Saturday, November 26, 2011

Filing bankruptcy to afford Christmas?


I am a bankruptcy attorney in Arizona ($995/Chapter 7) and know that society has really gotten out of hand when clients tell me they need to file bankruptcy now in order to afford Christmas. The pressure that is put on families to buy gifts for everyone has grown to an alarming level. If you don't buy presents for family members, close friends, co-workers, etc., people think there is something wrong with you. I would say that Jesus would be rolling over in his grave if he knew what had happened to the original meaning of Christmas, but he rose again and instead is looking down shaking his head.

This is the worst economy in years, and everyone is either underemployed, out of a job, or knows lots of people who are. Ironically, many of those underemployed are working for retailers this Christmas season, and need people to buy gifts. Sort of a catch-22. The stores are not going to let up on the pressure to buy-buy-buy.

If you are going to consider filing bankruptcy in order to afford Christmas, keep in mind the bankruptcy trustee will look long and hard at any large expenditures made around the bankruptcy filing. Bankruptcy is not supposed to be a license to spend freely. Everything should be done in moderation, and that includes buying presents at Christmas. Don't succumb to the pressure to be like Mr. and Mrs. Smith down the street.

Here are some ideas for inexpensive Christmas gifts:

http://collectibles.about.com/od/auctionsandshopping1/tp/twentygiftsforundertwenty.htm
http://www.redbookmag.com/kids-family/advice/inexpensive-Christmas-gift
http://www.coolchristmaspresents.org/inexpensive-christmas-gifts-cheap-christmas-gifts-theyll-love.html
http://www.moneyunder30.com/cheap-gifts-53-inexpensive-christmas-gifts
http://www.betterbudgeting.com/articles/money/63giftsunder10dollars.htm
http://www.mydollarplan.com/inexpensive-christmas-gifts/

Here are some tips for dealing with children who expect a lot of presents for Christmas. I found the book above which offers an in-depth explanation of why buying presents for Christmas is a bad idea.

The Alexander Bankruptcy Law Firm provides low low cost Chapter 7 and 13 personal bankruptcies. $995 Chapter 7 or $2500 Chapter 13 bankruptcies 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. 602-326-9116. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

Cheap Mortgages Aren't Helping Housing Market

Despite near-record lows for interest rates and a glut of houses available for sale, Americans simply are not lining up to purchase new or used homes.

According to Freddie Mac (FMCC) average mortgage rates remained below 4 percent for the fourth consecutive week. The current rate, which hovers around 3.98 percent, should be a positive factor in driving the housing market.

People can’t get refinanced if they’re upside down on their mortgage. That’s why the news that we’re near record-lows for interest rates isn’t going to do much for housing sales.

Read the rest of the article at Forbes

Help for the underwater homeowner: HARP 2.0

Who is eligible?

1. Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac.

2. Your loan must have been sold to Fannie Mae or Freddie Mac before April 1, 2009.

3. You haven’t already refinanced under HARP or you refinanced under the program between March and May 2009.

4. Your loan-to-value ratio must be higher than 80 percent.

5. You haven’t been late with a mortgage payment

6. You’re refinancing your primary residence.

7. You must benefit.

Read the rest of the article at Gaston Gazette

Fannie, Freddie caused the financial crisis

Efforts to blame the banks for the financial crisis are failing because they are not supported by data. The key fact is that, by 2008, before the crisis, half of the 54 million mortgages in the U.S. financial system were subprime and other low-quality mortgages.

More than 70% of these 27 million weak mortgages were on the books of government agencies, primarily the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. When these mortgages defaulted in unprecedented numbers, they drove down housing prices, weakened most large financial institutions and caused the financial crisis.

Read the rest of the article at USA Today

Moving beyond Freddie and Fannie

The term “permanent conservatorship” is an oxymoron. By its very construct, the conservatorship of a corporation is meant to be temporary. And yet three years after the bailout of Fannie Mae and Freddie Mac, we are no closer to transitioning them off government life support than we were the day in 2008 when they came under direct government control.

This is unacceptable.

Read the rest of the article at The Washington Post

Occupy protesters squat on Oakland foreclosure property

Anti-Wall Street demonstrators in Oakland, evicted from three public spaces in recent weeks, have set up camp on a privately owned vacant lot as they look to regain momentum for their protests.

The so-called Occupy Oakland activists, touting their latest move as a bid to rescue a piece of property from foreclosure, said the owner of the lot was allowing them to stay. But the owner, Gloria Cobb, would not confirm she gave her permission.

Read the rest of the article at Reuters

Banks will hold off on some holiday foreclosures

Got an e-mail from Wells Fargo responding to my column this week suggesting that banks consider a moratorium on home foreclosure activities, at least during the holiday season.

"Wells Fargo is suspending eviction actions from Nov. 23 to Nov. 25, and again from Dec. 19 to Jan. 2, 2012. We will not physically evict or conduct lockouts on the foreclosed properties in our owned portfolio during these times," said a Wells Fargo spokeswoman.

Read the rest of the article at the San Francisco Chronicle

Mortgage servicers making progress on fixing bad foreclosures

Banks and mortgage servicers are making progress in improving their processes and contacting homeowners hurt by invalid or flawed foreclosures, the Office of the U.S. Comptroller of the Currency (OCC) reported.

Under the consent decrees, banks were required to hire consultants to identify borrowers who improperly lost their homes, failed to get loans rewritten or were forced into court in 2009 and 2010 because of mistakes made by mortgage servicers or their vendors.

Mortgage servicers this month began contacting borrowers who may have suffered financial injury from errors and misrepresentations.

The companies also established a central website to help borrowers contact servicers and file claims.

Companies including JPMorgan Chase, Citigroup and Wells Fargo were part of the April accord.

Read the rest of the article at the Seattle Times

Bankruptcy filings in Phoenix area keep falling

Bankruptcy filings in the Phoenix metropolitan area continue to drop.

Filings in October rose slightly from September, but fell 22 percent from October 2010. That's the ninth consecutive month of year-over-year declines.

The Arizona Republic says filings are down 13 percent for the year to date, compared with the first 10 months of 2010.

The same trends are apparent across Arizona, where statewide filings fell 23 percent in October and the year-to-date numbers are down 13 percent.

Read the rest of the article at KPHO

Bankruptcies Fall 8% in Fiscal 2011

U.S. bankruptcies fell 8 percent in the year through September to 1.47 million as consumers reduced debt and fewer businesses sought to reorganize or liquidate, the American Bankruptcy Institute said.
Business bankruptcies declined 18 percent in the first nine months of the year, with Chapter 7 filings down 18 percent and Chapter 11 reorganizations decreasing 22 percent from the same period in 2010, the ABI said today, citing data from the Administrative Office of the U.S. Courts. Business bankruptcies include filings under Chapters 7, 11, 12 and 13, ABI said.
Consumer filings fell 11 percent to 1.06 million in the January to September period, according to the data cited by ABI in a statement. Nevada remained the state with the highest per capita filing rate in the U.S., at 9.7 per 1,000 residents.

Read the rest of the article at Bloomberg

Understanding bankruptcy

Chapter 7 is the most prevalent personal bankruptcy. It includes no repayment plan. Chapter 13 bankruptcy, also known as the "wage earner's plan," allows people with regular income to develop a plan to repay all or part of their debts.

"If you don't have a source of income, you will not qualify to file Chapter 13," Erickson said. "If you are unemployed but can make mortgage and car payments, you can file Chapter 7."

While you can keep your house in Chapter 7, unsecured debt such as credit card debt will be discharged, he said. But debt acquired within 90 days of filing may be excluded — an assurance that you won't go on a shopping spree, which was common under prior bankruptcy laws.

Read the rest of the article at the Chicago Tribune

Bankruptcy of Ireland's former richest man challenged

The Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank, launched a formal application on Thursday to overturn the bankruptcy declaration made by Ireland's former richest man, Sean Quinn.

IBRC wants to claw back as much money as it can from Quinn and is arguing that the insolvency proceedings should be annulled as the centre of Quinn's main interest was not in Northern Ireland.

Read the rest of the article at Reuters

Mortgage Insurer PMI Group Files for Bankruptcy

Mortgage insurer PMI Group Inc. filed for Chapter 11 bankruptcy protection Wednesday after an Arizona judge rejected its bid to overturn the October seizure of its mortgage-insurance unit by state regulators.

Read the rest of the article at the Wall Street Journal

Filing a Subsequent Chapter 7 or Chapter 13 Bankruptcy

With our country still in the midst of the "Great Recession," it is becoming more common for people to find themselves in need of additional bankruptcy protection long after an initial filing. The highly publicized 2005 amendments to the United States' bankruptcy laws (known as the Bankruptcy Abuse Prevention and Consumer Protection Act or "BAPCPA") changed the way in which subsequent bankruptcy filings were handled in an attempt to prevent so-called "serial bankruptcies." It is still possible for an individual to seek a second or even third bankruptcy, but there is a mandatory waiting period.

Read the rest of the article at Digital Journal

Bankruptcy: Debtor's downfall and trustee's boon?

The country's shattered economy has driven many a distressed debtor to bankruptcy court for relief.
Yet their creditors may walk away with nothing because of costs claimed by some bankruptcy trustees administering the estates.
Those bankruptcy trustees, who are appointed by the U.S. Trustee Program and are allowed to appoint themselves as attorney as well, argue that pocketing money recovered from debtors without disbursing any to creditors is within the law.
Some highly placed bankruptcy attorneys in Northwest Indiana, however, say the practice — especially with estates of less than $5,000 — is an abuse of the system.


Read the rest of the article at NWITimes.com

Harrisburg, PA Bankruptcy Petition Thrown Out of Court by Judge

Harrisburg’s bankruptcy case was thrown out by a judge who ruled the city council wasn’t authorized to file the petition for Pennsylvania’s capital.

U.S. Bankruptcy Judge Mary D. France held a hearing today in Harrisburg on whether the council violated state laws last month when a majority opted to file under Chapter 9 of the bankruptcy code. Mayor Linda D. Thompson opposed the filing.

“For Chapter 9 bankruptcy to work, all of the branches of the municipality must be on the same page,” France said. “Therefore I find that city council was not authorized to file the petition on Oct. 11.”

Read the rest of the article at the Washington Post

Monday, November 21, 2011

Filing bankruptcy in Arizona: Does the flat fee cover everything?

I am a bankruptcy attorney in Arizona ($995/Chapter 7) and frequently clients are confused about the pricing. Some bankruptcy attorneys advertise a flat fee, but end up charging extra for things like phone calls, emails, and more complicated bankruptcies. At the Alexander Bankruptcy Law Firm, we don't do any of that. What you see is what you get. We fully disclose on our website homepage that the only additional costs are the court filing fee ($299 for Chapter 7) and the two mandatory credit counseling classes (which you can take online cheaply for as low as $5 and $12). We don't charge extra for more complicated bankruptcies.

Many clients who don't have the full amount of money ready to pay us can make payments up until the filing date. We accept virtually all kinds of payment; credit cards, checks, money orders, etc. If you're looking for a competitively priced personal bankruptcy law firm, check us out.

The Alexander Bankruptcy Law Firm provides low low cost Chapter 7 and 13 personal bankruptcies. $995 Chapter 7 or $2500 Chapter 13 bankruptcies 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. 602-326-9116. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

Saturday, November 19, 2011

Filing bankruptcy in Arizona: Stopping calls from creditors and debt collectors

I am a bankruptcy attorney in Arizona ($995/Chapter 7) and one thing my clients are relieved to hear is that annoying calls from debt collectors stop when they file for bankruptcy. In fact, as soon as a client meets with me and retains me, I have him or her refer all these kinds of phone calls to me.

Occasionally I encounter a persistent debt collector who refuses to comply with the law, and continues to call clients right up until they file. Debt collectors are subject to a $1000 fine if they violate the Fair Debt Collection Practices Act. This Act provides that debt collectors who are collecting on behalf of a first creditor must stop calling when asked in writing (I've noticed that usually they will comply if you ask them over the phone). This means if you incurred a debt with a bank, but a collection agency is now collecting on behalf of the bank, the collection agency must stop (this does not appear to apply to third parties like subsequent banks who have assumed the debt in course of business, not just for the specific purpose of debt collection, however). Debt collectors who flaunt the law should be reported to the Better Business Bureau, your state Attorney General's Office, and the FTC.

Original creditors are not covered by the Fair Debt Collection Practices Act. However, some states have even stricter laws in this area that restrict original creditors. Arizona does not appear to be one of them.

It has been my experience that even most original creditors will stop harassing phone calls to clients once I notify them that a client will be filing bankruptcy. Unfortunately, once in awhile there is a rude creditor who refuses to leave my clients alone. Wells Fargo is one of them. This is not surprising considering Wells Fargo's arrogance and treatment of homeowners while getting preferential treatment by the government. Until they reign in their practices, they will continue to be the focus of the Occupy protesters' and others' anger.

For more information, click here and here. One of these websites explains how you can block creditors' phone calls with Anonymous Call Rejection.


The Alexander Bankruptcy Law Firm provides low low cost Chapter 7 and 13 personal bankruptcies. $995 Chapter 7 or $2500 Chapter 13 bankruptcies 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. 602-326-9116. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

Friday, November 18, 2011

Filing Chapter 7 bankruptcy in Arizona: Bankruptcy is actually a good deal

I am a bankruptcy lawyer in Arizona ($995/Chapter 7) and have observed that most people hear the word "bankruptcy" and think of it as something terrible, that will involve losing many of their assets and leave them with a devastating credit score that will affect their ability to do everything from lease to obtaining new credit.

The truth? Almost almost all of my clients are able to keep EVERYTHING they own when they file Chapter 7. The bankruptcy code protects a certain level of property - your home, car, home furnishings, pension, etc. As long as you are not wealthy, you will very likely end up keeping everything.

A year after filing bankruptcy, most clients' credit scores actually INCREASE by 100 points. The reason is all the bad debt is removed from their credit reports, and replaced by just one bankruptcy. After filing for bankruptcy, my clients start receiving offers of credit in the mail immediately. They may not have great interest rates, but they will improve.

Finally, most people will never know that you filed for bankruptcy. Other than the creditors you owe money to, it is not something that is published. Most people don't have a login to look up your bankruptcy in federal court records. Unless you're planning on becoming really famous or running for political office, there is very little chance anyone will ever know.

The Alexander Bankruptcy Law Firm provides low low cost Chapter 7 and 13 personal bankruptcies. $995 Chapter 7 or $2500 Chapter 13 bankruptcies 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. 602-326-9116. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

U.S. House Backs FHA Loan-Limit Boost Over Republican Objections

The U.S. House of Representatives approved higher limits for mortgages backed by the Federal Housing Administration, bypassing the objections of Republicans who said the increase could threaten the agency’s stability.

Lawmakers voted today for increasing the limit to $729,750 as part of a $182 billion spending bill that included funding for the government through Dec. 16. The legislation, approved in a 298-121 vote, was opposed by 101 members of the House’s Republican majority, some of whom said they opposed the measure primarily because of the loan-limit increase.

Read the rest of the article at Businessweek

Fewer mortgages going bad but foreclosures expected to increase

Fewer home loans are in trouble these days, but despite some improvements, the nation is not even halfway through cleaning up the foreclosure mess, industry experts said.

It could take three or four years to return to a typical pattern of delinquencies and foreclosures, the Mortgage Bankers Assn. said in releasing its quarterly delinquency report Thursday.

Read the rest of the article at The Los Angeles Times

Google yanks alleged mortgage scammers' ads

The alleged scammers preyed on homeowners seeking to lower their mortgages through a program created by the bailout. The program, known as the Home Affordable Modification Program, offers homeowners who are having difficulty paying their mortgages a way to alter their payments to ease the burden.

Read the rest of the article at MSN

California attorney general's office subpoenas Fannie, Freddie

Information is sought on the mortgage giants' roles as landlords who own thousands of foreclosed properties in California. Also sought are details of their mortgage-servicing and home-repossession practices, a source says.

Read the rest of the article at Los Angeles Times

8% of NJ Mortgage Holders in Foreclosure Process

About one in 12 New Jersey mortgage holders were in the foreclosure process in the third quarter, reflecting a backlog caused by the “robo-signing” mess, the Mortgage Bankers Association said Thursday

About 8 percent of mortgages are in the foreclosure process in the Garden State, compared with 4.4 percent nationwide, the mortgage trade group said.

In addition, about 3.8 percent of New Jersey mortgage holders, and 3.5 percent of U.S. mortgage holders, are “seriously delinquent” — 90 days or more late on their payments, the group said. Housing counselors say many homeowners can’t pay their mortgages because they’ve lost their jobs.

Read the rest of the article at LoanSafe.org

Ask a real estate pro: The foreclosure process, in simple terms

Q: I read in the paper that the banks are starting the foreclosures again. I just got served with a foreclosure lawsuit. Can you explain the process in layman's terms?

Read the answer at Sun-Sentinel

Foreclosure Crisis Is Far From Over, Report Finds

Five years in, the nation is less than halfway through its foreclosure crisis, the nonpartisan Center for Responsible Lending warned in a report released Thursday.

"For people that think we're out of the woods, they need to kind of rethink that premise," said Roberto Quercia, director of the Center for Community Capital at the University of North Carolina at Chapel Hill and one of the study's authors.

Roughly 42.2 million Americans took out a mortgage loan between 2004 and 2008. By February of this year, 2.7 million of those households, or 6.4 percent, had lost their home to foreclosure. CRL estimates that an additional 3.6 million households, or 8.3 percent, are at "immediate, serious risk" of losing their homes.

And that estimate is probably lowballing the problem, the researchers said: CRL's research only extends through February 2011, and it excludes both loans originated outside the given time-frame and loans that are not yet seriously delinquent.

What exactly is pushing homeowners to the brink? Researchers found the type of mortgage a borrower has can have a greater impact on the borrower's ability to stay in their home than even income or credit history.

Read the rest of the article at the Huffington Post

Couple's plight shows toll of foreclosure crisis

Ocea and Alicia Rice never thought they'd have to depend on food stamps or TennCare to survive. They never thought they'd face homelessness, either, but with her out of work and their College Street home foreclosed on, life on the streets is beckoning.

"Physically, I would not last one night," says Ocea, who is disabled, sitting on the couch with his wife, holding hands as tears roll down her face while they describe their experience.

Read the rest of the article at DNJ.com

11 Reasons Occupy Wall Street Should Become Occupy Foreclosure

Hear me out here... I'm not the most sympathetic toward the Occupy movement, but occupying foreclosures has the following benefits:

Real shelter means fewer deaths (as long as they don't do drugs).
The action is directly related to the financial sector (although they would quickly discover that Fannie Mae and Freddie Mac are bigger culprits than Goldman Sachs).
It would be genuinely disruptive to the financial sector. Don't fool yourselves, sleeping in a park is more disruptive to a bagel shop than to a hedge fund manager.
Far less impact on small businesses whose owners just want to make ends meet.

Read the rest of the article here

Should Occupy Wall Street become Occupy Foreclosures?

An argument for occupying foreclosures. But if you separate out the anarchists, mentally unbalanced, homeless and hipsters, there might not be much of a movement left — certainly not many protesters who would want the unglamorous task of occupying a house and keeping it up.

Read the rest of the article at The American

First Criminal Charges Filed in Association with Robo-Signing Scheme

In a statement, Nevada Deputy Attorney General John Kelleher said the grand jury found probable cause that a robo-signing scheme initiated by the two individuals resulted in the filing of tens of thousands of fraudulent documents.

Robo-signing is an act that came to light last year when it was discovered that major mortgage servicers had been completing the foreclosure process without first presenting notary public-verified sworn affidavits to courts as required by their states. Instead, they issued foreclosures with falsified, computer-generated signatures.
The illegal act is believed to have been responsible for thousands of wrongful foreclosures nationwide over the past few years. In fact, experts say the act has crippled the already troubled housing market by creating a backlog of foreclosures that now could take decades to clear out.

Read the rest of the article at GoBankingRates.com

Foreclosures rise, late payments fall in quarter

U.S. lenders started foreclosures on more properties in the third quarter, the first increase in a year, as a backlog stemming from claims of faulty home seizures began to ease.

New foreclosures rose to 1.08 percent of all loans from 0.96 percent in the prior three months, according to a report Thursday from the Mortgage Bankers Association. The rate had been falling since the third quarter of 2010, when regulators began investigating robo-signing, the practice of pushing through unverified paperwork.

Several of the nation's largest banks called a temporary halt to foreclosures at the end of last year while they addressed claims of flaws in their court documents. The moratoriums clogged the foreclosure pipeline as banks investigated their procedures, said Patrick Newport, an economist at IHS Global Insight.

Read the rest of the article at the San Francisco Chronicle

Fewer mortgages going bad but foreclosures expected to increase

Fewer home loans are in trouble these days, but despite some improvements, the nation is not even halfway through cleaning up the foreclosure mess, industry experts said.

It could take three or four years to return to a typical pattern of delinquencies and foreclosures, the Mortgage Bankers Assn. said in releasing its quarterly delinquency report Thursday.

An economist for the trade group declined to estimate how many households had lost their homes since the mortgage meltdown four years ago, or how many more foreclosures were to come.

Read the rest of the article at the Los Angeles Times

Top House Democrat demands explanation of penalties for late foreclosures

A top House Democrat is questioning why government-controlled Fannie Mae and Freddie Mac charged mortgage servicers millions of dollars in penalties for not moving fast enough on foreclosures.

House Overnight and Government Reform Committee ranking member Elijah Cummings (D-Md.) sent a letter Wednesday to Edward DeMarco, acting director of Federal Housing Finance Agency (FHFA), the regulator of Fannie and Freddie, requesting information about $150 million in fees the troubled mortgage giants charged mortgage servicing companies last year exceeding foreclosures timelines.

Read the rest of the article at The Hill

Lawmakers Contradict on Speeding up Foreclosures

So according to one committee member, it's bad to push the servicers to ramp up foreclosures, but another thinks it's good to push the judges to rubber stamp them faster? I realize these are two different lawmakers from two different sides of the aisle, but seriously folks, are fines/funding threats really the answer?

Read the full article at CNBC

Tuesday, November 15, 2011

How do you know when it's time to file for Chapter 7 bankruptcy in Arizona?

I am a bankruptcy attorney in Arizona ($995 Chapter 7) and often get asked when should someone consider bankruptcy. Generally the rule of thumb is when you can no longer afford your bills, and are accumulating more debt than you are paying off. If you have more than $10,000 in credit card debt, medical bills, etc. and find yourself in this situation, you should consult with a bankruptcy attorney. The longer you put it off, the more money you lose. For example, if you are trying to make $800 payments on your debt each month, that is $800 each month you will never see again. Whereas if you file for bankruptcy now, you can stop the payments now. For most people, there is no good reason to put it off.

Another factor to take into consideration is your home and car. If you file for bankruptcy, an automatic stay goes into effect which protects creditors from seizing your home or car even if you are a couple of payments late (provided you do not have over the legal limit of equity in each). As long as you keep current on your payments, you will be able to keep your home and car. But if you start getting behind on your payments now, there is nothing to stop your auto lender or home lender from seizing your property in the near future. After you miss three months of payments on your home, many lenders will start foreclosure proceedings immediately. If you are in that situation, it is best to file bankruptcy ASAP to protect your home and/or car.

Is FHA the next housing bailout?

Yes, is the answer to the question posed in the title of this report. That will seem a brave conclusion to some, given that the Federal Housing Administration (FHA) has not needed a direct recapitalization from Congress since its founding over three-quarters of century ago. However, it is highly likely, given FHA's current condition.
FHA's present state is precarious. For the past two years, it has been in violation of its most important capital reserve regulation, under which it is supposed to hold sufficient reserves against unexpected future losses on its existing insurance-in-force. To be barely compliant with this rule would have required just over a $12 billion capital infusion in fiscal year 2010, and that presumes that future losses are not being underestimated by FHA. This report suggests that they are by many tens of billions of dollars, so that the recapitalization required will be at least $50 billion, and likely much more, even if housing markets do not deteriorate unexpectedly.

Read the rest of the article at the American Enterprise Institute

Rich Neighborhoods Riddled With Foreclosures

Victoria Gotti, the reality TV star and daughter of infamous mob don John Gotti, made headlines in 2009 as the latest high-profile homeowner facing foreclosure. According to the New York Post, Zillow.com and others, she had stopped making mortgage payments to lender JP Morgan on her Long Island, N.Y., estate, which she had put up for sale the prior year, finding no takers at an asking price of $3.9 million. The home, in the tony neighborhood of Old Westbury, originally cost close to $4.1 million. Two years later, she’s still in the house–now listed for $2.9 million with Sotheby’s International Realty.

Read the rest of the article at Forbes

Update on Home Foreclosure Mediation

Here is another update on the development and operation of foreclosure mediation programs throughout the United States written by Mediate.com

Read the rest of the article at Mediate.com

Mass. pressed to reject 50-state foreclosure deal

Massachusetts housing advocates and victims of the housing crisis are pressing Attorney General Martha Coakley to reject a settlement over foreclosure abuses that federal officials and other state attorneys general are negotiating with major U.S. banks.

Critics of the resolution are scheduled to gather at the Statehouse in Boston on Tuesday to rally against a reported $20-billion settlement they say amounts to "a slap on the wrist" for financial institutions whose practices fueled the economic crisis.

Read the rest of the article at the Boston Herald

Freddie Blacklists New York’s Biggest Foreclosure Firm

The past few weeks have been grim for Steven J. Baum PC, New York’s largest foreclosure firm.

There were those photos, published in the New York Times, that depicted firm employees mocking victims of the mortgage crisis. And that $2 million settlement with the U.S. Attorney’s office in Manhattan over errors in the firm’s legal filings in state and federal court.

Now, more bad news: National mortgage servicing giant Freddie Mac has blacklisted the firm.

Read the rest of the article at the Wall Street Journal

Cain accuser's past includes financial troubles

Her motives and personal history under scrutiny, the woman who publicly has accused Republican presidential candidate Herman Cain of groping her inside a parked car in July 1997 says she came forward out of duty.

Cain rejected Sharon Bialek's claims as "totally fabricated," with his campaign pointedly noting her history of bankruptcies, unpaid debts and legal troubles.

"I tried to remember if I recognized her, and I didn't," Cain said at a Tuesday news conference. "I tried to remember if I remembered that name, and I didn't. The charges and allegations, I absolutely reject. They simply didn't happen."

Read the rest of the article at the Wall Street Journal

Bankruptcies Fall 8% in Fiscal 2011

U.S. bankruptcies fell 8 percent in the year through September to 1.47 million as consumers reduced debt and fewer businesses sought to reorganize or liquidate, the American Bankruptcy Institute said.
Business bankruptcies declined 18 percent in the first nine months of the year, with Chapter 7 filings down 18 percent and Chapter 11 reorganizations decreasing 22 percent from the same period in 2010, the ABI said today, citing data from the Administrative Office of the U.S. Courts. Business bankruptcies include filings under Chapters 7, 11, 12 and 13, ABI said.
Consumer filings fell 11 percent to 1.06 million in the January to September period, according to the data cited by ABI in a statement. Nevada remained the state with the highest per capita filing rate in the U.S., at 9.7 per 1,000 residents.

Read the rest of the article at Bloomberg

Behind on Mortgage in Bankruptcy. What Now?

Dear Bankruptcy Adviser,

We are three years into a Chapter 13 bankruptcy, and we have had issues with our house. We have fallen behind on our mortgage since filing, and we have also not paid our real estate (property) taxes. We are not sure what to do or if there is any way to turn this around. Should we let the house go?

- Mike

Read the answer on Fox Business

Sunday, November 13, 2011

Don't wait until the last minute if your home is near foreclosure!

I am a bankruptcy attorney in Arizona, and try to help clients in danger of having their homes foreclosed. Once you file for bankruptcy, the automatic stay goes into place and your lender cannot foreclose on you. It is important after the bankruptcy is discharged to catch up with your payments or work out a deal with your lender if you want to keep your home.

Recently we encountered something new and disturbing with lenders trying to foreclose on clients' homes. Lenders like Fannie Mae and Freddie Mac that aren't able to find a buyer for foreclosure are instead taking ownership of homes that are more than three months behind in payments, and telling the homeowners they can "rent" their homes for a brief period of time before being evicted. If a homeowner has not filed for bankruptcy yet, they may lose their home. There is an appeal process however when this happens, and I recommend that any homeowner in this situation look into this.

So just because your home was put up for foreclosure sale and no one bid on it, does not mean you can breathe for awhile. Your lender may take possession of your home the next day instead. If you find yourself in this position and have been considering filing bankruptcy and want to save your home, do not hesitate, file bankruptcy ASAP.

The Alexander Bankruptcy Law Firm provides low low cost Chapter 7 and 13 personal bankruptcies. $995 Chapter 7 or $2500 Chapter 13 bankruptcies 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. 602-326-9116. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

Occupy Bankruptcy!

Bankruptcy, on a personal, business, and nationwide scale, is the agent of this flexibility in the financial sphere, and bankruptcy laws need to be as liberal and generous to the borrower as possible. This ensures that the lenders, the wealthy and the investment banks, actually accept their share of the risk. They are the ones getting the high rate of return on their money, and you shouldn't get to do that without a gamble.

Read the rest of the article at the Huffington Post

Yes, there’s life after bankruptcy

Question: Why were they declared bankrupt?

Answer: In the majority of  cases,  they have defaulted on their payments,  especially vehicle loans, personal loans and housing loans. It has become so easy to get a loan now, especially car loans.

Car dealers and financial institutions offer such attractive deals that buyers do not even have to put down a deposit to secure a loan. But some of  these borrowers do not have the financial means to service the loans. So, when they are unable to make  payments  after some time, the banks can repossess the car and institute bankruptcy  proceedings to recover the loans.
Do you know that people like (president Dwight D.) Eisenhower and Donald Trump were bankrupt before?

Read the rest of the article at New Straits Times

Municipal bankruptcy in Alabama largest in US history

Municipal bankruptcy of Alabama's Jefferson County is the largest in American history. But will the county surrounding Birmingham, Ala. emerge stronger from its municipal bankruptcy?

Read the rest of the article at the Christian Science Monitor

Once-richest Irishman declared bankrupt

Sean Quinn, three years ago listed as Ireland’s richest man, has been declared bankrupt in a Northern Ireland court over alleged debts of €2.8bn to the Irish state-owned lender Anglo Irish Bank.
The 64-year old businessman’s insurance, cement and property empire collapsed last year following a multibillion euro stock market gamble on the share price of Anglo, which was nationalised during Ireland’s banking crisis.

Read the rest of the article at Financial Times

Monday, November 7, 2011

Obama's Housing Plan: Subsidizing the Terminally Stupid

This time, borrowers who are underwater by more than 25%, are on time with their payments, and have Fannie Mae/Freddie Mac mortgages dating before March 2009 will be allowed to refinance their home mortgages at cheaper rates.

That looks to me like subsidizing the terminally stupid.

Housing loans are non-recourse in most states. So if you're underwater on your home loan by more than 25% and you're paying an above market interest rate of say 6% on your loan, you're paying around 10% of the value of your house to the bank every year (including principal) while being unable to move. Since rental yields are in the 4% to 6% range, you'd be much better off walking away from the house, taking the hit to your credit rating, and renting for a few years.

The problem with all these federal schemes to assist underwater homeowners is that they prevent the market from clearing. That leaves an overhang of properties with owners who either cannot pay the mortgage or have a mortgage hugely larger than the value of their home.

Read the rest of the article at Money Morning

How to fix Fannie and Freddie

HARP’s shortcomings have nothing to do with its limited mandate but with its design. To make this refinancing plan a success, four obstacles need to be eliminated:

Three years and $141 billion of taxpayer money later, the first financial institutions to be rescued by the federal government, Fannie Mae and Freddie Mac, remain in conservatorship under the Federal Housing Finance Agency. The uncertain resolution of these government-controlled goliaths, which still dominate what is left of the mortgage finance business, is keeping most private sources of capital at bay.

The FHFA acting director, Ed DeMarco, has a statutory duty “to conserve the assets” of the two entities. He is not a housing czar empowered to reform a broken market. Nor can he provide backdoor fiscal stimulus by sanctioning outright principal reductions on underwater mortgages, if these reductions would create greater losses to Fannie and Freddie.

Read the rest of the article at Politico

Four Programs Offer Mortgage Assistance

With millions of Americans delinquent on their mortgages or in some phase of foreclosure, Uncle Sam has developed roughly a dozen programs designed to help struggling homeowners keep their properties.

"We really lead the marketplace when it comes to bending over backward to keeping people in their homes," says Brian Sullivan of the U.S. Department of Housing and Urban Development. "We want to make sure that we've exhausted all other options before families lose their properties."

Four years of anti-foreclosure efforts under the Bush and Obama administrations have spawned a confusing alphabet soup of aid programs, though. Should you apply for HAMP, or would you do better with HARP? What about HAFA?

To help sort things out, we offer a rundown of the government's major anti-foreclosure initiatives.

Sullivan also recommends homeowners in trouble contact a HUD-approved mortgage counselor for free, one-on-one advice. But he warns that you should avoid "mortgage-rescue" companies that claim they can save your home from foreclosure -- for a price.

Read the rest of the article at NuWire Investor

Fitch: Foreclosure rates are now twice last year's

Foreclosures on delinquent U.S. mortgages have almost doubled from this time last year, according to the latest reading from Fitch Ratings.

The higher foreclosure rates mean U.S. housing prices will probably fall another 10 percent before stabilizing, the ratings agency said Monday.

The rate of new foreclosures on delinquent loans has risen to over 10 percent a month, according to Fitch's latest RMBS (residential mortgage-backed security) Performance Metric. That's almost double the historical lows from a year ago, and is close to the 14 percent average rate between 2000 and 2010.

Read the rest of the article at MSN Money

Solar, Subsidies and Bankruptcies

The Solyndra bankruptcy seems to have created a cottage industry of soul-searching in the clean energy arena, with solar costs, global competition, American subsidies and failed companies. There is no shortage of opinions.

“Virtually every form of energy generation in the United States receives a subsidy of one form or another. Lacking a coherent mid-to-long range national energy policy certainly does not help us determine what to subsidize, for how long and at what level. This lack of clear vision is problem number one.

Read the rest of the article at Renewables Biz

Bankruptcy dilemma: file now or wait?

Emotions get invariably tangled up with the dispassionate process of bankruptcy. First comes denial, followed by a wait and see period, concluding with acceptance of a cold reality. Each financial situation is unique. Common to all is the need for legal guidance to make the decision to file now or wait.

Attorney Jeff Pruitt feels that, “bankruptcies are going to be the trend for a couple more years,” in this area based on the record number of cases going to court in Atlanta and Gainesville. His advice to clients considering bankruptcy is two-fold: be realistic by not basing decisions on what may happen in six months and understand the time investment needed to complete the paperwork.

Read the rest of the article at Gwinnett Business Journal

Bankruptcy 'still a valid solution'

In response to the latest Insolvency Service figures, financial solutions company Think Money says bankruptcy is still the best option for some people in debt, despite a sharp fall in take-up figures.

It says bankruptcy can be the most appropriate solution for people who really can't afford their debts.

The insolvency figures for the third quarter of this year show overall insolvencies dropped by 11% compared with the same quarter a year earlier, largely owing to a 32.1% drop in bankruptcy orders over that time.

Read the rest of the article at Easier Finance

Bankruptcy figures 'don't give the whole picture'

The latest official insolvency statistics - which showed a significant fall in bankruptcies in the third quarter of 2011 - don't fully reflect the situation many people find themselves in with debt, according to KPMG.

The insolvency expert said that there are still many people struggling with high levels of debt who don't feel able to do anything about it.

And it added that even those who enter into affordable repayment plans with their lenders may eventually find they can't keep up with their payments - meaning they may still have to turn to some kind of insolvency procedure, such as bankruptcy or an IVA (Individual Voluntary Arrangement).

Read the rest of the article at Think Money

Could Sony Be On The Road To Bankruptcy?

Sony (SNE) has dropped 18% since October 28, 2011. The sell-off was mainly due to the company's disappointing second quarter results. Sales decreased year-on-year, mainly due to the negative impact of the exchange rate and the decreasing sales of LCD TVs. CPS segment sales decreased 12%. This was primarily due to LCD TV sales price declines, resulting mainly from deterioration in market conditions in the Western markets, unfavorable foreign exchange rates and lower PC sales which reflected price competition. Operating loss was ¥34.6 billion, compared to plus ¥1.0 billion in the same quarter last year. This decrease was driven primarily by deterioration in the cost of sales ratio and decreasing gross profit resulting from the decrease in sales.

The company's game business sales, which include network service revenues, decreased year-on-year due to the strategic price reduction of PS3 hardware undertaken in August in advance of the year-end holiday selling season. The PS2 business as a whole continues to have steady demand in developing countries, but has peaked out and is shrinking. Operating income for the game business has decreased year-on-year as well. Although Sony continues to reduce the manufacturing costs of PS3 hardware, operating income decreased due to the change in the price of PS3 hardware.

Read the rest of the article at Seeking Alpha

Recent Data From HAMP On Homeowner Bankruptcy Shows Increases For Homeowner Seeking Aid

Homeowners who have been looking for assistance from HAMP are not always in a position where they have been able to avoid problems that have arisen and successfully take advantage of mortgage payment assistance, which have led some to file bankruptcy for a variety of reasons, particularly when a substantial amount of debt has become overwhelming. Yet, homeowners do still have foreclosure prevention and bankruptcy prevention assistance opportunities that can help them not only get a better grasp on their personal financial life but specific areas like their mortgage payment as well, but we have seen some increases in the area of bankruptcies in certain cases.

As an example, homeowners in the Home Affordable Modification Program who had their trial modification canceled saw an increase in the number of bankruptcies that were in progress, which was a cumulative total for major mortgage servicers between July and August, as this number increased by 89 homeowners. Yet, for homeowners who are not accepted for a trial modification within the federal program, these top 10 servicers totaled an increase of bankruptcies from 50,293 to 50,613.

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

Do homeowners who lost it all in flawed foreclosures deserve a second chance?

The Feds have launched a massive review of homeowners who lost everything in foreclosures that may have been seriously flawed.

Banks last week began sending out an estimated 4.5 million letters to homeowners who were in some stage of the foreclosure process in 2009 and 2010, informing them they may be eligible to have their files reviewed.

These include victims of robo-signing, in which banks churned out foreclosure documents in assembly-line fashion without checking the accuracy.

Still, it's far from a blanket amnesty. The reviews are aimed at helping homeowners who were foreclosed on even though they had already been accepted by the bank into a mortgage modification program or had been shielded by the bankruptcy process. Homeowners hit with questionable fees during the foreclosure process may also have a case.

Read the rest of the article at the Boston Globe

Thursday, November 3, 2011

30-year mortgage rates fall to 4.2 percent

30-year mortgage rates fell to 4.2 percent since last week. 30-year mortgage rates have been in decline for most of this year.

Read the article at The Christian Science Monitor

Freddie Mac loss widens, seeks $6 billion from Treasury

The government-owned company said it lost $4.4 billion in the third quarter, a big increase from a $2.5 billion loss in the year-ago period.

Low sale prices on foreclosed homes in its inventory, low mortgage rates on its refinanced loans, and losses on derivative investments continued to drain cash from the lender that the government rescued in 2008.

The company warned of further weakness ahead as the pace of foreclosure sales picks up.

Freddie Mac has already drawn $72.2 billion in taxpayer funds and needs extra public money to cover its latest loss plus a $1.6 billion dividend payment to the U.S. Treasury.

Read the rest of the article at Reuters

Avoiding Foreclosure May Still Be Possible with New Program HARP

HARP, which was announced October 24, is the federal Home Affordable Refinance Program. It is the only refinance program that allows borrowers who owe more than their home is worth to take advantage of low interest rates to refinance. To qualify, homeowners cannot have more than 20 percent equity in their home, must be current on their mortgage payments with no late payments in the past six months and no more than one late payment in the past 12 months.

Read the rest of the article at the Free Press

Foreclosure victims get new help from feds

Victims of wrongful foreclosures are finally getting a way to fight back. A year and a half after it was first announced, enforcement action is finally being taken against the 14 largest mortgage servicers in the country.

The Office of the Comptroller of the Currency (OCC) announced yesterday the beginning of the Independent Foreclosure Review; the OCC and the Federal Reserve had called for the review to start back in April 2010. This review, conducted by an independent agency, gives homeowners the opportunity to request a review of how the lender conducted the foreclosure of their primary residence.

Read the rest of the article at CBS News

Female bankruptcies reach record levels

The number of young women with unmanageable levels of debt has hit record-breaking new levels.
In the past quarter, 49.2% of all personal insolvencies involved women, the highest ever proportion, according to date from RSM Tenon, an accountancy firm.
Once the data was split down into age groups, women outnumbered men in the two youngest age groups: 65% of insolvencies in the 18-25 age group and 54% in the 26-35 group were women.

Read the rest of the article at Moneywise

Wells Fargo Bankruptcy After HAMP–Homeowners Filing After Not Receiving A Modification Differ In Recent Information

Homeowners with Wells Fargo who have turned to bankruptcy as a result of financial distress are among some who have seen problems arise after being denied a federal home loan modification from HAMP, but recent reports from the Treasury Department have shown that there was mixed results in this area for Wells Fargo, in terms of the number of homeowners who have found themselves in positions where they are in the process of bankruptcy. Yet, homeowners are often urged to remember that there are assistance options available that may help them avoid bankruptcy and foreclosure, as many servicers like Wells Fargo do still offer a multiple of programs that can be beneficial for homeowners in need.

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

Personal-Bankruptcy Filings Fall


Consumer bankruptcy filings declined in October for the fourth-straight month as households cut their use of credit by choice and by force.
The 106,255 personal filings last month were 19.6% below year-ago levels, the American Bankruptcy Institute and the National Bankruptcy Research Center said Wednesday. Compared with September, filings were down 2.1%. The monthly tallies aren't adjusted for seasonal swings.
"The declining filings correlate to tightened consumer spending and the overall pullback in consumer credit associated with a stagnant economy," said Samuel Gerdano, executive director of the bankruptcy institute.

Phoenix-area bankruptcy filings drop

An odd economic trend remained in force last month as metro Phoenix bankruptcies continued to moderate despite few signs of improvement in the economy.

Valley bankruptcy filings in October rose slightly from September but fell 22 percent from October 2010 -- the ninth consecutive month of year-over-year declines. Filings are down 13 percent for the year to date, compared with the first 10 months of 2010, according to the U.S. Bankruptcy Court in Phoenix.

The same trends are apparent across Arizona, where statewide filings fell 23 percent in October and the year-to-date numbers are down 13 percent.

But the picture doesn't mean consumers and businesses are getting their finances in better shape.

Ericka Young, a budget coach at Tailor-Made Budgets in Gilbert, feels that for many people a lack of income has become a bigger problem than excessive debts -- which might partly explain the drop in bankruptcy filings.

"If your (spending) behavior is out of line and you don't have the income to support it, bankruptcy won't necessarily help you," she said.

Read the rest of the article at AZCentral

Vallejo's bankruptcy ends after 3 tough years

A federal judge released the Solano County city from bankruptcy Tuesday, ending its dubious distinction of being one of the largest and first U.S. cities to go that route since the financial meltdown.

"I think we're all exhausted but exulted," said City Councilwoman Stephanie Gomes. "It's been a rough road."

Vallejo's City Council declared bankruptcy in May 2008, faced with large deficits, few reserves, costly police and fire contracts and plunging tax revenue. Declaring bankruptcy gave the city protection from creditors and allowed it to renegotiate its employee contracts.

Among other changes, city staffers now contribute more to their health insurance, new firefighters have lower pension plans, and the fire department no longer has minimum staffing requirements.

The city has also taken steps to find more revenue. It's created a one-stop permit center for developers and is asking for a 1-cent sales-tax increase and medical marijuana tax on the Nov. 8 ballot.

Read the rest of the article at the San Francisco Chronicle

Teresa Giudice puts bankruptcy behind her as she hustles for sales on Celebrity Apprentice

She's never had any trouble spending cash, but Teresa Guidice is hoping to prove she has earning power too on the new series of Celebrity Apprentice.
The 39-year-old Real Housewives of New Jersey star, who first filed for bankruptcy with her husband Joe Giudice in 2009, joined the new line of up of contestants in New York today.
The mother of four, who had to rein in her lavish lifestyle in the wake of the couple's financial woes, tried to stop traffic in Union Square in a bid to win the fifth season of Donald Trump's reality show.

Read the rest of the article at the UK Daily Mail