Consumer Law & Policy Blog

Home Equity Loans Squeezed

Not surprisingly in light of recent events, obtaining loans and maintaining lines of credit against one's home equity are getting more difficult.  This New York Times article explains.

2.5% of Home Mortgages in Forecslosure; More than 6% delinquent

Check out this post from Credit Slips discussing a survey done by the Mortgage Bankers Association showing that 2.47% of home mortgages are in bankruptcy and 6.35% are delinquent.

UPDATE (on June 9, 2008):  My apologies to co-blogger Alan White, who last Friday posted a detailed analysis of the survey.  You can read Alan's post here.

More on the National Arbitration Forum

We have blogged frequently about binding pre-dispute arbitration in consumer contracts, including here, here, and here about the alleged bias of the National Arbitration Forum, one of the major private arbitration companies. Now, Business Week has weighed in with this lengthy expose on the anti-consumer leanings of the NAF.

An Interesting Take on the Subprime Crisis

A stick figure explanation for the subprime crisis. (HT to Brian Leiter).

The Hazards of Suing a Consumer Review Website

by Paul Alan Levy

After Lifestyle Lift sued Justin Leonard for allowing putting its name in the “path” for pages on his infomercialscams.com web site where consumers commented on the merits of Lifestyle’s product, claiming trademark infringement and dilution, Leonard issued a warning that the case was so lacking in merit that attorney fees could be awarded if the suit proceeded.  When Lifestyle persisted in its suit, the district court ruled from the bench dismissing its lawsuit.  Lifestyle Lift then coughed up $17,500 rather than face a motion for fees under both Rule 11 and the Lanham Act.  Other documents in the case can be found here.

Lifestyle has shown a habit of filing suits against its critics, dragging them to the Eastern District of Michigan in the expectation that the high cost of defending will quash criticism.  It is to be hoped that Leonard’s successful resistance serves as a lesson – both to companies that get bad legal advice telling them how easy it is to suppress criticism through phony trademark claims (they should ask skeptical questions), and to the critics who receive such threats and face such suits (it is worth standing up to trademark bullies).

Business Week: "Banks vs. Consumers"

Spoiler alert: the banks win.

It's Bad Out There

Highlights of the First Quarter National Delinquency Survey
By Alan White

For the third quarter in a row, foreclosures and mortgage defaults are rocketing upwards, according to the Mortgage Bankers Association report on foreclosures and delinquent mortgages as of March 31, 2008. Not surprisingly, delinquencies and foreclosures are up dramatically in almost all categories, compared with the December 31, 2007 report, which already had record numbers.

As of March 31, MBA counted 1.12 million mortgages in a pending foreclosure, in its sample of about 80% of the market. This extrapolates to 1.4 million American homes that were in foreclosure at the end of the first quarter (up a quarter of a million from December 31, 2007.) About 53% of pending foreclosures are on subprime mortgages. Adding 60- and 90-day delinquencies brings the total to nearly 3 million homes. Even allowing for some investors, this crisis is directly affecting more than 5 million people.

New York City Consumer Debt Working Conference

The Feerick Center for Social Justice and the New York County Lawyers Association Justice Center are sponsoring a free conference on Consumer Debt in New York City on Thursday, June 19, 2008 from 8:30 AM to 5:00 PM at the Fordham Law School, 140 West 62nd Street (at Columbus Avenue), NY, NY-McNally Amphitheatre.  This working conference will bring together policy makers, consumer law experts, community-based service providers, court personnel, and other key stakeholders to problem solve around issues related to consumer debt and low income New Yorkers.

Conference goals include identifying concrete and achievable reforms and strategies focused on the Civil Court of the City of New York, the community, and the marketplace.  Plenary sessions will focus on the Credit Card, Debt Consolidation, and Debt Collection Industries, and the Civil Court while breakout sessions will explore Arbitration and Consumer Debt, the Intersection of Bankruptcy and Consumer Debt. Civil Court Reform and Practice, Financial Literacy and Credit Counseling, Credit Reporting, Medical Debt, and Post-Judgment Enforcement and Bank Policies and Practice  (disclosure: I'm a discussion leader for a breakout session, but despite that it sounds like an excellent conference).

Click here for more information and to register (the deadline for registration is June 12)

The Content of Consumer Law Classes

Want to know what is taught in consumer protection classes?  I've now posted to SSRN "The Content of Consumer Law Classes," which will appear in 12 Journal of Consumer and Commercial Law, No. 1.  The piece reports on the survey we conducted at Richard Alderman's Teaching Consumer Law Conference, under the auspices of the University of Houston Law Center.  The results in the paper are somewhat different from what I reported at the Conference because the paper includes more responses.  Here's the abstract:

Attendees at the University of Houston Law Center Conference titled Teaching Consumer Law: The Who, What, Where, Why, When and How were surveyed to determine what topics they covered in consumer law classes. Twenty-five responses were received, representing fourteen survey classes, five clinics, and six miscellaneous responses. The responses indicated considerable diversity in the topics covered. No topic was covered by more than 21 professors and each of the 32 topics listed on the survey instrument was discussed by at least four professors. Under the circumstances, it seems difficult to claim that consumer protection classes have a canon agreed upon by those who teach them. The responses, including those in survey courses, indicate that coverage is not static; many professors taught subjects that arose only recently, such as the subprime lending meltdown and statutes enacted since 1999.

Los Angeles to Sue Time Warner Cable for Poor Service

The Los Angeles City Attorney is suing Time-Warner Cable today for making false and misleading statements to subscribers and violating the terms of its franchise agreement with the city. The complaint alleges that, despite promises to "fix . . . problem[s] fast," the company left callers to its customer service line on hold for hours and excessively delayed repair work.

Correction: This post initially misidentified the defendant as Comcast. Los Angeles is actually suing Time-Warner Cable.

[via Consumerist]