Current Events in June 2015

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    Affordability of home ownership on the rise

    Both prices and interest rates are declining

    Housing affordability across the country is on the rise, thanks to lower interest rates and home prices.

    According to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index, 66.5% of new and existing homes sold between January and the end of March were affordable to families earning the median income of $65,800. The median is the point at which half the incomes are higher and half are lower.

    “Now is a great time for consumers to buy homes,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “Both first-time and move-up buyers can take advantage of these favorable market conditions and start building their American Dream.”

    The national median home price dipped from $215,000 in the fourth quarter to $210,000 in the first quarter, while, average mortgage interest rates fell from 4.29% to 4.03% in the same period.

    New mortgage programs

    First-time home buyers also can find help qualifying for a mortgage with low-down payment programs offered by Fannie Mae and Freddie Mac that are geared primarily toward them. These lenders now offer mortgages with 3% down payments, allowing more creditworthy borrowers who lack the funds for a large down payment to get a home mortgage.

    “Home ownership builds stronger communities, provides a solid foundation for family and personal achievement and improves the quality of life for millions of people,” said Woods.

    Housing affordability across the country is on the rise, thanks to lower interest rates and home prices. According to the latest National Association of H...

    Hemisphere Group recalls Vietnamese LP cashews

    The product may be contaminated with Salmonella

    The Hemisphere Group of Smithtown, N.Y., is recalling 14,000 lbs. of Vietnamese LP cashews.

    The product may be contaminated with Salmonella.

    The firm has not received any reports of illnesses to date.

    The following product is being recalled:

    Product: Vietnamese LP Cashew Kernels (shelled)
    Product: Vietnamese LP Cashew Kernels (shelled)
    Net Weight: 50 lbs. bulk cartons
    Packer: Hong Duc Company Limited
    FDA No.: 16153193186 (on carton)
    Hemisphere Code No. P95497

    The recalled product was distributed to direct customers in Kalamazoo, Mich.; North Billerica, Mass; Maspeth, N.Y.; and Quebec and Scarborough, Canada. These customers were instructed to notify their accounts if the cashews had been distributed and to return them to The Hemisphere Group.

    Consumers should not to consume this product and should return it to the place of purchase for a full refund.

    Consumers with questions may contact The Hemisphere Group at 1-800-339-8846 extension 32, Monday - Friday, 9:00 am - 5:00 pm, ET.

    The Hemisphere Group of Smithtown, N.Y., is recalling 14,000 lbs. of Vietnamese LP cashews. The product may be contaminated with Salmonella. The firm has...

    GM recalls Chevy Colorados and GMC Canyons

    The front driver air bag inflator could malfunction during a deployment

    General Motors is recalling 40 model year 2015 Chevrolet Colorados manufactured September 15, 2014, to January 21, 2015, and 2015 GMC Canyons manufactured October 3, 2014, to December 9, 2014.

    The recalled vehicles have a front driver air bag inflator that may be misaligned to the air bag module backplate, which can cause the inflator to separate from the backplate during a deployment.

    If that happens the inflator could rupture with metal fragments striking and potentially seriously injuring the driver or other occupants. Even if the inflator does not rupture, the air bag may fail to inflate properly or detach from the steering wheel, increasing the risk of injury to the driver.

    GM has notified owners, and dealers will inspect the driver air bag module inflator for proper alignment, replacing the air bag, as necessary, free of charge. The recall began March 19, 2015.

    Owners may contact Chevrolet customer service at 1-800-222-1020, or GMC customer service at 1-800-462-8782. GM's number for this recall is 15037.

    General Motors is recalling 40 model year 2015 Chevrolet Colorados manufactured September 15, 2014, to January 21, 2015, and 2015 GMC Canyons manufactured ...

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      Dodge Ram 1500, 2500, and 3500 trucks recalled

      The passenger side front air bag inflator has a defect

      Chrysler (FCA US) is recalling 438,156 model year 2003 Dodge Ram 1500, 2500, and 3500 trucks manufactured January 1, 2002, to July 25, 2003.

      A safety defect in the passenger side frontal air bag inflator may produce excessive internal pressure causing the inflator to rupture upon deployment of the air bag. This recall addresses both the passenger side frontal air bags that were originally installed in the vehicles, as well as replacement air bags that may have been installed as replacement service parts.

      A replacement air bag may have been installed, as one example, if a vehicle had been in a crash necessitating the replacement of the passenger side frontal air bag.

      In the event of a crash necessitating deployment of the passenger’s frontal air bag, the inflator could rupture with metal fragments striking the vehicle occupants potentially resulting in serious injury or death.

      Chrysler will notify owners, and dealers will replace the passenger front air bag. The manufacturer has not yet provided a notification schedule.

      Owners may contact Chrysler customer service at 1-800-853-1403. Chrysler's number for this recall is R26.  

      Chrysler (FCA US) is recalling 438,156 model year 2003 Dodge Ram 1500, 2500, and 3500 trucks manufactured January 1, 2002, to July 25, 2003. A safety defe...

      BMW recalls numerous vehicles with air bag issues

      The dual-stage driver front air bag inflator could rupture

      BMW of North America is recalling 420,661 model year 2002-2005 325i, 325xi, 330i, and 330xi Sedans, and 325xi and 325i Sportswagons, 2002-2006 330Ci, 325Ci, and M3 Convertibles and 325i, 330i, and M3 Coupes, 2002-2003 M5, 540i, 525i Sedan, and 530i Sedans, and 540i and 525i Sportswagons, and 2003-2004 X5 3.0i and 4.4i Sports Activity Vehicles.

      The 5-series and X5 vehicles are only included if they are equipped with the optional sports steering wheel.

      The dual-stage driver front air bag that may be susceptible to moisture intrusion which, over time, could cause the inflator to rupture. In the event of a crash necessitating deployment of the air bag, the inflator could rupture with metal fragments striking the driver or other occupants resulting in serious injury or death.

      Vehicles that have had their driver side front air bag replaced previously as part of a recall remedy need to have their air bag replaced under this recall as well.

      BMW will notify owners, and dealers will replace the front driver air bag module, free of charge. The manufacturer has not yet provided a notification schedule. Owners may contact BMW customer service at 1-800-525-7417.  

      BMW of North America is recalling 420,661 model year 2002-2005 325i, 325xi, 330i, and 330xi Sedans, and 325xi and 325i Sportswagons, 2002-2006 330Ci, 325Ci...

      Texas floods mean used car shoppers must be extra alert

      Here's how to avoid getting stuck with a waterlogged lemon

      It happened after Hurricane Katrina in 2005 and again in 2012 after Hurricane Sandy. Now that much of Texas has been hit by massive flooding, it will probably happen one more time.

      Thousands of cars that have spent days under water will find their way onto used car lots all over the country, saddling unsuspecting consumers with cars that may look fine on the outside but have been extensively damaged on the inside.

      The National Insurance Crime Bureau (NICB) said it is working with law enforcement agencies, insurance and car rental companies to identity and catalog water-damaged vehicles to keep them from being resold to consumers. 

      Dishonest salvage dealers

      "Unfortunately, natural disasters bring out dishonest salvage dealers who don't tell you that the vehicles they're selling are heavily water-damaged," said NICB President and CEO Joe Wehrle.

      Here is what is supposed to happen: the owner of a flood-damaged vehicles files a claim with his or her insurance company. The insurance company declares the vehicle a total loss.

      Next, the vehicles should go to a junk yard or salvage dealer where they may be sold for parts not affected by the flooding. If they are resold as cars, their title should clearly state that they are “salvage” vehicles, meaning they have been declared a total loss by an insurance company and the price should reflect that.

      But if unscrupulous dealers purchase the vehicles, they don't change the title to reflect their status as “salvage.” Instead, they clean them up and put them on their lots.

      Buyer beware

      "Consumers need to know that these vehicles may appear advertised for sale without any indication that they were affected by the flooding,” Wehrle said. “As always, buyers should be careful when considering a used vehicle purchase in the weeks and months following a disaster like this."

      In the aftermath of Hurricane Katrina 10 years ago this August, NICB established a consumer protection service known as VINCheck. It's a database that allows car buyers to see whether a vehicle has ever been declared as "salvage" or a total loss by an NICB member that participates in the program.

      NICB says about 88% of consumer auto insurers provide information to the system.

      While the database provides a good tool for used car shoppers to identity cars that have spent time underwater, there are some other tell-tale signs a car has been in a flood. For starters, look for the dealer's decal on the back of the vehicle. If the dealer is located in Texas and the vehicle is sitting on a lot in Nebraska, that could be a warning sign.

      What to look for

      Pay close attention to the interior. If there is a musty odor, it could be caused by excessive moisture. Look for water stains or grit in both the interior and engine compartment.

      Look under the floorboard carpet for water residue or stain marks from evaporated water not related to air-conditioning pan leaks. Look for signs of rust on metal fixtures in the interior. Inspect all interior upholstery and door panels for any evidence of fading.

      Finally, a below-market price could be a red flag. If the car has a market value of $5,000 but it's being offered to you for $3,900 you might think it's your lucky day. It isn't.

      It happened after Hurricane Katrina in 2005 and again in 2012 after Hurricane Sandy. Now that much of Texas has been hit by massive flooding, it will proba...

      Healthcare and other industries still in the dark about the extent of Internet security risks

      Should we improve Internet security before putting more secure stuff on the Internet?

      Since last summer, four major medical-themed hackings have been discovered somewhere in America, in addition to the seemingly endless stream of new retail and bureaucratic hackings reported every week or so – and finally, the healthcare industry is growing into the realization that if it's going to store confidential data on hackable networks, maybe it ought to make those networks less hackable, too.

      Last August, a for-profit hospital network called Community Health Systems, which owns and operates 206 hospitals in 29 states, admitted that Chinese hackers had broken into their network and stolen data from more than 4.5 million patients.

      The Chinese were also blamed for the three major health-insurance hackings discovered so far this year. In February, Anthem admitted that hackers had compromised the records of 80 million current and former Anthem customers dating back to 2004.

      In March, Premera Blue Cross admitted to a breach compromising 11 million medical and financial records dating back to 2002. And in May, CareFirst Blue Cross/Blue Shield discovered a breach compromising up to 1.1 million customer records.

      Scary stuff

      It's bad enough that last week, Larry Ponemon of the Ponemon Institute and Rick Kam of ID Experts wrote an op-ed going so far as to suggest that these “escalating cyberattacks threaten U.S. healthcare systems. … Imagine a hostile nation-state with your psychiatric records. Or an organized crime ring with your child’s medical file. Or a disgruntled employee with your medical insurance information.”

      Indeed, if you're an American, there's a 1 in 3 chance your health records have already been hacked – and remember that Anthem, Premera and CareFirst almost certainly are not the only health-insurance providers to have been hacked, merely the only ones to have discovered and admitted this so far.

      From a thieving hacker's perspective, stolen medical records are much more valuable than financial records. Jim Trainor, from the FBI's cyber security division, said this about the black-market value of various types of stolen data bought and sold by identity thieves: “Credit cards can be say five dollars or more, where [protected health information] records can go from 20 say up to — we've even seen $60 or $70.”

      And from a victim's perspective, medical identity theft is probably the worst kind of all. In February, when the Medical Identity Fraud Alliance (MIFA) released its Fifth Annual Study on Medical Identity Theft, the study reached some sobering conclusions:In 2014, there were more than 2 million victims of medical identity theft in the United States, almost half a million more than in 2013.

      What's worse is that, compared to other forms of identity theft, victims of medical identity theft are more likely to suffer personal financial consequences as a result.

      Financial ills

      Victims of credit card or similar forms of financial fraud are not expected to pay out of pocket to resolve the problem – but victims of medical identity theft often have to. MIFA's report said that 65% of medical identity theft victims paid more than $13,000 to fix it, including payments to legal counsel, healthcare or health insurance providers, and identity-protection services. That's in addition to the average of 200 hours of time the typical victim had to spend on the issue.

      And today, Politico published a report explaining how the healthcare industry is finally starting to address such problems: “After spending billions to install computerized documents in hospitals and networks, it now must spend billions more to make them secure.”

      The strange thing is that, despite the near-ubiquitousness of hacking stories in general, plus the growing knowledge that healthcare hacking in particular is especially threatening,

      … many in health care [are] finding it difficult to believe they are targets.

      One of [Chief Security Officer Jim] Nelms’ first efforts at [the] Mayo [Clinic] was to get 20,000 employees to switch to a dual recognition system, which uses frequently changing pass codes. He encountered disbelief at first. “A lot of the response was, ‘We live in a cornfield in the middle of Minnesota,’” he said. “’Who wants to hurt us? Who can even find us here?’”

      (Answer: pretty much anybody with an Internet connection plus enough web savvy to type “Mayo Clinic” into a search engine.)

      Hackable devices

      Medical records aren't the only things being connected to hackable networks; medical devices are, too.

      There’s a growing awareness among hospital officials that the hundreds of devices they use — the crash carts, insulin pumps, heart monitors and other machines integral to daily care — are really computers connected to a network, and entirely hackable, said Anthony Coronado, biomedical engineering manager at Renovo Solutions in California.

      The episode of Showtime’s “Homeland” TV drama in which a terrorist in a basement remotely turns off a senator’s pacemaker has never occurred, but “it’s only a matter of time before it does,” said James Carder of cyber firm LogRhythm.

      Internet of things/thugs

      To be fair, this security blind spot is hardly unique to the healthcare industry. After all, the constant stream of mass hackings hasn't slowed the expansion of the so-called “Internet of things.”

      In January, the Federal Trade Commission issued a Captain Obvious warning reminding people that Internet-enabled thermostats, smoke alarms, home-security systems, baby monitors, cars and other things run the same security risks as anything with an Internet connection.

      The following month, Senator Ed Markey of the Commerce, Science and Transportation Committee released a disturbing study showing that “Nearly 100 percent of [new] vehicles on the market include wireless technologies that could pose vulnerabilities to hacking or privacy intrusions.” In other words: almost every new car is equipped with hackable systems.

      Last October, security researchers discovered a flaw in mandatory smart electricity meters that would enable a hacker to “turn off the lights in a city or neighborhood.”

      Although maybe none of this is surprising, once you remember that the Internet – formerly known as the “information superhighway” – was built specifically to make it easier for computers or computerized devices to share information, whereas computer or online “security” tries to do the exact opposite: keep information secret.

      You can make it easier to share something, or you can make that something harder to steal – but using the same tool to do both at once hasn't been working too well.

      There's a common cliché about belated security measures: “Locking the barn door after the horse is already stolen.” But for the insecure-Internet era, maybe the cliché needs a little updating: “Locking the barn door? Great idea, definitely worth adding to our 'to-do' list, but locking the door now would be really expensive and inconvenient.

      Let's focus on replacing those stolen horses first. And while we're at it, why not keep even more of our valuables in the horse barn? Sure would be a shame to waste all that newly vacant stable space, after all.”

      Since last summer, four major medical-themed hackings have been discovered somewhere in America, in addition to the seemingly endless stream of new retail ...

      Consumers extend auto financing to record lengths

      The average car loan now lasts for 67 months -- 5 1/2 years

      New cars are getting more expensive, but consumers tend not to back away from pricier models and options when they encounter those higher sticker prices.

      Kelley Blue Book recently reported the estimated average transaction price (ATP) for new cars and trucks in April was $33,560, up $836 from a year ago and up $195 from March. That was in large part because consumers bought more expensive vehicles.

      "Prices were up across most of the industry, but we are seeing some of the greatest increases in the truck segments," Alec Gutierrez, senior analyst for Kelley Blue Book, said last month. "Full-size trucks were particularly strong, up 4.5%, while mid-size trucks were up 3.5%. Incentive spending on trucks also has been lighter this year, indicating a great market for these units right now."

      Taking 67 months to pay

      To pay for these more expensive cars and trucks, consumers are extending their payments beyond what has been customary in the past. Experian Automotive reports the average loan term for new and used vehicles rose by one month in the first quarter of 2015, reaching new all-time highs of 67 and 62 months, respectively.

      Traditionally, vehicle buyers have made hefty down payments – as much as 20% of the purchase price – and financed the balance for 4 years, or 48 months.

      But a growing number of buyers find they are unable to stick to that formula when buying a vehicle costing what a small house did just a few decades ago.

      But suppose you wanted to pay $33,000 for a vehicle and pay it off in 4 years, with a 20% down payment. You would need to come up with $6,600 in cash and/or trade in. That leaves a balance of $26,400.

      Financed for 48 months at 3% interest, the monthly payment would be $584.35, stretching the budgets of most consumers living paycheck-to-paycheck.

      To be able to purchase a more expensive vehicle but keep monthly payments lower, consumers are increasingly opting for longer loans. Findings from the Experian Automotive report also showed that longer loans, those with terms lasting 73 to 84 months, made up a record-setting 29.5% of all new vehicles financed.

      Used car loans getting longer too

      That's up 18.6% from the first quarter of last year and is the highest percentage on record. Consumers buying used cars also shattered records when it comes to the length of car loans. Loans stretching 73 to 84 months made up 16% of all used car financing in the first quarter, up from nearly 13% in the same period of 2014.

      Even though vehicle buyers are staying in debt longer, the trend may not be that costly. If auto loan rates were at levels of the early 2000s consumers could pay hundreds, maybe thousands in additional interest over the life of the loan. With the current low rates, the extra interest charge is much less.

      “While longer term loans are growing, they do not necessarily represent an ominous sign for the market,” said Melinda Zabritski, Experian’s senior director of automotive finance. “Most longer-term loans help consumers keep monthly payments manageable, while allowing them to purchase the vehicles they need without having to break the bank.”

      But here's a caveat. Zabritski says if consumers take out extra-long car loans, they need to keep the vehicles longer than just a few years. If they decide to trade in too soon they could owe more than the vehicle is worth.

      Leases are up

      More consumers are dealing with rising vehicle costs by choosing to lease. In the first quarter of 2015 leases rose from 30.22% of all new vehicle financing in the first quarter of 2014 to 31.46% in the first quarter this year.

      At the same time, the average monthly lease payment dropped to $405, down from $412 the previous year. It was also easier to qualify for a lease, as the average new vehicle lessee had a credit score of 718 in the first quarter, down from 721 the previous year.

      Of course, there are several ways to avoid a 6- or 7-year car payment. The most basic is: Don't spend $33,000 or more on a vehicle.

      In the used marketplace a low-mileage 3-year-old model will have a sharply lower sticker price than the comparable new model. Even in the new car market there are plenty of attractive vehicles that cost much less than the current average transaction price.

      Here are some lower-priced options you might want to consider.

      New cars are getting more expensive, but consumers tend not to back away from pricier models and options when they encounter those higher sticker prices....

      Struggling to make ends meet? This may be why

      In many states a nice, 2-bedroom apartment is financially out of reach

      Wages have remained stagnant since the Great Recession and many Americans are finding it almost impossible to stay financially afloat. The cost of housing is a big reason.

      The dream of buying a home is out of reach for many people living paycheck to paycheck. Worse still, a new study suggests even renting a nice apartment is increasingly out of reach.

      In a study of housing markets in all 50 states and the District of Columbia, the National Low Income Housing Coalition ( NLIHC) concludes that to afford the rent for an average 2-bedroom apartment, a renter needs to earn $19.35 an hour. Based on a 40-hour work week, that comes to just over $40,000 a year.

      State-by-state analysis

      Naturally, rent is higher in some markets and lower in others, so the study breaks it down by state. To rent the average 2-bedroom unit in Hawaii requires earning $31.61 an hour. The District of Columbia is the next highest rental market, requiring an hourly wage of $28.04. California is third, with the average 2-bedroom unit requiring a wage of $26.65 an hour.

      At the other extreme, you could get by on $12.95 an hour in Arkansas, $13.14 an hour in Kentucky and $13.21 in West Virginia.

      The study found no state where the average 1-bedroom unit was affordable for someone working full time earning the current minimum wage.

      “The Housing Wage for a two-bedroom unit is more than 2 and a half times the federal minimum wage of $7.25, and $4 more than the estimated average wage of $15.16 earned by renters nationwide,” the authors write.

      NLIHC says the National Housing Trust Fund (NHTF) will provide communities across the country with funds to build, preserve, and rehabilitate rental homes that are affordable for extremely and very low income households.

      Cost of not owning

      For consumers with the means to buy a home but who put it off, the real estate industry warns there is a cost every year a purchase is delayed. Real estate marketing site Realtor.com says expected increases in both home prices and interest rates produce what the company's chief economist Jonathan Smoke calls a “lost opportunity” cost.

      At current rates and prices, Smoke estimates the 30-year benefit of buying now is more than $217,000. Putting off a purchase for a year, he says, costs more than $18,000.

      “Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of the projected increase in mortgage rates and continuing price appreciation,” Smoke said. “The problem is inventory is low, which has many would-be home buyers –especially first timers – standing on the sidelines and missing out on potentially material financial gains.”

      Saving for a down payment can also be a challenge. And as the NLIHC study vividly shows, many people must find a way to afford their apartment before they can think about purchasing a home.

      Wages have remained stagnant since the Great Recession and many Americans are finding it almost impossible to stay financially afloat. The cost of housing ...

      Western diet bad news for prostate cancer patients

      Study finds higher risk of death in those eating red meat, high-fat dairy and refined grains

      By now, just about everybody knows that red meat, high-fat dairy products and refined grains don't add up to the healthiest diet. And now a study finds that the so-called Western diet leads to a sharply higher risk of death among patients with prostate cancer compared to a diet of fish, whole grains, vegetables and fruit.

      The study, by researchers from the Harvard School of Public Health, followed 926 men for an average of 14 years after their cancer diagnosis. It found that men who ate mostly a Western diet had a 67% higher risk of death from all causes than those who ate a healthier diet.

      "There is currently very little evidence to counsel men living with prostate cancer on how they can modify their lifestyle to improve survival. Our results suggest that a heart-healthy diet may benefit these men by specifically reducing their chances of dying of prostate cancer," said Jorge Chavarro, senior author of the study.

      The 926 men were participants in the Physicians' Health Study I and II. The researchers grouped them into quartiles according to whether they followed a Western dietary pattern or a "prudent" (higher consumption of vegetables, fruits, fish, legumes, and whole grains) dietary pattern.

      Study details

      They found that men who ate mostly a Western diet (those in the highest quartile of the Western dietary pattern) had two-and-a-half times higher risk of prostate cancer-related death -- and a 67% increased risk of death from any cause--than those in the lowest quartile. Men who ate mostly a "prudent" diet had a 36% lower risk of death from all causes.

      "These results are encouraging and add to the scant literature on this area, but it is important to keep in mind that all study participants are physicians and most are white. Therefore it is very important that our results are replicated in other studies with more diverse socioeconomic and racial/ethnic backgrounds," said lead author Meng Yang.

      The study, which appears online today in the journal Cancer Prevention Research.

      By now, just about everybody knows that red meat, high-fat dairy products and refined grains don't add up to the healthiest diet. And now a study finds tha...

      Court orders multi-million dollar judgment against foreclosure relief scammers

      The companies deceived consumers and collected illegal advance fees

      The Hoffman Law Group and corporate affiliates have been found liable for $11,730,579 -- the full amount of illegal fees paid by consumers -- and ordered to pay a $10 million civil penalty, in addition to penalties to the State of Florida.

      Five companies were accused of working together and using deceptive marketing practices and scamming distressed homeowners into paying illegal advance fees. Consumers were tricked into paying millions of dollars in illegal upfront fees to join frivolous lawsuits that the companies falsely claimed would pressure banks to modify their loans or provide foreclosure relief.

      “These companies preyed on vulnerable consumers who were trying to save their homes from foreclosure,” said Consumer Financial Protection Bureau (CFPB) Director Richard Cordray. “The false promises made by these companies lured struggling homeowners into scams that led to greater financial hardship. We are working to protect consumers from illegal predatory practices by holding bad actors accountable for their actions.”

      Defendants and charges

      The lawsuit named Hoffman Law Group (formerly Residential Litigation Group), its operators, Michael Harper, Benn Willcox, and attorney Marc Hoffman, and its affiliated companies, Nationwide Management Solutions, Legal Intake Solutions, File Intake Solutions, and BM Marketing Group, all based in North Palm Beach, Fla.

      The Hoffman Law Group was a law firm set up to give the appearance that consumers in financial distress needing to modify their mortgage loans or save their homes from foreclosure would get specialized help from attorneys. The related companies, which were run by Harper and Willcox, existed to market and support the scheme.

      In July 2014, the CFPB and Florida sought and obtained a temporary restraining order and an asset freeze against the companies and Harper, Willcox and Hoffman, and the court ordered a receiver to take charge of all the assets flowing from the alleged scam.

      The lawsuit charged Hoffman Law Group, its affiliated companies, and the individual defendants with violating Regulation O, formerly known as the Mortgage Assistance Relief Services (MARS) rule, and Florida state law. Regulation O prohibits charging advance fees for mortgage loan modification services, making misrepresentations about loan modification services, and it requires that consumers be given certain disclosures.

      A long list of violations

      The defendants were accused of:

      • Collecting fees before obtaining a loan modification: Companies cannot legally accept payment for helping to obtain a mortgage modification for a consumer before the consumer has a modification agreement in place with their lender. The Hoffman companies charged consumers advance fees without having first obtained modifications for them, which was not only illegal but also caused significant harm to consumers who often paid thousands of dollars without ever receiving a modification.
      • Inflating success rates and likelihood of obtaining a modification: The firm’s marketing materials misrepresented the likelihood that they would help consumers save substantial sums in mortgage payments. Ultimately, many consumers who paid these companies advance fees did not receive a mortgage modification and ended up worse off than they began.
      • Duping consumers into thinking they would receive legal representation: The lawsuit alleged that the companies and individual defendants engaged in a particularly egregious scam where they used their status as attorneys to dupe consumers into thinking they would receive legal representation.
      • Discouraging consumers from talking to their lenders and from making mortgage payments: The companies discouraged consumers from communicating directly with their lenders or servicers, claiming that they would handle all such communications. They also discouraged consumers from making mortgage payments to their lenders and servicers (and to make payments to the Hoffman companies instead), ostensibly in order for the consumer to better demonstrate financial hardship. As a result, many consumers were subject to negative credit ratings and/or foreclosure and consumers did not seek other relief from hardship caused by their mortgage, including working directly with their lender to receive a loan modification.

      Judgment terms

      The final judgment entered by the court included:

      • Redress to victims: The receiver, who took over the corporate defendants’ operations and froze assets belonging to the company and related individuals, will pay $655,737 -- the entire amount of the estate as of March 30, 2015, minus administrative expenses and funds required to pursue additional recoveries -- to the CFPB to be used for redress for victims. Although the court found the Hoffman Law Group and its corporate affiliates liable for $11,730,579 -- the full amount of illegal fees paid by approximately 2,000 affected consumers -- it suspended the balance of the judgment beyond the amount in the receivership estate as uncollectable.
      • Auctioning of personal effects: In the stipulated judgments against Harper, Willcox and Hoffman, the court ordered the receiver to auction certain personal belongings of value, including eleven watches, sixteen pieces of jewelry, two handguns, a computer, and a television, the proceeds of which will be paid to the receivership estate.
      • Pay $16 million in civil and state penalties for violating the law: The corporate defendants are required to pay a $10 million civil penalty for the violations of Regulation O and a $6 million state penalty for violation of the Florida Deceptive and Unfair Trade Practices Act, although the receivership estate (to which the companies have relinquished all their funds) does not currently have enough funds to pay those penalties. The individual defendants were also required to pay penalties under the stipulated judgment.
      • Cease all business operations: The companies have been permanently dissolved and can no longer operate or do business of any kind. The individual defendants are permanently banned from, among other things, advertising or selling any mortgage assistance relief product or service or any debt relief product or service. In addition, Hoffman relinquished his license to practice law in the state of Florida.  

      The Hoffman Law Group and corporate affiliates have been found liable for $11,730,579 -- the full amount of illegal fees paid by consumers -- and ordered t...

      Mitsubishi recalls Lancer, Lancer Evolution and Lancer Sportback vehicles

      les The passenger side front air bag inflator could rupture upon deployment

      Mitsubishi Motors North America is recalling 82,784 model year 2004-2006 Lancer vehicles manufactured August 4, 2003, to August 28, 2006; Lancer Evolution vehicles manufactured February 11, 2004, to September 1, 2006; and 2004 Lancer Sportback vehicles, manufactured August 4, 2003, to January 23, 2004.

      The passenger side front air bag may be susceptible to moisture intrusion which, over time, could cause the inflator to rupture. In the event of a crash necessitating deployment of the air bag, the inflator could rupture with metal fragments striking the vehicle occupants potentially resulting in serious injury or death.

      Mitsubishi will notify owners, and dealers will replace the front passenger air bag inflator, free of charge. The recall is expected to begin June 17, 2015. Owners may contact Mitsubishi customer service at 1-888-648-7820. Mitsubishi's number for this recall is SR-14-012. It supersedes a recall issued in December 2014.

      Mitsubishi Motors North America is recalling 82,784 model year 2004-2006 Lancer vehicles manufactured August 4, 2003, to August 28, 2006; Lancer Evolution ...

      Ford recalls Ranger trucks

      The passenger side front air bag inflator could rupture upon deployment

      Ford Motor Company is recalling 361,523 model year 2004-2006 Ranger trucks manufactured March 24, 2003, to May 4, 2006.

      The passenger side front air bag that may be susceptible to moisture intrusion which, over time, could cause the inflator to rupture. In the event of a crash necessitating deployment of the air bag, the inflator could rupture with metal fragments striking the vehicle occupants potentially resulting in serious injury or death.

      Ford will notify owners, and dealers will replace the front passenger air bag inflator, free of charge. The recall is expected to begin July 13, 2015.

      Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 15S22.  

      Ford Motor Company is recalling 361,523 model year 2004-2006 Ranger trucks manufactured March 24, 2003, to May 4, 2006. The passenger side front air bag ...

      Impreza and Saab 9-2x vehicles recalled

      The passenger side front air bag inflator could rupture upon deployment

      Subaru of America is recalling 81,100 model year 2004-2005 Impreza vehicles manufactured January 28, 2003, to May 31, 2005, and 2005 Saab 9-2x vehicles manufactured February 11, 2004, to March 17, 2005.

      The passenger side front air bag may be susceptible to moisture intrusion which, over time, could cause the inflator to rupture upon its deployment. In the event of a crash necessitating deployment of the air bag, the inflator could rupture with metal fragments striking the vehicle occupants potentially resulting in serious injury or death.

      Subaru will notify their owners and General Motors will notify Saab owners. Dealers will replace the passenger air bag inflator, free of charge. The recall is expected to begin July 27, 2015.

      Owners may contact Subaru customer service at 1-800-782-2783. Owners of Saab vehicles may call 1-800-955-9007. Subaru's number for this recall is WQR-53.

      Subaru of America is recalling 81,100 model year 2004-2005 Impreza vehicles manufactured January 28, 2003, to May 31, 2005, and 2005 Saab 9-2x vehicles man...

      GM recalls Chevy Silverados and GMC Sierras

      The passenger side front air bag flator could rupture upon deployment

      General Motors is recalling 330,198 model year 2007-2008 Chevrolet Silverado 2500HD and 3500HD trucks manufactured November 28, 2006, to August 29, 2008, and 2007-2008 GMC Sierra 2500HD and 3500HD trucks manufactured November 27, 2006, to August 29, 2008.

      The passenger side front air bag that may be susceptible to moisture intrusion which, over time, could cause the inflator to rupture upon its deployment. In the event of a crash necessitating deployment of the air bag, the inflator could rupture with metal fragments striking the vehicle occupants, potentially resulting in serious injury or death.

      GM will notify owners, and dealers will replace the front passenger air bag inflator, free of charge. The manufacturer has not yet provided a notification schedule.

      Owners may contact Chevrolet customer service at 1-800-222-1020 or GMC customer service at 1-800-462-8782. GM's number for this recall is 15438.

      General Motors is recalling 330,198 model year 2007-2008 Chevrolet Silverado 2500HD and 3500HD trucks manufactured November 28, 2006, to August 29, 2008, a...

      Paleteria La Jalpita recalls ice cream bars and popsicles

      The products may contain milk and sulfite, allergens not listed on the label

      Paleteria La Jalpita of Pasco, Wash., is recalling ice cream bars and popsicles.

      The products may contain milk and sulfite, allergens not listed on the label.

      No illnesses have been reported to date.

      The following products are being recalled:

      PRODUCTSUNDECLAREDNet Weight
      Coco (Coconut) PopsicleSulfite3 Fl oz.
      Walnut (Nuez) BolisMilk3.5 Fl oz.

      Coconut popsicles were distributed through the state of Oregon and Washington through retail and direct delivery, and the Walnut Bolis were sold only through the retail store located at 202 W. Lewis Street, Pasco Wash.

      These products, sold between March 2015 and May 2015, come in a sealed clear plastic bag or bolis (tube) and stored in a freezer. There are no codes on labels.

      Customers who purchased the recalled products should not to consume products if they have an allergy or severe sensitivity to milk or sulfite and and return them to the place of purchase for a full refund.

      Consumers with questions may contact the company at 1 (509) 545-9551 from 9am-8pm, PT, any day of the week.

      Paleteria La Jalpita of Pasco, Wash., is recalling ice cream bars and popsicles. The products may contain milk and sulfite, allergens not listed on the la...