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Home loan servicers are companies that manage the day-to-day administrative tasks of a mortgage, acting as an intermediary between the borrower and the lender or investor who owns the loan. At the Law Office of Christopher Hewitt, we help clients with issues with their loan servicing companies protect their homes. In recent years, many clients have contacted us with questions about a company called the Specialized Loan Servicing LLC, located at 6200 S Quebec St, Greenwood Village, CO, 80111.

Why Loan Servicing

Typically, the lender chooses to use a loan servicing company. When a loan is initially issued, the lender either has an in-house servicing department or contracts with an external loan servicing company to handle the day-to-day loan management. In many cases, lenders may sell the loan to investors in the secondary market but retain the servicing rights or transfer them to another servicing company. Even though the lender that originated the loan may no longer own it, they or another designated company will still manage the loan servicing. Borrowers typically do not have a say in who services their loan and may find that their loan servicing is transferred one or more times during the life of the loan. When a loan servicing transfer occurs, borrowers are notified in advance by the old and new loan servicers, as required by law, to ensure they know where to send their payments.

A “cram down” in bankruptcy refers to a legal process used primarily in Chapter 13 bankruptcy cases, allowing debtors to reduce the principal balance of a secured debt to the asset’s current market value. If you owe more on a loan than what the property (like a car, equipment, or sometimes real estate) is worth, you can “cram down” the loan amount to match the property’s value. The process effectively splits the debt into two parts: a secured debt equal to the property’s current market value and an unsecured debt for the remaining balance. It is essential to understand your leftover income after expenses on your Chapter 13 bankruptcy petition if you are trying to avoid paying for the unsecured debt.

An example of an auto cram down

You have a car loan with a balance of $15,000, but the current market value is only $10,000. You could reduce the loan balance to $10,000 by cramming down to the car’s market value. The remaining $5,000 becomes part of your unsecured debt, which the debtor will pay off at a significantly reduced rate through your Chapter 13 repayment plan. 

Throughout the United States, an increasing number of people complain about corruption stemming from the homeowners’ associations (HOAs) their homes are a part of. Some HOAs are increasing fees so fast that homeowners can’t keep up with their HOA payments. Others have been accused of laundering the money from the HOAs they preside over for their benefit. An even more alarming trend is emerging: having your home foreclosed on by an HOA with minimal warning and for a minimal amount of unpaid HOA fees.

Luckily, in California, there are laws to protect homeowners from an HOA foreclosing on their home. However, it is essential to understand the laws and ensure you protect your investment and your family home. As a bankruptcy attorney, I have dealt with these kinds of issues. Having been in the business of helping clients avoid foreclosure, I have seen all sorts of different methods banks, lenders, and HOAs may use to foreclose on your home.

In California, the laws governing HOAs and their ability to foreclose on properties are outlined in the Davis-Stirling Common Interest Development Act. This Act provides a comprehensive legal framework for managing and operating common interest developments, including HOAs, in California. Here are critical aspects of these laws as they relate to HOA foreclosures:

When you have a mountain of medical debt, it can feel as though there’s no way out. However, the statute of limitations in California provides a timeframe beyond which a creditor cannot sue you for certain types of debt, including medical bills. This article explores the implications of the statute of limitations and evaluates whether declaring bankruptcy is a viable solution.

What Happens if a Creditor Doesn’t File Within the Statute of Limitations?

A creditor must sue for medical debt before the statute of limitations expires. After this period, the debt becomes “time-barred,” making it illegal for creditors to file a lawsuit. However, simply waiting out the creditors is not always practical or efficient.

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In California’s diverse economic landscape, managing multiple high-interest debts is a significant challenge for many. Debt consolidation offers a practical approach, allowing individuals to combine their debts into a single, more manageable monthly payment, potentially with a lower interest rate. This method is akin to putting all your financial burdens into one basket, simplifying your financial management.

However, opting for debt consolidation in California requires a thorough evaluation of various options, each with its unique set of advantages and challenges. These options include credit card balance transfers, debt consolidation loans, home equity loans, and personal loans.

Pros of Debt Consolidation:

There is a company in Newport Beach called MacDowell & Associates which has earned a notorious name throughout Southern California as a debt collection agency who sues debtors across the region. This region is likely to affect areas such as Santa Ana, Riverside, Anaheim, and maybe even down to Temecula. If you have received any correspondence from this company or any other debt collection agency, you may want to contact a lawyer before making any response to the agency. Many uneducated debtors will unknowingly make a payment to a debt collection agency even though that debt has already expired and may cause the debt to reset its expiration and give legitimacy back to the debt. When debt has already expired but a debt collection agency tries to get money back from the debtor regardless, it is called a Zombie debt collection agency. 

What are Zombie Debt Collectors? 

“Zombie debt collectors” refer to collection agencies or debt buyers that attempt to collect on old, often expired, or previously settled debts that may no longer be legally enforceable. These debts are sometimes referred to as “zombie debts” because they can seemingly come back to life after a period of inactivity.

Over the past three years, a series of impactful events have significantly influenced the housing market. In response to the economic challenges posed by the COVID-19 pandemic, the Federal Reserve injected unprecedented amounts of money into circulation. This infusion of funds gave more individuals cash in hand to make down payments on homes. 

Why Did California Home Prices Rise So Fast? 

Simultaneously, the widespread adoption of WFH (work from home or remote work) reshaped living preferences, prompting a shift from urban to suburban and rural areas. People realized that if they didn’t need to consider commuting, they saw their relationship with work differently and could make lifestyle choices accordingly. Those who made a home purchase in 2020 or 2021 likely secured favorable fixed-interest rates, while those with adjustable rates may find themselves facing financial challenges. With interest rates at historic lows during the 2020-2021 period, the National Association of Realtors (NAR) highlighted in a report that the qualifying income for a median-priced home in America was approximately $50,000. Fast forward to 2023, and this figure has surged to around $107,000. This means that prospective homebuyers, who would have met the criteria for a home loan just a few years ago, now need significantly higher incomes to afford a similar property. This makes the number of possible home buyers shrink immensely over just a few years, not because they don’t want to buy a home but because they are no longer able to qualify for the mortgages. There are even stories floating around online that people who no longer qualify for the mortgage they already have, are being forced to refinance under the new interest rates simply because they no longer qualify based on the current conditions. That means theoretically people who had a 3.5% fixed mortgage could be forced into a 7.5% mortgage simply because they don’t make enough money after inflation. America has a habit of charging people more money when they can’t afford their current situation. 

How it started 

When Covid-19 hit America it was a black swan event that nobody could have predicted the series of financial turmoil it would cause for many Americans. Several major factors contributed to the reasons why Americans decided to buy new cars. Huge stimuluses were provided giving millions of Americans cash in hand as they pivoted from working in offices to working at home. With overflowing bank accounts and the fact that nobody could travel, eat out or do anything, many people decided to go out and finance new cars. Supply chains were also virtually shut down making car production and delivery difficult resulting in people fighting over what inventory was available. Many people are now asking how to give a car back and we are going to explore the options available to you. 

What dealerships did 

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How to File for Bankruptcy and Keep Your Car

If you’re contemplating bankruptcy and worried about keeping your car or truck, the solution isn’t straightforward, but there are strategies available to help you keep it. If you bought a brand-new or even a used vehicle over the last few years and you paid a premium for it, the vehicle may be underwater. There were many buyers during covid and people were offering over value on many hard-to-find vehicles when both manufacturers and dealers were unable to keep up with demand. This in turn pushed many Americans to agree to buy the car or truck that they wanted sometimes for thousands of dollars over the median price. Now that demand has slowed a bit there are many car owners who have vehicles in which they owe far more than the vehicle is worth. 

Can I file for bankruptcy? 

California Student Loan Debt Options 

For people in debt right now, things just got a lot worse. Notices have gone out to student debtors across the US that the moratorium has expired and can’t be extended thanks to the debt ceiling agreement. Payments have resumed since October 2023 and there are many unlucky people that simply can’t pay another bill right now. If you are considering your California student loan debt options, there is a lot to untangle. This article will focus on how you can (or can try) to discharge your student loans through bankruptcy, however there are some other good options I have listed below the article that you may want to consider if bankruptcy is not a consideration or of interest to you.

 How do you start the process? 

Frequently Asked Questions: Debt Consolidation in California
How does debt consolidation affect credit scores?

Initially, it might cause a slight dip due to credit inquiries. However, consistent payments can improve your credit score over time.

What is the difference between debt consolidation and debt settlement?

Debt consolidation involves taking a new loan to pay off debts, while debt settlement is negotiating to pay less than you owe. Settlement can negatively impact your credit score.

What are secured vs. unsecured debt consolidation loans?

Secured loans require collateral (like a house or car), usually with lower interest rates. Unsecured loans don't require collateral but typically have higher rates.

Is debt consolidation right for me?

It depends on your total debt, interest rates, credit score, and payment capability. It's suitable if you can pay off your debt within five years and secure a lower interest rate than your current debts.

Should I consider long-term financial planning?

Yes, debt consolidation should be part of a broader financial strategy including budgeting, cutting expenses, and building an emergency fund.

How do Chapter 7 and Chapter 13 bankruptcies in California differ?

Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows debt restructuring over a set period, usually three to five years.

Can my spouse's bank account be garnished for my debt?

Bankruptcy laws offer protections against such actions, but specifics depend on individual cases and state laws.

How can I learn more about my options?

Consulting a California bankruptcy attorney can provide clarity. Firms like The Law Offices of Christopher Hewitt offer free consultations to explore debt relief paths.

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