| Volume 64 Number 4 |
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The People’s Lawyer’s Tip of the Day
The Texas Deceptive Trade Practices Act (DTPA) protects you whenever someone misleads or deceives you. But beware! It applies to all sellers, including you when you sell at a garage sale, through a classified ad, or on the web. Don't say anything misleading or deceptive about what you are selling. You will be subject to the DTPA and it could cost you a substantial amount in damages. Click here for more.
Infiniti's New Concierge Service
General Motors started a trend with OnStar - a service that provides emergency assistance, navigation, security, maintenance reminders, and more. Other vehicle manufacturers quickly built their own service programs to compete with OnStar, including Mercedes, BMW, Lexus, and Hyundai. With the introduction of Infiniti's new service, "Infiniti Personal Assistant," OnStar and other vehicle assistant services simply pale in comparison. Instead of offering the service free for only six months, like OnStar, Infiniti's Personal Assistant is free for the first four years. Infiniti's Personal Assistant offers unlimited 24-hour access to a live team of professional assistants willing to help you with "anything" at "any time." Will Infiniti's new program entice you next time you're in the market for a new car?
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Alcohol & Cancer
French researchers publishing in the Canadian Medical Assn. Journal are suggesting that even "moderate" or "sensible" drinking of alcoholic beverages isn't safe in the long term. The concept of "sensible drinking" was introduced in the 1980s in hopes of establishing guidelines to prevent hospitalizations and death due to alcohol abuse. Although the guidelines kept many from "abusing" alcohol, they didn't account for the long term effects, including mouth, throat, breast, colorectal and liver cancers. Ultimately, the authors are encouraging health authorities against advising the public that the consumption of any alcohol is truly safe. Will the new reports make you think twice before your next drink? Click here for more.
Banks Changing Terms on Risky Loans
The New York Times reports that Bank of America and JPMorgan Chase are sending notices to some of their borrowers with high risk loans modifying the terms of the loan and reducing the principal due on the debt. Not much news worthy here, except, the letter is sent to borrowers who have not defaulted or requested a modification. The banks are proactively overhauling loans for borrowers who have so-called pay option adjustable rate mortgages, which were popular in the late stages of the housing boom, but which banks now view as potentially troublesome. In almost all case, these borrowers are substantially under-water. In one reported case, a borrower was told the amount she owed had been cut in half. The bank cut her principal by $150,000 while raising her interest rate to about 5 percent. Her payments would stay roughly the same. She had not complained to the bank about the amount of the loan, had not defaulted, and reported that she would not have defaulted. As crazy as this sounds it may make sense. Most of these mortgages are possible problem loans acquired through the purchase of troubled banks. I assume the banks can determine approximately how much they have invested in each of the loans, and perhaps this move is simply a way to protect that initial investment, plus a higher rate of interest. Waiting until default might not result in a similar outcome. Debtors in default have already ruined their credit, and have less incentive to work out new terms. In fact, they may have already made the decision to move. Working with those debtors may also impose substantial costs on the banks, in terms of staffing. This proactive strike may seem like throwing money away, but it could actually be an efficient way of protecting an investment. A move that could benefit both banks and consumers. Click here for more.
Your Money
What is the value of reducing, postponing, or foregoing expenses? Click here for more.
For the Lawyers
Default motion filed before default may violate Fair Debt Collection Practices Act. The Sixth Circuit held that a debt collector may have violated federal law by serving a motion for a default judgment in a state court collection proceeding before the expiration of the time the debtor had to answer the complaint. The court noted that the Grden, "argued the 'motion for default' was misleading because it falsely suggested that Grden had already missed the deadline to respond to Leikin's collection action. We think the record would allow a jury to agree with Grden on that point." Click here for more.