On October 17, 2005 President Bush sweeping bankruptcy reform law goes into effect forever changing the rules of debt collection in this nation. Consumer advocates and the public appear to be completely unaware of the total and complete victory of the creditors under the new legislation. This article opens the door to the Trogan Horse so that consumers can prepare themselves for the worse.

The most important aspect of the bankruptcy code was the automatic stay provision. This allowed consumers to file for bankruptcy at anytime during the creditors collection process putting an immediate stop to all contact and collection activities from the creditor. The new law requires that a debtor receive credit counseling from an approved non-profit credit counseling agency for 180 days prior to filing Chapter 7 or Chapter 13 bankruptcy.

While this may sound benevolent, a much closer look at the practical effect of this provision reveals the crafty peeling of the debtors rights. The 180 day requirement is to provide the credit counseling agency the opportunity to work out payment plans with creditors. However, during this same period of time the creditor is not restrained from collection efforts. For example, Margaret is a homeowner in Jacksonville, Florida and is six months behind on her mortgage. As a rule, credit counseling agencies only work with credit card companies and have little or no training with dealing with mortgage companies.

After receiving foreclosure papers, Margaret goes to see her attorney to file for bankruptcy and is told that she must first seek credit counseling before filing for bankruptcy protection. Meanwhile, the foreclosure proceeds on schedule and a sale date is set 120 days later. However, Margaret still has not completed her 180 day requirement. What will happen to Margarets home? Thats right! The home will be sold and she cannot stop the sale by filing bankruptcy.

This is the most sweeping shift in debt collection in the past 50 years. Margarets only hope will be to work out a repayment plan or a loan restructure with her mortgage company. This is a process called loss mitigation and is explained in great detail to consumers in our new book, How to Save Your Home, ISBN#09753754-0-7, $19.95, SYH University, LLC, 2005 which is sold at Amazon.com.

Loss Mitigation works because lenders lose an average of $28,000 to $50,000 per foreclosure nationwide. It is a myth that the lender wants your home and makes a profit off of foreclosure. A lender has to pay attorney fees, court and collection costs, maintain fire insurance, hire a real estate professional, repair structural and other damage to the home, and pay property taxes. The homeowner can work out an agreement with the lender in over 90% of cases. Our company has provided housing counseling service to thousands of homeowners and loss mitigation absolutely works.

In conclusion, it is up to the consumer to educate and prepare themselves for worse case scenarios. How to Save Your Home is an excellent training tool and will teach homeowners how to protect themselves under the new bankruptcy law. Most Americans do not have health or disability insurance and are vulnerable to job layoffs because of a stagnant economy. Who amongst us is immune to heart attacks, business failure, strokes, law suits, tax liens or other challenges that life sometimes presents. One pay check is literally what separates many families from home security and despair and the new bankruptcy law will severly punish those who slip behind on their mortgage payments.

Herbert Addison, JD, CHC is a Certified Housing Counselor and a member of the Virginia Association of Housing Counselors. Mr. Addison is co-author of the new book, How to Save Your Home, and has helped thousands of families to save their homes from foreclosure sales.

Puerto Rico Jill: New Bankruptcy Law Makes it Harder to Stop Foreclosure

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This is so unfortunate that families and individuals have to loose their homes and at the same time Corporations get bail out by the Federal Reserve. ScamFraudAlert.com is not anti-government or anti-capitalism.
The issue here is "Should The FED Bail Out Corporations and leave Homeowners holding the bag?"

Who's to blame

• The Corporations that made the bad "Sub-Prime Loans ?
• The Homeowners or Borrowers Who Wanted A Home?
• Wall Street or Investors who saw a Gold Rush?

The reality is we all are to be blame. If homeowners are allow to go through foreclosures, then corporations should be allow to go out of business.

Take the retail or restaurant industry, whenever one closes shop, another new one opens up within months. The Federal Reserve never bail out that industry. Regulations as much as we hate it design to prevent such from happening.

The same should apply to Wall Street. The FED should stop bailing out Wall Street at our expense. If the FED is going to bail out Wall Street, then homeowners deserve a break. A REFUND, A MORTGAGE REFUND. A mortgage refund would allow Home owner to use such refund as a down payment toward another home. This time the lender would ensure that the borrower or potential homeowner is not a sub-prime borrower.

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Legislators created the misery for thousands of Georgians who are losing their homes -- it's time to throw the bastards out!

It was enough to make you cry.

In January 2003, the lending industry and its servants – mostly legislators who **** the bankers' tits – proclaimed there was a "crisis" in Georgia. The only solution, they said, was to eviscerate one of the most enlightened pieces of consumer protection in America, a law passed the year before that safeguarded Georgians from predatory mortgage loan sharks.

The law was the handiwork of Roy Barnes, who two months earlier had lost his re-election bid for governor. With Sonny Perdue now at the helm, Republicans were ravenous to undo 130 years of Democrat Party rule.

Patrick Flood, at the time CEO of Atlanta-based Homebanc, gave the legislators a doomsday report. "Fixing the current crisis is crucial," he sternly warned, adding that "homeowners will find it difficult, if not impossible, to finance or refinance their homes," unless the General Assembly did exactly as the bankers wanted. He neglected to mention that during the year when Barnes' law had been on the books, Homebanc had scored record profits.

Flood is a religious zealot who wrapped his business in the name of the Lord. Who could doubt his words were anything less than Moses the Mortgage Broker delivering God's rebuke to the General Assembly?

The legislators said "hallelujah." Casey Cagle, then a state senator and now lite governor, warned that the fallout from Barnes' law would be "devastating. The industry would suffer greatly."

Pretty scary, eh?

No one was much interested in listening to those nobodies called citizens. As Barnes today recalls it, "Gullible legislators were swayed by lobbyists' and bankers' thick steaks and cold liquor."

Fast-forward five-and-a-half years.

Homeowners are indeed finding it "difficult, if not impossible, to finance or refinance their homes" – but not for the reasons Flood prophesized. In fact, precisely because the legislators cravenly did the bidding of Flood and his band of Judases, Georgia is among the states leading the nation in the collapse of the mortgage industry.

Flood's Homebanc is in bankruptcy court. He's out of a job – but with a $5 million severance to cushion the trauma. Failure can be sweet. Not so sweet for his clients who lost their homes, however.

In the last decade, an axis of evil arose. Predatory lenders -- the so-called "subprime" industry, which sells high-interest, high-fee loans to poor and credit-impaired people -- conned the aged and the financially unsophisticated into loans that were pure robbery. Some homeowners with a lot of equity saw that nest egg skimmed. Other homeowners were fleeced by repeatedly being sold new loans. Fees and bogus insurance policies bit into the consumers, and interest rates that would make a Mafia don blush finished off people who were trying to achieve the American dream.

Key to the subprime business was finding an ever-expanding base of people to be snookered. Borrowers were enticed with exotic mortgages – adjustable-rate and interest-only among the most common. They'd often have "teaser" payments at low interest rates – but after a few months, the payments would soar.

Bill Brennan, a lawyer with the Atlanta Legal Aid Society who has been fighting mortgage scams for 39 years, says, "These lenders knew [borrowers] couldn't qualify for a loan. The loan officers would put in fake incomes. All they wanted to do was make the loan. Lenders knew they wouldn't be held accountable."

That was only part of the axis. Lenders generally sell mortgages, and then the loans are bundled and resold as securities. To jack up the yield, or what the security pays investors, many of the usuriously high-interest subprime loans would be packaged with other mortgages. As those subprime borrowers began to default, the bottom fell out of the business, and the current crisis swept the mortgage and housing industries like a giant tsunami.

A third group of culprits was the companies that rate securities, such as Standard & Poor's. These outfits greased the scuttling of Georgia's predatory-lending law in 2003. Standard & Poor's claimed it couldn't rate the mortgage securities because Barnes' law actually held accountable those who committed fraud and theft. "It was an innate conflict of interest because these rating agencies collected fees for rating the securities," says state Sen. Vincent Fort, D-Atlanta, a sponsor of the 2002 predatory-lending law.

So the General Assembly in 2003 tossed Georgians into a pond filled with toothy financial carnivores. The story has been repeated nationally. Differences are apparent, however. Barnes points out that he patterned his law after one in North Carolina. "There are many foreclosures there, but nothing like here in Georgia," Barnes says.

There were 12,602 Georgia foreclosures in July, up 75 percent from June. Nationwide foreclosures in July totaled 179,599 – a 95 percent increase over the previous year. Forty-three states showed increases in foreclosures. But the shame for Georgia was special. Along with California, Florida, Michigan and Ohio, Georgia accounts for more than half of July's foreclosures.

That would have been bad enough. But the horror of almost 13,000 Georgia families losing their homes last month is just the beginning. Generally, a combination of events occurs. The teaser mortgage payments suddenly skyrocket. Maybe the breadwinner is laid off, or medical bills devastate a family. After being tossed on the street, the family then gets a bill from the IRS – when a loan is "forgiven" in foreclosure, the tax man sees the amount of the loan as "income."

I asked one of the architects of misery, state Rep. Johnny Floyd, R-Cordele, if he was embarrassed by what's happened since he helped gut the predatory-lending law. "Nah," he said. "What we're seeing is the market at work."

Horse****. He helped create a "market" where only thieves win.

In California, there is talk among legislators of declaring a moratorium on foreclosures. That should be an absolute must-do here in Georgia. Long term, we must revise the foreclosure laws. Georgia is among the states that allow "nonjudicial foreclosures" – the bank can grab your home without a court hearing and before you have time to even realize what's happening. That must stop.

More than anything, revive Barnes' law against predatory lending.

If the Legislature refuses to act, it's time for Georgians to foreclose on the Gold Dome. We really do need to throw the bastards out..

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