Thursday, June 30, 2011

Rates on 30-year mortgages edging up

With the yield on the benchmark 10-year Treasury bond rising nearly a third of a percentage point by Thursday from last Friday, mortgage rates, which have averaged 4.5% for the last four weeks, are following slowly, officials say. After hovering for four weeks at 4.5%, the 30-year fixed-rate home loan appears to be heading higher.

Read the rest of the article at the Los Angeles Times

Regulator Orders More Banks To Examine Foreclosure Practices

U.S. banks that have not already started reviews of how they handle foreclosures must now do so and compensate any homeowners who have been harmed, a federal regulator said Thursday.

The order by the Office of the Comptroller of the Currency, which regulates national banks, applies to institutions outside the 14 major banks and thrifts that regulators have ordered to overhaul their foreclosure practices. The bank regulator, along with the Federal Reserve and Office of Thrift Supervision, found in April that the banks filed foreclosures with improper documentation and lacked sufficient staff to properly handle distressed borrowers.

Read the rest of the article at NASDAQ

Foreclosure backlogs taking longer to process

In early 2007, it took less than six months on average to complete a foreclosure proceeding in Florida. Four years later, it takes an average of 619 days. In New York, it now takes an astounding 924 days to foreclose, up from 263. In New Jersey, it takes 908 days, up from 297. Foreclosure timelines also have grown in Maryland and Virginia, though less drastically. Nationwide, the time that it takes to complete a foreclosure has more than doubled, to an average of 400 days.

The number of new cases has fallen dramatically since last fall, when several major banks halted new foreclosures after revelations of widespread paperwork problems that led to questions over who exactly owned the properties being foreclosed upon. Much of the controversy focused on “robosigning,” in which employees signed someone else’s name on affidavits or did not verify the facts they were attesting to.

Read the rest of the article at the Washington Post

Delinquencies Drop, Foreclosures Rise

Fewer homeowners are experiencing financial difficulty with their mortgages, even as the number of foreclosures in progress continues to rise.

The number of first lien mortgages listed as seriously delinquent fell by more than 600,000 over the past year, according to new quarterly figures from the Office of the Comptroller of Currency (OCC), to 1.57 million – a decline of nearly 28 percent. Meanwhile, the share of mortgages listed as current and performing rose a full percentage point in the first quarter of the year, to 88.6 percent of first lien loans – the highest level in nearly two years.

Those figures reflect a gradually stabilizing economy, as fewer borrowers fall behind on their mortgage payments. But they also reflect a gradual working through a backlog of foreclosures and seriously overdue mortgages not yet in foreclosure, which is gradually working the number of bad loans out of the system.

Read the rest of the article at MortgageLoan.com

New Hawaii Foreclosure Law Controversial in Industry

The bill essentially requires lenders to meet face-to-face with borrowers via a neutral third party, to assure that compromising on a loan – instead of simply foreclosing – is a primary option.

Act 48 also forces lenders to actually show proof that they have the legal right to foreclose on a home – something that consumer advocates claimed was skirted in certain non-judicial foreclosure processes.

Act 48 places a moratorium on all new “Part 1” non-judicial foreclosures until July 1, 2012 with the hopes of keeping Hawaii homeowners in threat of foreclosures from quickly losing their homes.

Read the rest of the article at Hawaii Reporter

Greece sidesteps bankruptcy with austerity measures; markets rise on news

Greece fended off a bankruptcy that would have roiled global markets and threatened the future of the euro when lawmakers backed controversial austerity measures Wednesday in the face of violent protests. More than 100 people were injured in riots.

Investors cheered the bill -- which aims to cut spending and raise taxes by $40 billion and raise $71 billion in privatizations over five years -- but, in Athens, the mood was dark. In a haze of tear gas, protesters hurled anything they could find at riot police and tried to blockade the Parliament building.

A Greek default would threaten the viability of the euro, the European Union's common currency, and send shock waves through global markets similar to those that kicked off the global financial meltdown after the collapse of Lehman Brothers in 2008.

Read the full article at Detroit Free Press

The CBO’s Ticking Bankruptcy Bomb

Last week, the Congressional Budget Office (CBO) issued their Long Term Budget Outlook for 2011. The report closely validates my own analysis in my new book America’s Ticking Bankruptcy Bomb, released this month by HarperCollins.

CBO reports that the national debt is already the highest in history except for World War II, reaching roughly 70% of GDP this year. On our current course, CBO projects the national debt held by the public will climb to 100% of GDP by 2021, equal to our entire economy. By 2023, it will break the World War II historical record of 109% of GDP. It will then continue to rocket upward to 190% of GDP by 2035, which is higher than the level suffered by Greece when it collapsed into national bankruptcy.

Bankruptcy is defined here and in my book as when the federal government can no longer borrow enough in the credit markets to finance its budget deficit, which is precisely what Greece has been suffering. President Obama’s own 2012 budget projects the federal deficit for this year at $1.645 trillion, the highest in world history by far.

Read the rest of the article at Forbes Magazine

Some Dodgers employees' paychecks bounced after bankruptcy

In the wake of the Dodgers' bankruptcy filing, some paychecks issued to the team's employees bounced, according to spokesman Josh Rawitch. It's not clear how many employees were affected, KTLA reported.
Rawitch said that the team's accounts were frozen for 48 hours after the filing.

Read the rest of the article at Contra Costa Times

Pennsylvania Legislature takes bankruptcy off the table for Harrisburg

A voluntary bankruptcy is apparently off the table for Harrisburg. On a pair of party line votes, the state House and Senate both passed a fiscal code bill today containing a watered-down version of Sen. Jeffrey Piccola's 11th-hour bid to turn Harrisburg's proposed Act 47 fiscal recovery plan into a mandate.

The alternate language, which Piccola did not draft but does support and which Gov. Tom Corbett is expected to sign, prohibits third-class cities tagged by the state as "financially distressed" from filing for bankruptcy through June of 2012.

Read the full article at Penn Live

Monday, June 27, 2011

WSJ: Time for Reverse Mortgages is Now

With some uncertainties on the horizon for reverse mortgages, there are several alternative ways that families can set up a reverse mortgage-style agreement that still allow retirees to tap into their home equity, a Wall Street Journal article reported this weekend. The article suggests that as an alternative to a FHA-backed HECM loan, families with well-off adult children could set up their own private reverse mortgages for their parents, or could buy their parents’ homes outright and help fund retirement that way.

Further, the article suggests, the best time to do a reverse mortgage may be right now.

“Families with well-off adult children have tended to avoid reverse mortgages, in part due to the costs,” the article states. “The upfront fees can total as much as 5% of a home’s value. As part of the upfront costs, borrowers are required to pay a mortgage-insurance premium ranging from 0.1% for loans with a lower equity payout to 2% for those with a higher payout.”

Read the full article at the Wall Street Journal

How soon can you buy after foreclosure?

Fannie Mae and Freddie Mac stipulate that persons who had their homes foreclosed must wait a minimum of three years before being able to apply for credit with them again, while those who went for a short sale only need to wait two years. There can be extenuating circumstances however, and if borrowers are able to show how they were extremely unfortunate, and if they had a good financial track record in the past, they may be able to shorten the time they have to wait.

On the flip side however, those who cannot prove any misfortune may well face an even longer wait than the minimum three years – with some being forced to wait as many as seven years, or four years if they went bankrupt.

Those who take out a loan that is covered by the Federal Housing Administration, and have a perfect credit record after borrowing the money, will also be eligible to buy again three years after a foreclosure, or just two years following a declaration of bankruptcy.

 Read the entire article at Realty Biz News

The Soon-to-Evaporate Help for At-Risk Homeowners in 32 States

Homeowners at risk of foreclosure in 32 states can get emergency financial aid from the federal government, but they have to act fast. Deadlines are tight, and homeowners are already flooding the program with inquiries.

Within days of the program’s announcement last week, roughly 600 people had contacted CredAbility, a credit counseling agency in Atlanta, to ask for details, a spokesman says. CredAbility is one of 22 agencies chosen to administer the program by the federal government and NeighborWorks America, a nonprofit housing organization.

As part of the Dodd-Frank Act, Congress set aside $1 billion to help struggling homeowners.

If they qualify, homeowners can get interest-free loans to pay a portion of their monthly mortgage, as well as back payments and legal fees, for up to $50,000 or two years, whichever comes first. The loans do not have to be repaid, as long as the homeowner continues making mortgage payments on time for five years. The program is expected to help from 20,000 to 30,000 distressed homeowners.

The program, known as the Emergency Homeowners’ Loan Program, is available to homeowners ineligible for the larger, $7.6 billion “hardest hit” fund, which provided assistance to 18 states that absorbed the worst of the housing crisis.

There are some hoops to jump through though. To qualify, homeowners must be at least three months delinquent on their home loans and have suffered at least a 15 percent income reduction from a job loss due to economic or medical reasons. Other requirements, like income limits, also apply.

To make sure the emergency funds are used up by Sept. 30, the end of the federal fiscal year, there are tight deadlines to meet. Homeowners must submit preliminary applications for the funds by July 22, less than four weeks away. The counseling agencies will screen the applications and submit the names of eligible homeowners to NeigborWorks for review. Because demand is expected to outstrip available funding, finalists likely will be selected by lottery.

Read the full article at the New York Times

N.J. foreclosures down but could be calm before deluge

Foreclosure filings are down 86 percent in 2011 from last year in New Jersey, but housing attorneys fear this is only the calm before the deluge.

Lenders will be looking to file an estimated 28,500 foreclosures, and another 55,000 mortgage loans are currently more than 90 days behind, according to LPS Applied Analytics.

Read the full article from New Jersey Newsroom

New Law Protects Nevadans in Foreclosure from Debt Collectors

Plenty of Nevadans are in trouble on their mortgages because they took out second mortgages, and real estate tracking companies say more than 60,000 Nevada homes were in foreclosure as of May. However, a new law will soon protect Nevadans who lose their homes from being hounded by creditors years after the fact.

Las Vegas attorney Jamie Cogburn, who specializes in consumer advocacy law, says that under the old law, creditors had up to six years to proceed against former homeowners. He says the new law gives creditors just six months to go after debtors for debts not covered by the proceeds of a foreclosure.

Read the full article at Fox Reno

Rampant Bank Fraud and Wrongful Foreclosures Extend to the Commercial Real Estate Market

“Throughout the United States, reputable builders and commercial property owners have often been overlooked as victims of bank fraud and wrongful foreclosure in the Nation’s ongoing bank crises,” says 35-year trial lawyer and former prosecutor Michael S. Riley of Mitchell J. Stein & Associates LLP.

Mr. Riley, a Senior Partner of Mitchell J. Stein & Associates LLP and former governmental prosecutor for more than a decade, commented further that “the wave of significant and far reaching disclosures of horrible bank schemes against the core of our economy – middle America’s builders and commercial realty owners – are now going to begin hitting the national stage and its judicial system.”

Read the full article from PR Web

Dodgers file for bankruptcy

The fiscal crisis at the storied franchise began when owner Frank McCourt’s wife filed for divorce and claimed the Dodgers as community property.

Read the rest of the article at Hot Air

Electric Carmaker Think Files For Bankruptcy – Again

It looks like the end of a long and winding road for Think, the pioneering Norwegian electric carmaker.

On Wednesday, the Oslo-based company filed for bankruptcy protection in Norway and a court-appointed trustee assumed control of Think’s business, according to Debra Salem, a spokeswoman for its U.S. subsidiary.

“Think filed for bankruptcy after failing to attract adequate capital to continue funding operations,” Salem said in an email.

Read the entire article at Forbes Magazine

Private Student Loans Get Bankruptcy Protection With Proposed Legislation

A coalition of Democratic lawmakers have introduced bills in both the U.S. Senate and the U.S. House of Representatives that increase fairness in student lending by ending bankruptcy protection for private student loans.

The bills seek to roll back changes to private student loans that were made to the U.S. bankruptcy code in 2005. The changes prevented private student loans from being discharged in bankruptcy, a protection that had been granted for federal student loans in 1978 as a way to protect federal investments in higher education but which was not afforded any other type of commercial loan.

Read the entire article at Student Loans Blog

Dodgers bankruptcy filing: ‘Very, very sad’ says Roz Wyman, who helped bring team to L.A.

Rosalind Wyman, 80, the grande dame of California Democratic politics, and a former L.A. councilwoman who helped bring the Dodgers to L.A. more than 50 years ago, said the bankruptcy was a tragic milestone for the city.

Read the rest of the article at the Los Angeles Times

The Battle of Harrisburg: Bankruptcy or Budget Cuts?

With state, county and city officials at loggerheads over how to save Harrisburg, Pa., from a $300 million debt burden, residents of the state capital will have an opportunity to grill elected officials about their options at a public hearing Tuesday evening.

The discussion will likely center on whether the city would be better off filing for Chapter 9 bankruptcy protection or pursuing other alternatives to address the large debt linked to a failed incinerator project whose funding the city guaranteed.

Last Tuesday, however, the Harrisburg City Council approved by a 4-3 vote Councilman Brad Koplinski's recommendation to begin preparing paperwork in case of a bankruptcy filing.

Read the entire article at the Wall Street Journal

What Housing Bubble?

What the pundits want you to buy into is that some how the price of homes were being driven up for no reason what so ever and it reached this magical ceiling and it all came crashing down. How do we fix the problem? In order to jump start the economy we have to roll back the value of these homes. Roll them back to what their value was on July 2008 before the Democrats got together and burst the housing bubble!

Read the rest of the article at Intellectual Conservative

Saturday, June 25, 2011

Bank Errors Continue to Cause Wrongful Foreclosures

Four years into the foreclosure crisis, banks say they've made major improvements in how they handle struggling homeowners. They've promised, for example, not to foreclose on homeowners who are being considered for mortgage modifications. But that's still happening.

Consider the cases of Laurie Pinkerton and Lisa Peterson. The two women, both Californians and Bank of America customers, had been assured by the bank that they wouldn't lose their homes before they'd been evaluated for a possible modification. Both had their homes sold last month.

Such cases are particularly senseless, because simply modifying the mortgage by reducing the monthly payment might be in the interest not only of the homeowner, but also of the investor who owns the mortgage. Both Pinkerton and Peterson said their homes were sold after foreclosure for far less than they're worth.

Read the full story at Pro Publica

Home foreclosures, foreclosure sales declining

RealtyTrac, an online marketplace for foreclosure properties, recently released its U.S. Foreclosure Market Report for May 2011. It shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 214,927 U.S. properties in May. That's a 2 percent decrease from April and a 33 percent decrease from May 2010. The report also shows that one in every 605 U.S. housing units received a foreclosure filing during the month of May.

Read the full article at Sioux City Journal

Book details Nashville bankruptcy attorney's experiences

A Nashville lawyer and player in some of Middle Tennessee’s most high-profile bankruptcies is sharing his expertise about distressed businesses in a new book.

Bobby Guy of Frost Brown Todd has written Distress to Success: A Survival Handbook for Struggling Businesses & Buyers of Distressed Opportunities. It was published by FreneticMarket Press last month and was featured at this week’s iiBIG Healthcare M&A Conference in Chicago.

Read the full article at the Tennessean

Patricia Kluge, Once the Wealthiest Divorcee, Files for Bankruptcy Protection

Kluge, a socialite, acquired the 23,500-square-foot Albermarle House and 3,000 acres of rural Virginia land when she divorced billionaire media mogul John W. Kluge in 1990. At the time, it was the biggest divorce settlement in history, rumored to be $1 billion. John W. Kluge died in September.

In the U.S. Bankruptcy Court Chapter 7 filing, Kluge and husband William Moses listed business obligations as their major debts. They estimated their assets to be between $1 million and $10 million, with $10 million to $50 million in liabilities.

Read the full article from TV Guide

Saab faces bankruptcy

SAAB is on the brink of bankruptcy after the car maker admitted it cannot pay the wages and salaries of its 3700 employees. Losses, sustainable under the previous owner, General Motors, are on the verge of overwhelming Saab's Dutch parent, Swedish Automobile, which was forced to stop salary payments for 1500 factory workers on Thursday. The IF Metall union set the clock ticking on the company, warning it would enforce bankruptcy proceedings to reclaim the unpaid wages within a fortnight.

Read the full article at the Sydney Morning Herald

Harrisburg, Pennsylvania still weighing bankruptcy

As Pennsylvania's deeply indebted capital of Harrisburg weighs the state's rescue plan, lawmakers are at odds over whether chapter 9 municipal bankruptcy should still be on the table.

A bankruptcy filing could carry a stigma that might freeze Harrisburg, a city of 50,000, sitting about 100 miles west of Philadelphia, out of the municipal debt market.

At the root of Harrisburg's troubles is a financing scheme to fund its state-of-the-art trash-burning plant that left the city with roughly $300 million in debt.

Read the full article from Reuters

How Corporate Bankruptcies Affect Your Investment

Stockholders, who purchased a portion of the company, are paid last, if any money is available after secured and unsecured creditor claims have been paid.

Read the full article at Financial Map

Thursday, June 23, 2011

A New Study on Medically Related Bankruptcies

A new study appearing in the Journal of Clinical Oncology documents an increased risk of bankruptcy with certain types of cancers....The conclusions provide some support for both sides of the debate about whether medical problems lead to an increased risk of bankruptcy.

Read the full article at Credit Slips

The 10 Biggest Chapter 11 Bankruptcies In US History

CNBC has put together a quick slideshow list of the top 10 largest Chapter 11 bankruptcy filings in US history based on the pre-bankruptcy assets of the companies in question. It really gives you a sense of the incredible scale of the Lehman Brothers filing — the next closest bankruptcy was Worldcom, which had $103.9 billion in assets before the filing — 535.1 BILLION DOLLARS less than Lehman Brothers.

Watch the slideshow to find out who the companies are

The Increase In Bankruptcies And The Need For Bankruptcy Lawyers In Texas

Bankruptcy lawyers in Texas, and in all states, have seen an increase in filings. It was thought that the peak of the recession hit last year, but the signs of an economic recovery are still weak. Consumer confidence has not rebounded, and there is a high unemployment rate. Individuals have high debt and low savings, so with job losses and cutbacks in hours, they can run into trouble very quickly. Falling real estate prices and the high inventory of homes also is a factor. More and more individuals are seeking bankruptcy lawyers in Texas for assistance with the process.

Read the full article at Arkansas Bankruptcy Attorney News

GM Bailout and Airline Bankruptcies, Did Obama Save Jobs?

The common misconception over the Obama auto bailouts is that they prevented the loss of tens of thousands of jobs – which, claimed by the Obama administration, would have resulted from GM and Chrysler bankruptcies. But this is not the case.

The fact is, if GM would have endured a bankruptcy without taxpayer bailouts, there would still be plenty of GM jobs – and maybe, just as much if not more. The best case for this argument is the survival of the airline industry, despite its grave misfortune.

Read the full article at Brian Koenig's blog

Wednesday, June 22, 2011

Homeowners’ Associations Becoming Unavoidable and Quasi-Governmental

90 percent of new homes in Maricopa County are located within HOAs. They are becoming impossible to avoid. You trade in almost all your rights to live under an essentially socialist government that has little oversight. It has gotten worse in the economic downturn, with HOAs aggressively racking up unfair and excessive fees on existing homeowners to make up for the vacancies.

Read the rest of my article at Townhall.com

Forbes columnist cautioning against filing Chapter 7 bankruptcy

Certain factions of the consumer bankruptcy bar reacted violently to my recent post, Consumer Bankruptcies Do More Harm Than Good, as I suspect they will to this offering. It is a badge of honor.

I do not maintain that a chapter 7 bankruptcy is never in a consumer’s best interests. Chapter 7 bankruptcy is an option. Usually not it is not the best option.

Read the rest of the article at Forbes

Survey Finds Free-Fall Bankruptcies Becoming More Rare

The days of crash-and-burn bankruptcies may be flaming out.

An AlixPartners LLP survey released Wednesday found that most restructuring professionals expect that more than 50% of the large companies filing for Chapter 11 in the next 12 months will have at least a semblance of a turnaround plan in place when they enter bankruptcy.

And nearly all those surveyed, 97%, said those so-called prearranged and prepackaged filings have become a permanent part of the bankruptcy landscape.

Read the article at the Wall Street Journal

Most Bankruptcies Caused By Health Problems Suffered By People With Health Insurance

A recent Harvard study tells us that health problems cause more than half of America's bankruptcies, and that the vast majority of people seeking bankruptcy protection have health insurance. The study paints a hauntingly familiar picture: people get sick, insurance covers nothing, so they're forced to mortgage their homes to stay alive.

From Consumerist.com