Tuesday, March 23, 2010
Thomas Reuters Acquires Round Table Group

Today I received the following email from Round Table Group, an expert witness consulting service.

Dear Mr. Ulzheimer:

More than 15 years ago, we established Round Table Group as an expert witness consulting service to connect the right industry experts, corporate executives and academics with litigators building their cases. Today, Round Table Group helps connect expert witnesses to Am Law 200 and boutique law firms across the United States. We are pleased to tell you that our next step is just as exciting – we are joining Thomson Reuters, a leader in providing intelligent information to businesses and professionals.

Round Table Group will align with the litigation businesses within Thomson Reuters, and will complement the expert witness content on Westlaw, the preferred online legal research service for lawyers. The combination of Westlaw’s expert witness content and Round Table Group’s services will provide our litigator customers with an enhanced service and a more complete litigation solution. And along with our consulting services, this partnership will connect you to an expanded client base through Westlaw.

You can expect our service commitment to you will remain our highest priority throughout this transition and will be an area we will continue to invest in to achieve new levels of service performance on your behalf. And you will continue to work directly with your Round Table Group team, just as you do today.

We are delighted by the opportunity that this acquisition represents for you, Round Table Group and Thomson Reuters. We will continue to keep you updated as our plans unfold. If you have any questions, please contact us at (202)-595-1338. We look forward to continuing to work with you as a valued partner.

Best regards,

 

Russ Rosenzweig
Chief Executive Officer
Round Table Group

Allison Guidette
Vice President and General Manager - Litigation
Thomson Reuters

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Tuesday, March 23, 2010
Subcommittee to Examine Role of Credit Scores

Washington, DC - Tomorrow, Rep. Luis Gutierrez (D-IL), Chairman of the Subcommittee on Financial Institutions and Consumer Credit, will hold a hearing to examine the role consumer credit scores and reports play in today’s economy.  Credit scores and reports are ubiquitous in the current financial marketplace and are used for everything from credit card and mortgage approval to setting car insurance rates and even judging whether or not someone is employable. 

“Consumers’ credit scores and credit reports have become their passports in our financial world,” Rep. Gutierrez said. “Yet many consumers do not fully understand how these increasingly important scores and reports are created and used by lenders and others, how consumers can obtain copies of their credit scores and reports and use them to their best advantage, and what they can do in order to correct inaccuracies in their credit reports.” 

The subcommittee hearing will focus on how credit scores and reports are formulated, who purchases them and for what purpose. The hearing is also intended to provide a discussion of relevant issues of particular concern to consumers and several Members of Congress, including the impact of rising medical debt on credit scores and reports and their use for hiring purposes. Witnesses will include FICO, VantageScore, and the three major credit bureaus - Equifax, Experian and Transunion.  The Federal Reserve and the Federal Trade Commission will also testify to their recent and ongoing oversight efforts over the consumer credit scoring industry.

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Monday, March 22, 2010
Credit Score Recovery After Foreclosure or Short Sale

It has now become the million-dollar question despite the fact that only yesterday it was a 25 cent question because everyone already knew the answer.  How long does it take for your credit scores to recover from a short sale or a foreclosure?  Years, right?  These incidents remain on your credit reports for 7 years and short sales are reported as either charge offs or settlements.  Those two events as well as foreclosures are all seriously negative and could significantly damage your credit scores for many years.

So why has this become a topic of debate, discussion, and conflicting answers?  Well, to put it bluntly, someone thinks that you can repair your credit scores in as little as 9 months after a foreclosure or short sale.  Normally that kind of bold statement would be coming from a credit repair company trying to convince someone that they can work magic and convince the credit bureaus to remove the offending item from your credit reports.  No, this one didn’t come from Joe’s Credit Repair Depot and Emporium.  This one came from Barrett Burns, the CEO of VantageScore Solutions, the company that wants so desperately to unseat FICO as the king of the credit score. 

In March 23^rd’s American Banker Burns stated “…it can take borrowers as little as nine months to repair their credit score after a short sale or foreclosure.”  Wow, that’s great news…or is it?  Since this seemed to be unbelievable I interviewed Craig Watts from FICO and I wanted to get the company’s take on how long it takes to repair your credit scores after such an event.  Here’s the full transcript of my interview, unedited.

Ulzheimer:  Is FICO willing to go on the record discussing the impact of a foreclosure and/or a short sale on a consumer’s credit score?

Watts:  “FICO has consistently found that past payment history is the single most predictive category of information when we empirically develop credit scoring models using consumer credit histories. As an example, we recently looked at a sample of about 10 million credit reports representing a highly diverse U.S. population. We examined that group's most recent, twelve-month performance window. We found a default rate of 2.9% for the subset of all consumers with a clean credit record, and a default rate of 49% for the subset of all consumers who had had a recent foreclosure. In other words, consumers who recently experienced a foreclosure were about 17 times more likely to default on a credit obligation in the next 12 months than were people with a clean credit record. Obviously, recent credit defaults are vitally important when one is objectively assessing default risk.”

Ulzheimer: How long does it take for a consumer’s score to recover after a short sale or foreclosure?  And by recover I mean fully recover.

Watts:  “A consumer with a foreclosure or similar default on her credit report can expect her score to begin recovering after a couple of years if she consistently pays all her bills on time, keeps any credit card balances low, and takes on new credit only when needed. As the default event ages on her credit report its influence on her score will diminish, until the credit bureau removes the record from her file after seven years.”

              The bottom line is this... you can't fully repair your credit score in as little as nine months unless you can convince the credit bureaus to remove the items from your credit reports.  And as long as  the items are accurate they will remain for 7 years.  Your scores will begin to recover in time as the item gets older and older and therefore loses predictive value, but just not after 9 months.

 

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Monday, March 01, 2010
Cautionary Tale For Debt Collectors

This is text from a press release issued March 1 2010 by Scott Owens, Esq from the law firm of Cohen and Owens, P.A.

Florida Consumer Turns Tables On Debt Collector -- Sued For $800.00 Dollars, Consumer Collects $120,000.00 Dollars From Debt Collector

Boca Raton resident Steven J. Pincus incurred legal fees in excess of $100,000.00 dollars defending an alleged credit card debt of $800.00 dollars. Pincus later sued the debt collector in federal court for filing a time-barred lawsuit, a violation of the Fair Debt Collection Practices Act. The debt collector settled the matter for $120,000.00 dollars on February 15, 2010.

Hollywood, FL (PRWEB) March 1, 2010 -- Scott D. Owens, a partner at Cohen & Owens, P.A. (www.DebtDefense.com), has settled a federal lawsuit filed on behalf of Steven J. Pincus against a Florida-based debt collection law firm, The Law Offices of Erskine & Fleisher. The federal lawsuit was originally filed in the Southern District of Florida on November 14, 2008 (Steven J. Pincus v. The Law Offices of Erskine & Fleisher, et al., Case No. 08-CV-81357).

 

On November 20, 2007, Steven J. Pincus was sued in Palm Beach County Small Claims Court for a 3.5 year old Capital One Bank credit card debt of $803.95 dollars (Capital One Bank v. Steven J. Pincus, Case No. 502007SC016285). Though Pincus disputed the debt, he offered the credit card company a few hundred dollars to simply make the case go away and move on about his life. Capital One Bank rejected his offer so Pincus decided to hire Hollywood, Florida Attorney Scott D. Owens to defend him in state court and level the playing field against the $165 billon dollar credit card giant.

To the shock and horror of Pincus, Capital One Bank and its Florida attorneys launched a crusade against the 56 year old resident of Boca Raton, forcing him to incur more than $100,000.00 dollars in legal fees. Pincus’s attorney argued that although the case was filed in Florida, the proper time frame to file suit should be determined using Virginia law, which has a three year statute of limitations as opposed to Florida’s four year statue of limitations governing credit card debts. The legal argument is considered rather novel as most attorneys are unaware that debt collection lawsuits may be subject to another state's (shorter) statute of limitations.

“Its right there in black and white,” explained Owens, “though somewhat obscured in the six point font multi-page cardholder agreement, it does in fact state that the governing law is that of Virginia – not Florida.” Owens further elaborated, “it gets a little less clear as to what is the applicable statute of limitations in Virginia, however, in order for it to be considered a written contract and thus subject to a five year limitations period, the agreement must be signed by the consumer – the Capital One Bank cardholder agreement, like most others, is never in fact signed by anyone.” In September 2008, Palm Beach County Court Judge Ted S. Booras ultimately agreed with Pincus’s attorney, ruling that that the cardholder agreement was “an oral contract subject to Virginia's three year statute on limitation which was violated by the filing of this action in excess of three years from the date of the last transaction.”

Shortly thereafter, Pincus turned the tables and again hired Owens, this time to go after the Capital One Bank’s attorneys in federal court. Pincus filed a one count complaint for violation of the Fair Debt Collection Practices Act (FDCPA). Owens explained, “as an original creditor, Capital One Bank is typically exempt from the FDCPA but their debt collector attorneys do not enjoy this luxury.” The FDCPA allows plaintiffs to sue for $1,000.00 dollars in statutory damages plus any actual damages suffered by the consumer. Attorneys, such as Owens, are able to file such actions because the statute allows the for the recovery of attorney’s fees and costs. The federal case was also heavily litigated but eventually the Defendants relented and settled the lawsuit on February 15, 2010 for $120,000.00 dollars. “They didn’t admit any fault,” said Owens, “but then again law firms don’t generally write large checks when they think they’re in the right.”

Mr. Owens has filed several similar actions in federal court against other Florida debt collectors. He hopes that the Pincus settlement will give pause to those debt collectors who continually file time-barred lawsuits.

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