Daily Archives: July 26, 2014

For Lenders, Gaps in Federal Law Make Suing Soldiers Easy

Courts are required to appoint attorneys for service members if they are sued and can’t appear. But the law says little about what those lawyers must do. Some companies have taken advantage.

The law is clear: When far-flung members of the U.S. military are sued in civil court, judges must at least appoint lawyers for them.

But that basic layer of protection hasn’t provided much help to the hundreds of service members sued in Virginia courts each year by high-cost lender USA Discounters.

 

The state routinely allows plaintiffs like USA Discounters to suggest which lawyers should be appointed. Moreover, the federal Servicemembers Civil Relief Act (SCRA) doesn’t detail what those attorneys must do or how much they’ll be paid for doing it.

Practically speaking, military legal experts say, that means the attorneys often don’t do much at all.

An examination of recent USA Discounters’ cases shows the company typically chooses local attorney Tariq Louka to represent service members, many of whom are on active duty and unable to get to court. For his $35 fee, Louka sends each of these clients an identical letter advising them of their rights under the SCRA to have their case delayed if they can’t appear. But that’s it.

A fee that “absurdly low” shows that the attorney “does not plan on doing anything more than generating a form letter,” said John Odom, a retired judge advocate who has testified before Congress about the SCRA.

Louka’s fee is charged to the defendants if the company wins a judgment – and the company almost always does.

Read on.

Thank You for Your Service: How One Company Sues Soldiers Worldwide

With stores near military bases across the country, the retailer USA Discounters offers easy credit to service members. But when those loans go bad, the company uses the local courts near its Virginia headquarters to file suits by the thousands.

This article was co-published with The Washington Post.

Army Spc. Angel Aguirre needed a washer and dryer.

Money was tight, and neither Aguirre, 21, nor his wife had much credit history as they settled into life at Fort Carson in Colorado in 2010.

That’s when he saw an ad for USA Discounters, guaranteeing loan approval for service members. In military newspapers and magazines, on the radio, and on TV, the Virginia-based company’s ads shout, “NO CREDIT? NEED CREDIT? NO PROBLEM!” The store was only a few miles from Fort Carson.

“We ended up getting a computer, a TV, a ring, and a washer and dryer,” Aguirre said. “The only thing I really wanted was a washer and dryer.”

Aguirre later learned that USA Discounters’ easy lending has a flip side. Should customers fall behind, the company transforms into an efficient collection operation. And this part of its business takes place not where customers bought their appliances, but in two local courthouses just a short drive from the company’s Virginia Beach headquarters.

From there, USA Discounters files lawsuits against service members based anywhere in the world, no matter how much inconvenience or expense they would incur to attend a Virginia court date. Since 2006, the company has filed more than 13,470 suits and almost always wins, records show.

“They’re basically ruthless,” said Army Staff Sgt. David Ray, who was sued in Virginia while based in Germany over purchases he made at a store in Georgia.

Read on.

Family fears eviction after 4-year fight with Bank of America

Mike and Jamie Vos always dreamed of buying a home where they would put down roots and raise their children. In 2008, they found a house that seemed perfect — a two-story house on a quiet street in Buckley, Washington. For the first time their daughter, Autumn, then 5, and their son Cameron, then 11, would have their own bedrooms.

The Vos bought the house and regularly made their mortgage payments. But in early 2009 while the national economy was entering the worst downturn since the Great Depression, the family saw financial trouble looming and decided seek a loan modification in order to lower their monthly payments. They were turned down.

The Vos said that’s when they sought advice from Bank of America, the bank that was servicing their loan.

Mike Vos said that he remembers the conversation well: “They (Bank of America) said, ‘We can’t tell you to do this, we’re just giving you information on it. If you don’t make a payment for three months, it will show that you are in distress and you’ll be put at the top of the order to be able to be helped.’”

After hearing that advice, the Vos said they stopped making payments, and applied again for a loan modification. They said the process was overwhelming and confusing.

“It was this endless battle, it just seemed like, no matter what we couldn’t win,” Jamie Vos said. “We would send things in 30 times and when they finally did say they got it they would wait so long after that they would say the paperwork had expired and we needed to do it again.”

Jamie Vos said she would be on the phone with the bank for hours, but the next time she called there would be no record of the previous conversation.

On June 3, 2010, Bank of America denied their loan modification and the next day foreclosed and took possession of the Vos’ home.

The Vos said they pleaded with Bank of America to undo the foreclosure, noting that Mike’s income had improved and they could make their payments. A month later, they received word in an e-mail from Bank of America that the foreclosure sale had been rescinded. But later the bank said the sale was not rescinded and the foreclosure would stand.

For two years the Vos fought to have the foreclosure reversed. When they received a second eviction notice in 2012, they contacted the KING 5 Investigators. After KING 5 contacted Bank of America, Rick Simon, a spokesman for Bank of America Home Loans, sent a statement apologizing for how the case was handled and said it was unclear why the Vos’ foreclosure was not reversed in 2010. (Watch the 2012 KING 5 story.)

“I thought our prayers had been answered,” said Jamie Vos, “I thought it was finally an end to our fight. They had been exposed. They realized it and they were finally going to do what they were supposed to do in the first place.”

But it wasn’t over. In August 2012, Bank of America offered the Vos a trial loan modification but also said the family had to make mortgage payments for at least three months before the bank would rescind the foreclosure. The Vos said they didn’t trust the bank and refused to make the payments.

“Because our house was foreclosed on, it wasn’t in our name,” said Jamie Vos. “Bank of America still had the deed to our house. I don’t even know what we would have been making payments on. It makes no sense whatsoever to try to take payments on a house that is foreclosed on and they own it.”

The eviction notices started arriving again. Rick Simon told KING 5 that once the Vos turned down what the bank considered to be a “tremendous offer,” the bank had to move forward with the eviction.

Read on.