it assures credit card companies that they will have money for years.

House Judiciary Committee to Hold Hearing on Credit Card Merchant Fees

The House Judiciary Committee today will hold a hearing on H.R. 2695, the "Credit Card Fair Fee Act of 2009."

Hearing Information

Hearing on: H.R. 2695, the "Credit Card Fair Fee Act of 2009"
Wednesday 4/28/2010 - 10:00 A.M.
2141 Rayburn House Office Building
Full Committee
By Direction of the Chairman

FTC Shuts Down Credit Repair and Loan Scammers

The Federal Trade Commission obtained a court order banning eight companies and their principals from selling credit repair and mortgage relief services, and requiring them to pay more than $7.5 million for deceiving consumers throughout the United States.

The FTC charged seven of the companies and three officers with making false promises that they would improve consumers’ credit scores by removing negative information such as late payments, charge-offs, collections, inquiries, delinquencies, judgments, and accounts discharged in bankruptcy. According to the FTC, the defendants charged consumers up to $2,000, including illegally charging an advance payment of $300, and failed to provide written contracts and other materials required by law.

The FTC also asserted that various of the defendants falsely claimed they would help consumers get mortgage loan modifications or stop foreclosure in all or virtually all instances. The court entered default judgments against all of the defendants except Gerald Serino, also known as Jerry Serino, after they failed to respond to the lawsuit.

The credit repair defendants are United Credit Adjusters, Inc., doing business as United Credit Adjustors and UCA; United Credit Adjustors, Inc., d/b/a United Credit Adjusters and UCA; United Counseling Association, Inc., d/b/a UCA; Bankruptcy Masters Corp., National Bankruptcy Services Corp., Federal Debt Solutions, Ltd., United Money Tree, Inc., Ahron E. Henoch, Ezra Rishty, and Gerald Serino. The loan modification defendants are The Loan Modification Shop, Ltd., Casey Lynn Cohen, a/k/a Casey Lynn Collins, and Rishty.



The court order prohibits the credit repair companies and their owners from selling credit repair services, and it bans the loan modification companies and their individual owners from selling mortgage loan modification and foreclosure relief services. The order also prohibits the defendants from misleading consumers about financial goods and services, such as loan terms or rates, how much a consumer will save by enrolling in a debt relief service, and credit terms other than those a lender actually offers. The order also bars the defendants from misleading consumers about any good or service, such as refund terms, government affiliation, and total cost.



In addition, the order bars the defendants from trying to collect payment from their customers, and from selling or otherwise disclosing their customers’ personal or financial information. The order imposes a $7,500,334 judgment against the credit repair defendants, and a $32,710 judgment against the loan modification defendants. Litigation will continue against Serino.