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U.S. Supreme Court to rule on underwater mortgages

The United States Supreme Court is hearing oral arguments regarding whether it’s possible to discharge an underwater mortgage loan through Chapter 7 bankruptcy. Two homeowners with second mortgages owned homes worth less than what they owed on their first mortgages. The same lender possessed the junior-lien rights in both instances.

There have been conflicting rulings by courts on this issue. A prior Supreme Court decision ruled against homeowners facing an underwater second mortgage. However, a federal appellate court ruled in favor of homeowners in the current case, and that’s why this matter is now in front of the U.S. Supreme Court.

A growing consensus that student loan reform is urgently needed

Today's post is essentially a transition piece that we believe tightly and logically links back to our immediately preceding post on student loan debt. In our entry dated March 12, we noted that "loan payback amounts sometimes loom as lifelong obligations for select borrowers." Those obligations can seem far more onerous, we remarked, when authorities can seize tax refunds from borrowers who are behind on their loan repayments.

Indeed, there is no way to minimize or otherwise sugarcoat the dire degree to which hefty student loan obligations are dragging millions of American consumers down. Stories proliferate about loan exactions that saddle debtors for decades. A recent media article on the student loan crisis notes that "tens of thousands of seniors in 2013 were forced into poverty." Reportedly, many active-duty military members have been victimized by scamming lenders over many years. It is estimated that delinquencies on federal loans currently stand at close to 17 percent.

Student debt in default: Can a tax refund be seized for payment?

The entry "student loan debt" would seem to be an eminently appropriate definition for the term "slippery slope" in any dictionary of American idioms.

Millions of Americans from past generations likely feel as though they dodged a bullet regarding their pay-back duties to lenders following college graduation. Looking back, it might have seemed hard to ultimately put the fire out on those loans (and, for many people, it undoubtedly was), but the amounts owed on loans in decades past flatly paled in comparison to the stark amounts that now stare high numbers of graduates in the face.

In the Great Recession's wake, debt still trumps savings for many

Some consumers -- the most fortunate among us -- manage to save money just fine, while keeping troublesome debt levels at bay at the same time.

Others, conversely, neither save much nor tap into their credit cards to an extent that causes them to lose sleep at night. For them, personal finances are essentially a wash -- nothing much to speak of on either side of the ledger.

Court finds American Express actions heavy handed, unlawful

How would you feel as a Texas consumer if you wanted to use a particular credit card at a store but were constrained from doing so because another card issuer forbade the merchant from accepting the card?

And how would you feel upon learning that the card company imposing terms was slapping a comparatively higher transaction fee on the merchant for using its card, resulting in higher costs being passed along to you and other consumers?

Is DOJ mortgage fraud focus now shifting to criminal penalties?

One thing that the great national mortgage crisis of recent years readily signifies is that complex books often have many chapters.

A new one is currently being written, authored by outgoing U.S. Department of Justice Attorney General Eric Holder. Prior to turning his post over to successor Loretta Lynch, Holder has directed attorneys in his department to take a close look at mortgage fraud securities cases that might turn up individual wrongdoers for prosecution in criminal cases.

Is there a silver lining to continuing "zombie" foreclosures?

What might conceivably be the upside in an increased number of for-sale signs being seen in any American neighborhood that result from foreclosure and repossession?

For many people in Texas and elsewhere, those signs are clearly just dismal reminders that struggles persist for many homeowners. Even years after the so-called Great Recession and the monumental fallout from the nation's housing crisis, problems persist across the country for homeowners who just can't remain above water on their mortgage obligations.

Many Americans continue to cite money as top stress inducer

Work-related stresses? Check. Sleepless hours at night spent thinking about family responsibilities? Check. Money worries? Check -- underscored and in bold.

Americans worry about a great deal of things, which is understandable, given the nightly parading across the television screen of stories relating to terrorism, geo-political conflict, climactic change, legislative malaise on Capitol Hill and so forth.

Can federal regulators set interest limits on payday loans?

As loan vehicles, so-called “payday loans” are highly singular animals. Largely unregulated by federal authorities, a national industry comprised of such lenders has sprung up across the country, which includes many participants in Texas.

There is certainly a wide divide existing in the opinions of industry commentators regarding the particulars of such loan instruments. On the one hand, and as noted in a recent media overview discussing payday loans, they have been termed “scams” by consumer groups. On the other hand, a spokesperson for the country’s biggest payday lending outfit calls them “a viable credit option.”

It might be useful to think of a payday loan as synonymous with a burning match held between the fingers of a cold person in the woods. That individual might be able use the match in a timely and effective manner by quickly lighting a fire. Conversely, of course, holding onto the match for too long yields another result entirely; it renders the person who would profit from its use a victim by burning indiscriminately.

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