SOURCE: David B Shaev, Esq.

September 16, 2008 12:37 ET

Will Lehman Bring Your House Down?

Attorney Shaev Fights for Mortgage Holders' Rights

NEW YORK, NY--(Marketwire - September 16, 2008) - Prominent, Manhattan based, consumer bankruptcy attorney David B. Shaev appeared recently on CBS2 television in New York, speaking about homestead exemptions available to people filing for bankruptcy. Owing to the demise of Lehman Brothers and the acquisition of Merrill Lynch you might be seeing a lot more of him soon.

"Lehman Brothers in bankruptcy. Fear and loathing on Wall Street. The bursting of the housing bubble. Overleveraged mortgages. The government's intervention in Fannie Mae and Freddie Mac. Rising prices. A general economic downturn. All these factors are driving us into a brave new world for consumer bankruptcy. With all of this, people need to know how to protect their largest investment, their home. Help is available," said Shaev.

With the challenges facing consumers, the 2005 Bankruptcy Reform Act (BAPCPA) makes filing for personal bankruptcy more difficult than ever. Regulations were instituted increasing protection for banks and other lenders. This was done to protect those institutions from unscrupulous borrowers. But who protects consumers from the banks and financial institutions?

The idea that borrowers, in general, take advantage of lending institutions is false. On the contrary, some lending institutions are consistently and systematically violating the rules.

This is particularly true when it comes to Chapter 13 bankruptcy, which is not a complete discharge of personal debt, but a reorganization of it. Many lenders proceed to foreclosure against a borrower despite the borrower's filing Chapter 13 specifically to protect their home.

A mortgage study of 1,754 Chapter 13 cases found creditors do not comply with the rules of the bankruptcy court; creditors make impermissible, unreasonable and inaccurate charges too frequently to be error; and that the majority of proof of claims for mortgages are not even scrutinized, among other things.

"In my experience, people seeking bankruptcy protection do so because of real problems. Some do not file when they are actually entitled to. Now, after years of predatory lending, beleaguered homeowners are legitimately filing for protection to save their homes while some lenders are systematically violating the law and attempting to foreclose anyway. We have to stand up to protect the consumer," Shaev stated.

Shaev is at the forefront of debtor protection. When he saw a major financial institution violating the law, going after consumers for debts that had been discharged in bankruptcy, he brought a precedent setting action resulting in a major settlement against that lender.

"The best protection a borrower can have is knowledge of the law. But the law can be complicated and it is difficult for consumers to know what their rights are. Banks have fulltime legal teams enforcing their rights. Somebody has to look out for the everyman."

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