Wednesday, August 31, 2011

S&P gives subprime mortgages AAA rating

The credit ratings agency Standard and Poor's is now awarding higher credit standings to securities backed by subprime mortgages than to the U.S. government's debt, Bloomberg News reports.

Read the rest of the article at CBS News

Nevada AG questions Bank of America foreclosures, seeks to scuttle settlement

Nevada Attorney General Catherine Cortez Masto hit Bank of America with a new charge Tuesday: That it’s been foreclosing on homes it had no authority to foreclose on.

The allegations were made in an amended complaint in a lawsuit initially filed in December charging the banking giant had harmed struggling Nevada consumers by failing to help them modify their mortgages and had deceived some by leading them to believe their loans would be modified — but then foreclosed on them anyway.

Read the rest of the story at Vegas Inc.

Police: Foreclosures creating spike in marijuana grow houses

Police are reporting a spike in the presence of marijuana grow houses since the economic downturn. The Las Vegas Metro Police Department busted 119 operations last year. So far this year, that number is already at 108.

"We're busting almost three to four marijuana labs a week," says Metro narcotics Lieutenant Lazaro Chavez. "The majority of them are rental properties, some of them are abandoned houses that have been sitting abandoned for months."

Read the rest of the article at ABC 13 Action News

What’s worse for credit score — foreclosure, short sale or deed in lieu?

You can’t really say that credit scores don’t matter. They do.

So it’s understandable that the hundreds of thousands of homeowners who finally realize they can no longer hold onto their homes worry about how turning in their keys to the house through various transactions with their lender will affect their credit scores.

During the housing boom, millions of homeowners got easy access to mortgages. Now, some mortgage lenders and government officials have taken action after discovering that many mortgage documents were mishandled.
Gallery

A look at the leaders in Washington and beyond who are involved in the foreclosure mess.

People can just let the home go to foreclosure, and this will affect their scores for seven years. Or they can do a deed in lieu of foreclosure. With a deed in lieu, you voluntarily give your home to the lender in exchange for the cancellation of your loan. This, too, can create a negative mark on your credit history.

Read the rest of the article at the Washington Post

Government Looking for Ways to Unload Foreclosures

The American people should make up the biggest part of the homeowner pie. But they don’t. The US government is, and it’s looking for a way to unload some of their properties without making huge waves.

Government-run housing companies like Fannie Mae, Freddie Mac and the Federal Housing Administration hold around one-third, or 295,000, of the country’s 800,000 foreclosed properties, with inventory expected to continue growing.

The government is now turning to the public. The three agencies are asking people to send them suggestions to manage the inventory, especially ideas on how to turn the foreclosed properties into rentals.

Read the rest of the article at Rapid News Network

Foreclosures cause health problems

Losing a home through foreclosure is not just stressful financially, but it can also severely impact homeowners' health, the Wall Street Journal reported. In a study, two economists showed a direct correlation between foreclosure rates in Florida, New Jersey, California and Arizona and the health of residents in those areas. In their paper, the researchers noted that an increase of 100 foreclosures corresponded to a 7.2 percent rise in emergency room visits and hospitalizations for hypertension, and an 8.1 percent increase for diabetes, among people aged 20 to 49. Since the economists didn't find any connection to diseases such as cancer or elective surgeries such as hip replacement, they concluded that areas with high foreclosures are seeing mostly an increase of stress-related ailments.

Read the rest of the article at The Real Deal

Small Business Bankruptcies on the Rise

Equifax found bankruptcies more than doubled in three Southern California metropolitan areas, from prior to the start of the recession in 2008, to the first quarter of this year.

Read the rest of the article at NBC LA

Dick Cheney opposed GM bailout by Bush and Obama

Then-vice president Dick Cheney says he opposed the decision to save General Motor during its bankruptcy.

In a new memoir In My Time, Cheney says he disagreed with President George W. Bush's decision to rescue GM with a $13.4 billion bailout in the final days of his term,The Detroit News says.

Read the rest of the article at USA Today

Tuesday, August 30, 2011

At 65 percent, Nevada leads nation in sale of foreclosed homes, Arizona second

Nevada led the nation during the second quarter with 65 percent of its homes sold as foreclosures, according to a California research firm.

The nation’s percentage was 31 percent. Arizona was second with 57 percent and California was third with 51 percent.

Read the rest of the article at Vegas, Inc.

Foreclosure mess here to stay

Massachusetts will need more than six years to clear out all homes currently in the foreclosure “pipeline” if present trends continue — meaning the state’s housing crisis could drag on until at least 2017, new figures show.

LPS found that banks are only seizing deeds on about 788 Massachusetts properties per month, even though 58,957 Bay State homeowners are either in the foreclosure process or at least 90 days behind on mortgage bills.

At that pace, lenders would need 6.25 years to retake title on all “at-risk” Massachusetts properties. And that doesn’t include houses that fall into delinquency between now and 2017, nor properties where banks have seized deeds but haven’t evicted the residents or resold the homes.

Read the rest of the article at the Boston Herald

HUD extends foreclosure-prevention program

The U.S. Department of Housing and Urban Development is briefly reopening the application process for its Emergency Homeowners Loan Program, a $1 billion initiative to prevent foreclosures.

Qualified applicants can get up to $50,000 in interest-free loans to help pay mortgage bills for up to 24 months.

Read the rest of the article at the Boston Herald

Top 10 cities for small-biz bankruptcies

Sacramento and three other California metro areas top the latest list of small-business bankruptcies in the first quarter, according the the credit rating service Equifax .

Nationally, small-business bankruptcies declined more than 15 percent in the first quarter from the same period in 2010. But the rate of decline could be slowing, the service warned.

And the numbers far exceed levels seen before the Great Recession -- by 30 percent nationally. The company defined small businesses as those with fewer than 100 employees.

Read the rest of the article at the Sacramento Business Journal

1st drop in Orange County July bankruptcies in 5 years

In July, 1,414 Orange County residents and businesses filed for bankruptcy, down 17.5% from a year earlier, reports the U.S. Bankruptcy Court.

That's the first July decline in bankruptcy filings since 2006, according to data for the Central District of California, which comprises eight counties from San Luis Obispo to the Arizona border.

"I think consumer bankruptcies have been a little slower than we were a year ago," said Irvine consumer bankruptcy attorney Tim McFarlin of McFarlin & Geurts LLP. "What I saw driving a lot of Orange County bankruptcies were foreclosures. Recently, banks have been less aggressive about foreclosures and that has caused bankruptcies to slow.

Read the rest of the article at the Orange County Register

Bank Of America Homeowners See Increases In Bankruptcy After HAMP Denials–Options Still Available To Help Avoid Mortgage Troubles

Homeowners with Bank of America have fallen into a position where a HAMP modification program may not be available so they have turned to bankruptcy as a result of their financial situation, and according to the Treasury Department Making Home Affordable reports, Bank of America was one of the mortgage servicers who saw an increase in these bankruptcy numbers. However, homeowners may still have opportunities available outside of foreclosure and bankruptcy even when a modification program is not made available.

Yet, it does still need to remembered that there are some homeowners who feel that bankruptcy may be their only option, and in some cases a homeowner’s a situation may have deteriorated to a point where bankruptcy seems inevitable or could indeed be one of the last options they have. For homeowners whose trial modification was canceled within HAMP, the overall program total in the month of April for Bank of America stood at 7,197 homeowners who were facing bankruptcy, while this number in May increased to 7,802. Also, for a homeowners who were not accepted for a trial modification program, Bank of America saw a program total increase from 10,228 bankruptcies in April to 11,694 in May.

Read the rest of the article at Red, White and Blue Press

Most Of Michael Vick's New $100 Million Contract Is Already Spent

We said last night that Michael Vick's shaky financial situation has been taken care of thanks to his new $100 million contract with the Philadelphia Eagles.

The truth is a little more complicated, however. (For starters, the real number on the deal is closer to $40M.)
Vick will certainly be living comfortably for the next several years, but the vast majority of his new contract is already spoken for.

Before going to jail on dogfighting charges, Vick was bankrupted by his legal obligations and the cancellation of his then-record NFL contract.

Read the rest of article at Business Insider


Former Georgia football coach's bankruptcy plan in doubt

Jim Donnan, former football coach at the University of Georgia, has run into complications with his filing for protection under bankruptcy law.

Read the rest of the article at Bankruptcy Home

Monday, August 29, 2011

Should you file Chapter 7 or Chapter 13 bankruptcy in Arizona?

A common question I hear as a bankruptcy attorney is whether someone considering personal bankruptcy should file under Chapter 7 or Chapter 13. Usually, Chapter 7 is more desirable, since it wipes out all of your dischargeable debt; Chapter 13 merely reorganizes your debt into smaller amounts payable over 3-5 years. However, occasionally Chapter 13 is a better deal, and sometimes clients simply do not qualify for a Chapter 7 or do not want to give up an asset they would lose in a Chapter 7.

Chapter 13 can be a better deal if you have a second mortgage on your home. Generally you can keep your house when you file bankruptcy, unless you have more than $150,000 equity in it (the amount varies by state). But if you have a second mortgage, the best you can do is get it reorganized and reduced in a Chapter 13. If you owe $100,000 on a second mortgage, and have $75,000 in dischargeable debt, it is probably better to file Chapter 13. (There are some nuances to this, if you would like to set up a free consultation with us you can contact us at AlexanderBankruptcyLawFirm.com)

There are income caps to filing Chapter 7. In Arizona, you cannot make more than $55,000 per year in order to qualify. There are exceptions to this, and a married couple has a higher threshold.

In a Chapter 7 bankruptcy, you are permitted to keep one car per adult filing as long as the equity you own in the car does not exceed $5000 (the amount varies by state). You cannot own extra recreational vehicles or toys like a boat. Someone who does not want to give up their car that has over $5000 in equity or extra toys might want to file Chapter 13 instead for that reason. In a Chapter 13, you can keep all your property. 

Alexander Bankruptcy Law Firm provides low cost Chapter 7 and 13 personal bankruptcies. $995 Chapter 7 and $2500 Chapter 13 plus court filing fee. Free consultation with a compassionate attorney who will handle your case personally. Call 24/7, available to meet with you around your schedule. Conveniently located in Central Phoenix along the Camelback corridor.  

The New Fannie And Freddie: Flim And Flam

Jagadeesh Gokhale, a senior fellow at the Cato Institute, calls the U.S. to abolish the failed government-sponsored business model.

Read the article at Forbes

Housing refinance proposal unfair to most homeowners

The plan reportedly supported by the Obama administration to force Fannie Mae and Freddie Mac to reduce interest rates for millions of homeowners would mean that some homeowners get government help while their more responsible neighbors do not.

It would in effect be a backdoor stimulus, one involving pushing taxpayer cash out the door without a vote of Congress. And there is little reason to think it would be much more effective than the fiscal stimulus to date.

Read the rest of the article at The Hill

Recession leaves many in permanent cutback mode

Since the third quarter of 2008, overall U.S. household debt, which includes credit cards, mortgages, student loans and car loans, has declined by more than $1 trillion, according to the Federal Reserve Bank of New York. While the rate of the decline has slowed somewhat in recent months, total consumer debt is still down 8.6% from the third quarter of 2008.

Some of the reduction in debt stems from tighter credit standards, which have made it more difficult for consumers to borrow. Financial institutions have also written off billions in debts deemed uncollectable. But other trends point to a dramatic change in household balance sheets.

Read the rest of the article at USA Today

Feds Considering Helping Underwater Homeowners Refinance

This week we bring you news about aid for troubled homeowners and Bank of America foreclosing on people who’d either paid their loans on time or early.Refinancing: The New York Times reports that the Obama Administration is considering a refinancing program to help homeowners whose loan balances exceed their home values. The Times report U.S. homeowners owe $700 billion more than what their homes are worth. Bankrate’s Mortgages Blog says 70% of all mortgage applications in the first half of the eyar were from homeowners wanting to refinance.

Read the rest of the article at LoanSafe.org

Bank of America event offers help to customers at risk of foreclosure

Since 2009, Bank of America has ramped up efforts to help customers facing hardship with their homes. The number of mortgage specialists in the outreach division has quadrupled to 2,000 since late last year. And by the end of 2011, there will be nearly 50 customer assistance centers nationwide in areas that have been the hardest hit by the housing market, including locations in East Hanover and Pennsauken, NJ. The centers offer similar financial help as last week’s event, and customers can get on-site decisions with mortgage specialists and other financial counseling.

The goal is to get homeowners a loan modification, but options like short sales, deed in lieu of foreclosure (in which the house is given back to the lender without foreclosure) and foreclosure itself are also discussed. Of the customers who bring in all the necessary paperwork, about 60 percent receive a decision about a loan modification on-site and the remaining homeowners typically have an answer within 30 days.

Read the rest of the article at NJ.com

Do's and Don'ts Prior to Filing Bankruptcy

Do's

#1 Make your house payment.
#2 File your taxes.
#3 Prepare to meet with your attorney.

Don'ts

#1 Don't pay a debt to a family member.
#2 Don't continue to use your credit cards.
#3 Don't transfer assets out of your name.

Read the full article at JD Supra

Saturday, August 27, 2011

Patience paying off in short-sale process

Are short sales getting easier?

It's something that's hard to quantify because there are still plenty of horror stories in which a mortgage servicer took months longer than expected to decide on an offer, and the prospective buyers wouldn't wait or couldn't agree on a price.

But there is some numerical and anecdotal evidence that some servicers have grown more interested in approving short sales.

Read the rest of the article at the Chicago Tribune

Real Estate Scam of the Day: Alabama Real Estate Scam Mastermind Pleads Guilty

Lance Collins of Baldwin County, Alabama, pleaded guilty yesterday to conspiracy to commit mail and wire fraud. Based on prosecutors’ response – they agreed to recommend leniency and have agreed to a 6-month delay in sentencing – it appears that he plans to cooperate in revealing just how he “defrauded mortgage lenders by submitting false loan applications and settlement statements to get money to purchase condominiums near the beach”[1]. 16 different property owners are suing Collins in an attempt to recoup money lost on “silent second mortgages” on properties with an estimated loss of $1 million, while prosecutors have said they suspect there are at least 50 other similar transactions in existence.

Read the rest of the article from the Bryan Ellis Real Estate Letter

Who are Fannie Mae and Freddie Mac?

Fannie Mae and Freddie Mac are publicly traded companies that guarantee the majority of new mortgages in the U.S. They are key players in the government's foreclosure-prevention initiative.

Fannie Mae, officially the Federal National Mortgage Association, and Freddie Mac, the Federal Home Loan Mortgage Corp., were taken over by the government in 2008 after billions of dollars in losses and years of mismanagement.

Fannie and Freddie operate in the secondary mortgage market. They don't sell mortgages directly to homeowners; they buy mortgages from banks and other lenders, which can use the money to issue new home mortgages.

Read the rest of the article at the Seattle Times

Faced with foreclosure – for paying her mortgage early

Can the nation's big banks get any more incompetent in how they handle individual foreclosures?

A popular mistake seems to be foreclosing on the wrong home and then only offering a grudging apology later - of course not until after having thrown some innocent homeowner's possessions onto the sidewalk and locking everything up tighter than Fort Knox.

It's a hard act to top, but Bank of America appears to have succeeded in the case of a 70-year-old woman in Florida.

Underwater on her $133,000 New Port Richey home and nursing a bedridden husband, Sharon Bullington found herself in a financial jam as medical bills began to pile up.

Read the rest of the article from the Boston Globe

Distressed homes sell at double speed

Distressed homes for sale — bank-owned foreclosures and owners selling 'short sales" with lenders' help — move twice as fast as non-distressed homes.

Read the rest of the article at the Orange County Register

Trashing foreclosure homes may be on the rise

"It looks like someone took revenge," said Nick Davis, a real estate agent with Re-Max Premier Group. "Unfortunately, we're seeing more of this. We've seen cement in the plumbing systems, the air conditioners ripped out from the outside, wiring being removed.

Davis said he's talked to homeowners who view trashing their home on the way out the door as one last way to stick it to the bank. Real estate agents and lenders increasingly report deals falling through because of the condition of homes, left by original owners. While buyers used to be willing to clean up messes in exchange for a good deal, there are so many homes for sale now that buyers don't have to settle.

Read the rest of the article at Tampa Bay Online

Business Credit Card Debt Set to Rise?

When asked whether they expected demand for credit from small businesses to grow in the next six months, 74% of respondents said yes. But only 46% thought that the supply of credit to those small businesses would increase. That's quite a shortfall, and bigger than the one FICO found when it posed the same questions to bank risk managers in Europe. (Who'd have thought it? We've already discovered a more tedious task than talking to risk managers in American banks.)

So what can small businesses do when their bank loan applications are rejected?

Read the rest of the article at Fox Business

Johnson Sees End of Solar Subsidies, More Bankruptcies

Gordon Johnson, analyst at Axiom Capital Management Inc., talks about the state of the solar-energy industry, competition between Chinese and American solar companies, and the bankruptcy of Evergreen Solar Inc. Johnson speaks with Pimm Fox on Bloomberg Television's "Taking Stock."

Watch the video from the Washington Post

Bankruptcy Filing Fee Waiver Question & Other Bankruptcy Questions

I have been laid off 5 months now and need to file bankruptcy. I can't deal with the stress anymore of dealing with creditors. I am making $23,220 a year on unemployment. Would I qualify for the Chapter 7 fee waiver? Also, I heard it is tremendously difficult to get a chapter 7 approved. That true?

Also, how long does it take to find out if you are approved for the Fee Waiver and do I have to pay the fee in the meantime while I wait for approval?

Read the answer on Avvo

Saab might file for bankruptcy, again

Reports in Europe say that Saab will once again be seeking court-order protection from creditors, the European equivalent of bankruptcy.

The reports did not say when this would happen. Saab's U.S. spokeswoman, Michele Tinson, told Automotive News in an e-mail that she could neither confirm nor deny the report.

Swedish Automobile rescued Saab from shutting down last year when then-owner General Motors entered bankruptcy protection. Saab has been struggling ever since to restart production and to pay employee wages and suppliers.

Read the rest of the article at Auto Week

Thursday, August 25, 2011

Medical Debt Cited More Often in Bankruptcies

Medical debt is increasingly a factor in personal bankruptcy filings, an analysis of data at a large credit-counseling agency finds.

Roughly 20 percent of those seeking financial counseling this year and last cited medical debt as the primary cause of their decision to seek bankruptcy protection, according to CredAbility, an Atlanta-based nonprofit credit counseling agency that serves clients nationally. That’s up from about 12 to 13 percent in the prior two years. The analysis included more than 47,000 clients for the first half of this year, and more than 100,000 in each of the prior years. (Federal law requires anyone filing for bankruptcy to receive counseling in case other options are available.)

With unemployment persistently high, more people have lost health coverage along with their jobs, says Michelle Jones, the agency’s senior vice president of counseling. Health costs are escalating for employed people, as well, in the form of higher premiums and deductibles. More health plans are offering lower monthly premiums in exchange for higher deductibles, but that means people find themselves on the hook for more out-of-pocket costs, if they get sick.

Read the rest of the article at the New York Times

Bankruptcy filings, state by state, 2005-2010

Nevada still leads in filings per 1,000 residents.

Click here to see an interactive chart of bankruptcy filings by state from CreditCards.com



California Among Top 5 in Per-Capita Bankruptcies

California leads the nation in number of bankruptcy filings, with more than 126,000 filings during the first half of 2011, reports CreditCard.com.

But that’s not unexpected since California has the highest population among the 50 states. Perhaps the more meaningful ranking is per-capita bankruptcy filings. On that list, California is 5th for the first 6 months of 2011. (It was 6th in 2010.)

There’s little doubt that the state and region are struggling economically. According to the U.S. bankruptcy court, the Central District of California, which includes Orange County, had the second highest increase in bankruptcy filings in the nation in the past year.

CreditCard.com has a nifty interactive U.S. map that gives state-by-state bankruptcy details for 2007 through 2011.

It’s instructive to see how little problem bankruptcies were in California and most of the country a mere 4 years ago (except for Tennessee, Georgia and Alabama). That year, California had only 1.94 bankruptcy filings per 1,000 residents — and ranked 37th among the states — compared to 6.82 per thousand in the first six months this year.

There still are a lot of bankruptcy filings, according to the U.S. bankruptcy courts. The nation is on a pace to have 1.45 million bankruptcies this year. That compares with 1.55 million in 2010 and 1.44 million in 2009.

Read the rest of the article at Loan Safe

Bank-owned home sales stay high

Bank-owned house sales remained high during the second quarter of the year with homes in some stage of the foreclosure process, including short sales, rising to 31 percent of sales compared to 24 percent a year earlier.

Read the rest of the article at All Headline News

State accuses 2 credit consulting companies of scamming Hoosiers

Indiana Attorney General Greg Zoeller came to Porter County on Wednesday to file a lawsuit against two out-of-state credit service and foreclosure consultant companies.

The suit names Community One Law Center based in Florida and National Law Partners based in Florida and California as allegedly scamming 15 people or families in 13 Indiana counties.

“The lawsuit alleges both companies collected money up front and failed to provide refunds to customers after services were not provided,” according to a news release issued Wednesday by Zoeller’s office.

Read the rest of the article at the Chicago Sun-Times

Homeowner Associations in Need of Cash Sue to Force Foreclosures

Members of the Vintage East Condominium Association in Miami Beach got tired of waiting for JPMorgan Chase & Co. (JPM) to foreclose on unit 9, so they sued the bank in February to take control of the property.

In June, more than four years after the owner stopped making payments, a judge ruled that JPMorgan lost its claim to the $144,000 mortgage. The apartment is now on the market for $87,500, and the association may stave off insolvency with proceeds from the sale and a new owner who pays monthly dues, said Jane Losson, a board member at the complex. Four of the 11 other owners at the property are also behind on dues.

Read the rest of the article at Bloomberg

Foreclosure Sales Tick Up While Prices Slide

Nearly one-third of all U.S. homes sold in the second quarter of 2011 were in some stage of the foreclosure process or had been repossessed by a lender, according to numbers released today by RealtyTrac, an Irvine, Calif.-based real estate data provider.

Read the rest of the article at the Wall Street Journal

Small business bankruptcies declined in past year

A recent study by Equifax finds that the number of small businesses that have filed for protection under bankruptcy law has dropped by 15.32 percent from the first quarter of 2010 to the first quarter of 2011.

Read the rest of the article from Bankruptcy Home

Lehman revises bankruptcy plan to deal with objections

Lehman Brothers Holdings Inc filed a revised version of its bankruptcy plan that included a request from JPMorgan Chase that the bank did not play any role in drafting the disclosure statement.

According to court filings, the new paragraph in the statement says that JPMorgan also disagrees with certain descriptions and characterizations of JPMorgan.

Prior to Lehman filing for Chapter 11 protection, JPMorgan served as the company's primary bank. JPMorgan and its affiliates have filed proofs of claims against Lehman of around USD 29 billion.

Read the rest of the article at Money Control

Washington Mutual's $7 Billion Bankruptcy Nears Finish Line

The company said the problems–including over-generous grants of legal immunity–have been fixed, and the plan should be approved as a reasonable way out of the legal wreckage left behind when it lost Washington Mutual Bank, or WaMu, to a regulatory seizure.

Shareholders and others being left out in the cold under the Chapter 11 plan are mustering their final arguments in a last-ditch effort to defeat it. They said Washington Mutual settled valuable claims related to WaMu for just enough to pay creditors, leaving billions of dollars of damages on the table.

Cash has accumulated in the Chapter 11 coffers as tax refunds stacked up, thanks to a new law that allowed WaMu’s former parent to make the most of its losses on the thrift. In the meantime, WaMu’s former parent hammered out a settlement with regulators and WaMu’s new owner, J.P. Morgan Chase.

Read the rest of the article at the Wall Street Journal

Monday, August 22, 2011

Considering filing for Chapter 7 bankruptcy in Arizona yourself?

Some people find themselves so broke they decide to file for bankruptcy without seeking out the help of a lawyer. As a bankruptcy lawyer, I see all too many sad cases where someone files for bankruptcy pro se and ends up with unfortunate results. Approximately 50% of bankruptcy petitions filed by pro se petitioners are thrown out! The bankruptcy laws are vast and complex, and any little mistake can get your bankruptcy thrown out of court or you could lose valuable property. It takes lawyers years to learn all the ins and outs of the system.

If your bankruptcy petition is thrown out due to a mistake, it will cost you several hundred dollars to get it reinstated. If the court finds out about an asset you failed to protect, that asset could be seized from you and split up among your creditors. Too many people who file their own bankruptcies end up losing a car, investment money, or worse.  

Fortunately, the cost to file bankruptcy has come way down. I charge clients the low price of $995 to file Chapter 7 bankruptcy, plus a $299 court filing fee. My clients are able to come up with the money to pay me because they stop paying on their credit cards and other debts that will be discharged in the bankruptcy.



Sunday, August 21, 2011

Trying to Get Out of Home Ownership -- Don't Count On the Short Sale

1. Your credit score still suffers a hit.
2. You still might not be off the hook for the balance of the loan.
3. Whether or not the sale is approved is entirely up to the bank.

Read the rest of the article at Fox News

Cooperative Short Sale: A New Solution for Homeowners in Distress

Property owners in the US have not seen many meaningful solutions to their mortgage problems these past three years. Recently, however, a few investment companies have discovered a way to work within the system in a manner that benefits all concerned parties.

The cooperative short sale will not solve all problems, but it is a welcome new option for homeowners with upside-down properties and, therefore, an important step towards resolving the nation's foreclosure crisis.

Read the full article at JD Supra

Housing "short sales" is booming business

Realtor Mark Boyland said in 2008 short sales represented about one percent of his business. "Last year it was about 36 percent of my business," Boyland said. "This year it might surpass 60 to 70% of our business."

Read the rest of the article at CBS News

Short Sales Explained

An area of extreme interest, much discussion and a great deal of misunderstanding, a “short sale” is simply a real estate closing where the sales price of the real estate (single family home, condominium, townhouse, 2-flat, etc.) is not high enough (it is “short”) to cover the existing mortgage or mortgages. In order for the closing between Seller and Buyer to take place, the mortgage lender(s) needs to agree to release its mortgage lien against the property for an amount less than is owed on the mortgage, so that the Buyer can obtain a clear title. Except for this one aspect, a short sale is not any different than any other real estate closing.

Read the rest of the article at Trib Local

Bank of America breakup may loom

With the domestic economy seemingly grinding to a halt and housing still resolutely in the dumps, investors have all but written off BofA. Its stock has fallen nearly 50% this year—the worst decline for any big bank in the U.S. or Europe. Even though BofA has relatively little exposure to Italy, Spain or the other European nations that provided the fuel for last week's market panic, its problems stateside are considered so serious that there's now a $130 billion gap between the bank's market valuation and the price it would fetch if its stock merely traded at the industry average.

Read the rest of the article at Crains New York

UM players could face bankruptcy clawback suits for Ponzi gifts

The University of Miami athletes who reportedly scored large sums of cash and big gifts from convicted Ponzi schemer and UM booster Nevin Shapiro may wind up facing bankruptcy clawback suits seeking repayment.

That is, if they don't voluntarily come forward to repay the bankruptcy trustee overseeing Shapiro's now-defunct investment company, Capitol Investments USA, which is facing more than $100 million in claims from bilked investors.

Under bankruptcy law, the trustee can seek to collect payments, cash and gifts such as jewelry and cars that Shapiro says he lavished on dozens of UM players in recent years. Yahoo! Sports published a detailed investigative expose Tuesday in which Shapiro, after 100 hours of jailhouse interviews over the course of months, alleged he spent tens of thousands of dollars on UM players, in violation of NCAA rules.

Read the rest of the article at the Chicago Tribune

Divorce, bankruptcy won't eliminate liability

Q: Dear Rick: I got divorced a little over two years ago. At the time, my husband owed a substantial amount on his charge card. Under the terms of the divorce, he was responsible for that debt. About a year ago, my ex-husband filed for bankruptcy. He still owed a substantial amount on his charge card. Last week, I got a letter from the charge card company claiming that I am responsible for my ex-husband's debt. I have not contacted the charge company yet, but I wanted to get your opinion. I assume that since my ex-husband was responsible for the debt under our divorce, that I should ignore the charge card company. What are your thoughts?

Read the answer at Hometown Life

Indicted former Fry's exec files for bankruptcy, lists $137 million in debt

An ex-Fry's executive indicted on a charge of allegedly trying to shake down the electronics store's vendors to support a lavish lifestyle has filed for bankruptcy, listing nearly $137 million in debt, much of it to Vegas casinos.
Ausaf "Omar" Siddiqui was once a prized "whale" in Vegas, a high roller who demanded that casino butlers and bellboys call him "Mr. S" and fill his room with golden raisins, bottles of Dom Pérignon and Glitterati Mentissimo peppermints adorned with a single rose.

Siddiqui's Chapter 7 bankruptcy filing July 13 in San Jose shows he's on the hook for $11.5 million to the MGM Grand Hotel, $5.7 million to Caesar's Palace, $2.3 million to the Palms Casino Resort, and $1 million to Hard Rock. That's not to mention the "unknown" amounts he owes other creditors, Mohegan Tribal Gaming in Connecticut, and three high-end casinos in London -- Les Ambassedeurs, Aspinalls and Maxim's Casino Club.

Read the rest of the article at Mercury News

GM says bankruptcy excuses it from repairs on 400K cars

General Motors Co. is seeking to dismiss a lawsuit over a suspension problem on more than 400,000 Chevrolet Impalas from the 2007 and 2008 model years, saying it should not be responsible for repairs because the flaw predated its bankruptcy.

The lawsuit, filed on June 29 by Donna Trusky of Blakely, Penn., contended that her Impala suffered from faulty rear spindle rods, causing her rear tires to wear out after just 6,000 miles.

Seeking class-action status and alleging breach of warranty, the lawsuit demands that GM fix the rods, saying that it had done so on Impala police vehicles.

But in a recent filing with the U.S. District Court in Detroit, GM noted that the cars were made by its predecessor General Motors Corp, now called Motors Liquidation Co or "Old GM," before its 2009 bankruptcy and federal bailout.

Read the rest of the article at the Chicago Tribune

Thursday, August 18, 2011

What You Should Know About Filing Chapter 7 Bankruptcy in Arizona

 The economic downturn has resulted in massive foreclosures, layoffs, and spiraling credit card debt. Is filing for Chapter 7 bankruptcy the way to save your home and property and get out of debt? I am a bankruptcy attorney in Arizona and represent clients filing Chapter 7 and Chapter 13 personal bankruptcies. Here is what you really need to know.

Wednesday, August 17, 2011

7 Benefits of Chapter 7 Bankruptcy

For most people who are looking to file bankruptcy the choice really comes down to filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. In this article I would like to go over seven reasons why Chapter 7 can be preferable over a Chapter 13. Not all bankruptcy attorneys agree with me on this, and in fact there is a reputable attorney back East that has put a list of 50 reasons why a Chapter 13 is preferable, but I think in most situations people are much happier with the benefits offered in a Chapter 7 bankruptcy case.

Read the article at JD Supra

Credit Counseling: Damaging as Bankruptcy?

Dear Bankruptcy Adviser,
I recently went through a divorce and was unable to pay my credit cards. I went to a credit counseling agency for assistance. They were able to lower my interest rates and lower my monthly payments. I am now able to make the payments. When I have applied for credit, the lenders tell me credit counseling is equivalent to filing bankruptcy. Is this correct? If so, wouldn't it be better to file bankruptcy and not have to make the payments?
-- Clint

Read the answer at Fox Business

Analyst: Evergreen Solar Bankruptcy is the 'Tip of the Iceberg'

When Evergreen Solar Inc. filed for Chapter 11 bankruptcy Aug. 15, the company cited several market conditions that have impacted business, including a drop in silicon pricing, significant global capacity expansion and an end to industry subsidies in Germany and other key markets.

The company's troubles could force it to give back money it received in the form of tax breaks from the state of Massachusetts, according to a National Public Radio report.

The news could cast further doubt on the usefulness subsidies provide to the renewable-energy market.

Read the rest of the article at Industry Week

Weirdness bubbles to surface in Dodgers bankruptcy

A lawyer representing five Los Angeles Dodgers season-ticket holders -- including the Frank Sinatra estate -- is asking a Delaware bankruptcy court to force the team to pay for her representation of fans in the court proceedings.

The Sinatra heirs control eight primo season tickets at Dodger Stadium. Bankruptcy attorney Robbin L. Itkin is asking U.S. Bankruptcy Judge Kevin Gross to set up a committee to represent the interests of 17,000 or so season-ticket holders in the Dodgers bankruptcy proceedings, though at this time she represents only five. Naturally, of course, she's asking that the team pick up the tab.

Read the rest of the article at Ballpark Digest

Monday, August 15, 2011

Bankruptcy Filings Drop Due To Apathy

Reports from Wall Street have been bleak this week. So, news that bankruptcy filings were down compared to last year might appear to be some good news.

But as VPR's Nina Keck reports, experts say the reasons behind the decline are troubling.

"I think there's a degree of apathy that's just come over a segment of the population and they just don't care anymore. They have just surrendered to their situation."

Read the rest of the article at Vermont Public Radio

Friday, August 12, 2011

Alexander Bankruptcy Law Firm's 10 Top Reasons not to File for Bankruptcy Pro Se

1. If you make a mistake and your bankruptcy petition is dismissed, it will likely cost you several hundred dollars extra to reinstate it. Approximately 50% of pro se filings get dismissed! There are also restrictions in place that prevent "serial filers." They might impede you from refiling. You could end up with a bankruptcy filing on your credit record and no relief.

2. There are some things that are considered fraud in a bankruptcy filing. If you commit any of them, you could find yourself facing criminal prosecution. Most people are unaware of what they are. Did you know that transferring some of your property to a family member prior to filing may constitute fraud?

3. Without the assistance of a knowledgeable attorney, you may lose a valuable asset. For example, in Arizona, if you file Chapter 7 bankruptcy, your car is protected as long as you have less than $5000 equity in it. If you have more equity in than that, you may lose your car. Do you own an RV or a boat? You may lose them in a bankruptcy unless you have taken the proper steps to prevent it from happening. A knowledgeable attorney will know how to deal with these kinds of situation before you file.

4. There are certain pre-filing requirements that must be satisfied or your petition will be dismissed.

5. Many debtors will be required to prepare a "means test," which is a very complicated assessment of your expenses and bills. It is so complex that most attorneys use software to ensure that it is done properly.

6. Creditors may challenge some of your bankruptcy. You need a skilled, aggressive litigator who knows how to deal with them.

7. The current bankruptcy law is 500 pages long, and became much more complex in 2005.

8. Peace of mind knowing your bankruptcy will be handled by someone experienced in the law.

9. Many bankruptcy lawyers offer free consultations. What do you have to lose?

10. Have you ever encountered an attorney who thought it was a good idea to file bankruptcy pro se?

Top 10 reasons not to file pro se bankruptcy


The new bankruptcy law is five hundred (500) pages long, extremely complex and adds a tremendous level of complexity to the filing of personal bankruptcy petitions.
There are certain pre-filing requirements that must be satisfied or else the bankruptcy petition will be dismissed. For example, the Bankruptcy Trustee must be provided with the debtor's prior year tax return as well as pay stubs for the 60 day period prior to the filing.
A debtor (or the debtor's attorney) must now calculate the debtor's median income. This calculation is complicated and consists of averaging the debtor's gross income for the 6 months prior to filing, less Social Security payments.
Many debtors will need to prepare a "means test". This is a very complicated 6-page calculation, similar to preparing a complicated tax return.
If a bankruptcy petition is dismissed and re-filed, the automatic stay will remain in effect for only 30 days following dismissal. The debtor needs to make a motion to continue the automatic stay and this motion must be both filed and heard by a Judge within that 30 day period.

You Get What You Pay For – Hire An Attorney To File Bankruptcy

This pro se filer ended up losing two cars and several thousand dollars from a tax refund.

Read the article at National Bankruptcy Forum

Filing a Pro Se Bankruptcy is a Bad Idea

The trouble for this pro se case began when the chapter 7 trustee asked, “do you have items for sale on craigslist?”

“Yes.” replied the pro se debtor.

“Why didn’t you list them in your bankruptcy petition?” replied the trustee.

“Because they really don’t belong to me.” replied pro se debtor.

“Do you have a paypal account?” asked the trustee.

“Yes.” replied the pro se debtor.

“How much money is this account right now.”

“Four thousand dollars but its not really mine. Its my boyfriends money” replied the pro se debtor.

Read the rest of the article on National Bankruptcy Forum

Tuesday, August 9, 2011

Is Bank of America on the brink of bankruptcy?

Ongoing mortgage issues, plunging stock values, and a fresh $10 billion lawsuit have analysts and investors worried about the financial giant's health.

Read the rest of the article at The Week

Monday, August 8, 2011

Housing's Double Dip Part II: Rising Foreclosures

Just as we saw a double dip in home prices, we may be seeing another surge in foreclosures.

And just as the home price scenario was caused by artificial government stimulus, in the form of the home buyer tax credit juicing home sales only briefly, the foreclosure scenario was caused by real negligence, in the form of the "robo-signing" paperwork scandal.

Banks and servicers stopped foreclosures entirely for a time after the malpractice was discovered, and courts delayed the process, picking through papers as foreclosures were resubmitted; that is now turning around.

The system is ramping up again, and foreclosure starts are up dramatically, more than 10 percent in June from the previous month, according to Lender Processing Services (LPS).

Read the rest of the article at CNBC

Top Five Foreclosure Tactics To Get The Bank To Cancel Foreclosure Sales

1. Possession of the Original Mortgage Note – The mortgage lender must be in possession of the original mortgage note to foreclose, hence the term “Produce the Note”.
2. Holder in Due Course – If a mortgage lender is not a holder in due course it can be challenged that they have no standing to foreclose.
3. Improper Mortgage Assignment – Over 60 million mortgages were assigned by MERS (Mortgage Electronic Registration Systems, Inc) authority to transfer mortgage notes can be challenged to prevent foreclosure.
4. Objection to Creditor – Mortgage lenders will often not foreclose in their own name and not reveal the identity of the true creditor which can be challenged to Stop Foreclosure.
5. Validation of Debt – Demand that the mortgage lender validate debt to have a right to foreclose.

Read the rest of the article at RealEstateRama

Banks Now Prefer Short Sales to Foreclosures

A lender’s interest is in profit, and a foreclosure used to be more lucrative for a bank than a short sale. Now, however, the average foreclosure takes more than 300 days to process and the time and work that goes into the process now costs banks more profit than a short sale – wherein a bank approves the sale by the homeowner for less than the loan amount, losing the difference between the sale price and the loan. In New York and New Jersey the process can take more than 600 days; time where no profit is being made on the house, and it remains as a negative entry on the bank’s books. This shortcut is becoming an increasingly more popular option for the nation’s three largest mortgage carriers, Bank of America, JPMorgan Chase and Wells Fargo.

Read the rest of the article at NuWire

How to learn if the US downgrade could affect you

Here are some questions to ask as you try to assess whether your loans could be affected by the market turmoil:

— Can my interest rate increase?
— What benchmark or index is my loan or card tied to?
— How much might my monthly payments increase?
— How many times per year can my rate adjust?

Read the full article by the Associated Press

AIG sues Bank of America for $10 billion over mortgages

American International Group said Monday it sued Bank of America for more than $10 billion, saying the bank cheated it by selling residential mortgage-backed securities that were overvalued.

Bank of America (BAC) denied the allegations, saying AIG(AIG) "recklessly" chased investments with high returns, and was big and sophisticated enough to know the risks.

Banks have been hit by a series of suits over misrepresentations of mortgage-based securities.

Read the rest of the article at USA Today

Bank of America Leads Surge in Credit Swaps on Downgrade Concern Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/08/07/bloomberg1376-LPLZ796VDKI001-4F008PQK2DB3KFA63QP3KBEKAD.DTL#ixzz1UT2UrjQj

The cost to protect against a default by U.S. banks jumped after Standard & Poor's cut the AAA rating on the government's debt, raising investor concern that grades on lenders and other financial companies will be reduced.

Credit-default swaps on Bank of America Corp., the nation's biggest bank by assets, soared to the highest since May 2009, while contracts tied to Morgan Stanley debt increased the most since May 2010. Swaps on insurers Hartford Financial Services Group Inc., MetLife Inc. and Prudential Financial Inc. rose, while a benchmark gauge of corporate credit risk climbed to the highest since September 2010.

Read the rest of the article at the San Francisco

Wednesday, August 3, 2011

California Hotel Foreclosures Jump 91% as Lenders Seek to Sell Properties

Hotel foreclosures in California jumped 91 percent in the second quarter as lenders repossessed properties to sell them amid a recovery in property prices, Atlas Hospitality Group said today.

The number of foreclosed hotels climbed to 191 in the three months ended June 30 from 100 a year earlier, according to the Irvine, California-based brokerage. Seizures also rose from the first quarter, when lenders took over 148 California hotels. The state’s biggest hotel foreclosure in the second quarter was the 331-room Hilton Sacramento Arden West, Atlas said.

Read the rest of the article at Bloomberg

Pima County foreclosure numbers drop again

The number of Pima County property owners who received foreclosure notices reached a 40-month low last month. That's a 40 percent decrease compared with July 2010. But local rate of loan defaults remains high in national rankings.

Read the rest of the article at the Arizona Daily Star

Foreclosures still coming

The rate of homes that have reached the point of foreclosure has dipped. That is factually correct. However, the percentages of homeowners who ultimately have defaulted or will default to the lender are not reflected in the current local and national statistics.

Read the rest of the article at the Northwest Herald

Why the foreclosure crisis isn't improving

Rising unemployment and higher interest rates may be to blame for another record month. The economy may be leveling off, but a new wave of foreclosures is starting to build this summer. Foreclosures hit a record in 2009. This year could be worse.

Housing analysts attribute at least some of the rising level of foreclosures on the jobless rate, which now stands at 9.4 percent. But the economy alone is not to blame – a large number of adjustable-rate mortgages are coming due for higher interest rates.

In addition, with real-estate values stabilizing, some analysts think some mortgage-servicing companies think it’s now more profitable to foreclose on a house than to make a loan modification. In California, the largest center of foreclosures, banks have beefed up their foreclosure departments, an indication that they expect unfortunate home losses to continue.

Read the rest of the article at the Christian Science Monitor

Foreclosures on the rise: Is your city on the Top 10 list?

Foreclosures have been huge in cities that rode the real estate bubble in the West and in Florida. But the fastest rise in foreclosures is taking place primarily in far less frothy metropolitan areas of the Southeast, according to a new report by RealtyTrac. North Carolina alone was home to four of the Top 10 fastest-rising foreclosure metros last year. While their foreclosure rates are still quite low compared with most places, these metros and their plight illustrate how the poor economy is driving the housing crisis now.

Read the list at the Christian Science Monitor

Foreclosures in New York City near 2,000. Are banks keeping up the buildings?

Foreclosures come into the spotlight in New York after a fire at one of those foreclosures claims three victims. State senator says banks that own properties aren't maintaining them.

Read the rest of the article at the Christian Science Monitor

Bank Of America Seeks Immunity In Mortgage Deal With Prosecutors

Bank of America may be looking to give distressed homeowners a break–for a price, of course. There are reports out this evening that the nation’s largest bank is negotiating a side deal with state and federal regulators over its mortgage and foreclosure practices. The deal, as reported by The Huffington Post, would force BofA to pay a hefty fine which would be used to toward writing down certain homeowners’ mortgages. The catch is that in exchange BofA would be granted some kind of immunity from future claims relating to its shady mortgage practices.

Read the rest of the article at Forbes

U.S. Mortgage Applications Up 7%, Says New MBA Weekly Survey

According to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending July 29, mortgage applications in the U.S. increased 7.1 percent from one week earlier.

Read the rest of the article at World Property Channel

July consumer bankruptcies fall 18%

“Should these trends persist, we expect to see fewer consumer bankruptcies in 2011 than were filed in 2010,’’ American Bankruptcy Institute executive director Samuel J. Gerdano said in the statement, pointing to a deleveraging of household debts during the past year.

Read the rest of the article at the Boston Globe

Driven to Bankruptcy in Upside-Down Car

My husband and I are preparing paperwork to file for a Chapter 7 bankruptcy. One of our major issues is we have two cars, and the loans for both of them are upside down. That is, they are for more than the cars are worth. At present, we plan to reaffirm the car loans on our vehicles even though I would prefer to let them go because they're upside down. Our problem is that we live outside of the metro area where we both work. We need two vehicles. But we have no cash to purchase cars. If we chose to surrender the cars we have now, how could we obtain replacement vehicles?

Read the answer at Fox Business

Crystal Cathedral looks to donations to emerge from bankruptcy

The church's board no longer wants to sell the Garden Grove campus to pay off more than $50 million in debt, and will instead seek a 'faith-generated' solution. Creditors push forward with their own exit plan.

Read the rest of the article at the Los Angeles Times

Hooters Casino Hotel in Las Vegas filing for Chapter 11 bankruptcy

Hooters Casino Hotel, a 696 room facility with dining and entertainment located one block from the Las Vegas Strip, recently announced it is seeking financial restructuring and will reorganize under Chapter 11 bankruptcy law.

Read the rest of the article at Bankruptcy Home