A Look At The Future Of Bank Of America And Citigroup

The majority of large financial institutions have lost a significant amount of value over the last 3 months. There have been several reasons for the loss in value which include: high unemployment, problems raising capital, Europe’s financial crisis, lagging real estate market, delinquent loans, bankruptcies, and fear of another recession among several other reasons. The stocks that have lost value are each exposed to one if not all issues that have negatively affected the banking industry. But some companies have been exposed more than others yet most stocks in this industry have trended considerably low without taking into consideration individual company performance. Below is a look at two of the largest financial institutions in the United States. Both companies have posted a large amount of loss yet both companies are significantly different therefore I have included financial, stock, and performance information along with my opinions regarding the future of these two companies.

Read the rest of the article at Seeking Alpha

Bankruptcies a learning experience, Scalf says

COLUMBUS — Democratic mayoral candidate Priscilla Scalf says two bankruptcies, a check deception charge and 12 cases against her in small claims court were the result of her former husband’s job losses and a subsequent divorce.

Scalf and her then-husband, Richard Scalf Jr., filed for bankruptcy protection in 1995 and again in 2000.

Each time, Richard Scalf’s student loans accounted for the bulk of the couple’s debt.

Read the rest of the article at the Yellow Bullet

Friendly's Preparing Bankruptcy Filing

The Friendly's restaurant chain is preparing for a possible Chapter 11 bankruptcy filing and potential sale, said people familiar with the matter.

Friendly Ice Cream Corp., which employs roughly 10,000 people and operates more than 500 restaurants known for sundaes and hamburgers, could seek protection from creditors as soon as next week, the people said. The Wilbraham, Mass.-based company would then try to sell itself through a bankruptcy auction, the people said.

Read the rest of the article at the Wall Street Journal

Papa John's bankruptcy filing stalls paychecks, stores remain open

A Papa John's Pizza bankruptcy filing Tuesday has stalled paychecks for employees although the 84 stores in Colorado and Minnesota continue to operate.

Franchise PJCOMN Acquisition Corp. asked for Chapter 11 bankruptcy protection in filing, which was submitted in Baltimore where the company has its headquarters.

Today, an emergency motion was filed so employees can be paid while the company works out its financial and legal issues.

Read the rest of the story at the Denver Post

Filing Chapter 7 bankruptcy in Arizona? What about your multiple cars?

I am a bankruptcy attorney and recently some clients asked me what would happen to their cars when they file for Chapter 7 bankruptcy. They are married and have three cars. One of the cars belongs to their daughter, but the title is in their name. The bankruptcy code generally (specifics vary from state to state) provides an exemption for each adult filing bankruptcy to keep one car. However, there are a few caveats.

First of all, in Arizona, each adult who files bankruptcy is allowed only $5000 equity per car. That means if you have paid off your car completely, and the value of the car is over $5000, you may not be able to keep it. Some people take out title loans in order to reduce the equity in their car when they file bankruptcy. To find the value of your car, look up the private party sale value on Edmund's.

If you are still making payments on your car, you may be more likely to keep it. For example, if you still owe $5,000 on your car, and your car is worth $10,000, you will be fine since you only have $5,000 equity in the car.

If you own more than one car per adult, you may be able to keep a third car provided you have little or no equity in it. For example, if you owe $5000 on a third car, but it is only worth $5000, the bankruptcy trustee is not going to seize it. However, you may want to talk to your auto lender and make sure with a "reaffirmation agreement" that they do not intend to seize it after your bankruptcy is discharged.

U.S. mortgage settlement with Bank of America costly to taxpayers, report says

Government regulators may have cost taxpayers billions of dollars by settling mortgage-related claims with Bank of America before addressing questions about the methods used to evaluate the loans involved, according to a government report due out Tuesday.

Senior managers at the Federal Housing Finance Agency, the independent agency that oversees government-sponsored mortgage giants Fannie Mae and Freddie Mac, failed to act in a timely way to “significant concerns” about the process Freddie Mac employed to determine which faulty loans it wanted Bank of America to buy back, the agency’s inspector general found.

Read the rest of the article at the Washington Post

Freddie May Have Spared Banks, Cost Taxpayers, Watchdog Says

Freddie Mac is reviewing its procedures for examining mortgages after auditors faulted its handling of lapsed loans issued before the 2008 credit crisis, a government watchdog said in a report on the finance firm.

The mortgage-finance firm, which is operating under U.S. conservatorship, didn't do enough to find flaws that could've increased recovery of money from banks that sold defective loans, the Federal Housing Finance Agency's inspector general said in the report released today.

FHFA, the regulator that oversees Freddie Mac and larger rival Fannie Mae, suspended loan-repurchase agreements while the agency and the McLean, Virginia-based company explore ways to uncover more defective loans, according to the report.

Read the rest of the article at Businessweek

Mortgage-Fraud Reports Up 88%

Reports of mortgage fraud in the U.S. surged by nearly 88% in the second quarter of this year as banks discovered more problem loans made during the housing boom, according to a government report released Wednesday.

The Financial Crimes Enforcement Network, a Treasury Department agency, reported 29,558 “suspicious activity reports” related to suspected mortgage fraud in the April-June period. That was up from 15,727 in the same quarter a year earlier.

Read the rest of the article at the Wall Street Journal

Foreclosure Lawsuits Spike

Foreclosure lawsuits spiked during the second quarter, driving the Mortgage Litigation Index to its highest level since it was introduced in 2007. The Mortgage Litigation Index reflects all mortgage-related cases compiled by MortgageDaily.com , an online mortgage news publication in conjunction with law firm Patton Boggs.

Read the rest of the article at The Street

Bill would challenge Delaware's monopoly on bankruptcies

A proposal in Congress would make it tougher for companies to file for federal bankruptcy reorganization in the leading corporate legal centers of Wilmington, with its business-friendly laws, and New York, with its major concentration of corporate law firms.

H.R. 2533, sponsored by Rep. Lamar Smith (R., Texas), would restrict troubled companies from filing for bankruptcy in the states where they are legally incorporated. Instead, it would push them to file in cities where their headquarters or assets are based.

Read the rest of the article at the Philadelphia Enquirer

Owner of Vermont radio stations faces involuntary bankruptcy

The general manager of several Vermont radio stations says it’s business as usual after the New Jersey parent company was forced into bankruptcy court this month by its major creditors.

“It does not affect anything we’re doing,” said John Gales, general manager of WEXP-FM, “The Fox,” in Rutland.

Gales also manages Barre stations WWFY-FM, WORK-FM and WSNO-AM.

Read the rest of the article at the Rutland Herald

Greece faces scrutiny in its attempt to avoid bankruptcy

Greece faced a new test in its attempt to avoid bankruptcy on Wednesday as international auditors headed for Athens, while Germany suggested a new bailout may be renegotiated as argument rages over whether private creditors should take bigger losses.

The “troika” audit team from the European Union, European Central Bank and IMF is expected to start arriving on Wednesday and begin talks the day after on the Greek government’s plan to deepen budget cuts and raise new taxes.

Read the rest of the article at First Post

Connecting Anna Nicole Smith to the Lehman Bankruptcy

J.P. Morgan late Monday said it wants to move the case out of bankruptcy court, citing the precedent of a recent Supreme Court case that involved, yup, Anna Nicole Smith, her long-dead oil tycoon husband J. Howard Marshall and Smith’s former boyfriend and lawyer, Howard K. Stern. The case was the second time the Supreme Court had weighed in on the the long-simmering dispute over who should collect money from J. Howard Marshall’s estate.

In the June ruling that has proved contentious in bankruptcy circles, the Supreme Court said a bankruptcy court didn’t have power to decide on cases beyond bankruptcy.

At issue was whether the bankruptcy court, which awarded Smith millions of dollars, should be able to wipe out the ruling of the Texas probate court, which ruled for J. Howard Marhsall’s son. (Both Smith and Pierce Marshall have since died.)

J.P. Morgan, taking the place of Pierce Marshall this time, said its court battle with Lehman similarly belongs in a federal court — not in the same New York bankruptcy court also sorting through the leftover bits of Lehman.

Read the rest of the article at the Wall Street Journal

Can you keep multiple cars if you file for bankruptcy?

Most people have heard you can keep one car if you file for bankruptcy, or two if you are filing jointly with a spouse. It is true that most states permit you that, up to usually $5000 or $7500 per car or so depending upon the state. But that refers to equity. If you owe more money on the cars than the equity you have in them, you are not limited. Say you bought a car for $15,000, which is worth on Kelly or Edmunds bluebook about $10,000 now. If you owe $10,000 on that still, you have no equity in it. You might have three cars in a situation like that. If so, as long as you reaffirm the debt, and your auto lender is fine with you continuing to own the car and pay your car payment, you can keep all three cars.

Problems arise when you own cars that you have paid off, and/or you have more than the legal limit of equity in them. For more information, check out this article.

20-percent rule for mortgage down payments unlikely in near future

Remember the proposed requirement from six federal agencies that home buyers make down payments of at least 20 percent if they want the lowest interest rates?

Remember the controversy that erupted over the plan last spring, when labor unions joined with bankers, civil rights groups, mortgage companies, real estate agents and consumer advocates to try to make sure it didn’t take effect? A bipartisan group of 39 senators and more than 250 Democrats and Republicans in the House even signed letters demanding that the agencies ditch the proposal on grounds that it would greatly harm a housing market in deep trouble.

Half a year has passed since then, so here’s an update: The 20-percent proposal is still alive, but it’s temporarily bogged down in agency reviews of the roughly 12,000 comments filed by interest groups and individuals. It almost certainly would not be ready for adoption until the first quarter of 2012. Even then, there would be a mandatory one-year lag before the requirement could take effect, pushing the issue into 2013 — well after the presidential and congressional elections.

Read the rest of the article at The Washington Post

Fannie, Freddie Fees Rose In 2010, Report Says

The average fee charged by Fannie Mae (FNMA) and Freddie Mac (FMCC) to lenders rose last year, but subsidies from lower-risk mortgages to higher-risk ones continued, a federal regulator found Friday. Fannie and Freddie are government-controlled mortgage-finance companies. They don't directly make mortgages but provide a federal guarantee that protects investors in mortgage-backed securities if borrowers default. The two firms were put under federal control three years ago after rising losses threatened to burn through their thin capital cushions. The government has spent $141 billion to keep them going. The report by the Federal Housing Finance Agency found that on average, Fannie and Freddie charged a fee of 0.26 percentage point of the loan's value for every loan they guaranteed. That compares with 0.22 percentage point a year earlier.

Read the rest of the article at the Wall Street Journal

Mortgage refinancing? Not for these 2.3 million homeowners.

Mortgage refinancing would have benefited them last year, Fed study says. But 2.3 million either were 'underwater' or didn't have credit scores to qualify for mortgage refinancing.

Read the rest of the article at Christian Science Monitor

Fannie Mae Cited For Failing To Stop Robo-Signing

Fannie Mae missed chances to catch law firms illegally signing foreclosure documents and its government overseer did not take the right steps to ensure Fannie was doing its job, according to a federal watchdog. The Federal Housing Finance Agency's inspector general said in a report Friday that Fannie failed to establish an "acceptable and effective" way to monitor foreclosure proceedings between 2006 and early 2011. FHFA then failed to ensure it was complying with demands that it clean up its programs.

Read the rest of the article at NPR

BofA settlement may be pushing more into foreclosure

It's no secret that Bank of America wants to put its mortgage-related woes behind it. But it appears that a key $8.5 billion settlement with large investors is playing a role in pushing many more people into foreclosures. The number of homes across the country that received an initial default notice — the first step in the foreclosure process — jumped 33% in August from July, the foreclosure listing firm RealtyTrac reported last week. It was the largest monthly increase since August 2007, right after the housing bubble had burst.

Read the rest of the article at USA Today

Sen. Johnson: Investigate 'green energy' bankruptcies

U-S Senator Ron Johnson is co-sponsoring a bill to require federal investigations into companies that go bankrupt after getting renewable energy funds. The Wisconsin lawmaker is teaming up with fellow Republican David Vitter of Louisiana – who’s critical of White House loan guarantees given to Solyndra Incorporated of Fremont California. Critics said the White House rushed the approval without enough oversight. The company filed for Chapter-11 bankruptcy earlier this month, and laid off all of its 1100 employees.


Read the rest of the article at WTAQ

Central bank president no longer rules out Greek bankruptcy

The Dutch central bank has not ruled out Greece being unable to meet its debts and potentially going bankrupt, the Financieele Dagblad reports on Friday. ‘It is one of the scenarios. I am not saying that Greece cannot go bankrupt’, the paper quotes the new central bank chief Klaas Knot as saying.

Read the rest of the article from Dutch News

National Slavery Museum files for bankruptcy with debts of $3million after being dogged by years of controversy

The blighted U.S. National Slavery Museum, founded by former Virginia governor Doug Wilder and with a board including actor Bill Cosby, has filed for bankruptcy. According to court documents filed in U.S. Federal Court, the museum which was to be built in Fredericksburg, Virginia, owes nine creditors across the country more than $3 million.

Read the rest of the article at the UK Mail Online

Fewer Bankruptcies: Thank the Recession?

The recession has made it harder for people who can't pay back loans to get loans to not pay back. And isn't that exactly what got us into this mess in the first place? So thanks to the recession, it is now much harder for people to buy houses they can't afford, resulting in fewer bankruptcies. See, there's always a blessing to count.

Read the rest of the article at USGovInfo

Congressional Investigator: More Solar Bankruptcies to Come

A top congressional investigator said on Tuesday that he believes more companies that benefitted from the stimulus bill’s renewable energy loan guarantee program will go bankrupt before all allotted funds are spent.
The program, which guaranteed a $535 million loan to Solyndra before the company declared bankruptcy last week, still has $8-10 billion in authorized funding that has yet to be spent. Rep. Cliff Stearns (R-FL), who chairs the House Energy and Commerce Subcommittee on Oversight and Investigations, said he had called on the administration to hold off on awarding more loan guarantees from the program.

Read the rest of the article at the Heritage Foundation

Bankruptcies Among Edumacated Americans Up 20 Percent

College graduates and Americans with advanced degrees are filing bankruptcy more often, according to a report published today by the Institute for Financial Literacy. But even though bankruptcy filings by degreed persons increased 20 percent since the passage of the Bankruptcy Abuse Prevention and Protection Act, non-degreed filers still make up 70 percent of bankruptcy cases.

Read the rest of the article at Reason

Swedish union set to apply for Saab bankruptcy

Swedish labour union IF Metall, representing about 1,500 unpaid employees at troubled Swedish car maker Saab Automobile AB, said Friday it will file for Saab Automobile's bankruptcy if the Appeals Court hasn't granted the company protection from its creditors by Sept. 20 at the latest.

Read the rest of the article at MarketWatch

Philadelphia Orchestra bankruptcy now featuring email probe

The latest development in the Philadelphia Orchestra Association bankruptcy case has bankruptcy lawyers for the American Federation of Musicians and Employers' Pension Fund sifting through more than 50,000 emails in search of extra funds that may be available to creditors.

The probe resulted from suspicion that a portion of the orchestra's endowment was not included by donors and therefore may still be available to creditors as an inclusion in the settlement plan.

Read the rest of the article at Bankruptcy Home

Dallas Stars Hockey Team Files Bankruptcy With Plan for Sale

The Dallas Stars hockey team, the last professional sports club owned by former billionaire Thomas Hicks, filed for bankruptcy with a plan to sell the franchise through a court-approved auction.

The Stars are the fifth professional sports team to file bankruptcy in the last two years. The Los Angeles Dodgers baseball team filed in June, the Texas Rangers baseball team filed last year and the Chicago Cubs baseball team filed in 2009, one year after former owner Tribune Co. went bankrupt.

The Phoenix Coyotes hockey team filed in 2009 and, like the Rangers and the Cubs, was sold under court supervision. The National Hockey League took ownership of the Coyotes and is looking for a buyer willing to keep the team in Arizona.

Read the rest of the article at BusinessWeek

Alabama county votes to settle debt, avoid bankruptcy

Leaders of Alabama's largest county Friday approved a framework for a settlement with Wall Street over $3.1 billion in debt from a sewer system overhaul gone bad, avoiding the possibility of immediately filing the largest municipal bankruptcy in U.S. history.

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

Banks Said to Balk at ‘Robo-Signing’ Offer

U.S. banks are balking at an offer by state officials to limit their blame for alleged improper mortgage practices in return for a multibillion-dollar payment.Mortgage giants Bank of America Corp., J.P. Morgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. say the latest attorneys general proposal over so-called robo-signing and other sloppy mortgage practices is a “non-starter” because it does not release the banks from all future liability for past mortgage practices and mortgage-backed securities they sold to investors, people with direct knowledge of the discussions told the Financial Times.

Read the rest of the article at LoanSafe

Cities have trouble selling fixed-up foreclosures

They've got the homes. They just need buyers.

Local communities have been using millions of federal dollars to fix up and resell foreclosed homes in an effort to battle blight and to protect surrounding property values, but those neighborhood revivals are being hampered by rehabbed homes that cities can't unload.

Read the rest of the article at Sun-Sentinel

Time for deal on banks’ misconduct

IT’S BEEN months since the nation learned that some of America’s biggest banks engaged in dubious practices regarding loan modifications and foreclosures, including the now notorious “robo-signing” of what were supposed to be individually vetted documents. Yet in all that time, no one has produced evidence that large numbers of homeowners who were current on their mortgages were cast out of their homes because of bank misconduct. This looks like a case of spectacular wrongdoing with hardly any victims.

Read the editorial at the Washington Post

Idaho Gets New Foreclosure Law

A new foreclosure law that took effect Thursday provides Idaho homeowners with better information regarding their rights and ensures lenders provide ample notice of sales and respond accordingly with mortgage modification requests.Unfortunately, said Brett DeLange, foreclosures will not stop as a result of the new legislation.

Read the rest of the article at LoanSafe

Will my employer be told if I go bankrupt?

If you declare yourself bankrupt we consider what affect this will have on your employment and whether your employer will be told.

Your employer will not automatically be told by the court or official receiver if you are declared bankrupt.

Affect on employment status

Read the rest of the article at Beat My Debt

Lien Stripping in Chapter 13 Bankruptcy

Individuals with second mortgages and underwater mortgages may benefit from changing the character of their second-mortgage debt from secured to unsecured debt through Chapter 13 lien stripping.

Read the article at EIN News

Bankruptcy usually doesn't erase student loan debt

Dear Liz: I was hurt on the job and was fired. I have a lawyer helping me fight the company, but I have no income and I'm being haunted by collection agencies. I owe $5,000 on credit cards and have a student loan that started at $20,000 but is now $30,000. I was thinking of filing for bankruptcy. I have nothing, and I feel bad all the time. I can't afford Christmas or birthday presents or find a job that I can do. Any advice would be helpful.

Read the answer at the Los Angeles Times

Is Bankruptcy a Good Option? Bankruptcy and the Bigger Picture

Draining the retirement account to settle one debt would take away the immediate pain, but would not stop the bleeding associated with the credit card debt. The danger in this thought process is that while draining the retirement account will help the here and now, bankruptcy will likely be something that will have to happen a few years down the road. Only now not only are you filing for bankruptcy but you have drained your retirement account and have no savings whatsoever. In deciding whether bankruptcy is a good option for you, it is important to not only look at the problems you have today, but how you will deal with your debt problems down the road if you don't file for bankruptcy.

Read the rest of this article at JD Supra

Do You Need a Bankruptcy Attorney?

Rather thаn havіng tо search fоr thе forms to fill out, and then struggling wіth how to answer somе оf the questions, yоu shоuld seek somе help. A bankruptcy attorney would lіkelу hаvе уоu bring the forms to the office to ensure yоu arе filling thеm оut correctly, and wоuld explain any unfamiliar terms or requests. You dо nоt wаnt tо answer a question incorrectly, оr sign ѕоmething whеn уоu hаvе nо idea what yоu аre signing for. An experienced lawyer could hеlp you navigate the оftеn murky waters оf thіs process.

Read the rest of this article at EQuicknews

US Postal Service On Brink Of Bankruptcy

The United States Postal Service could shut down this winter without some emergency help from Congress. The agency says it faces default if it can't make a $5.5 billion payment due this month.

Read the rest of the article at NY1

US Banks Face Federal Lawsuit Over Mortgages

News reports say the United States government will sue major banks for allegedly misrepresenting the quality of mortgage securities they sold before the financial crisis. The news comes after a volatile August on U.S. markets for banking stocks, which finished the month 15 percent lower.

Bank of America, JPMorgan Chase, Goldman Sachs, and Germany's Deutsche Bank are among more than a dozen banks that news reports say the U.S. Federal Housing Finance Agency will sue.

The agency is expected to argue that the banks missed evidence that borrower incomes were falsified, and then packaged mortgages to sell as securities.

Read the rest of the article at Voice of America

Washington Supreme Court to weigh legality of MERS foreclosures

Washington state's highest court is set to determine whether thousands of pending foreclosures can proceed out of court, potentially averting months of conflicting and murky rulings.

The court will hear arguments over whether lenders can file foreclosures in the name of MERS, a private company that owns a computerized mortgage registry system. Big lenders, including Fannie Mae, Freddie Mac and several large U.S. banks, created MERS in 1995 to get around cumbersome laws that required paperwork to be filed with county clerks when a mortgage changed hands.

But in the midst of a foreclosure crisis, the company is facing investigations over whether it can legally initiate foreclosure proceedings.

Read the rest of the article at Oregon Live

U.S. Consumer Bankruptcies Fell 11% in August, Group Says

U.S. consumer bankruptcies fell 11 percent in August compared with the same month last year, continuing a trend that began as early as January, the American Bankruptcy Institute reported.

Consumers filed 113,432 bankruptcies last month, compared with 127,028 in August 2010, Alexandria, Virginia-based ABI said in a statement today.

"Consumer bankruptcies continue to decline over the past year as households deleverage and consumer credit remains tight," ABI Executive Director Samuel J. Gerdano said in the statement.

Read the rest of the article at the San Francisco Chronicle

Personal bankruptcies fall, but maybe more people should file

Why the decline? Several possibilities, including:

--while more households are receiving credit card offers, credit is still tight.
--since the economic slowdown is years long, maybe a lot of families already filed; 2009 was a heavy year for filings.
--maybe enough families have taken charge of their own debt payoff to not need the help of bankruptcy court. Consumer debt levels have been steadily decreasing.
--a depressing possibility: families are still in deep, and holding their bankruptcy card until they see a light at the end of the tunnel. There's no point in discharging your debts if you're broke and jobless.

On the day that the government announced that August's unemployment rate remained at 9.1 percent, unchanged from July, I can't help but wonder if bankruptcy rates will climb once jobless families exhaust their safety net.

And may I throw out this thought to chew on? Are there families out there struggling to pay a mortgage for an underwater home they can't afford, or feed a family on a part time job, who should be filing for bankruptcy but don't because of the stigma?

Read the rest of the article at Star-Tribune

Another U.S. Solar Firm Files for Bankruptcy

Solyndra, a California based solar panel manufacturer, filed for bankruptcy on August 31, following in the footsteps of Evergreen Solar, based in Massachusetts, and SpectraWatt, based in New York[ii]. According to GTM Research, a renewable energy market analysis firm in Boston, these bankruptcies and the closing of BP Solar’s plant in Frederick, Maryland last year removes about one-fifth of the solar panel manufacturing capacity in the United States.[iii] Solyndra will be laying off 1,100 workers[iv], the largest to date in a solar firm bankruptcy. Solyndra’s size was aided by loan guarantees from the U.S. Department of Energy totaling $535 million of U.S. taxpayers’ money. The cause of Solyndra’s demise, like that of other solar companies, is due to Chinese solar panels, subsidized by the government, undercutting the global solar market.

Read the rest of the article at Canada Free Press

Federal judge says no bankruptcy for Idaho county

A federal judge says the sparsely populated Boise County can't declare bankruptcy in a bid to stave off paying a legal judgment worth more than $5 million.

Boise County, which has a population of only about 7,000 people and sits north of Idaho's most populated Ada County, was sued by developer Oaas-Laney LLC for allegedly violating the federal Fair Housing Act. Oaas-Laney wanted to build a 72-bed treatment center for teens called Alamar Ranch, and contended the county worked with neighbors of the ranch to set impossible planning and zoning requirements.

Read the rest of the article at the Houston Chronicle