How to File an Offer in Compromise for Your Tax Bill

If you owe the IRS more in taxes than you can comfortably pay, then you may be able to negotiate an offer in compromise. An offer in compromise is pretty much what it sounds like: a compromise on your existing tax bill, meaning you agree to pay part of what you owe, and the IRS agrees to forgive the rest.

Offer in compromise requirements
Before you can start the offer in compromise process, you’ll need to meet certain requirements. First, you must have filed all required tax returns. Second, you must have received at least one bill from the IRS for your existing tax debt. And third, you must have made all estimated tax payments for the year and (if you’re a business owner) made all your payroll deposits as well.

You also need acceptable grounds for making the offer. The IRS will accept one of three official grounds: doubt as to collectibility, effective tax administration, and doubt as to liability. The most frequently used of the three reasons, doubt as to collectibility means that the IRS isn’t sure it will ever be able to collect the full amount of your tax bill. Effective tax administration is a fancy way of saying that you have some special circumstance that would make paying your tax bill in full an economic hardship for you, even if you technically have enough assets and/or income to cover the debt. Finally, doubt as to liability means that you can prove you shouldn’t owe the taxes at all. This last option is so rarely successful that it’s usually not even worth trying.

Filling out the paperwork
Getting started with an offer in compromise means filling out a whole lot of paperwork. First, there’s Form 656, the main Offer in Compromise form. It asks for basic information about you and your debt, asks you to select one of the official grounds, and allows you to make a payment offer in the form of either a single lump sum or a periodic payment plan running anywhere from six to 24 months.

Next, you get to fill out Form 433-A (or Form 433-B, if you’re requesting an offer in compromise on business taxes). This form requires you to disclose your assets, income and expenses in excruciating detail. Tedious as this form is, you have to fill it out as completely and accurately as possible, as this is the information the IRS will use when deciding whether or not to approve your offer.
If you would rather not take on this process alone call Galler Law 770.671-8830.

How to Stop the IRS from Contacting You

Are you receiving notices from the IRS?

Do you owe federal or state taxes to the IRS?

Do you have tax returns that haven’t been filed?

Once the IRS zeroes in on you, you’re usually in store for a bumpy ride. Letters from the IRS are hard to understand and menacing. Fortunately, there are ways you can minimize and oftentimes eliminate the stress associated with resolving your tax situation.

Did you know that IRS cannot legally contact you once you hire a representative?

Instead of going to battle with the IRS yourself, use Fee Auction to enlist the help of a qualified IRS representative. Let an experienced tax professional do all the heavy lifting as they review the correspondence, diagnose the issues, and map out a resolution strategy.

When you’re represented by an Enrolled Agent, CPA or Tax Attorney, they walk you through every step of the process, explaining the situation, verifying information presented by the IRS, and preparing responses and requests for reductions, penalty abatement, or Offer-in-Compromises. You can rest assured that:

Your taxpayer rights are protected;
They will make certain the IRS follows all procedures and acts within their guidelines;
They will represent you to ensure compliance and reduce your possible exposure before federal & state tax agencies.
Whether your IRS problems require assistance with an audit or help negotiating your tax debt, they can get you back on track.

Do You Need a Student Loan Ombudsman?

Do You Need a Student Loan Ombudsman?

As outstanding student loan debt stays above the trillion-dollar mark, many fresh graduates are faced with the seemingly insurmountable task of paying down their loans in a weak labor and economic environment.

For many new grads, the student loan payments have started rolling in, but a steady and adequate paycheck might be more elusive, making it hard to make payments. To help sort through their budget and work with lenders, some young adults have started working with student loan ombudsman.

An ombudsman serves as a neutral party to review discrepancies and disputes to work with borrowers and loan holders or servicers (lenders, guarantors, collection agencies, the Department of Education to fix any mistakes and potentially reach a compromise.

“They help the borrower understand his or her specific issue and provide options for the borrower, both immediate and longer term, so future problems can be avoided,” says Karen McCarthy, spokesperson for the National Association of Student Financial Aid Administrators .

While an ombudsman can be a great resource for grads seeking additional guidance, experts stress it should be an avenue of last resort only after the borrower has taken extensive steps to resolve the issue(s) on their own with the loan servicer.

“The loan servicers want to help the borrowers resolve the issues [and] is the entity with which they’re going to have that long time relationship with while they’re repaying that loan, so it’s really important for them to try to work through it with the loan servicer,” says Joyce DeMoss, Federal Student Aid Ombudsman .

Do You Need Help?

If borrowers have reached an impasse with loan servicers, the Federal Student Aid Ombudsman Group will listen to their issue and help them figure out a solution that’s tailored to their situation, according to DeMoss.

“Maybe they feel that the servicer [is not] developing a personalized enough solution for them or they’re just not explaining things in a way that is helpful to the student,” she says.

It’s essential to understand that an ombudsman is completely impartial when it comes to resolving issues on behalf of the borrower, says Dave Macoubrie, vice president of Repayment Solutions for Inceptia, a division of National Student Loan Program (NSLP)

“The ombudsman does not always automatically take the student’s side in complaint; their role as an independent third party is to investigate complaints, not take a side or render a decision,” he says. “They work to ensure both parties understand the facts in an effort to find agreement.”

While students and recent grads with federal student loan disputes can contact the U.S. Department of Education FSA Ombudsman Group, The Consumer Financial Protection Bureau Opens a New Window. has a complaint process for private student loans. Although the services of an ombudsman are free, students and grads may incur costs for providing copies of documentation, says Macoubrie.

What to Expect From an Ombudsman

The ombudsman’s office can help resolve discrepancies and disputes regarding loan payments, tax offsets, consolidation, default status, interest and collection charges, and other related loan repayment issues, explains McCarthy.

“They can also help borrowers who don’t necessarily have disputes, but need help understanding loan repayment issues,” she says.

According to Federal Student Aid , an ombudsman will not make binding decisions or overturn the decisions of other entities, accept complaints about grants or private student loans, accept complaints when the Education Department has already begun formal or legal investigations, accept loan payments or process deferment, forbearance, or discharge requests (loan servicers or collection agencies must be contacted directly), testify or serve as a witness.

“We’ve got to work within the current law, within the regulations,” says DeMoss. “If you’re looking to have a loan written off or forgiven for something that is not explicitly stated in the law or statute, we’re not going to be able to get that for you.”

How to be Prepared for Help

Before meeting with an ombudsman, grads should ready questions about the process, gather supporting documents (previous contact with servicer, documentation of loan balance and create a detailed payment history to save time and effort, says Macoubrie.

“Be patient and don’t assume they know everything about your situation,” he says. “If the representative is unable to provide a response to your questions, calmly state your issue again and request the information or resolution you are seeking.”

Borrowers should have prepared answers to a series of questions: What are their expectations? What is preventing them from resolving the issue? Is the borrower willing to complete the necessary actions to achieve the desired outcome?

“If you speak with a representative on the phone, keep track of whom you spoke with, the date and time of the call, and what was said,” says Macoubrie. “If you choose to communicate in writing, keep a copy of your letter or e-mail and any replies you receive.”

DeMoss recommends borrowers use the FSA’s Ombudsman Information checklist Checklist

as a guide to prepare their questions about resolving their federal student loan issues.

“We’re confidential so we can help people think through some really tough situations and they can ask all kinds of questions and express some things to us that they might not feel comfortable expressing directly to their loan holder or loan servicer,” she says. “The [desired] outcome is resolving the issue and seeing it brought to closure.”

Understanding Bankruptcy

Understanding Bankruptcy

Bankruptcy is a set of federal laws and rules that can help individuals and businesses who owe more debt than they can pay. Federal courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in a state court.

Bankruptcy laws help people who can no longer pay their creditors get a fresh start by liquidating their assets to pay their debts, or by creating a repayment plan. Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation. These procedures are covered under Title 11 of the United States Code (the Bankruptcy Code). The vast majority of cases are filed under the three main chapters of the Bankruptcy Code, which are Chapter 7, Chapter 11, and Chapter 13.

The primary purposes of the law of bankruptcy are

• to give an honest debtor a “fresh start” in life by relieving the debtor of most debts, and
• to repay creditors in an orderly manner to the extent that the debtor has property available for payment.

US student debt tops $1.31 trillion: Does Betsy DeVos have a plan?

US student debt tops $1.31 trillion: Does Betsy DeVos have a plan?
The growth of student loans drove or a substantial increase in household debt last year, say experts.

FEBRUARY 18, 2017 —Student loans were the leading cause for a substantial increase in household debt last year, the Federal Reserve Bank of New York said Thursday.

While the high balance of US student debt is not news anymore, the new record-high $1.31 trillion balance, up 2.4 percent in the fourth quarter, is another reminder of the severity of a problem that has cast a shadow over the nation in recent years.

During her confirmation hearing, now-Secretary of Education Betsy DeVos suggested a vision for higher education that might not require as much student debt.

“We need to embrace new pathways of learning,” said Ms. DeVos, who has championed trade schools and for-profit online universities. “For too long, a college degree has been pushed as the only avenue for a better life. The old and expensive brick-mortar-and-ivy model is not the only one that will lead to a prosperous future.”

Loans taken out by undergraduate and graduate students are a key driver of household debt, explained Wilbert van der Klaauw, senior vice president at the New York Fed, in a statement. “Debt held by Americans is approaching its previous peak, yet its composition today is vastly different as the growth in balances has been driven by non-housing debt,” he said.

Student loans: 10 states with the lowest college debt
“Since reaching a trough in mid-2013, the rebound in household debt has been led by student debt and auto debt, with only sluggish growth in mortgage debt,” he said.

Contributing $31 billion of the $226 billion increase in total household debt, student debt balances have rise every year for the past 18 years, the report shows. While the total household loan balances have dropped 1 percent since year-end 2008, student loan and auto debt are the only two categories of consumer debt tracked by the New York Fed that have steadily increased during the same period.

But the $1.31 trillion figure is lower than the one reported by the Federal Reserve Board in Washington, which pegs total student debt $100 million higher, at $1.41 trillion.

Regulators blame the discrepancy on the New York Fed’s sampling of household credit reports, which are often filled with errors.

Five high-paying jobs for high school graduates
The news of the record-high student loan balance comes two weeks after DeVos was confirmed as the new secretary of Education, the department that is the largest provider of student loans. While she said she recognized the severity of the issue, as someone who has no personal experience with college financial aid – neither she nor her children had ever borrowed money for school – her nomination had come under much scrutiny.

“The issue of student debt and the amount of student debt – over $1.3 trillion right now up, almost 1000 percent in the last eight years – that’s a very serious issue,” DeVos said at her confirmation hearing, mistakenly referencing the growth of college costs over 30 years.

With her support for the for-profit industry and upholding vocational education as “a noble pursuit,” DeVos also signaled an unwillingness to commit to enforce the “gainful employment” rule championed by the Obama administration. This controversial standard, which seeks to punish schools that leave students with high levels of debt but weak job prospects, was seen as targeting for-profit colleges.

During her hearing, she was asked about tuition-free colleges, which formed a major part of Sen. Bernie Sanders’s campaign platform.

“Senator, I think that is a really interesting idea and it’s really great to consider and think about,” she said. “But we also have to consider the fact that there is nothing in life that’s truly free. Somebody has got to pay for it.”

Mortgage Servicing Industry Seeks To Standardize The Loan Modification Process

Mortgage Servicing Industry Seeks To Standardize The Loan Modification Process
Written by Patrick Barnard
on February 18, 2017 No Comments
Categories : Featured, Mortgage Servicing
Can Quicken Loans do for mortgage modifications what it did on the front end for originations via Rocket Mortgage?

During a lively panel session presented during the Mortgage Bankers Association’s (MBA) annual National Mortgage Servicing Conference & Expo 2017 in Dallas, Michael S. Malloy, vice president of servicing for Quicken Loans, told a packed room that he has directed his team to figure out a way to get the loan modification approval process down to just minutes.

“The vision I have – and what I’ve asked my team to figure out – is how can we take a [borrower] and use the integration of data and information from third-party sources – to plug into a model that would meet the needs of any investor – and give that [borrower] a decision on a modification or other solution, while they’re on the phone with our team member, that would be safe and sustainable for the investor and would meet [agency] requirements,” Malloy told the crowd. “It’s possible. We do it on the front end with Rocket Mortgage. And we can do it together, as an industry, on the back end.”

The session, dubbed “The Future Of Loss Mitigation,” essentially covered the recent evolution of loss mitigation, from the inception of the Home Affordable Modification Program (HAMP) in 2009, through its sunsetting on Dec. 31, 2016, to the development of Fannie Mae and Freddie Mac’s Flex Modification program, a HAMP replacement, and the recent efforts of the MBA and industry stakeholders to develop the One Mod program, which aims to standardize the loan modification framework industry-wide.

Moderated by Pete Mills, senior vice president, residential policy and member engagement, for the MBA, the session also included panelists Ivery W. Himes, director of the Office for Single Family Asset Management in the U.S. Department of Housing and Urban Development; Erik Schmitt, managing director for JPMorgan Chase; and Prasant K. Sar, supervisory policy analyst, servicing policy and asset management for the Federal Housing Finance Agency.

All of the panelists agreed that standardizing the mortgage modification process is the key to holding down costs while at the same time eliminating risk from the process, and thus is the future of default servicing. They were also in agreement that the key to standardizing the modification process – just as with originations – is to utilize technology and, in particular, automation, including automated employment, income and asset verification as well as automated underwriting. Using a mix of technologies and database integration, it will be possible to not only standardize the loan modification process, but make it much simpler for borrowers, as well.

When asked what lessons the mortgage servicing industry learned from HAMP, Malloy characterized the program as one of the first efforts to try to standardize the modification process.

“When we went through the crisis, it was the Wild West,” Malloy said. “Some [servicers] did loan mods – some didn’t – because the underlying securities prevented them. So, there were all kinds of ideas and thoughts [about how to do loan mods]. So, when the Treasury got the industry together and came up with [HAMP], it was a way to … all work together and arrive at what a loan modification should look like … to say, ‘Here’s how it can be appropriately done, as a matter of securities law.’ Sure, there were a lot of bumps along the way – if I say ‘supplemental directives,’ every servicer in the room gets a shiver up and down their spine, right? But it standardized the industry and created a template – and, built on top of it were a lot of proprietary programs. So, it did move the industry forward, in a time of uncertainty.”

Malloy said the main lesson learned from HAMP is “that simplicity is genius.”

“We learned that asking a borrower for 14 documents when they’re already in trouble is only going to make things harder,” he said. “We learned that when a modification only delivers a slight reduction in payment that it’s not going to resonate the borrower and it’s going to be a challenge.”

He further added that a borrower “must feel like a loan mod is a lifeline and not just them being asked for a stack of paper.”

Himes said the main lesson servicers learned from HAMP is that they “must provide quality communications to borrowers once they are in default” and also that “early intervention is really important.”

“You have to connect with the borrower and get them to trust you, so that they are willing fill out that application, tell you about their situation and, more than anything, that they will call you back,” Himes told the group.

Servicers also learned that they “must be able to understand the other things that are going on in a borrowers life – that they could be worried about other things beyond losing their home,” she said.

Himes emphasized that simplicity in the application package is critically important.

“We must have a simple application package – something that he borrower can really understand,” she said. “We need standard terms – and a new form application.”

Another lesson learned from HAMP, she said, “is the significance of working with our housing counseling partners, because a lot of time [the borrower] does not trust us [their servicer] – but they might trust someone who they feel is on the outside of the industry – someone who can help the borrower understand the terminology, the options and what we need from them to help them calculate a sustainable payment.”

Sar, speaking from the investors perspective, said “one of the big takeaways from the crisis is that government can be impactful.” He said the development of HAMP over time resulted in standardization of the loan mod process and, as a result, “servicers are now much more uniform in how they solicit borrowers.”

The main downside of the program, from an investors perspective, he said, was that it further complicated the loss mitigation landscape, because it meant that two types of HAMP loans were in play, in addition to all the proprietary loan mods.

“With the HAMP standard and streamlined [programs], there were multiple loss mitigation products – and that made for a more complex compliance review,” Prasat said. “To conduct a compliance review was really challenging for servicers, really changing for the government and really changing for Fannie and Freddie.

“And that lesson is what has led us [to where we are now], which is trying to develop a more simplified product,” he said. “We believe that all stakeholders have their individual interests – but we all have the same goal: For servicers, investors, borrowers and the government, it is all about sustainability; getting borrowers into the right solution.”

Another lesson learned from HAMP, the panelists said, was that borrower debt-to income (DTI) is not as important of factor in bringing loans back to re-performing status. Rather, the percentage by which a borrower’s monthly payment is reduced is more important. Thus, using DTI as a determinant for eligibility is flawed, as it leads to borrowers getting approved for mods that simply do not reduce their monthly payment enough.

This was underscored when Malloy said Quicken Loans in January had implemented Fannie Mae and Freddie Mac’s Flexible Modification program, a HAMP replacement that does not rely on DTI for underwriting and which aims to reduce borrowers’ monthly payments by an average of 20%. He said so far his company has processed hundreds of Flex Mods and that, of those, “we’ve had an 80% approval rate and an average payment reduction of 23%.”

Schmitt added that recent research shows that DTI “does not make a material difference” in whether a loan becomes re-performing, rather, “What makes a difference in performance is the amount of the reduction.”

Meanwhile, the MBA continues to refine its One Mod program, which, as explained in a recent white paper, is based on four key tenets: “Accessibility, affordability, sustainability and transparency.”

“Accessibility: Make it easier for borrowers to get into the door – simplify the doc set,” Malloy said. “Affordability: Aim for payment reduction. Solve for DTI, yes, but know that performance is directly related to the amount of payment reduction. If you do that, then you’ll have a lot fewer documents than [if you are] calculating DTI.

“Sustainability: If you can reduce payment and get more people in the door, you can shoot for a lower default rate. You need a product that can flex up and down,” he continued. “And Transparency: Client service – being able to explain to folks on the phone, ‘If you can give me these two or three things, I can help you.’”

“That transparency – and the ability to market – is critical,” he said.

Student loan forgiveness can come with a tax bomb

Student loan forgiveness may be a sweet deal for borrowers, who have collectively accumulated more than $1.3 trillion in debt. The downside: a potentially big tax bill down the road.

The federal government currently offers two types of loan forgiveness for student debt: public service loan forgiveness and loan forgiveness provided by income-based repayment plans, the latter of which requires two decades or more of loan repayment.

The public service route is tax-free while debt canceled by income-based repayment plans is taxed. That potential tax liability could be crippling to lower-income borrowers.

“It replaces student loan debt with tax debt,” said Mark Kantrowitz, publisher of Cappex, a website that connects students with colleges and scholarships.

Tax trouble on the horizon

As currently structured, July 2019 is the earliest any borrower may receive loan forgiveness under an income-based repayment plan and a tax bill from the IRS.

However, unexpected tax bills have already arisen for people who have had their student debt discharged after death or because they are permanently disabled.

In April, a bipartisan group of U.S. senators introduced a bill to eliminate the tax penalty levied on student loans forgiven for death or permanent disability.

“Families grieving the loss or permanent disability of a child did nothing wrong, and they should not be punished by the federal government with a massive tax bill,” Republican Sen. Rob Portman of Ohio said in a statement when he co-sponsored the bill.

“The same tragic reason they cannot pay back their student loans is the reason that they cannot afford an enormous tax increase so contrary to the purposes of our student loan system.”

The taxman doesn’t care if your school closes either. If the 35,000 students enrolled in the recently shuttered ITT Tech schools successfully applied for loan discharges, they may still owe taxes on the amounts canceled.
The number of people affected by tax liabilities from income-based repayment plans will dwarf taxes owed for loan discharges from death, permanent disability and school closures.
The percentage of federal student loan borrowers enrolled in income-based repayment plans has quadrupled over the past four years from 5 percent in 2012 to nearly 20 percent in 2016. Though most borrowers in income-based repayment plans will pay off their debts, low-income workers likely will barely manage to cover the interest on their student loans as their balances grow.

Upon receiving student loan forgiveness, low-income borrowers will owe the IRS up to 25 percent of whatever amount is forgiven plus additional state taxes. Alexander Holt, an education policy analyst at New America, a nonpartisan think tank, used this example:

Take a person who started with $20,000 in debt and had a $20,000 salary in her first year out of college with a 2 percent raise every year. She would have about $44,000 ($30,000 in today’s dollars) forgiven after 20 years. Having never paid more than $10 dollars a month, she would owe the IRS at least $4,000 in today’s dollars in additional taxes that year, which would quadruple her income-tax payment (not including extra state taxes she may owe as well). Overall, that year her federal tax payment would be around 30 percent of her actual, near-poverty-level income.
“A plan that promises borrowers they never will owe a burdensome payment but eventually creates an impossibly large payment out of ‘forgiveness’ is deceptive and has the potential to stop low-income borrowers from enrolling in the program out of fear of the tax,” Holt wrote in his January analysis of student loan forgiveness.

He estimated that the cost of tax-free loan forgiveness for borrowers in income-based repayment plans would be less than $20 million. That sum is tiny compared with the $11 billion the Department of Education spends on income-based repayment plans each year.

The long road

Eligibility for loan forgiveness hinges on the borrower’s ability to make on-time payments. And loan forgiveness programs do not apply to private student loans, which make up about 7.5 percent of the educational lending market.

No borrower will be eligible for the federal public service loan forgiveness until October 2017. The program cancels the remaining balance on your federal student loans after you have made 120 monthly payments while working full time for an approved employer.

In 2012, the Department of Education introduced a voluntary employment certification form to help borrowers track their progress toward meeting the requirements for public service loan forgiveness. Nearly 432,000 people have submitted forms that the department has approved for public service loan forgiveness eligibility.

“One of the biggest questions I’m asked is ‘Am I eligible for public service loan forgiveness?'” said Andy Josuweit, co-founder and CEO of Student Loan Hero, a website that provides free tools to help borrowers manage their debts. In August, the site launched a free calculator to help users determine the benefits of public service loan forgiveness.

If you work in public service, check to see if your state offers a forgiveness program. Often these programs are designed for teachers, social workers, health-care providers and lawyers who work for government agencies or nonprofits. The tax liability of the loan forgiveness depends on the state program.
For those who do not work in public service, loan forgiveness through an income-based repayment plan is an option. Among the four different repayment plans the Department of Education provides, you will need to make 20 years or 25 years of steady payments to be eligible.

Gradible offers a free online student loan evaluation to determine if a repayment plan is right for you.

Borrowers who make it through the gantlet of their repayment plans and still owe on their debts will have their federal student loans forgiven. To satisfy the tax bill, borrowers will have to pay it off in full or enter into a monthly payment plan with the IRS. To start a monthly plan, you will need to fill out Form 9465, Installment Agreement Request.

“The key to such an agreement with the IRS is that you must keep to the terms of the agreement,” said Grafton Willey, a CPA and managing director at accounting and professional services firm CBIZ MHM. “If you default on the agreement, the IRS is not too forgiving.”

New rules to ensure mortgage lenders, servicers treat borrowers fairly

New rules to ensure mortgage lenders, servicers treat borrowers fairly

POSTED: September 12, 2016
It came as quite a shock to many distressed homeowners that the U.S. Treasury’s Home Affordable Modification Program and Home Affordable Refinance Program would end Dec. 31.

You still have until then to get out from the “under” that the bursting of the housing bubble put you in.

Although the programs were extended past their original expiration dates because the nationwide foreclosure crisis was deeper and lasted longer than anyone had imagined, this is it.

For me, this means my lender will not mention HARP when it sends me the 8,000th offer to refinance my mortgage without an appraisal. I didn’t qualify anyway, and the lender wasted postage and UPS delivery charges.

There is a difference of opinion on how well the two programs worked, and continuing concerns about the high percentage of defaults among these modified loans.

One constant, however, has been complaints about the treatment of distressed borrowers by lenders and servicers, something that the Consumer Finance Protection Bureau is hoping to address with new measures “to ensure that homeowners and struggling borrowers are treated fairly by mortgage servicers.”

I touched on these briefly in an Aug. 4 article, but I thought it was important to expand on some of the CFPB’s changes, which take effect in 12 months.

Under existing rules, a servicer must give borrowers foreclosure protections – including the right to be evaluated under the bureau’s requirements for options to avert foreclosure – only once during the life of the loan.

The new rule will require servicers to give those protections again to a borrower who has brought a loan current at any time since submitting the previous complete loss-mitigation application.

This change will be particularly helpful for borrowers who obtain a permanent loan modification and later suffer an unrelated hardship – such as the loss of a job or the death of a family member – that could otherwise cause them to face foreclosure.

If a borrower dies, current rules require that servicers promptly identify and communicate with family members, heirs, or other parties, known as “successors in interest,” who have a legal interest in the home.

The new rule establishes a broad definition of “successor in interest” that generally includes people who receive property upon the death of a relative or joint tenant, or as a result of a divorce or legal separation, through certain trusts, or from a spouse or parent.

This ensures that those confirmed as successors in interest will generally receive the same protections under the mortgage-servicing rules as the original borrower.

Servicers are now prevented from taking certain actions in foreclosure once they receive a complete loss-mitigation application from a borrower more than 37 days before a scheduled sale.

In some cases, borrowers are not receiving this protection.

The new rule clarifies that, if a servicer has already made the first foreclosure notice or filing and receives a timely complete application, servicers and their foreclosure counsel must not move for a foreclosure judgment or order of sale, or conduct a foreclosure sale, even if a third party conducts the sale proceedings, unless the borrower’s loss-mitigation application is properly denied or withdrawn or the borrower fails to perform on a loss-mitigation agreement.

These clarifications will aid servicers in complying with, and assist courts in applying, the dual-tracking prohibitions in foreclosure proceedings to prevent wrongful foreclosures, the CFPB said.

For-Profit Colleges Account for a Third of All Federal Student Loan Defaults

For-Profit Colleges Account for a Third of All Federal Student Loan Defaults

Even though they account for just 26% of all federal loans.
Over one-third of federal student loan defaults can be attributed to students at for-profit schools.

Students at for-profit colleges accounted for 35% of defaults during the three year period starting in 2013—down from 44% two years earlier, according to new data from the Department of Education, released Wednesday. Though it should be noted that students at for-profit colleges account for just 26% of all borrowers.

The report measured the number of students or former students who had failed to make a payment for 360 consecutive days since the loan was first issued during the fiscal year ending September 2013.

That comes at a time the DoE has been increasingly cracking down on for-profit colleges such as ITT Technical Institute, DeVry, Corinthian Colleges, and Brown Mackie College. Critics have accused for-profit institutions of deceiving consumers and pushing low-income students into costly loans.

In early September, the ITT Educational Services said it would shut its doors after the DoE said that students at the college were no longer eligible for federal funding. It was a death blow, as federal student loans accounted for 68% of the company’s revenue in 2015. Corinthian Colleges was also forced to close last year, while Brown Mackie College whittled itself down from 28 locations to just four.

Adam Looney from the U.S. Treasury and Constantine Yannelis of Stanford University attribute the higher rate of student loan defaults among for-profit colleges to the poor job prospects and low earnings facing graduates in a 2015 Brookings Institute report.

“For most borrowers (and the majority of the student loan portfolio) the education investments financed with their loans are associated with favorable economic outcomes, and borrowers are able to repay their debt even during recessionary periods,” the authors wrote. “These non-traditional borrowers were drawn from lower income families, attended institutions with relatively weak educational outcomes, and experienced poor labor market outcomes after leaving school. ”

While 15% of for-profit student borrowers on a federal loan have defaulted since 2013, 7% of students at private schools and 11.3% of borrowers at public universities defaulted in the same period.

Overall, the three-year federal student loan default rate fell from 11.8% to 11.3%, the DoE reported. Though the number of borrowers has also increased from 5.1 million to 5.2 million. And that, combined with the $1.4 trillion worth of student debt in the U.S., has weighed on the minds of voters.

Both Democratic presidential nominee Hillary Clinton, and Republican presidential nominee Donald Trump have weighed in on the issue of student loans. While Clinton has recommended lowering the price of tuition, Trump’s platform is less clear.

“We’re going to restructure it, we’re going to make it possible for people to borrow money, go through college, get through it, we’re going to make it affordable,” Trump said in a Twitter video session. The businessman though, is currently in hot water for his own for-profit education company (not a for-profit college, nor were its students eligible for federal student aid), Trump University.
ITT Campus in Chantilly, Virginia
For call with Student loan problems, contact Galler Law , LLC

What Does My IRS Collection Notice Mean?

You may need help with the IRS if you received an IRS collection notice. If you owe back tax debt to the IRS, you will receive letters with “number codes” on the upper right hand side of the letter.

Those “number codes are very important as each IRS collection code signifies a certain step in the IRS collection cycle of your back tax debt.

Each IRS collection notice is a warning to you as to the next step that the Internal Revenue Service is going to take with respect to the collection of your back taxes. Here are some of the codes and what they mean:

531 T Notice of Deficiency

You will likely receive this IRS collection notice after an IRS audit is finished. You have 90 days to go to Tax Court or you can hire a tax attorney to negotiate a possible tax settlement with the Internal Revenue Service.

​4549 Income Tax Examination Changes

If after your tax audit, you owe back tax debt to the IRS, form 4549 will show what deductions or other items the IRS did not allow on your income tax return.

The IRS will also include what penalties and interest you owe based upon the changes. At this point, either you or your tax lawyer has 30 days to respond to the income tax examination changes.

​3254 Examination Appointment

Unfortunately, you are being audited by the IRS. Audits are often caused by certain deductions that are “red flagged” by the IRS.

​688-D Release of Levy/Release of Property from Levy

Many of our clients call us when there is a bank levy or IRS wage garnishment in place. At this point, we have to take action quickly to enter into a tax settlement with the IRS so that we can get the IRS levy released.

​CP 14 Notice of Unpaid Taxes

A CP14 Notice of Unpaid Taxes lets you know how much in income taxes you owe and for how long you have owed the taxes.

At this point, it would be a good idea to a seek the advice of tax attorney to explore your tax resolution options if you cannot pay the back tax debt in full.

​CP 504 Notice of Intent to Levy

This IRS collection notice often gets the attention of many people who may have ignored the prior notices. The IRS is getting more serious about getting your attention and they are very close to issuing a bank levy or wage garnishment.

​1058 Final Notice of Intent to Levy

At this point, all prior IRS notices have been ignored. If you haven’t responded by now, you will have your wages garnished or your bank account levied within 45 days from receipt of this notice.

​IRS Collection Notice Help

If you need help with an IRS collection notice contact Galler Law.