Saturday, July 30, 2011

Homeowners have reasons to be concerned as the debt ceiling debate drags on

Homeowners have a lot at stake in the political showdown over the country’s debt ceiling.

One of the major concerns for many is the fate of a valued tax break. The benefit, which allows taxpayers to deduct their mortgage interest payments, is used by 35 million households.

Now lawmakers have proposed limiting the deduction as part of an agreement to raise the government’s borrowing limit to avoid a default after the Aug. 2 deadline. But that isn’t the only concern for homeowners and prospective buyers as the negotiations heat up in Washington.

Even if lawmakers strike a deal by next week’s deadline, there’s still a chance the government’s credit rating could be downgraded. That raises the prospect of higher mortgage rates, meaning those who’ve been holding tight for home prices to fall further may feel that time is running out to take advantage of low rates.

Read the rest of the article at the Boston Globe

Equifax Data Reveals Bankruptcy Landscape Blurred by Progress and Setbacks

In a recent, nationwide study on small business and consumer bankruptcies, Equifax Inc. (NYSE: EFX) identified some interesting trends that pose questions about the future direction of an economic recovery. While small business bankruptcy petitions have consistently decreased since Q2 2009, the rate of decline slowed in Q2 2011. Another intriguing development is the apparent rise in consumer bankruptcies during the second quarter of this year. According to Equifax analysis, consumer bankruptcy petitions climbed more than 4.0 percent from Q1 2011 to Q2 2011 – reaching a level not seen since the second quarter of 2009. Are these findings a possible sign of changing economic conditions in our business markets? Will these trends ensue and do more challenges lie ahead?

Read the rest of the article at The Sacramento Bee

The Basics of Chapter 13 Bankruptcy

Chapter 13 is very effective at helping filers get a fresh financial start while being able to keep valuable assets like homes and cars Federal bankruptcy laws exist to give debtors an escape from overwhelming debt when they find themselves in an unworkable financial situation. The protections offered by a bankruptcy filing have only rarely been more important than they are in our country's current economic situation. Stock market woes, the burst housing bubble and chronically high unemployment rates have left record numbers of Americans in financial trouble and looking for more information about debt relief options like credit counseling, loan modification, debt consolidation and bankruptcy.

Read the rest of the article at EIN News

City of Vallejo Set To Emerge From Bankruptcy

More than three years after declaring Chapter 9 bankruptcy, a federal judge has cleared the way to emerge from bankruptcy. The city submitted an 81-page plan to the court Friday. The deal included union concessions with pay cuts and reduced health benefits. The city lost significant tax revenue when the economy soured and ended up declaring bankruptcy in May of 2008. Vallejo responded by making significant cuts to its police and fire departments.

Read the rest of the article at KTVU

Pakistan: Countdown for US bankruptcy

The countdown for the first bankruptcy in US history is running. Less than a week before the predicted default on 2nd August the two parties Democrats and Republicans are further divided on any rescue plan than a week ago. Republicans are holding to their guns with Mr Boehner Republican Leader in the House honestly holding to his plan to cut one trillion in spending and give one trillion to cover deficit but stiffly refusing to yield to the demand of creating new revenues by raising taxes which would hurt those at the higher scales of the income and salaries in the US. President Obama is adamant and has not agreed to this proposal but is supporting a plan by Senator Harry Reid who offered a 2.7 trillion spending cuts this time without creating any new revenues while holding that Medicare & Medicaid should be protected from heavy cuts. At the heart of the cuts according to Senator Reid would be military expenses.

Republicans denounced this as not only gimmick but jugglery of figures because reduction of military spending in Iraq and Afghanistan which has been included was a reduction which would come anyway and was therefore no real cut. At the back of all this is also the fate of Obama and the Democrats who need the lifting of the spending ceiling until at least after the forthcoming elections in November 2012. In any case Obama has shown a lot of weakness in this fight and whatsoever the outcome it would probably cost him the second term in next election.

Read the rest of the article at the Pakistan Observer

Debt Crisis? Bankruptcy Fears? See Jefferson County, Ala.

A few hundred miles north of here, politicians are fighting over debt. It is a spirited debate, full of discussions about what kind of country will be left for future generations and pledges not to kick the can down the road.

But one does not have to go far to see that possible future. Welcome to Jefferson County. This is the end of the road, where the can cannot be kicked any farther.

All of these beliefs have led to a place where the government can no longer borrow and the little cash on hand is being demanded by creditors, where the Sheriff’s Department cannot afford to respond to traffic accidents and hundreds of county workers are sitting at home, temporarily or possibly permanently out of work. They have also led to a widely held conclusion among residents that no one is on their side.

Read the rest of the article at the New York Times

Friday, July 22, 2011

Q&A: Deed in lieu of foreclosure saves time as a last resort

In a deed in lieu of foreclosure, you surrender your home to the lender to avoid the hassle of the lender filing a foreclosure action against you. Essentially, you're making a pre-emptive strike and going out on your own terms rather than being forced out.

Read the rest of the article at the Kansas City Star

Foreclosures gone wrong can haunt homeowners

Kamal Sharma almost lost his house in a foreclosure auction. The funny thing is: He doesn't even owe any money on it.

Kamal Sharma, left, and real estate agent Manny Toledo visit the house Sharma purchased in West Sacramento, Calif., as income property. Even though Sharma had paid cash, Bank of America listed the house in a foreclosure auction. Renee C. Byer

Sharma's story — an extreme case even in Sacramento's chaotic real estate market — shows that lenders continue to make foreclosure mistakes despite extensive publicity and promises to fix problems, which include sloppy paperwork and communication breakdowns.

“There are a lot of people that have been wrongly foreclosed upon,” said Kevin Stein, associate director of the San Francisco-based California Reinvestment Coalition.

Read the rest of the article at The Oklahoman

Washington State Foreclosure Fairness Act Takes Effect

Washington homeowners who are in the process of foreclosure may now qualify for help under a new state law.

The Foreclosure Fairness Act takes effect July 22, allowing distressed homeowners to request a mediator to come to a resolution with the lender.

Rick Torrance with the state Department of Commerce says the law requires lenders to send a letter to homeowners about what their options are.

Read the rest of the article at KGMI

What To Do If You're Facing Foreclosure

Get help right away.
Make sure your counselor is HUD-approved.
Never agree to pay up-front fees for foreclosure counseling.
Keep a record of everything you do.
Keep a record of everything you do.

Read the rest of the article at Consumer Affairs

Government Weighs Turning Foreclosures Into Rentals

There’s an 800-pound gorilla in the nation’s hardest-hit housing markets: hundreds of thousands of foreclosed properties are selling, and there’s four times as many potential foreclosures behind them.

The Journal writes today that one idea gaining support in Washington is an effort to pull some of those properties off the market and rent them out, either on homes owned by federal agencies or loan giants Fannie Mae and Freddie Mac.

These firms and U.S. banks currently own more than 500,000 foreclosed homes, and there’s another 2 million loans in some stage of foreclosure. The high share of distressed sales in many struggling markets is contributing to continued declines in home prices.

Read the rest of the article at the Wall Street Journal

Mortgage Default Rates Keep Falling

The contradictions of the current housing market are many, including the continued drop in mortgage defaults despite the hobbled economic recovery and widespread drops in housing prices.

S&P Indices and Experian reported today that default rates for first and second mortgages continued to decrease in June, as part of a general decline in defaults across major consumer credit categories. The news was similar for May, as we reported. The numbers vary by region, with some cities hard-hit by the housing crash, such as Miami, showing stubbornly high default rates.

Read the rest of the article at the Wall Street Journal

As housing prices drop, closing costs are rising

Nationwide, the average origination and title fees on a $200,000 purchase mortgage totaled $4,070, according to Bankrate's annual survey of closing costs. That's an 8.8 percent jump compared to 2010 when the average closing costs totaled $3,741.

For the second year in a row, the states with the highest closing costs are New York, where costs average $6,183; Texas at $4,944; followed by Utah with $4,906. Next was California, where average closing costs in San Francisco totaled $4,832. New York and Texas have dominated the top spots for five years.
The cheapest places to get a mortgage are Arkansas, North Carolina and Indiana. In each of these states, the average closing costs are close to $3,400.

Read the rest of the article at MSNBC

Disturbing Trend Shows Bankruptcies Up for Seniors

More states are taking long, hard looks at their bankruptcy rates, and don’t like what they’re seeing. The fastest growing group falling into bankruptcy, studies say, are elderly citizens. Inflation, low savings and health issues are mainly to blame, but they’re not the only factors.

A University of Michigan Law School study says that nationwide, bankruptcy among seniors has doubled in the past eight years, from about 3.5% to 7%.

Read the rest of the article Main Street

Tuesday, July 19, 2011

S&P/Experian: Consumer Credit Default Rates Fell In June

U.S. consumers did a better job of paying off their debts in June according to a joint-report Tuesday by Standard & Poor's and Experian, a credit information firm.

The S&P/Experian Credit Default Indices, which measures consumer default rates for first and second mortgages, bank cards, and auto loans, said default rates in all four categories decreased in June.

Bank cards saw the largest decline, falling from 5.93% to 5.69%, which is a positive sign -- especially when coupled with a recent Federal Reserve consumer credit report.

"The Federal Reserve reported that revolving credit -- which includes bank cards -- rose in May for the first time since 2008. Combined with the improving default experience we are seeing this is a positive sign for an economy suffering from a lack of consumer spending," David Blitzer, the chairman of the S&P/Experian Credit Default Indices said in a statement.

Read the rest of the article at iMarket News

Time for Action on Freddie and Fannie

A year after passage of the Dodd-Frank act, the $10.5 trillion American mortgage market remains in limbo. One big reason is that the law scarcely touches Fannie Mae, Freddie Mac and the Federal Housing Administration — the government-run lenders that dominate the home loan market.

The consequences of lax mortgage lending were central to the crisis that Dodd-Frank was intended to make unrepeatable. But rather than tackle the huge and highly political issue of Fannie, Freddie and the F.H.A., the law narrowly focused on one part of the market. That’s the private-label mortgage-backed securities area, source of more than $3 trillion of mortgage bonds from 2002 to 2007.

Read the rest of the article at the New York Times

Wells Fargo Shrinks Mortgage Staff in Breakout Quarter

Wells Fargo & Co. made cuts in its mortgage unit in the second quarter, reducing headcount slightly versus the first quarter this year.

The San Francisco-based lender reduced the number of people on payroll by 3,600 in the three months ended June 30, a 1.3% decrease from the first quarter, bringing total staff to 266,600, according to its quarterly earnings release this morning.

Read the rest of the article at FINS

Bank of America Takes Another Mortgage Hit

The bad news for Bank of America is that mortgages cost the bank $20 billion in the second quarter.

The worse news is that management continues to struggle over the ultimate cost of its mortgage operations.

The mortgage-related costs were announced June 29, including a proposed $8.5 billion settlement with 22 institutions that bought mortgage backed securities (MBS) from Bank of America backed by mortgages that were fraudulent or otherwise didn't meet the underwriting criteria promised to the investors who bought the MBS.

Read the rest of the article at The Street

Study Reveals Original Foreclosure-Related Documents Often Do Not Exist

If a lender has not been paid in months or years and believes that they can convert a property to a performing investment, then they are going to have a very high interest in foreclosing. However, in many cases, if they had to use real, legitimate, original documents to carry out that process, it simply would never happen. Why? Because the originals simply do not exist[1]. Reuters calls this “one of the overlooked legacies of the housing boom,” and explains in a new report that “in the rush to make new home loans and sell them off as fast as possible…the original lenders…destroyed original documents or never turned them over as required.” As a result, promissory notes and mortgages frequently never made it to the end-buyer – or even just the next guy in line. This means that “many pension funds, insurance companies and hedge funds that invested in [investor] trusts never got formal title to the mortgages they had paid for.” And that means that when it comes time to foreclose, they may have no choice but to use doctored or replicated documents in order to do so.

Read the rest of the article at The Bryan Ellis Real Estate Letter

California foreclosure starts fall to lowest level in four years

The number of Californians entering foreclosure dropped steeply in the second quarter to hit its lowest level since 2007, a sign the foreclosure crisis in the Golden State could be easing amid a more stable housing market and increased scrutiny from regulators.

Notices of default filed against California homes dropped 19.2% during the three months ended June 30, when compared withthe same period a year earlier, and 17.0% from the prior quarter, according to San Diego research firm MDA DataQuick.

Read the rest of the article at the Los Angeles Times

Bad Robot: Big Banks Are Still Faking Home Loan Documents

After getting caught last year falsifying legal documents as part of conducting illegal foreclosures, big banks promised never to do it again. In April, more than a dozen large mortgage servicers also signed agreements with financial regulators pledging to stop “robo-signing,” as the practice is known, and to fix their foreclosure procedures. The result, Reuters reports:

[S]ome of the biggest U.S. banks and other “loan servicers” continue to file questionable foreclosure documents with courts and county clerks. They are using tactics that late last year triggered an outcry, multiple investigations and temporary moratoriums on foreclosures.

In recent months, servicers have filed thousands of documents that appear to have been fabricated or improperly altered, or have sworn to false facts.

At least five of those banks and servicers — Bank of America (BAC), GMAC Mortgage, HSBC Bank USA, OneWest and Wells Fargo (WFC) — have recently filed documents of “questionable validity,” according to the wire service. Same goes for other major servicers that didn’t sign on to the government settlement.

Read the rest of the article at BNET

The Unloved Winner of the Borders Bankruptcy Liquidation (BKS, AMZN, BAMM) Read more: The Unloved Winner of the Borders Bankruptcy Liquidation (BKS, AMZN, BAMM)

What is interesting is that investors are generally considering Barnes & Noble, Inc. (NYSE: BKS) as the only winner in this matter. Shares are up another 2.5% today at $17.67, but the stock was down at almost $17.00 during Monday’s lows. Now that Borders is toast, this means more brick and mortar bookstore buyers can still head the way of Barnes & Noble stores to buy books, newspapers, calendars, and other items. Barnes & Noble still has a market cap of only $1 billion and it is obvious that the outfit does not want to get into that buyout that was around from John Malone. B&N operates over 1,300 retail stores if you count campuses and its fiscal-2011 sales were roughly $7 billion.

There may actually be another winner that has gone largely overlooked and maybe even unloved. Books-A-Million Inc. (NASDAQ: BAMM) is a mere $49 million company based in Birmingham, Alabama. It now operates over 200 sores in 23 states and in D.C. and has been considered the third largest book retailer in America. Books-A-Million’s sales have been in decline and the most recent year (January 2011) saw sales of roughly $495 million, but it has still managed to remain profitable in each of the last three fiscal years. It is small enough that it actually has no large firms covering the stock but the earnings for each of the last three years (most recent first) is here: $8.9 million, $13.3 million, and $10.5 million.

Read the rest of the article at 24/7 Wall Street

For Investors, Lessons from the Death of Borders

1. Act Like Everyone Is Out to Get You – Because They Are
2. Don't Believe the Hype
3. Borrowers and Gamblers Beware
4. One Man's Demise is Another's Opportunity... Eventually

Read the rest of the article at Daily Finance

Philadelphia Orchestra, in bankruptcy petition, seeks lower rent

In its bankruptcy petition, the Philadelphia Orchestra seeks to reach a new contract with its own musicians and to sever ties with Peter Nero and the Philly Pops. But the bankruptcy also sweeps into court a renegotiation of the orchestra's lease agreement with its landlord, the Kimmel Center.

Talks are ongoing, and a solution is expected to be filed with the court, subject to the approval of Judge Eric L. Frank, as part of the Philadelphia Orchestra Association's anticipated exit from bankruptcy by the end of the year.

What does the orchestra want?

Read the rest of the article at the Philadelphia Enquirer

Bankruptcy May Remove Tax Bill

Yes, you can possibly eliminate personal federal and state income taxes when you file bankruptcy. However, there are very tight restrictions on how this can occur. To be dischargeable, the tax return must have been due for at least three years, including any extension that may have been filed. You must have filed the tax returns at least two years prior to filing the bankruptcy. The taxes must have been assessed at least 240 days prior to filing bankruptcy.

Read the rest of the article at Fox News Business

Borders closing all stores

As reported by HCN’s Woodlands Sun, a press release from Borders Group, Illinois-based Hilco Merchant Resources and Massachusetts-based Gordon Brothers Group will, pending approval of the U.S. Bankruptcy Court, purchase the store assets of the business and administer the liquidation process. Both Hilco and Gordon Brothers specialize in helping companies with restructuring.

"Following the best efforts of all parties, we are saddened by this development," said Borders Group President Mike Edwards in the release. "We were all working hard toward a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution and turbulent economy, have brought us to where we are now.”

Read the rest of the article from Your Houston News

What Bankruptcy Means for Stockholders

In the past year alone, household names like Blockbuster, Sbarros and Borders have filed for bankruptcy, the last of which recently announced it would begin the liquidation process. Aside from being a loss to bookworms, the decline of these companies also poses a unique issue for shareholders: What happens to your stock when a company goes bankrupt?

The short answer is that the stock takes a nosedive, though how much of a nosedive ultimately depends on whether the company files for Chapter 11 bankruptcy and successfully restructures, or if it goes bankrupt and ultimately disappears out of business. If it’s the latter, as is the case with Borders, most stockholders can kiss their shares goodbye.

Read the rest of the article from Main Street

Sunday, July 17, 2011

Big Mortgages Are Back

Low interest rates are driving high-end home buyers to supersized mortgages at a pace unseen since the housing boom. But the deals may have a limited shelf life.

So-called jumbo loans—generally those bigger than $417,000—are a better bargain now than they have been in years.

Read the rest of the article at the Wall Street Journal

Las Vegas attorneys build business by telling homeowners to stop paying mortgages

Your neighbors aren't paying on their mortgages so why should you?

That provocative question is being posed by a Las Vegas law firm's TV ad campaign, and the commercials are stirring debate.

The Haines & Krieger law firm's spots, promising to show homeowners how to stay in their homes without paying on their mortgages, seem to be bringing in business, said a staffer for the law firm who asked not to be named.

But with the Las Vegas Valley being ground zero for foreclosures, some worry that encouraging more people to quit paying their mortgages could worsen the problem.

Read the rest of the article at Las Vegas Review-Journal

Bridging the mortgage gap: How to take advantage of record low rates

The mortgage arena remains a market of two halves with the best deals available only to borrowers with a perfect credit history and a healthy chunk of equity in their home.

In contrast, first-time buyers and those with little or no equity continue to struggle. But all borrowers should try, where possible, to take full advantage of low mortgage rates.

Financial Mail examines the options.

Read the rest of the article at This is Money

Do Not Fall Victim to Mortgage Modification Scams; Get Real Help

Learn how to avoid being taken advantage of by loan modification companies, and find out where you can turn for legitimate assistance in saving your home. Avoid Foreclosure Rescue Companies.

Read the full article at US Politics Today

Damaged foreclosures hurting Las Vegas values

Deterioration of vacant homes -- many of them bank-owned -- continues to drag down home values in Las Vegas while other housing markets are showing signs of stabilization.

Local home values have dropped more than 60 percent from their peak to a median price of $111,000 in May, Home Builders Research reports.

Hundreds of foreclosed homes languish on the market for months, even years, often hurting home values in the surrounding neighborhood. They're consistently devalued by appraisers, chopped by $5,000 or more based simply on appearance.

Read the rest of the article at Las Vegas Review-Journal

Help Is On The Way To Those Who Face Forclosure

Eligible homeowners, in danger of foreclosure due to loss of job, can qualify for up to $50,000 in emergency federal loans to avoid foreclosure. The deadline to apply is July 22.

Read the rest of the article at Yorktown Patch

Eva Longoria's Vegas Nightclub Closes Due To Bankruptcy

After filing for bankruptcy in January, Eve nightclub - which is owned by Eva Longoria and attached to her Beso Steakhouse on the Las Vegas strip - sadly closed down on Monday because it failed to cover its $5.7 million debt!

Both establishments opened in December of 2009, but luckily, Beso is still profitable and will remain open!
And Eve may already have a new possible investor, as on-line cheating website Ashley Madison sent a letter to Longoria's lawyers recently.

Read the rest of the article at Perez Hilton

Borders' Fate Decided by 5 p.m. Sunday

America will get a good idea by 5 p.m. Sunday whether the nation will completely lose its second largest bookstore chain or not. Borders is close to liquidation after the company said it will not seek approval for white knight Najafi's bid in U.S. Bankruptcy Court Friday.

Borders was close to approval on an agreed upon deal with Najafi Cos. for $215 million and an assumption of $220 million in debt in bankruptcy proceedings, but the deal has apparently fallen apart. Borders, based in Ann Arbor, Michigan, faced objection to the agreed upon deal with Najafi as creditors said Najafi could simply buy assets and liquidate the company.

Creditors preferred another bid from liquidators Hilco Merchant Resources and Gordon Brothers, saying it was stronger. Creditors argued that bid, a clear liquidation deal, involved more cash than the one from Najafi. Creditors hoped Najafi would submit a higher bid, but Najafi is standing by its original offer.

Borders now says it will accept bids until 5 p.m. Sunday and will give notice to the bankruptcy court if no other bid emerges. Regardless, the odds that Borders will soon liquidate, closing its remaining 400 bookstores, are strong.

Read the rest of the article at International Business Times

Dodgers Official Bankruptcy Creditors Committee to Include Beating Victim

The Los Angeles Dodgers official creditors’ committee will include representatives of the man beaten after the team’s first home win, an attack that helped prompt Major League Baseball to appoint a monitor over the team, according to U.S. Bankruptcy Court records.

The family of the man who was beaten, Bryan Stow, sued the Dodgers and team owner Frank McCourt in May. The attack drew widespread media coverage and was one reason Baseball Commissioner Bud Selig appointed a monitor to oversee the team, Dodgers’ attorney Bruce Bennett said at a court hearing.

Others on the official committee of creditors include AVM Systems Limited Partnership, KABC Radio LLC, Major League Baseball Players Association and fireworks company Pyro Events, Inc., according to a filing by the Office of the U.S. Trustee, an arm of the Department of Justice that monitors bankruptcies.

The Dodgers filed for bankruptcy on June 27 after Selig rejected a proposed television-rights deal McCourt negotiated with News Corp. (NWSA)’s Fox Sports.

Read the rest of the article at Bloomberg

Perkins restaurant and Marie Callender's chain files bankruptcy plan

Perkins & Marie Callender's Inc, the owner of the restaurant chains of the same names, said on Friday it expects to emerge from bankruptcy during the fourth quarter under the control of noteholders.

The company filed a plan of reorganization with the Delaware Bankruptcy Court that contemplates cutting its debt by swapping newly issued stock for its unsecured notes.

Read the rest of the article at Reuters

Former Head Coach Jim Donnan Declares Bankruptcy; Former Assistant Coach Todd Donnan Sued

Since I don’t have much nice to say about Jim Donnan, I try not to say much at all, but, as has been noted in recent fanshots here at Dawg Sports, Coach Donnan recently filed for bankruptcy.

When the story first broke, it struck me as odd. After all, the Georgia Bulldogs paid Jim Donnan a significant amount of money not to coach the Red and Black, and he subsequently has been gainfully employed as a television and radio college football commentator. Besides, Ray Goff managed to invest his severance money wisely enough to do well in his involuntarily retirement, so shouldn’t Coach Donnan have been capable of doing the same?

As strange as the story seemed from the outset, it has only gotten more bizarre since:

Jim Donnan's name was attached to an accusation of Ponzi scheme involvement in an extensive ESPN report.

We didn't make note at the time of reports of Donnan's family having declared bankruptcy, but it looks like we should have. Both stories have revolved around West Virginia company GLC Limited, which went under after being outed.

The College Football Hall of Fame coach's family is being sued over a decision by Donnan and his wife to transfer assets to their children.

Read the full article at Dawg Sports

Thursday, July 14, 2011

Las Vegas Megachurch Fights Foreclosure, Seeks Bankruptcy

The Church at South Las Vegas, known for its outreach to prostitutes in Sin City, has filed for bankruptcy protection.

Members of the church agreed to not pay the church’s mortgage after they found out that they owed the bank more than three times the amount that the church building was worth. The 23,635 square foot church building is worth only $2.375 million compared to the $7.653 million owed in mortgage, according to Vegas Inc.

Read the rest of the article at Christian Post

Soldiers seek foreclosures class action

Lawyers said they hope to get class action certification in New York for an increasing number of active-duty U.S. soldiers fighting mortgage foreclosures.

The federal Servicemembers Civil Relief Act prohibits the foreclosure sale of an active-duty soldier's home without a highly detailed court order. Lenders can access a certain Web site to learn whether a soldier is on active duty, the newspaper said.

Read the rest of the article at UPI

Foreclosures decline due to processing delays

The decline, though, is not a sign of a rallying economy, the report notes. Rather, the decline is attributed to processing and procedural delays nudging foreclosures further and further out.

Read the rest of the article at Memphis Business Journal

Foreclosure drop seen as false indicator

Foreclosure filings across the nation in the first half of 2011 are down 29 percent from the same period last year, but not because the housing market is healing, says a national real estate tracking firm.

“Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn't appear to be the case," Saccacio said, adding that paperwork delays were the main reason for the drop. "We estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012 or perhaps even later."

Read the rest of the article at the Atlanta Journal-Constitution

Bankruptcies Are Down, But Will it Last?

Finally, some good news on the personal finance front: Consumer bankruptcies are down by 8% in the first half of 2011. Americans seem to be getting a better grip on their money, but with fresh evidence the economy is stalling -- including the rising unemployment rate -- how long will the good times last?

The Bureau Labor of Labor Statistics reports the jobless rate had risen to 9.2% in June and the "underemployment rate" is rising to 16.2%. Bankruptcies track unemployment fairly closely, although such factors as heightened consumer debt and weak personal savings rates can worsen the problem. If the jobless rate doesn't turn around, economists say, bankruptcy rates will rise, leading more Americans into uncharted territory. But all that depends on other key economic factors outside of employment, housing chief among them.

Read the rest of the article at The Street

Jefferson County Has A Plan To Avert Largest-Ever Muni Bankruptcy

After hovering near the brink of insolvency for nearly three years, Alabama's Jefferson County finally has a plan to settle its $3.2 billion sewer debt and hopefully avoid the largest municipal bankruptcy in U.S. history.

In an interview with Birmingham's WBRC TV station, Jefferson County Commission President David Carrington said county officials had finalized a plan to present to creditors that includes a fixed-rate repayment plan with a fixed term, and would be backed by the state of Alabama's good credit.

Read the rest at Business Insider

Bankruptcy court judge approves Borders auction, liquidators will be the opening bid

Borders Group, the nation’s second largest book store chain that once operated over 1,000 stores, appears headed for liquidation after a judge on Thursday approved its motion to auction itself off with a team of liquidators as its opening bid.

Read the rest of the article at the Washington Post

Sunday, July 10, 2011

10 Ways to Dig Yourself Out of Credit Card Debt

Many Americans have struggled with the burden of credit card debt at one time or another. And getting out of the red and into the black can often seem overwhelming.

If this is any consolation, you're not alone. Credit card debt affects nearly one-third of Americans. At the end of 2010, the average consumer in the U.S. owed $4,200 to credit card companies.

While that number is down slightly from years past, it remains startlingly high. If you are one the millions of Americans burdened by credit cards, here are 10 ways to help you dig yourself out of trouble.

1. Stop Using Your Cards

The first step in ridding yourself of credit card debt is to stop adding to your balance. Credit cards are convenient, but if each purchase is increasing your charged interest, the card isn't worth it. It will be difficult at first, but switching to an all-cash system will help you stay within your monthly budget. Spending with cash is another way to become aware of what you spend so that you can waste less and apply more toward quickly minimizing the balance.

Read the rest of the article at Investing Answers

Credit Card Use Up For First Time In 3 Years

Americans took on more debt in May and used their credit cards more for only the second time in nearly three years. Consumers stepped up their borrowing just as the economy began to slump and hiring slowed.

The Federal Reserve said Friday that consumer borrowing rose $5.1 billion in May, the eighth straight monthly increase. It followed a revised gain of $5.7 billion in April. Borrowing in the category that covers credit cards increased, as did borrowing in the category for auto and student loans.

Borrowing is a sign of confidence in the economy. Consumers tend to take on more debt when they feel wealthier. That boosts consumer spending. Ultimately, it gives businesses more faith to expand and hire. But an increase in credit card debt can also be a sign of people falling on harder times.

Read the full article at Elev8

Borrow against your home to pay credit card debt?

The big question is should you use a home equity loan or HELOC to consolidate debt or pay off high-interest credit cards. First ask, how did you get into credit card debt in the first place? If it was unforeseen health issues, the loss of a job or other events beyond your control, then using your home as your bank may have been warranted. You will most likely have the discipline to repay the loans. However, if you overextended your credit cards because of out-of-control credit card use, old habits die hard. You may lack the restraint to rein in your expenditures, and your home could be at risk.

Read the rest of the article at Fox Business

Wells Fargo Agrees To Pay $125 Million To Investors In Mortgage Lawsuit

Wells Fargo & Co. has agreed to pay $125 million to a group of pension funds and other investors to settle allegations the bank failed to warn investors of the risks the poorly-written mortgage backed securities.

The proposed settlement was filed Wednesday in a California federal court and represents lawsuits filed by the pension funds of Detroit, Alameda County, New Orleans, Guam, and other plaintiffs. The settlement is subject to court approval.

Read the rest of the article at the Huffington Post

Help for mortgages is good but not enough

A new federal program that lets the unemployed defer all or part of their mortgage payments for 12 months or more will provide a real safety net for families that need a temporary bridge to save their homes. But the program is too limited, applying only to loans backed by the Federal Housing Administration. Foreclosures today are more likely due to a homeowner's unemployment than having been trapped in a subprime loan. A large-scale program that grants the jobless a decent reprieve from mortgage payments is needed.

Turning around the housing market is still a major item on President Barack Obama's to-do list. The continued decline in housing prices coupled with record numbers of homeowners in trouble puts a serious drag on the economy, particularly in Florida. As much as the administration has tried to address the issue with a variety of programs — from direct mortgage assistance to rewarding banks and mortgage servicers for modifying loans — its initiatives, as the president acknowledged last week, have had little effect on stabilizing the housing market.

Read the rest of the article at St. Petersburg Times

Oregon Legislature shut door in homeowners' faces over foreclosures

Washington enacted the Foreclosure Fairness Act, allowing homeowners to demand a mediation face to face with their lenders before a foreclosure sale. Attorney General Rob McKenna got power to punish lenders who don't follow it.

Oregon lawmakers actually let protections slide for those facing foreclosure. As of Jan. 2, meetings to simply discuss modifications will no longer be a right. Attorney General John Kroger lacked much enforcement power and won't get any now.

"Clearly the Legislature took a pass on really helping to get Oregon out of this foreclosure crisis," said David Rosenfeld, executive director of the consumer advocacy group OSPIRG. "That's a real shame, given how integral the stability of the housing market is to Oregon's economic recovery."

Read the rest of the article at Oregon Live

Neighbor vs. neighbor as homeowner fights get ugly

The Inlet House condo complex in Fort Pierce, Fla., was once the kind of place the 55-and-older set aspired to. It was affordable. The pool and clubhouse were tidy, the lawns freshly snipped. Residents, push-carts in tow, walked to the beach, the bank, the beauty parlor, the cinema and the supermarket. In post-crash America, this was a dreamy little spot. Especially on a fixed income.

But that was Inlet House before the rats started chewing through the toilet seats in vacant units and sewage started seeping from the ceiling. Before condos that were worth $79,000 four years ago sold for as little as $3,000. And before the homeowners' association levied $6,000 assessments on everyone — and then foreclosed on seniors who couldn't pay the association bill, even if they didn't owe the bank a dime.

Normally, it's the bankers who go after delinquent homeowners. But in communities governed by the mighty homeowners' association, as the sour economy leaves more people unable to pay their fees, it's neighbor versus neighbor.

Read the rest of the article at Times-Union

U.S. Personal Bankruptcies Below 2010 Pace

Fewer Americans filed for bankruptcy in the first half of 2011 but the improvement hasn’t spread evenly across the nation. Filings have fallen in most states compared to a year ago. But Southwestern states, hard-hit by the housing bust, are still struggling with disproportionately high bankruptcy filings. Nevada has had the highest number of bankruptcies per capita since the beginning of 2010. Still, its filings are declining: They’ve fallen 16% this year compared to 2010. In nearby California there’s little sign of improvement. Filings are at roughly the same level as last year.

Read the rest of the article at the Wall Street Journal

Has tide of bankruptcies crested?

Bankruptcy attorney Joe Lamb also sees repeat filers keeping dockets busy down the road.
“A lot of people are marking the time until they are eligible to file,” said Lamb. “I’ve seen more previous filers coming in than I have before.”

Overall, Lamb said he is seeing fewer clients than he did last year.

He still expects continued demand from individuals who got temporary loan modifications on their homes and now face a return to their regular mortgage payments.

“What some programs will do is reduce the payment from $2,000 to $1,200 a month for the next two years. Now coming up on the two-year mark, have they recovered enough financially, or are they right back where they were?” Lamb said.

Then there are those who are turning to bankruptcy after months of haggling with lenders only to have the modification be denied.

“I think as loan modification programs start to bear less and less fruit, there might be a slight uptick,” Lamb said.

Read the rest of the article at Richmond Biz Sense

Bankruptcies down in first half of 2011

U.S. consumer bankruptcies fell 8 percent in the first half of 2011 from the same period last year as households cut debt and the economy recovered, according to data released Tuesday.

Read the rest of the article at Christian Science Monitor

U.S. shifts policy on same-sex bankruptcies

The U.S. Justice Department has dropped its opposition to joint bankruptcy petitions filed by same-sex married couples in a victory for supporters of gay marriage.

The policy change is the latest setback for the 1996 Defense of Marriage Act (DOMA), which has come under increasing pressure since the Obama administration said in February that it would no longer defend its constitutionality.

Until now, the Justice Department had routinely intervened to stop joint bankruptcy cases filed by same-sex couples.

Read the rest of the article at Reuters

Alabama Seeks to Help County Avoid Bankruptcy Filing

Alabama wants to make sure debt-laden Jefferson County doesn't file for what would be the largest municipal bankruptcy in history, a state official said late Wednesday.

While it isn't willing to offer a "cash bailout" to Jefferson County, the state is open to providing a type of "credit enhancement" that would make a deal between the county and its sewer creditors "more palatable," Alabama Finance Director David Perry said in an interview.

That "credit enhancement" could involve making Jefferson County's sewer system an independent entity apart from the county, which Mr. Perry said could help lower the rate that would have to be paid when billions of dollars in sewer debt are eventually refinanced. Such a move would require the passage of state legislation, he said.

"We're willing to do whatever it takes" for the county to avoid filing bankruptcy, Mr. Perry said. But he warned, without elaborating, that Gov. Robert Bentley "wouldn't do anything that's not in the best interests of both the county and the state." Mr. Bentley, a Republican, previously said he'd support a bankruptcy filing by Jefferson County if its officials chose that course of action.

Jefferson County, home to the state's largest city, Birmingham, has struggled for about three years under the weight of $3.2 billion in sewer debt after a failed bond financing.

Read the rest of the article at the Wall Street Journal

Tucson bankruptcies may be leveling off

Tucson bankruptcy filings - which spiked in recent years due to tight credit, plummeting housing values and the persistently sluggish economy - may have started to level off.

Total filings in the first half of 2011, at 3,808, were 7.5 percent fewer than in the same time period last year.
Statewide, the number of bankruptcy filings has also been dropping, data from the U.S. Bankruptcy Court's Arizona District show. There were 19,080 bankruptcy filings in Arizona during the first six months of 2011, a 7.5 percent drop compared to the first half of 2010.

The decreases come after four years of booming bankruptcy rates. Filings have roughly tripled since the onset of the recession. From January to June 2007, there were 1,208 bankruptcy filings in Tucson.

The most frequent filing is Chapter 7, when people or businesses sell off their remaining assets to repay creditors. In Tucson there were 3,052 such filings in the first half of 2011, down 8.5 percent from the same period in 2010.

But Tucson's Chapter 11 filings - used primarily by businesses to restructure their debts - haven't experienced a similar decrease. There were 49 Chapter 11 filings in the first half of 2011. During the same time last year, there were 40 such filings.

Read the rest of the article at the Arizona Daily Star

Wednesday, July 6, 2011

Fewer Americans File for Bankruptcy

After steadily climbing for several years, the number of Americans filing for bankruptcy is on the decline, though that is not necessarily an indicator of an improving economy.

"If they keep going the way they were, bankruptcy filings will keep going down a little bit," said Robert M. Lawless, a professor and bankruptcy specialist.

The number of bankruptcy filings in June was 120,623, or an average of 5,483 a day, a drop of 6.2 percent from May, when filings totaled 122,775, or 5,846 a day, according to a report from Epiq Systems, which tracks bankruptcy filings. There was one additional day to file in June compared with May. Average daily filings are down nearly 10 percent from June of last year.

Though economic factors like foreclosures and unemployment play a role in bankruptcy, over the long run, the filing rate tends to be more closely tethered to the amount of outstanding consumer debt.

Read the rest of the article at the New York Times

Tuesday, July 5, 2011

3 out of 5 mortgages in Reno-Sparks region underwater

Six years after area home prices started their precipitous drop, nearly three in five homes with a mortgage in the Reno-Sparks market are either suffering from negative equity or are at risk of being underwater.

Read the rest of the article at RGJ.com

Why are big banks easing mortgage terms?

JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) are “quietly modifying loans” for borrowers not even in default, cutting debt and easing mortgage terms for borrowers deemed to be at risk by the banks. Banks are being proactive over pay option adjustable rate mortgages (option ARMs), popular before the financial crisis when the housing market was booming, but now at heightened risk for default. Many of these borrowers end up owing more on their mortgages than their homes are worth, which prevents them from moving and taking new jobs.

But many borrowers receiving the unsolicited relief are suspicious both of the actual status of their mortgages and of the banks’ (NYSE:XLF) motives. According to Federal Reserve economists, cutting loan balances, even on loans in default, is so rare that the Fed said they “could find no evidence that any lender was actually reducing principal” on mortgages, according to a paper published back in March.

Read the rest of the article at Wall Street Cheat Sheet

Little-Known Way to Save on Foreclosures

Like many other homebuyers who consider buying a foreclosed home, Chad Kinney was disappointed when he learned it would be difficult to get a mortgage for the property he chose.

The Fannie Mae-owned house that he wanted to buy needed repairs and would likely not pass the property inspection required by mortgage lenders, he was told. That's when the listing agent suggested he apply for a HomePath Mortgage, which doesn't require mortgage insurance, a property inspection or appraisal and is offered exclusively to borrowers buying homes from Fannie Mae.

"That was the first time I ever heard of HomePath, so I started researching," he says. "To me, the selling point was my monthly payment is lower and I can get an additional $15,000 for renovations."

Read the rest of the article at Fox Business

Facing Foreclosure? Bank of America Thumbs Its Nose at You

Hooray! Bank of America (BAC) is lowering your mortgage payments, which means you’ll get to keep your house. Or maybe not: Many homeowners report that the financial giant is moving to foreclose ever after it granted them a permanent loan modification under the federal government’s main anti-foreclosure initiative.

Read the rest of the article at BNET

Luxury real estate: How to snag a deal on a foreclosure or short sale

“There are bargains to be had,” Sharga says. But “unless you’re absolutely in love with the property,” hold off until you know you’re getting a great deal, he notes. Foreclosures sold at prices an average 27 percent below non-foreclosed property in the first quarter of 2011, he says.

James Reid, a businessman from Anchorage, Alaska, was looking to pick up a house in the Seattle area to avoid staying in hotels on his regular trips there. He and his wife found a property on Puget Sound that had sold for $1 million-plus and was on its way to foreclosure. While the price to get the two-bedroom, two-bathroom waterfront home was discounted in a short sale to about $750,000, Reid said he made a cash offer of $650,000.

They learned that while the seller might be okay with their offer, it was still up to the mortgage holder to agree to the price, since a short sale is an agreement to accept less money than is owed to avoid the more cumbersome and lengthy foreclosure process. The first mortgage holder agreed. But a second mortgage holder that did not. After a lot of negotiating, the deal was sweetened to $730,000 and closed in about three months, Reid said.

Read the rest of the article at Reuters

Supreme Court in Anna Nicole Smith case: Bankruptcy Courts Cannot Decide Debtors’ State Law Counterclaims

In a decision that may have significant practical implications to the practice of bankruptcy law, the U.S. Supreme Court recently declared, on constitutional grounds, that a bankruptcy court cannot exercise jurisdiction over a debtor’s state law counterclaims, thus considerably limiting the ability of the bankruptcy court to fully and finally adjudicate claims in a bankruptcy case. Stern v. Marshall, No. 10-179 (June 23, 2011).

Stern is the latest chapter in the long-running saga over entitlement to nearly half a billion dollars from the estate of oilman J. Howard Marshall II. The key players are Vickie Lynn Marshall (aka Anna Nicole Smith) and her late husband’s son, Pierce Marshall.

Read the rest of the article at JD Supra

State's Bankruptcy: Back In Time to Steal Your Pension and Benefits

The threat of the federal government providing State bankruptcy protections has disappeared from the news since it first surfaced, to much republican applause, six months ago. This is an ominous silence.

The fiscal crises most states are experiencing will necessitate their need to use bankruptcy protection. All State employees, or employees whose jobs or pensions exist per contracts with the State, should be alarmed because State bankruptcy protections will suddenly, if not overnight, take away your contractual rights. Chapter 9 bankruptcy protection is currently available only to municipalities. If Chapter 9 is applied to the states it will mean the reduction of any expected pension benefits for current employees and retired former employees. Contracts with current employees and with sub-contractors to the States will also be under the control of the court and likely dramatically reduced.

It has been a quiet four months since the idea of allowing the States to declare bankruptcy re-submerged. Spawned by David Skeel in an op-ed piece in The Weekly Standard the possibility of allowing the States to further financially assault their employees via bankruptcy was immediately seized upon by congressional legislators like Newt Gingrich. "We're faced with the danger that the states are going to try to show up and say to Washington: You have to give us money," Gingrich said. "And I think we have to have an alternative that allows us to say no." From October 2010 to February 2011 the States bankruptcy proposal was warmly received by the Republican side of the aisle.

Read the rest of the article at Op Ed News

'Sovereign Citizen' Arrested After Trying To Place The U.S. In Bankruptcy

Marshall E. Home, a self-styled 'sovereign citizen' in Arizona and former Tucson mayoral candidate, has been arrested on two federal charges of making false claims related to a "business" he ran that purported to save homes from foreclosure.

The complaint alleges that Home also tried to place the U.S. in bankruptcy in March, and falsely claimed he had a claim of $3 billion against the federal government.

Home, 81, was arrested Friday in Tucson after a criminal complaint charged him with two counts of false claims in bankruptcy. The complaint identifies him as a sovereign citizen -- someone who doesn't believe in the legitimacy of the U.S. government.

According to the complaint, Home and another individual operate "Individual Rights Party; Mortgage Rescue Service," which claims it can help people stop foreclosure on their homes for a $500 fee as part of his "larger overall bankruptcy liquidation."

Read the rest of the article at TPM

Still plenty of personal bankruptcies in California

Personal bankruptcies are down in many parts of the country, but there’s little sign of improvement in California, according to the latest statistics from the National Bankruptcy Research Center.

More than one in every six bankruptcy filings nationwide was in California during the first six months of 2011.

The latest statistics show fewer Americans filed for bankruptcy in the first half of this year nationwide, falling the most in North Dakota, Vermont, Washington, D.C., and West Virginia.

Read the rest of the article at MyDesert.com

U.S. Personal Bankruptcies Below 2010 Pace

Fewer Americans filed for bankruptcy in the first half of 2011 but the improvement hasn’t spread evenly across the nation.

“The drop in bankruptcies for the first half of the year shows the continued efforts of consumers to reduce their household debt, and the overall pull back in consumer credit,” said Samuel J. Gerdano, executive director of the American Bankruptcy Institute.

As of June there were 709,303 personal bankruptcy filings this year, down 7.9% from the same period a year earlier, according to the American Bankruptcy Institute and the National Bankruptcy Research Center.

Filings in June were up 4.3% from a month earlier, though monthly tallies aren’t adjusted for seasonal swings. “The broader perspective suggests less of a concern,” said Ronald Mann, a law professor at Columbia University. “Filings were still lower than last year’s torrid rate.”

Read the rest of the article at the Wall Street Journal

Monday, July 4, 2011

Reverse mortgage defaults threaten seniors

Reverse mortgages, which allow older adults to convert some of the equity in their homes into cash, have been a life line for many house-rich, cash-poor seniors struggling to get by.

But now, with a growing number of reverse mortgages falling into default, these retirees could end up losing their homes.

As the name implies, reverse mortgages work the opposite of traditional mortgages. Instead of the homeowner making monthly payments to the lender, the lender pays the homeowner, in a lump sum or a set amount each month.

Available to people age 62 and older, none of the money -- which might be used for medical bills, home repairs or day-to-day living expenses -- has to be repaid as long as the borrower remains in the home.

Read the rest of the article at the Pittsburgh Post-Gazette

Chicago’s Loftiest Foreclosure—and Possibly the World’s

When a 2,900-square-foot condo on the 83rd floor at the John Hancock Center sold June 22, it became Chicago’s loftiest foreclosure—and very likely, the world’s.

The condo, which combines what were a four-bedroom unit and a studio unit, had been completely renovated within the past several years, says Meg Nagel, the Southport Sotheby’s International agent who represented the home. The condo has marble, granite, and onyx finishes, whitewashed oak flooring, lots of cabinetry in the kitchen, and a walk-in pantry. Its condition, Nagel says, was “exquisite, move right in, nothing wrong with it. There is so much closet space, it looks like a movie star’s home, and the views are spectacular. On the west you get the sunsets, and north you see across Oak Street Beach and all the way up the lakefront to Evanston.”

Nagel, who lives in the building and knew the former residents of this condo, would not discuss them.

Read the rest of the article at ChicagoMag.com

HUD Secretary: U.S. Home prices poised to climb

Prices for U.S. homes may climb as soon as the third quarter, ending declines as foreclosures decline make more home available for sale, Housing and Urban Development Secretary Shaun Donovan said.

“It’s very unlikely that we will see a significant further decline,” Donovan said yesterday on CNN. “The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”

Home sales have increased in six out of the past nine months and the number of property owners in default is declining, Donovan said on CNN’s “State of the Union” program. Housing prices will begin rising as the number of foreclosures declines, he said.

Read the rest of the article at Bloomberg

Economy Project: Options When Faced With Foreclosures

A new program just came out. Specifically, it can help Texas, in addition to other states. It's called the Emergency Homeowners Loan Program. And then other options would be you may qualify for HAMP which the Making Home (Affordable) Loan Modification program. You may qualify, simply, for a special forbearance, let's say, if you have an FHA loan. So it's really going to come down to the loan that you have.

Read the rest of the article at KERA Public Broadcasting

Foreclosure overhaul leads to Hawaii housing glut

When Hawaii passed a new law with extensive protections to prevent residents from losing their homes, it was hailed as the nation's strongest foreclosure law - maybe too strong, many warn.

In response to the law, mortgage giant Fannie Mae ( FNM - news - people ) directed its lenders three weeks ago to move all of its Hawaii foreclosures into the courts rather than use a mediation system the law created.

The courts say they'll struggle to handle the load, with foreclosure cases already taking 12 to 14 months to resolve. Lenders are warning lawmakers that they don't intend to use mediation at all.

The likely result will be further delays in getting foreclosed homes back on the market, prolonging the slow housing recovery at the root of the country's enduring economic troubles.

Read the rest of the article at Forbes

Saturday, July 2, 2011

Mortgage Executive Receives 30-Year Sentence

A federal judge on Thursday sentenced Lee B. Farkas, a former mortgage industry executive accused of masterminding one of the largest bank fraud schemes in history, to 30 years in prison.

The case against Mr. Farkas, the former chairman of the mortgage firm Taylor, Bean & Whitaker, stands as the single-biggest prosecution stemming from the financial crisis. Prosecutors had asked for a sentence of as much as 385 years.

As chairman of Taylor Bean, Mr. Farkas orchestrated a plot that caused the demise of Colonial Bank and cheated investors and the government out of billions of dollars, prosecutors say.

Read the rest of the article at the New York Times

Mortgage defaults expected to rise in England

Mortgage lenders expect the number of people defaulting on their home loans to rise in the coming months, according to a new survey.

The Bank of England's quarterly study of credit conditions revealed the default rate on secured loans was unchanged in the second quarter of 2011, but banks and building societies expect an increase in the third quarter.

Default rates on unsecured loans fell for a seventh consecutive three-month period, the analysis added, but this rate is also predicted to rise.

Meanwhile, the number of people failing to make payments on credit cards increased and is expected to continue rising in the coming three months.

On the supply side, the availability of mortgages remained flat between April and June, a trend that banks and building societies believe will carry on in the coming three months.

Read the rest of the article at My Finances

The Swindler and the Home Loans

Holding banks accountable for all those disastrous mortgages has been remarkably difficult. But last week, a big bank agreed to pay a price: Bank of America announced that it would part with $8.5 billion to settle claims that its Countrywide Financial unit had packaged garbage loans into investments that were said to be safe.

That is good news for investors, as these things go. But another, lesser-known case now winding its way through the courts may help others recover losses from lenders who dealt in risky mortgages and claimed that they had no duty to their customers.

The case involves 21 families on Long Island and a convicted swindler named Peter J. Dawson. Mr. Dawson, a self-described financial planner, stole roughly $8 million from his clients, among them elderly parishioners at his church in Uniondale, N.Y. He pleaded guilty in state court in December 2007 and is serving 5 to 15 years in prison.

What does this have to do with mortgage lenders? Home loans were central to Mr. Dawson’s theft. He persuaded people who had paid off all or much of their mortgages to take out new home loans and entrust him with the proceeds. He promised to pay off their new loans with income from investments. Instead, he absconded with their money. Many of his victims lost their life savings and now cannot afford to pay off the mortgages.

Read the rest of the article at the New York Times

Bank of America's mortgage settlement doesn't benefit homeowners now, but it may down the road

On June 29 we learned that Bank of America will pay $8.5 billion to settle claims by big investors, including the New York Federal Reserve, that mortgage backed securities sold by Countrywide (which BofA acquired in the heat of the financial crisis) weren't as pristine as they were cracked up to be. That's good news for investors. The settlement may also, down the road, create some good news for homeowners.

Read the rest of the article at Slate

New Funding to Help Homeowners Facing Foreclosure Due to Economy or Medical Condition

The Emergency Homeowners Loan Program (EHLP), will provide emergency mortgage assistance to homeowners who are temporarily and involuntarily unemployed due to the economy or a medical condition and are at risk of foreclosure. The EHLP can provide eligible homeowners with a 0% interest, forgivable loan that pays past-due mortgage payments, as well as a portion of the homeowners mortgage payment for up to 24 consecutive months, or up to $50,000, whichever comes first. This federal program has specific eligibility criteria, and pre-applications will only be taken from June 20th through July 22nd. Pre-application worksheets are available from www.FindEHLP.org. Homeowners should know that there is no fee associated with the counseling or the loan - any company asking for a fee to participate in the EHLP program is probably a scam.

Read the full article at Newsleader

Experts: Pinellas lawyer takes foreclosure fight to ethical edge

Pinellas County attorney Robert L. Tankel advocates showing no mercy toward property owners who fall behind on their homeowners association fees.

"If you have to sue some people, that's life," Tankel advised associations in a YouTube video.

The pitch helped Tankel secure more than 500 association clients, some of which have gone after homeowners for as little as $239.50 in unpaid fees. The swift action allows associations to foreclose on the property, kick the homeowner out, and then collect rent from a new tenant or sell the homes to third parties.

Either way, the HOA gets its money and Tankel gets a fee, usually a couple thousand dollars. Tankel has also offered to waive his legal fee if his clients sell their properties to a company he owns.

Read the full article at the St. Petersburg Times

Debunking the Foreclosure-to-Apartment Assumption

Apartment operators have long been considered big beneficiaries of the housing bust. But one leading industry analyst thinks that rental homes are the post-housing crash world’s real stars...In the last few years, investors have been snapping up distressed and foreclosed homes and renting them out, dramatically increasing the supply of rental single-family homes. The number of single-family rental households spiked 21% from 2005 until 2010...In Nevada, Florida and Arizona – all markets hard-hit by foreclosures – the growth of single-family residential over apartment rental is even more striking: Between 2005 and 2010 the number of families renting homes grew 47.6%, compared with a growth rate of just 0.6% in traditional apartments. About one-in-three rental units is a single-family house, the report says.

Read the full article at the Wall Street Journal

8 in East Bay admit to rigging foreclosure auctions

Eight Bay Area real estate investors agreed to plead guilty to rigging foreclosure auctions in Alameda and Contra Costa counties, the Department of Justice said on Thursday. The investors' actions suppressed competition for properties, keeping their prices noncompetitive, it said.


Read the full article at the San Francisco Chronicle

Most American Bankruptcies Include Extreme Medical Expenses

“Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy,” said Dr. David Himmelstein, associate professor of medicine at Harvard Medical School. He described the situation as “frightening” in a news release issued by the Physicians for a National Health Program. Himmelstein is lead author of a study to be published in the August 2009 issue of the American Journal of Medicine but the report can be found online now.

The study, conducted by researchers at Harvard’s medical and law schools, as well as researchers at Ohio University, found that, in 2007, two-thirds of all bankruptcies in the US involved medical expenses and related issues. When compared to bankruptcies in 2001, the presence of medical issues in bankruptcies jumped by almost 50%.

Read the rest of the article at Med Headlines

Billionaire Bankruptcies?

As reports surface that wealthy socialite Patricia Kluge has filed for Chapter 7 bankruptcy protection, many have wondered: how can you file for bankruptcy when you are a billionaire?

When United State bankruptcy laws were drafted, the focus was pro-debtor. The idea was to provide a fresh start for people who had suffered under the weight of heavy debts. Rather than be forced to struggle the rest of their lives with the debt, filers in bankruptcy could liquidate and sell their assets to pay creditors what they could, and then walk away.

The idea was not limited to the extremely poor. Thomas Jefferson reportedly filed for multiple bankruptcies over the course of his lifetime, along will thousands of other wealthy Americans. Whenever an individual’s debt exceeds their assets, bankruptcy may be worth consideration.

For Patricia Kluge, bankruptcy was a good option. With over $50 million in debts, but somewhere between $1 to $10 million in assets, bankruptcy is a winning proposition.

Read the rest of the article at National Bankruptcy Forum

The Latest Weapon in the Pro Sports Playbook: Bankruptcy

A nasty bout of bankruptcies is racing through the sports world as four North American franchises have taken the unusual step of filing for Chapter 11 in the past three years -- a startling increase from the just six filings in the previous 40 years.

The Los Angeles Dodgers became the latest victim to succumb to the bankruptcy bug as the storied baseball team took the Chapter 11 plunge this week despite being one of the richest and most profitable franchises in all of sports.

But before you blame the sluggish economy for the rash of filings, realize debt-ridden owners and prospective buyers are increasingly using the bankruptcy courts as a vehicle for getting what they want and dodging edicts from league commissioners.

Read the full article at Fox News Business