Why Won't My Mortgage Lender Work With Me?

Dear Dr. Don, I would like to have more information about loan modification. I've been struggling for three years trying to negotiate with my bank, but up to the moment, no one has contacted me back. I have copies of all the letters and emails, and a phone log with names, the times of my calls, etc. Can you please help me? Thank you. -- Lili Later

Read the answer at Fox Business

Foreclosure crisis hitting older Americans hard, says AARP

More than 1.5 million older Americans already have lost their homes, with millions more at risk as the national housing crisis takes its toll on those who are among the worst positioned to weather the storm, a new AARP report says. Older African Americans and Hispanics are the hardest hit. "The Great Recession has been brutal for many older Americans," said Debra Whitman, AARP's policy chief. "This shows that home ownership doesn't guarantee financial security later in life." Homeowners who are younger than 50 have a lower rate of serious delinquency than their older counterparts, and the rate is increasing at a faster pace for older Americans than for younger ones, according to AARP's analysis of more than 17 million mortgages.

Read the rest of the article at The Morning Sentinel

My City Went Bankrupt -- Should I Flee?

In recent weeks, three California cities have filed for bankruptcy: Stockton, in the Central Valley; Mammoth Lakes, near Yosemite and the Sierras; and San Bernardino, in the sprawling Inland Empire east of Los Angeles. If you live there, should you get out of town? And if you don't live there, should you worry that your city is next? In short: no, and no. Here's why.

Read the rest of the article at The Huffington Post

Exactly How Embarrassing is Bankruptcy?

You are an adult. You are approaching your bankruptcy as an adult – making the hard decisions and living with the consequences. But you can admit it. Despite your ability to try and remove the emotion from this decision to file bankruptcy, there is a big worry in the back of your mind that the entire world is going to know you filed for bankruptcy. And if everyone knew, that would be really embarrassing. Many believe that once you file bankruptcy that your name will be in the paper or that there will be some website of shame where you name will appear. But the reality is, unless you are Warren Sapp, Toni Braxton, or some other famous person filing for bankruptcy, the only people who will really know is whoever you decide to tell.

Read the rest of the article at JD Supra

Pondering bankruptcy: What's at stake

Q: I have been unemployed for about a year and still have not gotten a job. I was paying my credit cards until a couple of months ago. My unemployment benefits stopped, and my savings are now gone. I have spoken with my credit card companies and most of them understand my situation. When I could make a partial payment, I did. But I received a collection agency notice yesterday on one of my accounts even though I made some payments to them. Should I file for Chapter 7? The total amount I owe is about $50,000.

Read the answer at The Chicago Tribune

The pros and cons of bankruptcy

In my 12 years as a certified county-court mediator in Florida, one of the most common questions I've heard defendants ask is, "Should I file for bankruptcy?" It is a good question, but one that should be directed to an experienced bankruptcy attorney, who will be able to explain the process, eligibility, costs and available options in greater detail. With so many individuals being sued because of large outstanding debts for credit cards, mortgages, car loans, etc., it is important for people to consult with expert counsel to better grasp the advantages and disadvantages of bankruptcy. There are two forms of personal bankruptcy: Chapter 13 and Chapter 7.

Read the rest of the article at The Chicago Tribune

Bankruptcy judge will OK new ownership for Tribune Co.

Tribune Co. lurched into bankruptcy court less than a year after a bid to take the company private led by Chicago billionaire Sam Zell left it with a $13 billion tower of debt just as the economy and advertising markets began to collapse. Since then, Tribune Co. has lost thousands of employees, endured an embarrassing management crisis and, like all traditional media companies, struggled to find a new business model as the proliferation of websites and mobile devices transform how people receive and consume news.

Read the rest of the article at The Chicago Tribune

There really can be life after bankruptcy

Some exerpts from the article -

“Many who need it cannot afford it,” added David Nadler of Rothschild & Nadler, also in Cedar Rapids. “It can cost from $1,000 to $3,000 to file.”

Alternatives to bankruptcy, according to Taylor, include out-of-court settlements and reduction of payments. Repayment can sometimes be achieved by selling property or borrowing on property or by locating a new investor.

Bankruptcy lawyer Kevin Ahrenholz said that while his focus is primarily individuals, in the past five years there have been more businesses knocking on the door. These are primarily mom-and-pop companies and businesses with two to three shareholders.

Some small businesses, as an alternative to bankruptcy, simply prefer to close their doors and let the business die a natural death.

Read the full article at The Gazette

Obama Administration Backs Bankruptcy Option for Some Student Debt

The Obama administration urged Congress to make it easier for people to discharge a portion of certain student debt by filing for bankruptcy protection. The recommendation, in a report by the Education Department and the Consumer Financial Protection Bureau, wouldn't affect the vast majority of student debt, which is issued by the federal government. It would apply only to the roughly $150 billion, or 15% of total outstanding student debt, issued by private lenders such as SLM Corp.'s Sallie Mae and Wells Fargo & Co.

Read the rest of the article at The Wall Street Journal

Can you get the filing fee waived when filing bankruptcy in Arizona?

I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and our clients frequently have difficulty coming up with the money to pay us and file. In addition to our $995 fee, there is a $306 court filing fee. Sometimes that fee can be waived if someone makes very low income. The guidelines in order to qualify are on the bankruptcy court website here. If your annual income is less than $16,335, which is 150% of the official poverty level, you should be eligible to have the fee waived. That amount increases by family size. If you are a family of four, that level is $33,525. You will need to fill out an application to have it waived, then a judge will decide whether you qualify. For someone who has lost a job, not having to pay that additional fee can be a great relief.

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. 602-910-6812. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

The lure of flipping foreclosures

The DIY strategy is gaining traction these days as energetic homeowners try to build equity in a still-depressed housing market, with a growing number of foreclosures filling the multiple listing services with run-down homes. According to RealtyTrac, a foreclosure listing service, 26 percent of homes sold in the first quarter of 2012 were foreclosed properties, an increase of 8 percent from 2011. Short sales of properties accounted for 12 percent of national sales in the first quarter, up from 9 percent last year. This glut of properties means a great need for renovation, say industry experts like Eric Sussman, a senior lecturer in real estate at the University of California at Los Angeles Anderson School of Management. As property values have decreased and families deferred maintenance work, many of the most affordable homes need significant renovations, he said. Foreclosures can be especially problematic, as many people have been trashing foreclosures and carrying away appliances, said Bruce Graf, a general contractor in Grand Prairie, Texas.

Read the rest of the article at The Chicago Tribune

Tax Liens Trigger More Foreclosures

When Elsa Dabreo inherited a house from her late father, she thought it was the best thing that ever happened to her. But now she is struggling to keep it. The house, in a suburb of Boston, was mortgage free and valued at about $330,000 when she received the deed in 2005. However, it was saddled with $20,000 in back taxes which Ms. Dabreo, now 54 years old, couldn't pay. In 2010, after the taxes and penalties had ballooned to $42,000, the city of Weymouth, Mass., sold the debt at a tax-lien auction. If Ms. Dabreo can't pay the debt, she could be subject to foreclosure. Relatives advised her to sell the home and pay off the debt, but she refused. "I wouldn't be honoring my father's memory if I sold the home that he worked so hard to buy," said Ms. Dabreo, a former child-care worker who is now unemployed. She recently filed for bankruptcy and hopes to keep living in the home—which has fallen in value to $296,000. A report released this week by the National Consumer Law Center, says Ms. Dabreo's situation isn't unusual. Although mortgage default is behind most home foreclosures in the U.S., the number of foreclosures tied to delinquent tax payments is climbing. The NCLC, an advocacy group, estimates that $15 billion of tax-lien foreclosures happened in 2010, the latest year for which data are available.

Read the rest of the article at The Wall Street Journal

Arizona should adopt Calif. law on foreclosures

"Dual-tracking" will be outlawed. The law bans banks from pursuing foreclosure while a borrower is seeking a loan modification, a process known as "dual-tracking" that has led to countless foreclosures -- even as homeowners were attempting to stay in their homes. Lenders cannot give borrowers the runaround. Homeowners will no longer have to speak to a different person every time they call their lender and resubmit the same mountain of paperwork to different people at the same bank. The new law requires banks to assign borrowers a single point of contact, or they can be taken to court. Borrowers will be able to sue their banks. California homeowners will now have the right to sue banks for "significant, material" violations of the law. Homeowners will also have a clearly defined right to access the courts to protect themselves from violations.

Read the rest of the article at AZ Central

Ex-Mets Player Lenny Dykstra Pleads Guilty to Bankruptcy Fraud

Former New York Mets outfielder Lenny Dykstra pleaded guilty to looting valuables from his $18 million mansion and secretly selling them after his bankruptcy filing in 2009. Dykstra, 49, pleaded guilty to three counts of bankruptcy fraud, concealment of bankruptcy property, and money laundering at a hearing yesterday in federal court in Los Angeles. He faces as long as 20 years in prison. “Mr. Dykstra’s days of playing games with the public and the legal system are over,” Andre Birotte Jr., the U.S. attorney in Los Angeles, said in a statement. “With these federal convictions, Mr. Dykstra’s fraud and deceit have been exposed for all to see.” Dykstra, in shackles and dressed in a green prison windbreaker and white prison trousers, didn’t speak at the hearing other than to state his name and level of education, high school, and to respond to the judge’s questions, including whether he understood the rights he was giving up and whether he was coerced, with “yes, your honor” or “no, your honor.”

Read the rest of the article at The San Francisco Chronicle

Foreclosure outreach touching few

Two new reports out of Washington point out what has been a foregone conclusion to many who are the front lines of the foreclosure crisis, be they homeowners, community members or professionals who work in the field. The national foreclosure review's outreach to troubled borrowers has been inadequate, according to one report. The other one concludes more oversight is necessary to ensure foreclosed homes are properly managed and maintained and their values maximized. The federal Government Accountability Office specifically looked at the outreach to borrowers who were eligible for a free, independent review of their 2009 or 2010 foreclosure actions to see if they suffered financial hardship and were due remediation. The review process was part of a federal consent order finalized in April 2011 with 14 mortgage loan servicers.

Read the rest of the article at The Chicago Tribune

Housing Rebound Signaled as Banks Resume Foreclosures

U.S. lenders are notifying more delinquent homeowners they face foreclosure, a step toward clearing a backlog of properties and helping to accelerate a housing recovery. Initial notices of foreclosure, the start of the process, jumped 6 percent in the second quarter from a year earlier, the first annual increase since 2009, according to RealtyTrac Inc., a seller of housing market data. Banks at the same time found alternatives to the final step of seizing the home, either by working with the borrower or by agreeing to sell properties for less than what was owed, with repossessions falling 22 percent. “You have to get to the point where the market can heal itself and foreclosures and price adjustments are the only way that can happen,” said Anthony B. Sanders, an economics professor at George Mason University in Fairfax, Virginia.

Read the rest of the article at Businessweek

Phoenix-area bankruptcy filings drop

Amid signs that consumers are getting a better handle on their finances, metro Phoenix bankruptcy filings fell another 27 percent in June. The 1,770 Phoenix area filings last month brought the total for the first half of the year to 10,867, down nearly 24 percent from the 14,271 in the first half of 2011, the U.S. Bankruptcy Court for Arizona reported. The statistics cover January through June. The numbers were in line with a statewide filing drop of 25 percent in June and 23 percent over the first six months of the year. Both sets of statistics mirrored the national trend, in which filings fell 18 percent in June from a year earlier, with a decline of 14 percent in the first half of the year. "We are on pace for perhaps the lowest total (of) new bankruptcies since before the financial crisis in 2008," said Samuel Gerdano, executive director of the American Bankruptcy Institute, which released the national figures along with Epiq Systems In

Read the rest of the article at The Arizona Republic

The Ripple Effect of California's Bankruptcies

Are L.A. and Riverside next?

In the latest sign that some U.S. cities are barely making ends meet, the city of Oakland, California Thursday priced a $211 million taxable bond which will help it cover pension obligations. Yes, borrowing money to cover retiree pay. Moody's Investor Service has proposed adjusting its U.S. public sector pension data to put the unfunded liabilities at $2.2 trillion, nearly triple what they were two years ago. While market reaction to San Bernardino's pending bankruptcy has been "much calmer than expected," Envision Capital's Marilyn Cohen added, "people are asking 'Is Riverside next?'" referring to the other major city in California's Inland Empire. The heat from three California bankruptcies in two weeks is fanning out like a late summer brushfire. Los Angeles County officials have ordered a review comparing their financial practices to now-bankrupt Stockton.

Read the rest of the article at CNBC

California bankruptcies are only the beginning

San Bernardino became the third California city to file for bankruptcy in the past few weeks ... but it won't be the last. Many municipalities in the Golden State and around the nation are struggling to cover their costs as the economic malaise continues to hurt tax revenue streams, experts said. This will lead to more municipal bankruptcies, which have been rare until now. "This is not the end. This is the beginning," said Peter Navarro, business professor at University of California, Irvine. "As cities see it can be done and is being done, it will give them the idea to do it."

Read the rest of the article at CNN

The Domino Theory of Bankruptcy

Two years ago, an obscure Wall Street analyst named Meredith Whitney was vilified for this statement she made to CBS' “60 Minutes:” “There's not a doubt in my mind that you will see a spate of municipal bond defaults. You could see 50 sizeable defaults, 50 to 100 sizable defaults, more. This will amount to hundreds of billions of dollars.” You see, Whitney was threatening a major industry in this country that typically goes under the radar - the municipal bond industry, a massive $3.7 trillion industry. It relies on the confidence of investors and Whitney was threatening it. But this week, she looks like she was on to something.

Read the rest of the story at Fox News

Valence Technology, Maker off Batteries for Electric Vehicles, Files Bankruptcy

Valence Technology Inc. (VLNC), a maker of batteries for electric vehicles, sought bankruptcy protection from creditors, saying it plans to complete its restructuring this year. The company, based in Austin, Texas, listed debt of $82.6 million and assets of $31.5 million as of March 31 in Chapter 11 documents filed today in U.S. Bankruptcy Court in its hometown. Valence owes $35 million on loans from affiliates of Chairman Carl Berg, about $34 million in interest on those loans, and $3 million on another third-party loan, according to court papers. The company also owes about $9 million on two series of convertible preferred stock held by Berg affiliates and has $11 million in trade debt and accrued expenses.

Read the rest of the article at Bloomberg

Kodak, in bankruptcy, seeks bonuses to keep executives

When Eastman Kodak went into bankruptcy proceedings six months ago, it left creditors holding unpaid bills and the world with questions about whether the company would simply shut down. Now, Kodak's top executives could be in line for big bonuses if creditors get some payback and if the company successfully emerges from bankruptcy or gets acquired. The printing and imaging company on Wednesday filed a motion in U.S. Bankruptcy Court seeking approval for as much as $17.6 million in bonuses for 15 executives. CEO Antonio Perez could receive up to $4.4 million if unsecured creditors — those who have no assurance they'll get paid — get back every dime they're owed. If they get back 30 cents on the dollar, which is Kodak's target, Perez would receive $2.2 million.

Read the rest of the article at USA Today

Sheriff, DA investigating bankruptcy-bound CA city of San Bernadino

The Sheriff's Department said Thursday it was working with police and the district attorney's office to investigate possible criminal activity within the government of San Bernardino, where city officials voted this week to take the rare step of filing for bankruptcy. Sheriff-Coroner Rod Hoops said in a statement the investigation began at the request of city officials several months ago. City Attorney James Penman said earlier this week that the City Council had been presented with falsified documents that masked the city's deficit for 13 of the past 16 years, and he had given evidence of financial mismanagement to "appropriate government agencies," declining to provide further details.

Read the rest of the article from the AP

Bankruptcy Loses its Taboo for California's Cities

Bankruptcy is no longer taboo among California’s struggling cities. San Bernardino has just become the third Golden State municipality in two weeks to fail - ending a four-year hiatus since fellow California town Vallejo began its costly and protracted court battle against creditors. So far, though, investors seem pretty sanguine. Granted, the three cities, which also include Stockton and Mammoth Lakes, are hardly bustling metropolises - each has a population of less than 300,000. But California, home to the glamorous Silicon Valley and Los Angeles, has the high taxes, big government and heavy regulation that are characteristic of major metropolitan areas. That makes it especially tough for cities in the state’s heartland that can’t attract the glitterati. They have also been hammered by the housing market bust. Throw in rising pension costs and terrible governance and it’s likely that other towns will turn to the courts to remedy their woeful finances.

Read the rest of the article at Slate

How to know when it's time to declare bankruptcy

As the housing crisis continues to touch American lives, one of the ripple effects of the crisis is the desperate financial straits of homeowners who continue to struggle with debt -- even years after losing their homes. As lenders continue to pursue deficiencies from three or four years ago, honest people who want to make good on their debts are increasingly overwhelmed. They find it impossible to rebuild their financial lives. Attempting to make even the minimum payments on a sea of debt can wipe out your retirement savings and max out your credit cards. It takes only one small shift in circumstance to make repayment an impossible task: a loss of employment, divorces, a health or housing crisis. Remaining in denial about the futility of repaying all debt is stressful and takes a toll on your relationships, family and health. When your liabilities are excessive, and your assets are minimal, if not gone, it is time to take a rational look at a very personal and, often emotional, decision: Should you declare personal bankruptcy? Years ago, personal bankruptcy was considered by some to be a shameful last resort. Read more: http://www.foxnews.com/opinion/2012/06/30/how-to-know-when-it-time-to-declare-bankruptcy/?intcmp=features#ixzz1zOgenI3d

Filing bankruptcy in Arizona: More information on discharging student loans

I am a bankruptcy attorney in Arizona ($995/Chapter 7) and am finding myself increasingly helping clients deal with their student loans. I've heard that as many as 1/3 of all student loans are now in default. Student loans are becoming the next economic crisis. Young people are having the hardest time in this economy yet they're saddled with this huge debt. Congress has made it increasingly difficult over the years to discharge student loan debt. Now, you have to show "undue hardship" in order to get them discharged in a bankruptcy. This usually means demonstrating that you cannot earn a sufficient income due to a medical injury or similar egregious circumstances. Chapter 13 bankruptcy may provide some relief. In a Chapter 13, a debtor comes up with a payment plan to pay a set amount of money to his creditors over 3-5 years. This includes the student loan lenders. So for 3-5 years, there will be some reduction in the amount required to pay on student loans.


Below are my favorite articles on student loans and dischargeability, which discuss how to show "undue hardship" and provide some cases where they have been successfully discharged. They also discuss the history of how Congress has treated student loans and legislation currently under consideration.


http://www.studentloanborrowerassistance.org/bankruptcy/
http://www.finaid.org/questions/bankruptcy.phtml
http://www.newamerica.net/blog/higher-ed-watch/2008/bankrupt-policy-8753
http://www.studentloanborrowerassistance.org/blogs/wp-content/www.studentloanborrowerassistance.org/uploads/File/nowayout.pdf
http://www.huffingtonpost.com/fred-bauer/student-loan-debt_b_1403280.html

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. 602-910-6812. Conveniently located in Central Phoenix along the Camelback corridor.

Making Student Loans Dischargeable in Bankruptcy Could Be a Free-Market Idea

News stories abound with examples of graduates who have borrowed colossal amounts of money and who have little potential of paying it back, at least in the short- and medium-term. These students are shackled to this debt. It's true that these graduates chose to borrow this money, but it is also true that the federal government has chosen to give protections to lending companies for a certain kind of loan. It is not clear whether these special protections for certain lenders are in the best interests of the nation and its citizens, nor is it clear why the loans taken on by some of America's youngest should be the hardest to discharge.

Here's a riddle that many Americans are familiar with: how are a house mortgage, credit card debt, and a car loan different from student loans? For the latter, the federal government has gone the extra mile to protect lenders by making them non-dischargeable in bankruptcy. This means that student loans, unlike almost every other kind of loan available, cannot be escaped through bankruptcy. With student loan debt approaching nearly $1 trillion nationally, a growing portion of Americans are facing a growing burden of inescapable indebtedness. This burden of debt is especially borne by the young, the group which has perhaps been hit the hardest by the economic slowdown.

It wasn't always this way. According to the non-partisan Congressional Research Service, until 1976, all student loans could be discharged in bankruptcy. Up until 1998, student loans could be discharged after a waiting period (of initially five and later seven years after repayment was scheduled to begin). In 1998, Congress made federal student loans nondischargeable in bankruptcy, and, in 2005, it similarly extended nodischargeability to private student loans. (Extreme hardship can still result in the discharge of some student loans, but this condition is rather difficult to establish.) Since 2000, student loan debt has exploded, and private student loans have grown at an accelerated rate. Somehow, people still went to college and were able to get loans prior to 2005. Clearly, certain lenders found it in their own interest to provide loans even when there was a chance of bankruptcy.

Read the rest of the article at The Huffington Post

What should you look for in a bankruptcy attorney?

When selecting a bankruptcy attorney, not all are equal. The costs especially can be very different. Look for an attorney who discloses all of their fees and costs upfront. Some attorneys will not disclose their costs and fees on their website, but when you go in for a consultation you will find out they are much higher than the competition. Most attorneys advertise a "flat fee," but does that flat fee include phone calls, emails, copying, court appearances, initial consultation? I do not charge extra for phone calls, emails, copies, appearing at the 341 Meeting of the Creditors, and consultations. Some attorneys advertise a flat fee but reserve the right in certain circumstances to charge extra. One large law firm in town advertises $995 for Chapter 7, but when you go in for a consultation, informs you that it is only if you are on assisted living. I charge $995 for every Chapter 7, regardless of your situation. The only extra costs you should see with me are the two mandatory courses you must take, which can be found online for as inexpensively as $5 and $12.50.

Some bankruptcy attorneys advertise generous payment plans, like "no money required up front" and "payment plans available." I also offer that, but I would not characterize it as such. Here is why: Let's say you need to file bankruptcy ASAP, in like two days, in order to avoid foreclosure on your home or garnishment of your paycheck. You will need to pay your attorney the filing fee ($308 for Chapter 7) and the bankruptcy fee BEFORE filing, otherwise you sort of become a creditor in the bankruptcy. I do not know of any attorneys who will let you pay after you file. So the "payment plan" and "no money down" is really not much of anything, you need to come up with the full amount in two days. Of course, if you're not in any hurry to file, you can just sit around and come up with the money gradually.

Finally, check out your bankruptcy attorney thoroughly. How many years have they been practicing law? What law school did they attend? This information should be disclosed on their website. You can look that information up on the Arizona State Bar website at myazbar.org. You can look up the ranking of their law school at the US News & World Report's website.

Will I owe taxes on a short sale or foreclosure?

I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and frequently deal with client issues involving short sales, foreclosures and mortgage loan modifications. One situation that arises frequently is whether clients will owe taxes on a short sale, foreclosure, deed in lieu or foreclosure, or loan modification. Even if the lender doesn't come after them for the difference in value, will the IRS, labeling it as income that must be taxed? To deal with the impending real estate crisis, Congress passed the Mortgage Forgiveness Debt Relief Act in 2007. It exempts from taxation certain debt forgiveness involved with losing your home - but not all. The home must be your primary residence (you must have lived there for at least 2 consecutive years within the past 5 years), and the loss must have been for buying, building or improving your home. Home equity loans or cash-out mortgage refinancings only qualify if they were used to make improvements. The maximum amount that may be forgiven is $2 million for a couple or $1 million for a single person.

If you don't qualify for the exemption, filing bankruptcy will eliminate the IRS debt. If you're seen as insolvent, the IRS cannot impute income to you.

For more information, click here and here.



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. 602-910-6812. Conveniently located in Central Phoenix along the Camelback corridor.

$599 bankruptcy: Too good to be true?

I am a bankruptcy attorney ($995/Chapter 7) and frequently see all too many bankruptcies advertised at super low prices turn into much more than advertised for. When you shop around for a bankruptcy attorney, you need to ask them up front what that flat fee includes. When you add up all the extra costs, you could be looking at paying $3950 total! We saw that happen to someone today in a bankruptcy hearing.

It doesn't have to be that way. When you find a bankruptcy attorney, ask them up front before hiring them what the flat fee includes. Generally, the only extra costs should be the court filing fee ($306) and the 2 required financial courses (which can be found online as cheaply as $10). With rare exceptions (which have never come up for any of my clients), there should not be any additional expenses.

Here is a list of additional expenses that we do not charge extra for. Be sure to ask any attorney advertising for a super low price whether they charge extra for these. Then figure out how much the real amount will be. Is it still a good deal?

1. Attending the mandatory 341 Meeting of the Creditors. One attorney friend of ours charges an additional $400.
2. Responding to emails.
3. Responding to phone calls.
4. Pulling a credit report ($30-$50 and even more if marked up)
5. Any additional meetings with you.
6. Any additional meetings or court appearances required by the bankruptcy court.
7. Any additional motions or filings required, including adversary proceedings.
8. Copies.
9. Helping you get a loan modification on your home.

You should also ask how much you will be dealing with the attorney, or will you be mostly working with a secretary or paralegal. We've seen far too many cases go to the 341 Meeting of the Creditors where the attorney is not prepared because someone else in the firm actually did the bankruptcy.

How to Pump Up Your Credit Score

ONE prescription for avoiding another real estate bubble is that banks tighten up mortgage requirements. Now, a new Federal Reserve report indicates that lenders have indeed been doing just that. For news and features on real estate, follow @nytrealestate. A majority of banks are less likely to offer loans to people with a FICO credit score of 620 and a 10 percent down payment than they were in 2006, according to the report. Lenders were also less likely to do so even for those with a score of 720. Such stricter standards have drawn the attention of Ben S. Bernanke, the chairman of the Federal Reserve, who last week told a bankers group that “current standards may be limiting or preventing lending to many creditworthy borrowers.” For those with lower credit scores, the math is stark: A borrower with a credit score of 720 can expect a rate of 3.70 percent on a 30-year, $300,000 fixed-rate mortgage, according to myfico.com, while someone with a score of 620 to 639 can expect a 5.07 percent rate — or an extra $242 per monthly payment.

Read the rest of the article at The New York Times

Wells Fargo Foreclosure Leads Man To Commit Suicide

Norman and Oriane Rousseau were one more couple pushed by a huge, greedy bank to the brink of homelessness. On Sunday, desperate and with nowhere to go, Norman Rousseau shot himself. This is the story of what happens when an average couple is up against a giant, wealthy, powerful bank. Unfortunately the result is what the result always is when people are on their own against the wealthy and powerful: the bank ends up with all of their money, takes their house to sell and throws them out onto the street. In this case the bank is Wells Fargo.

Read the rest of the article at The Huffington Post

Foreclosed Americans Find Way Back to Homeownership

When Jennifer Anderson's family could no longer afford their mortgage and lost their home, she expected many years to pass before they would again become property owners. But less than two years later, in March, they purchased a $297,000 house outside Phoenix, Arizona, after qualifying for a loan backed by the U.S. government. They joined a small but growing number of Americans who are making a surprisingly quick return to homeownership after defaulting on their loans or being forced into short sales that cost their banks money. "We didn't really expect it," said Anderson, 40. "We were resigned to the fact that we were going to be in a rental property for a while."

Read the rest of the article at Fox Business

Foreclosures Fall...And That's a Bad Thing?

A new report came out this week with a curious headline: "Foreclosure Activity Declines, Hurting Investors." I read it twice. You would think declines in foreclosure activity would be a good thing, that is, would help, not hurt. Not in this bizarre housing market. The report is from Foreclosure Radar, a foreclosure sales and analytics website. Foreclosure starts, the first stage in the foreclosure process, fell in April in the hardest hit states of California, Arizona and Nevada, according to Foreclosure Radar. California saw the steepest slide, with Notice of Default filings down nearly 16% from a year ago and nearly 70% from the peak in March of 2009. Foreclosure sales (sales of these properties at the courthouse steps, not sales of already bank-owned, or REO, properties) also declined, as the investor share of these purchases soared to a record high. "Nevada investors purchased more than 50% of foreclosure sales for the first time at 50.7%," according to the Foreclosure Radar report. "The low number of sales, combined with a record percent purchased on the courthouse steps, left very little to become Bank Owned (REO). This further depletes the inventory of Bank Owned homes, as REO sales continue to outpace the addition of new inventory."

Read the rest of the article at The Street

Foreclosures down, short sales up. Are banks getting smart?

The number of foreclosures in April fell to their lowest level since 2007 – and one reason is that lenders are getting smart. Instead of foreclosing on people, a costly and lengthy process, they're increasingly using short sales to move people out of homes they can no longer afford. Short sales are not only faster than foreclosures, they often turn out to be cheaper. By forgiving part of the loan up front (a loss they would take anyway during foreclosure, lenders can get possession of a house faster and sell it before it has had time to deteriorate. Homeowners get to shed their mortgage debt faster – and with less damage to their credit rating. Short sales began outpacing foreclosures in some states late last year. Six states saw more preforeclosure sales – typically, short sales – than foreclosures in the fourth quarter, according to RealtyTrac, an online marketplace for foreclosure properties based in Irvine, Calif. In preliminary first quarter data for 2012, that total jumped to 12 states, including traditionally big foreclosure states like California and Arizona, RealtyTrac reported Thursday.

Read the rest of the article at Christian Science Monitor

Study: More Than Half Of U.S. Bankruptcies From Medical Bills

In an economy where many Americans are living paycheck to paycheck, imagine a $10,000 medical bill or even $50,000. That is at the low end of the medical bills some patients are piling up. A study in the American Journal of Medicine says most Americans are just one major illness away from bankruptcy. The report reveals that 62% of all bankruptcies are credited to medical bills. It's a sad reality, especially for people who appear seemingly healthy and suddenly find out they have a terminal illness - as Sharon Ferrell did. The then 40-year-old woman had a routine health check up in 2010. In two years, she has gone from being a preschool teacher to homeless. These days all she has to her name are medical bills.

Read the rest of the article at DigTriad

Will Bankruptcy Eliminate All Of My Debts?

If you’re thinking about bankruptcy in Arizona, you should understand the different chapters of Arizona bankruptcy available to determine which type is best for you. Determining which type of bankruptcy to file generally depends on the kind of debt you have. The two types of debts are secured and unsecured. Secured debt is tied to collateral or a specific asset, such as home loans and vehicle loans, while unsecured debt is mainly credit card debt. An Arizona chapter 7 bankruptcy will eliminate almost all debt, including credit cards and wage garnishments. If you had a vehicle repossession, any deficiency debt the lender demands you pay is also dischargeable. A chapter 7 bankruptcy in Arizona will not eliminate secured debt however unless you agree to surrender the property that secures the debt.

Read the rest of the article at JD Supra

Contrary to popular belief, bankruptcy may help your credit score

Have you heard that bankruptcy will ruin your credit for 10 years? This is a common misconception. The correct information is that the notation of bankruptcy may stay on your credit report for up to 10 years, but your credit score will not suffer that entire time because of it. In fact, in many cases bankruptcy can help improve your credit score faster than paying off a large amount of credit card debt over time or settling accounts one by one. Filing bankruptcy can cause your credit score to drop 100 to 200 points right away, depending on what your score was prior to filing. However, after about a year from filing bankruptcy, even without doing a thing to “rebuild” your credit, your credit score will increase on its own. After two years, it should be back up to pre-bankruptcy numbers, if not higher.

Read the rest of the article at Ahwatukee Foothills News

Ask the Attorney: Debt Management or Bankruptcy?

Q: I am up to my neck in credit card debt and don’t know where to turn. I keep hearing all of these commercials for debt management programs that make bankruptcy sound like the worst thing ever. What’s the deal?

Read the answer at Canon-McMillan

LightSquared Files Bankruptcy After Network Blocked

LightSquared Inc. filed for bankruptcy, saying it will seek to resolve the concerns of U.S. regulators who thwarted the company’s plan to deliver high-speed wireless to as many as 260 million people. LightSquared, based in Reston, Virginia, listed assets of $4.48 billion and debt of $2.29 billion as of Feb. 29 in a Chapter 11 filing yesterday in U.S. Bankruptcy Court in Manhattan. The filing followed intense negotiations with creditors, who had requested that the company’s backer, Philip Falcone, step aside. Falcone and the current management team will remain with the company, Terry Neal, a LightSquared spokesman, said yesterday. Bankruptcy “is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network,” Chief Financial Officer Marc Montagner said in a statement. Reaching agreements with U.S. agencies may take as long as two years, he said in court papers.

Read the rest of the article at Bloomberg

Octomom's Bankruptcy Rejected

On Wednesday Octomom's Bankruptcy Rejected was a top story. Here is the recap: (TMZ) You can't get un-pregnant, but apparently you can go un-bankrupt -- because TMZ has learned Octomom's bankruptcy papers were not filed properly and have been rejected by the judge ... leaving her creditors free to come after her in full force. As TMZ first reported, Octo filed for Chapter 7 on April 30 ... the most serious form of bankruptcy.

Read the rest of the article at Anti-Music

Silver Legacy Resort files for bankruptcy

The Silver Legacy Resort Casino has filed for Chapter 11 bankruptcy, but its owners said it won't affect the ongoing operations or any of the 1,800 employees at one of the largest hotel-casinos in northern Nevada. Company officials announced the filing for protection against creditors Thursday while seeking reorganization of a $142.8 million debt. Gary Carano, the CEO of the Circus and Eldorado Joint Venture, said the operation still has a positive cash flow but has been challenged by the financing markets and sour economy. He told the Reno Gazette-Journal the property's largest bondholder has agreed to continue restructuring negotiations until June 1 and expects to ultimately "emerge as a stronger company." Meanwhile, Carano said it will be "business as usual" for guests and workers at the 1,700-room high-rise in downtown Reno.

Read the rest of the article at Manteca Bulletin

Watchdog Asks To Stub Pot Grower’s Bankruptcy

The feds are burned out with a medical marijuana grower that it suspects isn’t quite taking its bankruptcy case seriously. A federal court watchdog wants a judge to dismiss the Chapter 11 bankruptcy case of Denver-based CGO Enterprise LLC, arguing that the company shouldn’t be allowed to reorganize its finances in a way that would allow it to continue profiting from criminal activity. U.S. trustee Richard Wieland, who patrols bankruptcy cases for the Justice Department, pointed out that CGO Enterprise executives would likely have to reorganize its operations around sales from its primary asset: $130,000 worth of unharvested marijuana leaves listed on the bankruptcy petition filed May 1 in U.S. Bankruptcy Court in Denver.

Read the rest of the article at the Wall Street Journal

Theft and fraud by crews push airline towards bankruptcy

THEFT, fraud and abuse of perks by pilots and crew has set India's national carrier on course to bankruptcy, the aviation minister has claimed, with staff caught stealing whisky and caviar, and being chauffeured in limousines to five-star hotels. In eight years Air India, knownas the "Maharaja" for its turbaned cartoon mascot, has fallen from profit to an estimated $10 billion (£6.3 billion) in debt. In frustration, Ajit Singh, India's aviation minister, has said the country does not need a national carrier. Air India is investigating 161 cases of theft, fraud and abuse of perks, he told MPs. One catering officer was caught stealing caviar worth around £300, while a purser was discovered walking away with more than 370 spirit miniatures.

Read the rest of the article at New York Daily News

Filing bankruptcy can save your home from foreclosure

I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and one additional way I am able to help my clients is to save their homes from foreclosure. Did you know that the instant you file bankruptcy, generally your home becomes protected under the automatic stay and your lender cannot touch it until your bankruptcy is discharged?** A typical Chapter 7 bankruptcy takes around 4-5 months to cycle through, giving you 4-5 months of protection. During that period of time, most lenders become more willing to negotiate with you and give you a loan modification to lower your monthly payments. Because they realize you will have fewer bills so you will be better able to make your mortgage payments. Rep. David Scheikert and other members of Congress have been very helpful to our clients acting as a liaison to their lenders to help them obtain loan modifications.

But don't wait until the night before your home goes up for foreclosure to meet with a bankruptcy attorney. They may not be able to get your bankruptcy ready in one day. For example, you are only allowed to have $150 in your bank account on the day you file. If you take out thousands of dollars the day before filing bankruptcy, the trustee will likely want to know what happened to that money and could seize it back from you. You are better off setting up a free consultation well in advance to analyze all of your options and future possibilities. After you have gone over all of the contingencies and scenarios with your attorney, then you can decide whether or not it is a good idea to put off filing until somewhat close to the foreclosure date, in order to maximize the amount of time you have protecting your home.

**Each state has a certain homestead exemption that protects up to a certain amount of value in a home. In Arizona, the limit is $150,000. This only applies to equity. So, if you own a home worth $400,000, but owe $250,000 on it, your home will be protected. If you own a home worth $160,000 and owe nothing on it, it may not be protected so be sure to talk to a bankruptcy attorney.

Wells Fargo Now Refusing To Waive Deficiency Rights On Freddie Mac Short Sales

Good old Wells Fargo is up to their tricks again. Only this time, they may be playing with fire. If you haven’t already heard, Wells Fargo instituted a policy that went into effect on 5/1/12. From now on, they are refusing to waive any deficiency rights for their Freddie Mac short sales. This, despite the fact that Freddie just instituted a policy on 2/15/12, specifically barring any lender/servicer from requiring deficiency language in their short sale approval letters. The new policy reads “Reinforcing the requirement that the Servicer, for itself and on behalf of Freddie Mac, must waive all rights to seek deficiencies for short payoffs and deed-in-lieu of foreclosure transactions on Freddie Mac Mortgages that have closed in accordance with the Guide”. So, what did Wells Fargo do with this requirement? They basically gave Freddie Mac (and distressed homeowners) the proverbial “middle finger”, and instituted a policy that REQUIRES that ALL Freddie Mac mortgages will have the following language in the approval letters they issue: “With the exception of a Home Affordable Foreclosure Alternative (HAFA) closing, nothing in this Demand Statement or in the release of the mortgage shall waive the right to seek a deficiency under the loan documents or any of its other rights thereunder, and the obligations evidenced by the note shall remain in full force and effect until paid in full“. Houston, we have a problem!

Read the rest of the article at For Sale Phoenix Homes

When is foreclosure right for you?

Great piece over at Prescott eNews analyzing when you should consider foreclosure. Generally, short selling is always better. Not only do you walk away free and clear here in Arizona, but you might even get $3000 or so back. I recommend Will Wright if you are considering short selling, he is excellent at it.

William Wright

Eagle First Realty

Associate Broker

480-216-6882   direct

Will@WilliamWrightRealty.com

Filing bankruptcy in Arizona: Can I hide any of my assets?

I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and frequently clients ask me if they have to report everything they own. One potential client came in for a free consultation and asked us if he had to report $200,000 in cash he had hidden in a closet. Another client did not want to report her separated husband's vacation homes, since he was not filing for bankruptcy. A third client did not want to report that he may have some money coming to him in lawsuits and a patent on an invention.

I told every one of them that not to disclose assets in bankruptcy is a felony. Yes that's right, it's not just a no-no, it's a a felony punishable by huge fines and possibly even jailtime. Now some potential clients may choose to walk away, maybe even find another attorney and not disclose those assets to him/her, and hope to make it through the bankruptcy without the court ever finding out. I strongly advise against this. The federal bankruptcy courts have started cracking down recently, scrutinizing debtors very closely. The trustees have ways of finding property you have not disclosed. And it could be discovered in ways you never thought of. For example, what if you have cash hidden in a closet. The trustee decides to investigate your situation thoroughly, and asks to speak to your accountant. Your accountant, who may be put under oath, may disclose the cash to the trustee. Or the trustee may ask to speak to your separated non-filing spouse, who may disclose the cash, possibly not realizing you were trying to hide it.

There are ways to protect assets and that is why you should always consult with a bankruptcy attorney and disclose ALL of your assets to him/her. If you have a lien on your property, it is less likely the bankruptcy court will seize it during the bankruptcy. If you invest your cash in an exempt asset such as one house, or an educational savings account for your children, it will most likely be protected. If you are legally separated from your spouse, you probably do not have to disclose his separate property.

Do not lie to your bankruptcy attorney either! It is better to get everything out in the open right away so he/she can help you figure out how to protect your assets, rather than let your assets be discovered midway through the bankruptcy when it is too late to protect them.

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. 602-910-6812. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

Income cap for filing Chapter 7 bankruptcy has dropped

I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and one of the changes made to federal bankruptcy law in 2005 was to put in income eligibility caps. If you make more than the median income in your state, you cannot file for bankruptcy. There are some exceptions however, if you have children or certain types of expenses you may still qualify. The income cap changes year to year depending on your state's median income. Until today, the median income in Arizona was about $44,000. It has now decreased, obviously due to the recession, and is at $42,691. For a married couple, it is $55,479. It jumps higher if you have children; a family with four children has an income cap of $68,787 in order to be eligible to file.

Set up a consultation with us and we can determine whether or not you can fit into a Chapter 7. Child support alimony, taxes, insurance and health costs can all count as expenses that lower your income. If your income is still too high for a Chapter 7, you may still be eligible to file Chapter 13 bankruptcy. Although it does not discharge all of your unsecured debt, it will reorganize it and reduce it, making it into realistic payments that you can afford over the next 3-5 years. 

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. 602-910-6812. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

Jailed for $280: The Return of Debtors' Prisons

How did breast cancer survivor Lisa Lindsay end up behind bars? She didn't pay a medical bill -- one the Herrin, Ill., teaching assistant was told she didn't owe. "She got a $280 medical bill in error and was told she didn't have to pay it," The Associated Press reports. "But the bill was turned over to a collection agency, and eventually state troopers showed up at her home and took her to jail in handcuffs." Although the U.S. abolished debtors' prisons in the 1830s, more than a third of U.S. states allow the police to haul people in who don't pay all manner of debts, from bills for health care services to credit card and auto loans. In parts of Illinois, debt collectors commonly use publicly funded courts, sheriff's deputies, and country jails to pressure people who owe even small amounts to pay up, according to the AP. Under the law, debtors aren't arrested for nonpayment, but rather for failing to respond to court hearings, pay legal fines, or otherwise showing "contempt of court" in connection with a creditor lawsuit. That loophole has lawmakers in the Illinois House of Representatives concerned enough to pass a bill in March that would make it illegal to send residents of the state to jail if they can't pay a debt. The measure awaits action in the senate. "Creditors have been manipulating the court system to extract money from the unemployed, veterans, even seniors who rely solely on their benefits to get by each month," Illinois Attorney General Lisa Madigan said last month in a statement voicing support for the legislation. "Too many people have been thrown in jail simply because they're too poor to pay their debts. We cannot allow these illegal abuses to continue."

Read the rest of the article at Yahoo

AG HORNE FILES LAWSUIT ALLEGING CONSUMER FRAUD VIOLATIONS AGAINST LOAN MODIFICATION COMPANY

April 23, 2012 Press Release For immediate Release Contact: Amy Rezzonico (602) 542-8019 www.AZAG.gov | Facebook | Twitter AG HORNE FILES LAWSUIT ALLEGING CONSUMER FRAUD VIOLATIONS AGAINST LOAN MODIFICATION COMPANY PHOENIX (Monday, April 23, 2012) -- Attorney General Tom Horne today filed a lawsuit against Mortgage Relief Group, d.b.a. Mortgage Assistance Group, and its owner, Stan Allotey, alleging that the Defendants engaged in deceptive loan modification services.  The lawsuit alleges that since at least February of 2008, the company deceived consumers into paying fees, ranging from $995 to $3,245, for loan modification services by misrepresenting their ability to help consumers obtain mortgage relief and save their homes, thereby violating the Arizona Consumer Fraud Act.  The Defendants are also accused of using deceptive means to lure financially distressed homeowners into paying up-front fees with promises that the company would prevent foreclosure and save the consumers’ homes by negotiating modifications of mortgage loans. Also, the company allegedly continued to charge or collect up-front fees even after the enactment of the Arizona Foreclosure Consultant Regulation Law’s ban on charging or collecting such fees.  Once homeowners paid the upfront fees, the Defendants allegedly often failed to perform their part of the contract, keep homeowners informed of the status of their application for a modification, refund fees, or otherwise do anything to earn their fee.  “Predatory loan modification scams are an unfortunate part of the housing crisis,” Horne said. “Cases such as this show that every consumer needs to thoroughly research the companies with which they do business. And it is a reminder that nobody should ever agree to paying up-front fees for services of this kind.”  The Complaint alleges that defendants violated the Arizona Consumer Fraud Act, the Arizona Telephone Solicitations Act, and the Arizona Foreclosure Consultant Regulation Law, and asks the Court to bar Defendants from conducting any further foreclosure consulting business, impose civil penalties against the Defendants of up to $10,000 for each violation, pay the State of Arizona its costs of investigation and prosecution, and provide refunds to consumers.  The case is being handled by Assistant Attorney General Alyse Meislik in the Consumer Protection and Advocacy Division.  The Attorney General recommends that homeowners who are in or facing foreclosure contact their lender or servicer or a government-approved housing counselor. The Arizona Foreclosure Help-Line, 1-877-448-1211, refers consumers to HUD-approved housing counseling agencies who provide loan modifications and other services at no cost.  If you feel you have been a victim of consumer fraud, please contact the Arizona Attorney General’s Office of Consumer Information & Complaints Unit at (602) 542-5763 / (520) 628-6504 / (800) 352-8431. You may also file a consumer complaint online at:http://www.azag.gov/consumer/complaintform.html.

Student Loan Forgiveness Act Introduced in Congress

US House Representative Hansen Clarke from Michigan introduced HR 4170, or the Student Loan Forgiveness Act, on March 8th, a bill that is extremely important in this economy, especially to the Millennium Generation. If passed, the bill would forgive outstanding student loan debt to any person who makes consecutive payments of at least 10 percent of discretionary income for ten years. It also includes forgiveness options for going into public service or teaching.
This bill could not come at a better time and in many ways is extremely overdue given that student loan debt now exceeds credit card debt and is set to surpass 1 trillion in 2012. Today’s recent college graduates (myself included) are faced with the worst job market post World War II, an ever increasing cost of living, and the highest rate of student loan debt in history. Rent, gas, and food are all substantially more expensive than 25 years ago when our parents were graduating from college.

Read the rest of the article at Borderless News and Views

Arizona tops Nevada as nation's No. 1 state for foreclosures

Arizona has broken Nevada's 62-month streak as the foreclosure capital of the nation.

The state's foreclosure rate in March actually dropped, but Nevada's dropped more. California kept its third-place ranking.

Data released Thursday by foreclosure tracking firm RealtyTrac shows banks actually repossessed nearly 3,600 Arizona homes last month. More than 5,900 homeowners received a notice of default, the first step in the foreclosure process. In all, that's a 40 percent drop in foreclosure activity.

Read the rest of the article at The Republic

Paying home mortgage no longer Americans' top priority

A leading credit information company says the lingering effects of the recession have turned the country's bill-paying habits upside down.

A TransUnion study finds car payments have become the priority when it comes to paying bills in America.

It used to be that cash-strapped Americans would always pay their home loans first, then their credit card and car loans.

"Nowadays, consumers seem to be opting to pay the auto loan first, and then the credit card. And only last do they pay the mortgage," says Ezra Becker, TransUnion's vice president of research and consulting.

He says folks need that car to get to work or look for work. So, the mortgage and credit card payments are dependent on the vehicle.

Read the rest of the article at WWL AM 870

US Mortgage Lenders Fear Effect Of New Mortgage Rule

--New U.S. consumer bureau designing Dodd-Frank "qualified mortgage" rule

--Rule expected to be finished this summer sets out new standards for U.S. mortgage industry

--33 groups, mostly banking and housing organizations, urge strict standards not be enacted

WASHINGTON -- U.S. mortgage lenders and real-estate agents are growing concerned that a new set of mortgage-lending standards under development by a new consumer regulator will imperil the fledgling housing recovery and limit the availability of home loans.

In recent weeks, after meetings with consumer-bureau officials, several real-estate industry groups and some consumer- advocacy organizations have grown worried about how the Consumer Financial Protection Bureau could interpret the mortgage-lending rules, which it is aims to finish by this summer.

Read the rest of the article at NASDAQ

Foreclosure Filings Decline in U.S. to Lowest Since 2007

Foreclosure filings in the U.S. fell in the first quarter to their lowest level in more than four years after lenders under legal scrutiny slowed actions against delinquent homeowners, according to RealtyTrac Inc.

Default, auction and repossession notices were sent to 572,928 properties, down 2 percent from the previous three months and 16 percent from the first quarter of 2011. It was the lowest quarterly tally since the fourth quarter of 2007, the Irvine, California-based data firm said today in a statement. One in every 230 U.S. households received a filing.

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement. “The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen.”

The five largest banks agreed Feb. 9 to a $25 billion settlement after their foreclosure practices were subjected to a 16-month probe by all 50 state attorneys general. The accord removed some barriers to property seizures and cleared the way for lender actions to resume without releasing banks from individual or class-action claims or criminal liability.

Read the rest of the article at Bloomberg Businessweek

The zombie files: Nearly 7,000 stagnating foreclosure cases lie dormant in Palm Beach County’s court

Nearly 7,000 stagnating foreclosure cases lie dormant in Palm Beach County's courts, creating a payment-free limbo for some homeowners but a stain of vacant and abandoned homes in deteriorating neighborhoods.
These sleeper files, which have remained inactive for a year or longer, date as far back as 1997, according to documents provided to The Palm Beach Post by the clerk of courts.
But most are from the early years of the housing crash when lenders feverishly sought to repossess homes, unaware that the frenetic pace would cause a second crisis based on faulty documents and unlawful corner-cutting.
While an unknown number of dormant files are mistakes, such as one party forgetting to request a dismissal after an agreement is reached, others remain open but unmoving because of homeowner bankruptcy, loan modification negotiations or bank neglect.

Read the rest of the article at WPTV

Bank of America sues itself: Foreclosure ineptitude or conflict of interest Continue reading on Examiner.com Bank of America sues itself: Foreclosure ineptitude or conflict of interest

Bank of America has recently had run of negative publicity, and a good portion of it involves inept execution in its handling of foreclosures. Allegations of wrongful foreclosures, inaccurate title documents, and questionable foreclosure tactics, have not put Bank of America in a positive light.

Lynn Szymnoniak, an attorney in Palm Beach County, Florida, was instrumental in uncovering mortgage and foreclosure fraud involving JPMorgan Chase, Wells Fargo, Ally Financial, Citigroup, and Bank of America. Her lawsuit alleged the aforementioned financial institutions engaged in a nationwide practice of failing to obtain required documents used to identify the true owner of a mortgage. In far too many cases those financial institutions initiated foreclosure proceedings even though they were not the true owners of the property. They were involved in outright fraud in their representation and/or questionable actions in their zeal to foreclose. A settlement was reached in the amount of $25 billion.
In Palm Beach County, Florida alone, Bank of America has sued itself eleven times in foreclosure cases. Ms. Szymnoniak said, “There are likely at least 100 examples of the same thing happening across the state.” One example of Bank of America suing itself; on March 29, 2012, in a foreclosure matter filed in Palm Beach County, Bank of America is listed as plaintiff and Alegandro Caro, Nicola Revell and Bank of America are listed as defendants.

Zjumana Bauwens, a Bank of America spokesperson, has said, “We are servicing the first mortgage on behalf of an investor and we own the second mortgage. Naming the second lien holder in the suit is necessary to eliminate the junior interest.”

Read the rest of the article at Fort Lauderdale Business Law Examiner

The future of foreclosures

It's been five years since the housing bubble burst, yet hundreds of thousands of California homeowners remain in default and en route to foreclosure. Some of these troubled borrowers will benefit from new consumer protections included in a nationwide settlement that five major banks agreed to in February, including a requirement that foreclosure proceedings wait until the bank considers a modified mortgage that would be less costly to borrower and lender alike. Those protections, however, extend no further than the five banks and the loans they service. This week, state lawmakers are set to take up a series of mortgage-related bills backed by Atty. Gen. Kamala Harris, beginning with a measure (AB 1602) to enshrine the national settlement's safeguards into California law and apply them to all borrowers in the state. Also included in the package are proposals to improve lenders' record keeping and extend the statute of limitations for prosecuting certain mortgage-related crimes.

The measures are sensible and important, yet they're running into resistance from bank lobbyists. One of the main complaints is that some of the bills would encourage defaulting borrowers to file lawsuits to drag out the foreclosure process, even if they have no intention or ability to keep their homes.

Complaints about potentially abusive lawsuits would be more persuasive if they weren't coming from an industry whose companies foreclosed on properties despite falsified court affidavits (by "robo-signing" documents) and serious discrepancies in the ownership records. Nevertheless, to minimize the risk of spurious claims and delaying tactics, sponsors have amended the legislation to significantly narrow individuals' right to sue. Borrowers also would be deterred from making multiple spurious applications for mortgage modifications.

Read the rest of the article at The Los Angeles Times

After two bankruptcies, Buffets managers share bonuses

Michael Andrews, chief executive of Buffets Holdings Inc., helped guide the restaurant owner through bankruptcy twice in the past four years. Both times, he was rewarded with court-approved bonuses.

Andrews, Chief Financial Officer Keith Wall and the Eagan-based company's concept officer are among 16 managers who may split about $2.3 million during Buffets' current bankruptcy. The three men also shared in about $1 million in bonuses handed out in the company's 2008 case, according to court records.

Both bonus programs took advantage of a common loophole to avoid a 2005 federal law that restricts extra pay for executives who put their companies into bankruptcy. Instead of payments made through so-called Key Employee Retention Plans, which Congress made harder to hand out, bankrupt companies now routinely set up Key Employee Incentive Plans, claiming the extra pay is tied to progress in reorganizing operations.

Read the rest of the article at the Star-Tribune

California city, known for Olympic training, faces bankruptcy

Crippled by a staggering legal judgment, a California town and resort area, a popular training destination for Olympic athletes, faces bankruptcy throwing the town's future into question.
"We have a major judgment against us," Assistant Town Manager Marianna Marysheva-Martinez said Thursday, to the Associated Press. "With the magnitude, it's almost unimaginable for us how we're going to deal with this judgment."
According to the New York Times, The Sierra Nevada ski resort town of Mammoth Lakes, which sits five hours north of L.A., lost a breach-of-contract lawsuit after it had tried to back out of a 1997 agreement with Mammoth Lakes Land Acquisition that gave a developer the right to develop a hotel and buy land in return for improving the local airport.
But the town backed out of the deal after the Federal Aviation Administration, which provided Mammoth Lakes with grants to improve the airport, objected to development nearby.

Read the rest of the article at Digital Journal

Warren Sapp filed for bankruptcy to avoid going to jail

Warren Sapp says a bad construction deal at the worst possible time sent him spiraling into debt that led him to file for bankruptcy last week.
Sapp made his first comments on the situation to Tampa Bay Times columnist Gary Shelton and said he was motivated to file for bankruptcy with $6.7 million worth of debt because he didn’t want to go to jail.
“Do you think I wanted to declare bankruptcy?'' Sapp told Shelton. "Do you think if there was any other way possible I would have done it? It was either this or go to jail. Those were my choices.''
[ Also: Lingerie Football League goes on hiatus for 2012 season ]
Sapp estimates he grossed about $60 million during his playing days, primarily with the Tampa Bay Buccaneers, and now he’s reduced to not much. It’s a little hard to believe one failed investment project, building homes in Fort Pierce, Fla., broke him. But that’s what Sapp explains.
Since, he’s become the butt of plenty of jokes. Sapp claims he’s lost not only his Super Bowl XXXVII ring but also his ring he earned as a member of a national championship team at the University of Miami. Losing one ring? OK. Losing two rings? Come on. They’re really been misplaced?

Read the rest of the article at Yahoo

Boston Bank Questions Church’s Eligibility to File for Bankruptcy

A key creditor in the bankruptcy filing of a historic Boston church has raised objections about the church’s eligibility for bankruptcy, and sources suggest that this challenge may throw a wrench in the church’s debt relief plans.

This week, OneUnited Bank submitted papers to a bankruptcy court that claim the Chapter 11 bankruptcy filing of Charles Street AME Church, a historic venue in Roxbury, Massachusetts, should be voided because the church did not have the right to seek bankruptcy protection.

According to a recent report from the Boston Herald, the church filed for Chapter 11 bankruptcy in order to avoid foreclosure, but OneUnited Bank, the church’s largest creditor, claims that the church is being disingenuous when it claims poverty.

Sources say that the church allegedly combines its assets with the First District of the African Methodist Episcopal church, which has more than $500 million in assets.

Read the rest of the article at Total Bankruptcy

In bankruptcy, religious order tries to cap damages from molestation charges

The Irish Christian Brothers, who founded Brother Rice and Leo high schools in Chicago, and St. Laurence High School in Burbank, are trying to cap damages from allegations some members of their order molested the children they taught.

The Brothers are in bankruptcy, having filed for Chapter 11 reorganization protection. And so they’ve set Aug. 1 as the last date anyone can file sex abuse claims against any members of the order.

“After that date, if you’ve been abused, physically or sexually, you will not be able to bring a lawsuit against the Christian Brothers,” said attorney Mark McKenna, who has sued the brothers on behalf of Chicago-area victims.

Over the last several weeks, letters about the case and the deadline were sent to alumni who attended the schools during years when known or alleged abusers were assigned there.

Three brothers who at one time worked in Chicago have been identified as sexual predators in lawsuits filed in other states, primarily Washington, where the order also ran schools and an orphanage: Brother Edward Courtney, Brother Robert Brouillette, and Brother D.P. Ryan.

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

Student Loan Debt Seen as Growing Threat to the Economy

Move over, mortgages. Get out of the way, Greece. Another economic doomsday scenario is emerging.

Student loan debt has reached about $870 billion, exceeding credit cards and auto loans, and balances are expected to continue climbing, the Federal Reserve Bank of New York said last month. In February, the National Association of Consumer Bankruptcy Attorneys referred to a “student loan ‘debt bomb’” and wondered if it was shaping up to become “America’s next mortgage-style economic crisis.” Such a burden could crimp an already weak economy.

“Student debt poses a large and growing threat to the stability of our economy,” Illinois Attorney General Lisa Madigan testified March 20 before a U.S. Senate judiciary subcommittee hearing in Washington on the looming student debt crisis.

“Just as the housing crisis has trapped millions of borrowers in mortgages that are underwater, student debt could very well prevent millions of Americans from fully participating in the economy or ever achieving financial security,” Madigan said.

Read the rest of the article at LoanSafe

On the tracks to bankruptcy: California High Speed Rail

Golden State’s $68 billion train boondoggle showcases government folly

California’s fanciful bullet train project embodies everything that is wrong with government today. The state’s High-Speed Rail Authority on Tuesday released details of a revised business plan that claims laying down tracks from Los Angeles to San Francisco will now cost a mere $68 billion instead of $98 billion - as if that were a bargain.

President Obama’s infatuation with the effort to create another government-subsidized rail entitlement means the rest of the country is on the hook for at least half of this still considerable sum. Retirees in Florida and schoolteachers in Mississippi, who will never ride California’s train, will be forced to pay for it anyway.

Politicians asked Golden State voters in 2008 whether they wanted this shiny new train set. Fifty-three percent said “sure,” without devoting much thought to the cost of their choice. To put $68 billion in perspective, five major airlines offer flights from Los Angeles to San Francisco for $200 or less - an amount that includes $39.60 in various taxes. Volume discounts aside, for the cost of the rail infrastructure, California could purchase 340 million round-trip tickets - enough to provide nine round-trip flights for each of the state’s documented residents.

Read the rest of the article at The Washington Times

Filing bankruptcy? What you can and can't do with your tax refund

I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and find that most people considering filing for bankruptcy have no idea that it is very serious how they treat their tax refund. In fact, it is so important that it can affect when someone files for bankruptcy. The reason is because the bankruptcy laws prohibit you from spending that money frivolously. If you receive a tax refund and spend it on frivolous items within 90 days of filing for bankruptcy, the court may demand that you pay it back into the bankruptcy for your creditors. It is best to spend it on necessities like rent, food, gas and utilities. Don't spend it on creditors you intend to discharge, like credit cards and medical bills, because the bankruptcy court may seize it back and redistribute it amongst all your creditors. And if you intend to file for bankruptcy, you're really just throwing that money away by paying creditors you intend to write off.

If you receive a tax refund during your bankruptcy, the bankruptcy court will seize it and distribute it amongst your creditors. So if you are expecting a tax refund, it's best to file bankruptcy after you have received it and spent it on regular expenses. 

The timeframe for scrutinizing your tax refunds lasts well after your bankruptcy is discharged, until you receive your next refund. The bankruptcy court will likely seize that refund too, so many of my clients choose to have the least amount possible withheld from their paychecks after filing bankruptcy to avoid that scenario.

The most important thing to be aware of about tax refunds in bankruptcy is that you could get into real trouble in this area if you are not careful. A couple of weeks ago when I was in a 341 Meeting of the Creditors with a client, we observed another bankruptcy proceeding go sour. The woman filing bankruptcy told the trustee that she had received a $5000 tax refund a few days earlier, which her daughter took out of her checking account. The trustee announced that she was going to hire an attorney and sue her daughter to get the money. The lesson is to always be upfront about your activity and consult an attorney about bankruptcy so you don't make mistakes like that.

The good news is you can safely spend your tax refund on a bankruptcy proceeding. More than 200,000 households around the country will do that this year.

Hassayampa Golf Course files bankruptcy - how is a corporate bankruptcy different from personal bankruptcy?

I am a bankruptcy attorney in Phoenix ($995/Chapter 7), and occasionally have clients with businesses. If the owner can be held personally accountable for the business debts, and it is a smaller business, usually it is best to file for personal bankruptcy (Chapter 7 and 13). Otherwise, creditors can come after the individual. These are usually sole proprietorships, entrepreneurs, and partnerships that intend to dissolve, since if there are any assets they will be distributed amongst creditors.

Businesses that are incorporated and a separate legal entity where an individual is not personally liable, and where there are significant assets, usually file for corporate bankruptcy, without including anyone personally (Chapter 11). A Chapter 11 will reorganize or liquidate the business in order to pay its debts. The debtor may propose its own restructuring plan, but after a certain amount of time has passed, the creditors get to propose alternative plans, and vote on which plan will be accepted. Usually by filing Chapter 11, a business intends to stay in business instead of dissolving.

Although an individual will have a bankruptcy on their credit history if they file for personal bankruptcy, it is usually significantly cheaper to file for personal bankruptcy than corporate bankruptcy, which usually costs around $5000 or more.

The Hassayampa Golf Course in Prescott, Arizona filed this year for Chapter 11 bankruptcy. This comes as no surprise considering the economy; recreational and luxury businesses are suffering severely. What appears to have gotten the golf course into financial difficulty was taxes, it owes $162,724.72 in taxes. Politicians call for higher taxes on businesses, but in this economy taxes are taking a toll on businesses. Generally, those taxes will not be dischargeable in the bankruptcy. There are also 1375 creditors listed on the bankruptcy petition. Many businesses cannot survive after a corporate bankruptcy, because they still must pay back much of the debt, and end up converting to a Chapter 7 bankruptcy and dissolving. Considering the economy is not picking up, I give Hassayampa a 50/50 chance at lasting another year after the bankruptcy.

Read more about the Hassayampa bankruptcy here. 

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. 602-910-6812. Conveniently located in Central Phoenix along the Camelback corridor. AlexanderBankruptcyLawFirm.com

Foreclosure Review: Just 3 Percent Of Eligible Borrowers Apply For Review

Bob Hale nearly lost his Concord, Mass., home to foreclosure in 2010 as a result of what he claims were bank errors.

That would make him a prime candidate for the Independent Foreclosure Review, a program overseen by federal bank regulators that is designed to grant cash payouts to homeowners who prove that their loan was mismanaged during the foreclosure process.

But Hale is taking a pass. "I'm reluctant to waste my time," he wrote in a recent email exchange. "I just don't trust a word they say," he said, referring to several banks' close involvement in shaping the review process.

Hale is one of millions of borrowers who have not bothered to apply for relief through this program. So far, just 136,000, or 3 percent of qualifying borrowers, have mailed in forms requesting a loan audit, according to the Office of the Comptroller of the Currency, one of the regulators overseeing the program. Mailings to notify borrowers eligible to apply to program were first sent beginning Nov. 1, 2010.

Read the rest of the article at The Huffington Post

Pima County foreclosures: Notices double the rate of sales

Home foreclosure filings in Pima County outpaced foreclosure sales during the first quarter by nearly a 2-1 ratio, keeping optimism in check for the new construction industry.
Year-to-date, 2,527 trustee’s sale notices have been issued compared to 1,342 foreclosure sales. Although the pace of notices has slowed moderately, down 5.9 percent year over year, sales have plunged 34.6 percent during the same period.

Read the rest of the article at Inside Tucson Business