A Different ‘Night Before…’

We love Christmas, love the holiday season, so please take the following in the spirit in which it is written.

To all our clients and clients to be, who are thinking of presents under the tree instead putting the December mortgage payment in the mail.

‘Twas the night before Christmas, when all through the house

santa-sleigh-reindeer-jpg-500x0_q80_crop-smart_upscale-trueNot a creature was stirring, except me and my mouse;

I was moving bill payments around with care,

In hopes that Christmas presents I could Amazon there;

The children were nestled all snug in their beds,

While visions of PlayStations danced in their heads;

I, to make Christmas as great as they hopefully awaited,

Put off the mortgage payment Sarah so carefully negotiated;

And so, instead I ordered a Sanyo flat screen

With Amazon Prime, it was only eight-seventeen;

Then out on the lawn there arose such a clatter,

I sprang from my desk to see what was the matter.

Away to the window I flew like a flash,

Tore open the shutters and threw up the sash.

The moon on the breast of the new-fallen snow

Gave the lustre of mid-day to objects below,

When, what to my wondering eyes should appear,

But a miniature moving van, and a tiny auctioneer….

We are seeing this a lot, even this early in the Holiday Season, people putting off their modification plan payments in order to make Christmas special for the kids. We understand the temptation, we understand the pressures of the holidays that mount every time you put on the TV and see shiny happy people (sorry, R.E.M) buying cars for Christmas (really, really, hate those ads).

But, kids just want to be kids – with their parents and in their own beds in their own home.2af616a

We know, also, that some people put off hiring a lawyer for their foreclosure because they want to spend money on Christmas. Christmas, though, as we all know from It’s a Wonderful Life, doesn’t stop a case from moving forward or a deadline from passing.

So, please just think about that before right-clicking on order.

Flounder’s Car and No Worry Foreclosure Solutions

flounderAn attorney and a real estate guy were just arrested in Connecticut for allegedly running a scam on people facing foreclosure. They’re accused of something that looks remarkably like a variation on the Detroit scam I wrote about awhile back.

According to the Connecticut Law Journal “[they] would offer to purchase their homes and pay off their mortgages. The distressed homeowners agreed to sign various documents, including quitclaim deeds, indemnification agreements, management agreements and third-party authorization letters that [they] presented to them with the promise that they would be able to walk away from their homes debt-free.”

The homeowners were told to ignore any future communications from their banks, most, if not all of them, moved out. After they moved out, the alleged scammers then rented out the homes and pocketed the rent. No money was ever forwarded to either the real owners or the banks. It’s assumed that this went on until the banks foreclosed and the renters received eviction notices.

This is disturbing and, unfortunately, not uncommon. Distressed homeowners are well named – aside serious health issues there’s few things more stressful than facing losing one’s home. Distressed homeowners are targets for the smart but unscrupulous. Theses predators invent fantastical solutions that sound dead-on doable. Real.

So, here’s the thing, and it’s simple – if someone says they’ll handle everything, deal with the bank for you, take all the stress off, allow you to ignore future notices and all those pesky court dates they are ripping you off.

Get a lawyer, go to court, handle it directly, there is no magic to it. Real Estate Maven, Lawyer, Doctor, your favorite brother-in-law, anyone who tells you they have the solution and you can ignore … everything … is not there to help.

Go ahead and deal with these people and you’ll end up like Flounder from Animal House. Remember, he loans the guys his brother’s car for the infamous road trip and it comes back so trashed it’s unrecognizable. The response from Otter? To paraphase, “Face it, you screwed up, you trusted us.”

Debt, Dickens, and the Ghost of Christmas Yet to Come

So now, as an infallible way of making little ease great ease, I began to contract a quantity of debt.

~ Charles Dickens, Great Expectations

imageWhere would Charles Dickens have been without debt? Where would English Lit, Hollywood, and Christmas be without Dickens?

The running themes through Dickens’ long – and lucrative – career were crushing debt, workhouses, courts snarled in technicalities, poverty, sour credit, low wages, foreclosures, banks, scams, mass incarceration, sweatshops, social injustice … All very much applicable today.

If Dickens came back tomorrow, he’d be astonished by the speed of today’s communications; overwhelmed by the modern technologies used in finance; awed but probably pleased with the serialized novel on TV and Netflix, et al – I imagine him binge watching Breaking Bad and The Wire.

He’d find some things appallingly the same, others miraculous. He’d immediately recognize Pharma Bro, everyone running for President, the characters in The Big Short. Give him a week and he’d be working on a new novel.

Dickens had an unfailing eye for all this because he lived it. He grew up in a imagemiddle class family, comfortable, good at school, apparently fairly happy. All that was destroyed when he was twelve and his father was tossed into debtor’s prison (right). Charles’ mother and younger siblings went with him – as was the custom. Charles,was forced to pawn his school books, was sent off to a workshop to help pay off his father’s debts.

An inheritance saved the family though Dickens’ mother was adamantly opposed to his leaving work and forced him to stay there for long, unhappy months before he left to resume his studies. He rewarded her for that particularly slight through dozens of novels and plays. (From Dickens to Bob Dylan and Alanis Morissette, it’s never a good idea to upset an artist with wide reach).

In his early writing career – he was pretty much a prodigy from the start – he covered the courts and, briefly, Parliament.

He saw the system from every angle and he set out to attack it in the only way he could, through his writing, within the flexibility and thin protection of the novel. He opened Victorian eyes to the seamy underbelly of British wealth, society, and empire.

imageIn 1843 he turned his wrath to Christmas. At the time, many – including his good friend Washington Irving – felt that Christmas season was ebbing away from the poor and increasingly put upon middle-class.

He didn’t like what he was seeing, feeling, and he sat down to write a scathing pamphlet about the issue. It soon occurred to him that a novel would work much better, reach more people. In six weeks he crafted his ‘ghost story’, A Christmas Carol.

He published it himself in an effort to not be ripped off by his usual publisher.A Christmas Carol in prose. - caption: 'Marley's Ghost. Ebenezer Scrooge visited by a ghost.' In today’s parlance, it went viral. Immensely popular, even his [many] critics extolled it. Thousands and thousands of copies were sold, many more – particularly in the United States were ‘bootlegged’ – and it was immediately adapted for the stage. Dickens himself did stage readings of the entire manuscript. It was everywhere.

Humanitarianism, redemption, a dead-on accurate portrayal of early-Victorian England, it hit a nerve in Great Britain and the United States. It hit, hard, the people bearing the burden of the Industrial Revolution, changed the way everyone thought of the Christmas season.

imageHow a man who, when first confronted with poverty and homelessness, says, “Are there no prisons? Are there no workhouses?” Finds empathy is inspiring regardless of religious belief. A Christmas Carol was a great story, a strong, bitter indictment of the times, and it worked. It changed things. It has never been out of print.

Again, no debt, no Dickens, no Dickens, no holiday season? The latter may be a stretch, but it’s not unthinkable.

So, sometime in the next few days I plan on catching the 1950 Alastair Sim, A Christmas Carol – a great adaptation (out of dozens, beginning with Thomas Edison’s version in the early 1900s!).

And to all my readers, I hope it’s obvious, “God Bless Us, Everyone.”


The Plague, Embalming in the Civil War, Detroit, and Internet Promises

He that maketh haste to be rich shall not be innocent. ~Proverbs 28:20


Four things occurred when the Black Plague arrived in London in 1665. Those who could afford it were allowed to flee the city for a fairly hefty fee; everyone else either got ill or endured unlivable conditions; doctors, nurses, and clergy made heroic efforts to heal those they could and comfort those they could not; scammers descended on the city and made their fortunes.

Virtually instantaneous with the onset of the plague London was overrun with charlatans armed with herbs, potions, mysterious amulets, and every manner of fake cure or deterrent creative minds could conjure up.   They posted and handed out flyers but, of course, their best advertisement was their own good health. Or, they could point to their ‘success stories’ – the so far unafflicted.

Who could argue that their next door neighbor, healthy in the midst of disease, wasn’t that way because of the rabbit leg charm they bought a week ago? In the absence of any clue about what caused bubonic plague, who would take that chance if they had the cash to pony up?

Embalming, not yet a science or even much of an art, came into vogue in the North during the Civil War. Embalmers offered the opportunity for families to have their dead sons and fathers transported back from Southern battlefields for a proper burial. The government neither regulated nor paid for embalming.

Embalming dead soldiers quickly became ‘commoditized’ as the 100newspapers of the day quickly began to complain. Competition for bodies was fierce, flip through any period newspaper of the era and you won’t be able to miss ads that bashed the competition and made increasingly outrageous claims. Outright fraud – and worse – quickly followed, some bodies were embalmed without authorization, then held ‘hostage’ until the family coughed up $100 or so to liberate the body.

By the last year of the war it was so bad Ulysses S. Grant banned embalmers and embalming from all Union armies.

It’s pretty clear that throughout human history when something bad occurs three things happen in fairly quick succession: people cope, people help, and some people cash in and get rich.

The mortgage crisis, of course, was and is not immune to this. If anything, it’s worse. The power of computers, the Internet, everything else we enjoy about the Information Age has also been used by the scammers to profit. And, even when they don’t manage to succeed and lure in a new ‘client’ they manage to disseminate clouds of bad information that just buries the good.

1200x-1I see it every day, warn people, spend an inordinate amount of time debunking newly minted myths. My assistant, Heidi, just forwarded me an article about a scam in Detroit that’s as audacious as it is heartbreaking: getting people to lease-to-own abandoned homes, fix them up, pay for years, only to find out that the company has never paid the real estate taxes. Or the mortgages. Or anything. The real estate management company, the leasing company, the company holding the mortgages, and the financing company all had slightly different ownerships and were completely, totally removed from any responsibility.

This scheme looked spectacular on paper – well, on the website. The scammers promised the city it could clean up Detroit’s blighted neighborhoods, Detroit funded the company with public pension funds, lost them. It promised citizens of Detroit a home, it delivered foreclosure notices.

So, just a note that the foreclosure crisis is not over and the charlatans are still out there. Every time someone runs a Google search for ‘foreclosure defense’, or ‘debt consolidation’, or ‘credit card help’ they’re there to hand out that flyer that will most assuredly cure you.

Cinco de Mayo and Debts (Really)

More history of debt – I think we can all agree that Cinco de Mayo is a pretty fun day. A celebration of great food, drink, festive, upbeat.

IMG_0855What most people don’t know is how the holiday came to be. It’s not, as a lot of North-of-the-Border types believe, Mexican Independence Day. The 5th marks the Battle of Puebla in 1862 between French and Mexican forces in which a rag tag Mexican army of 2,000 routed a French army – and a division of the Foreign Legion – of 8,000.

That’s right, the French and Mexican armies fought a series of battles in the middle of our Civil War that eventually resulted in a French installed government ruling Mexico until 1866.

“Well, great, Sarah, thanks for the history lesson, it’ll probably be worth a drink or two in a bar trivia contest some day, but what does this have to do with debt?”

Everything, actually. Napoleon III’s invasion and eventual take-over of Mexico was, in fact, perhaps the largest repossession action in history.

After the Mexican-American War and a series of revolutions and civil wars, Mexico was mired in debt and was forced to suspend payments on its foreign debt. With the Civil War raging in the United States, Mexico’s European creditors didn’t have to worry about the Monroe Doctrine. The British and Spanish sent naval forces to Vera Cruz to register their displeasure, they quickly negotiated new repayment schedules. The French, however, were not so easily appeased (or maybe the new payment schedules with Spain and Britain left little for the French) and invaded.

Cinco de Mayo was a successful debt defense worth celebrating. It should be noted, however, that while it was a spectacular upset, the victory was fleeting and Mexico was, in effect, repossessed by the French for four very miserable years.

It was the military equivalent of firing off a strongly worded letter to a creditor, filing a complaint with the BBB, very satisfactually slamming the phone down on the subsequent toll free call, then watching the creditor exploit a rare loophole and still repossess your car.

I like to think I can be as ferocious as that rag tag Mexican Army when it comes to consumer debt, but I know I’m a lot more effective in the long run.

Still, I – and I hope my clients – have more reasons that tequila, great food and good company to celebrate Cinco de Mayo. It’s somehow . . . empowering.

The DaVinci Code, Debt, and A Book Announcement

I’m working on a book – Got Debt? Essays from the Front Lines of America’s Debt Epidemic. I’ll be writing (and talking) a lot more about it over the coming weeks but I’m excited and hope you will be too.

For now, here’s a little bit from the introduction:

films.01If you read Dan Brown’s The DaVinci Code – or survived through the movie – you may remember the hero, Robert Langdon, talking about the mysterious Knights Templar, driven underground by King Philip IV of France in the early 1300s.

They knew great secrets’ and were persecuted, hunted down, thought wiped out but live on, unnoticed, influencing great events … you know the spiel.

Under Brown’s layers of conspiracy theories is a historical truth that should speak loudly to millions of us today. In reality, the Templars did indeed very much exist. They were fabulously wealthy, the result of certain extracurricular activities during the Crusades.

They were entrenched in France when Philip philippe_le_bel-1bcd9b4ascended the throne. It being France and the Middle Ages, Philip spent the majority of his time fighting the English. When peace broke out with them, he turned his attention to the Flemings.

Wars are, and have always been, expensive. Philip borrowed heavily from the Templars, probably far more than he or the kingdom could ever hope to repay.

He certainly could not maintain his wars or refill his empty coffers while repaying the Templars. For our purposes, think of being short of cash in the middle of February and needing to choose between paying the oil bill or CapitalOne.

Philip faced that same quandary, solved his fiscal quandary on Friday, October 13, 1307 by having the entire order of the Templars simultaneously arrested.End of the Templars, Philip burned his notes to them and…. well, the Templars as well. Then he confiscated all their holdings.
In one fell swoop Philip wiped out his debt and filed his coffers.

Philip burning his I.O.U.s
Philip burning his I.O.U.s

It’s good to be king.

While most of us can only dream of taking care of our debt with such . . . finality . . . it’s important to take a few lessons from this.First, debt, credit, debtors, creditors, collections, and defaults have been around for a very long time. Second, everyone – you, me, kings, queens, dictators, presidents, Founding Fathers – have debt. Lastly, we have options in how we handle that debt – not Philip’s options – but options still, and more than most people are aware they have.

A Glimpse at the Future.

imageI can guess where some of my future clients will be coming from – online fantasy sports games credit card debt.

In the last month, if you’ve watched TV or surfed the web, or turned on your smart phone, AM-FM radio, opened a newspaper, or stood near someone who has, you have been assaulted with ads for Draftkings and FanDuel.

They are online sports fantasy games and they are everywhere. Their pitch is simple – sign up, log in, charge a few bucks to your credit card (they will match your funds up to $200, so . . .), plug in your lineups on their easy to use platforms, hit enter, and WIN!

According to their websites there’ll be $2 billion in winnings this year.

Oh, yeah, it’s a game of skill, not gambling, though being lucky doesn’t hurt.

imageHundreds of thousands of people spend hundreds of millions of dollars playing hundreds of games daily and getting additional ‘credits’ for automatically refreshing their accounts ala Starbucks.

People do win . . . it’s just pretty much the same ones over and over again because the pros have moved in. The guys who spend thousands a pop, work at this 10-12 hours a day, design computer programs and algorithms to play a thousand or so games at a clip, subscribe to professional newsletters and sites . . . those are the guys winning all the money.

By the way, that sounds a whole lot more like a job – a tough job – than FUN.

imageAccording to NPR and the NY Times, these sites – who may merge any day now – break down into two distinct groups – the pros and the rest. The pros comprise 1% of the players and 80% of the prize money, and rising.

This fact will stop no-one because the games are fun, addictive, and there is that chance of winning, however slim. And, you can watch a crappy NFL game, like most of them this past weekend, and still have a rooting interest.

Which has not gone unnoticed by the powers that be – NFL teams are pumping funds into these companies on a record pace, hence all the money available for the nonstop ads.

Absent an act of Congress – which inadvertently recognized these sort of games as not gambling – they aren’t going anywhere.

One percent pulls in the overwhelming bulk of the rewards, computer programs and algorithms stilt the competition, enormous corporations  invest and stand to profit greatly, ‘regular’ people are racking up debt to play.

That remind you of anything?

U.S. Grant and Crushing Debt

A story from a friend of mine from his law school days – just another reminder that your financial condition today neither defines you or your future.

December 1991, I came out of New York Law School at 11:30 pm after a five hour Constitutional Law final. Cold, windy, raw, the World Trade Tower looming a few blocks away- I thought it ugly then, miss it now – the Commerce Clause ricocheting around my head like shrapnel in a tank (to the same effect), I did not have it in me to hike over to City Hall and the Lexington Avenue Express to Grand Central. Alone on the corner of Church and Worth, I flagged down a cab, jumped in, skipped eye contact with the driver, an average looking black guy who gave me a surprising, pleasant ‘Hello, where to?’

I responded with a mumbled, “Grand Central, don’t take Park”, nestled into the corner, eschewed the seatbelt, pulled my bag tight to my side, closed one eye, kept the other half opened to insure he did indeed stay away from Park. Took a bump on Sixth that forced me to open both eyes, I scanned the glass divider, taped to it behind the driver was this picture of Grant.

grantI looked at it, stared at it, held my curiosity for half a block before asking, “Why do you have a picture of Ulysses S. Grant on the glass.”

“Ah, you know him,” he sounded surprised – which, if you dwell on it, is perhaps a bit disturbing.

“Of course,” I answered, but not in that tone reserved for cab drivers who insist on engaging in conversation at exactly the moment you are in no mood to talk to anyone, never mind the stranger driving you the long way to your destination, “so why his picture?”

“I just turned forty,” he announced, and I knew at once where this was going, sat up, “and I’m driving a cab, trying to finish school, kinda’ the loser’s track, you know? So, I put that photo there to remind me that when Grant was forty he was bankrupt, lived with his wife and kids in his father-in-law’s house, worked as a clerk in a feed store . . . . talk about losers. . . eight years later he was President of the United States . . . . that’s it, man, nothing’s ever over.”

Just saying …