Monday, January 30, 2012

Is a reverse mortgage right for you?

A reverse mortgage is a loan for senior homeowners over 62-years-old that uses some of your home equity as collateral. If you keep paying your property taxes and insurance, the loan does not have to be repaid until the last homeowner moves out of the property or passes away. At that point, the home is sold and the loan plus interest is repaid and the remaining home equity goes to the surviving owner or the estate. If the home is worth less than the loan, the estate is not liable for any losses.

Most homes are eligible, although mobile homes must be on owned land and built in last 30 years. Your home needs to either be free and clear of other loans, or any existing mortgage will first be paid off with loan proceeds before additional money is taken out. For instance, you might still owe $100,000 on a loan and have monthly payments of $1,000 a month. With a reverse mortgage, you could pay off the loan and also receive perhaps $1,000 a month in extra income. This would leave you $2,000 a month richer.

Read the rest of the article at Valley News

Freddie Mac Bets Against American Homeowners

Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates.

Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.

No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are “walled off” from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules.

Freddie’s charter calls for the company to make home loans more accessible. Its chief executive, Charles Haldeman Jr., recently told Congress that his company is “helping financially strapped families reduce their mortgage costs through refinancing their mortgages.”

But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance.

Read the rest of the article at Pro Publica

Mortgage Modification Program Expanded to Investors, Others

The Obama administration on Friday announced it would significantly broaden the pool of consumers eligible for mortgage modifications by opening its program to owners of rental properties and homeowners burdened by medical and credit card bills and second mortgages.

Under an expansion of the Home Affordable Modification Program, investors can seek mortgage loan modifications for rental properties, regardless of whether the home is occupied by a tenant or it is vacant but the owner plans to rent it. Previously, only owner-occupants were eligible for loan modifications under the government’s plan, but officials said they decided to take this step because foreclosed rental properties were having a particularly detrimental effect on low- and moderate-income renters.

Read the rest of the article at LoanSafe

Obama turns attention to housing market, but Arizona needs a lot of help

The questions surrounding this latest push center on whether refinancings will, or can include mortgage principal reductions. A homeowner that is underwater $180,000 in Surprise or Chandler probably needs a little more help than lower interest rates.
More refinancings will help some, but they won’t help dramatically underwater homeowners in Phoenix, Las Vegas and Southern California. They likely need principal reductions to set their ships right.

Read the rest of the article at the Phoenix Business Journal

Mortgages may be cheaper than ever but that doesn’t mean it’s time to buy

The U.S. housing market is like a case of good cop/bad cop.

The good cop softens you up with record-low mortgage rates and a huge supply of available houses. The bad cops — risk-averse lenders – have tightened their loans and require bigger down payments along with stellar credit.

This push-pull scenario is likely to continue in 2012, say U.S. housing experts. The National Association of Realtors forecasts a rise in home sales of 5 percent, to 4.5 million in 2012, but at the same time, “[growth] is a slow, gradual process. It’s been frustrating,” says Walter Molony, National Association of Realtors spokesman. “It’s tough to get a mortgage. People have to pay attention to their credit scores.”

Read the rest of the article at The Daily Caller

Plan seeks refinancing on private mortgages

Currently, the Home Affordable Refinance Program, or HARP, is only set up to help underwater homeowners with mortgages backed by publicly owned but government-sponsored corporations Fannie Mae and Freddie Mac. In October, Obama announced the refinancing program would be expanded to allow homeowners to refinance to lower rates no matter how underwater they are on their mortgages, as long as they have a federally backed loan. Investors are also now included in the refinancing plan if their loans are backed by Fannie or Freddie.

But homeowners with private loans have been left out. In Arizona, nearly 50 percent of homeowners are underwater, and many have privately held mortgages. The goal of the expanded program would be to get homeowners lower monthly payments so they will continue to pay their mortgages, even though they owe more than their houses are worth.

Read the rest of the article at AZ Central

Foreclosures: America's hardest hit neighborhoods

The housing collapse has dramatically changed the nation's foreclosure landscape.
Neighborhoods boasting modern homes, cul-de-sacs and tree-lined streets in and around Western cities now dominate the list of the top 100 U.S. zip codes hit hardest by foreclosures and claim and comprise all of the top 10 spots, according to data generated for CNNMoney by RealtyTrac. In 2011, Western states claimed 82 of the 100 worst hit zip codes with 38 in California and another 28 in Nevada.

Read the rest of the article at CNN

Buckeye has most foreclosures in state

uckeye had among the most foreclosure filings in the nation last year, according to a new report by RealtyTrac.
Out of 100 ZIP codes with the most foreclosures around the nation, 15 were in Arizona -- Phoenix, Laveen, Peoria, Chandler, Goodyear, Maricopa, Surprise, Glendale, Queen Creek, Tolleson and Mesa.
But Realtor and foreclosure expert Art Welch says that's changed over the last six months.
"On a typical month, it used to be you'd have 3,000 to 4,000 homes in Buckeye that were in foreclosure," he said.
Today there are fewer than 500.

Read the rest of the article at AZ Family

Phoenix Housing Rises as Canada Buyers Seek 55% Desert Discount

Bob Major returned to Phoenix in October in search of more bargains like the four empty houses he bought in 2010 at rock-bottom prices. The retired builder from Vancouver instead found real estate about 20 percent higher and stiff competition.

“There’s been an extreme turn,” Major, 66, said in an interview at a Chandler, Arizona, pizzeria, sitting beside his wife, Wendy. “We put bids on 30 properties and only got two.”

The Phoenix housing market, down 55 percent from peak values with more than two-thirds of borrowers owing more than their properties are worth, is starting to recover as demand grows and inventory shrinks. Sales rose in November for the 12th straight month on a year-over-year basis, and distressed real estate accounted for the smallest share of purchases since 2008, according to research firm DataQuick.

Read the rest of the article at Businessweek

Foreclosures Worsen in New York, New Jersey as Arizona Improves

The number of homes in the foreclosure pipeline is increasing in states including New York, New Jersey and Connecticut, where the process is slowed by courts, as Arizona, California and Nevada digest their backlog.

Home loans that were delinquent or in foreclosure fell in three states hit hard by the housing market collapse, dropping 19 percent in Nevada, 21 percent in California and 25 percent in Arizona in the year through Nov. 30, Lender Processing Services Inc. reported today. At the same time, they rose 7.4 percent in New Jersey, 5.2 percent in Connecticut and 2 percent in New York, as mandatory judicial procedures delayed seizures.

Read the rest of the article at Businessweek

Arizona's projected growth rate third in the country

Total inventory for the Valley coasted on a steady downward trend throughout 2011 with a high starting at 42,881 homes for sale in Jan. 2011 and continuing down to 24,712 in Dec 2011.

Dec.’s total inventory number represents a 42.37 percent drop from Jan.’s high according to the Arizona Multiple Listing Service. Reduction in inventory plays a major role in the supply in demand balance, which is so critical in correcting the Valley’s housing market.

Distressed sales, which include bank, owned sales and short sales have dominated the total sale composition for many months. In November, distressed properties as a percentage of total sales dropped below 60 percent, and remained relatively unchanged in Dec. at 59.8 percent. In Jan. 2012, the number of short sales (2526) eclipsed the number of bank owned sales (2165) for the first time in recent memory, suggesting a shift in lender appetite toward dealing with homeowner debt, rather than taking the property back through foreclosure according to the Arizona Multiple Listing Service.

Read the rest of the article at San Tan Valley Today

States where citizens carry the most mortgage debt

How much residents of each state owe on their mortgages is an interesting statistic. For the most part, residents of the states with the highest average mortgage debt are not in trouble. While the average home price in these states dropped in value during the recession, the foreclosure rates in these states are among the lowest in the country. The reason: residents of these states can generally afford to lose and owe more money than their counterparts in other states. 24/7 Wall St. examined a recent report by Credit Karma to find the 10 states with the highest average mortgage debt.
Most of the states on our list have extremely high mortgage debt because of the size of their initial mortgages. States like Connecticut and Massachusetts, which have among the highest median home values in the U.S., also have among the highest mortgage debt. Hawaii, which has the second-highest average mortgage debt per person, has the highest median home value of $525,400.

Read the rest of the article at MSNBC

Foreclosures keep pushing house prices lower

The ongoing wave of foreclosures continues to drag home prices lower.
Foreclosure-related properties, which made up roughly one in five home sales in the third quarter of last year, sold for an average 34 percent less than homes that were not “distressed sales,” according to the latest data from RealtyTrac, a housing data research firm.
Foreclosures accounted for a smaller share of total sales as banks already glutted with properties slowed the pace of new seizures until they could unload the houses they already owned. The share of distressed sales also slowed last year following a slowdown in new foreclosures after consumer complaints and lawsuits challenging seizures that resulted from “robo-signing” and other questionable document practices.
“The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties," said Brandon Moore, chief executive officer of RealtyTrac.

Read the rest of the article at MSNBC

States to decide this week on mortgage deal

State and federal officials are close to a settlement with the largest U.S. banks over mortgage abuses, with states facing an end-of-the-week deadline to decide whether they will sign on, people close to the talks said.

The final value of any settlement will depend on which states it includes, and could drop sharply if states like California, one of the hardest hit by the foreclosure crisis, do not join.

In another sign the deal is close, negotiators have overcome a sticking point and agreed on Joseph Smith, North Carolina's banking commissioner, as a monitor to ensure the banks comply with the terms of the settlement, these people said.

Read the rest of the article at Reuters

Size of Bankruptcy Key to Investing in Distressed Companies

With limited opportunities for investing in distressed companies right now, the size and phase of a bankruptcy are key factors for possible investments as part of a credit portfolio, says Nancy Havens, Founder of Havens Advisors, and Richard Goldstein, Managing Director at the firm.

“We try and do full-out bankruptcies. And on the bankruptcy side, there are not that many bankruptcies to do right now. We’re interested right now in the size of the bankruptcies,” Ms. Havens said. “In credit, we are in a bunch of bankruptcies and strict event situations as well as high-yield situations that are also event related.”

Read the rest of the article at The Wall Street Transcript

SHORT SALE IN SURPRISE, ARIZONA: When it is the best option

Foreclosure and short sales are becoming part of everyday conversation in Surprise, Arizona, it
seems. Many clients wonder when a short sale is really their best option. The simple answer is a
short sale is your best option if a foreclosure is pending against you. In fact, the short sale as an
attractive option (for both the homeowner and the mortgage lender) is really a direct response to
the current housing crisis.

A short sale occurs when the mortgage lender allows the homeowner to sell the house for less
than what is owed on the loan. Why would a lender agree to this? First, it allows the lender to
avoid adding another piece of property to their foreclosed inventory (which for many lenders is
overloaded already). The lender also saves time and money in avoiding the foreclosure process.
Finally, in most cases, the lender can get more money from the short sale than it can at a
foreclosure auction.

Most successful short sales occur when the homeowner is in default on the mortgage loan (more
than 3 payments in arrears) and in the pre-foreclosure process. A bank is typically more
motivated to agree to a short sale when it appears that foreclosure is imminent.

Read the rest of the article at JD Supra

Filing for Bankruptcy in Arizona? Don't Worry, You Can Keep Your Car

Arizona has an expressed statute that allows for certain personal items to be exempt from the bankruptcy estate, and thus the debtor is allowed to keep them, including your car.
Filing for bankruptcy is often one of the best ways to obtain a fresh start when completely overwhelmed by debt. However, many people are hesitant to file for bankruptcy because they see the entire process as a daunting task. Moreover, many people considering bankruptcy are concerned, if not downright scared, that they will lose all of their possessions if they file. Fortunately though, Arizona has many bankruptcy exemptions available to protect the personal property of debtors in the "Grand Canyon State" - most notably the exemption protecting their car.
Bankruptcy Exemptions
Generally, bankruptcies in the U.S. are governed by federal law. However, when it comes to bankruptcy exemptions - property excluded from the bankruptcy estate, and thus can be kept by the debtor - the bankruptcy code expressly allows states to opt-out of the federal exemptions and establish their own. Arizona, like most other states, has in fact opted out of the federal exemptions.

Read the rest of the article at Digital Journal

Friday, January 27, 2012

The perils of putting off bankruptcy in Phoenix, Arizona


I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and frequently have clients come in for consultations who don't choose to file right away. Some have difficulty coming up with the fee, others have a hard time finding time to get their paystubs and documentation together or file late taxes, and still others are simply procrastinators.

However this can be very risky. If you are behind on a credit card payment, and the same bank that owns the credit card is who you bank with, the bank can instantly seize the overdue funds from your bank account. Other creditors must go through the judgment process, sue you in court and get a judgment against you before they can garnish you. Some people think they're safe for awhile; because after the judgment they expect the creditor to file garnishment paperwork next to get at their wages. But creditors can also get at your bank account. They can accomplish this very quickly, and usually take all but $300 out of your bank account.

Why put up with the constant phone calls from rude third-party collectors and endless streams of bills in the mail? Sometimes there is a good reason to put off filing, such as if your income was too high for awhile so you are not eligible to file yet. But most of the time there is no good reason to put off filing, it creates a headache that can compound your financial problems.


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 Phoenix 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

For Bankrupt Saab, a Wrenching Farewell to Its Heritage

More than 100 Saabs, from the streamlined 1947 prototype known as the Ursaab to a 2010 9-5 sedan, are to be taken from their home at the company’s museum in Trollhattan, Sweden, and sold to the highest bidder.

As part of an effort to liquidate the assets of the Swedish automaker, whose parent company declared bankruptcy in December, Delphi, a Swedish law firm handling aspects of the bankruptcy process, is soliciting bids for specific cars or for the whole collection by Friday.

The auction comes during a tumultuous week for the brand. Several board members of Swedish Automobile, the automaker’s parent, announced on Wednesday that they were stepping down over disagreements about the company’s finances.

Read the rest of the article at the New York Times

How to Get Along with Your Arizona Bankruptcy Trustee

When you file for bankruptcy here in Arizona your case will be assigned to a bankruptcy trustee. This person works under the Department of Justice and in a chapter 7 bankruptcy, their job is to review your bankruptcy documents, determine if there are any assets that can be sold, and then distribute the proceeds to your creditors.

If your chapter 7 case is typical you will only see your bankruptcy trustee on one occasion – the Meeting of Creditors. However, despite not having much face time with your trustee, your bankruptcy trustee can cause you and your bankruptcy attorney a lot of grief.

Read the rest of the article at JD Supra

What happens when you walk away from your home?

Wanting to downsize their lives as they headed toward retirement, they bought a new house in Mesa, Arizona, before they sold the old one, also in Mesa. Their previous home had been appraised at nearly $400,000 at the height of the market, but as the housing crisis ravaged Arizona, they were told they'd be lucky to get $200,000 for it.

They were carrying a loan of $260,000 on their original home alone, meaning they were well 'underwater,' owing much more than it was worth. Combined with the mortgage on the new house, their housing payments had become an "anchor around our necks," she says, threatening to gobble up all their retirement savings and leave them with nothing.

The couple made a difficult call: They would do a 'strategic default,' and simply stop paying the old mortgage. "We really had to wrestle with it," said Perkins, 60. "We had worked all of our lives to build good strong credit, and we're proud people. But it came down to, 'Can we keep doing this?' We had to say 'No.'"

Read the rest of the article at Reuters

Can I Sell My Stuff Before Filing for Bankruptcy?

#1 – You Can’t Give it Away.
#2- You Can Sell Your Stuff
Now What Do I do With All This Money?

Read the article at JD Supra

Taxpayers Take Hit as Layoffs, Bankruptcies Plague Green Firms

Federal tax credits, loan and grant programs that expired at the end of last year have plugged the financial flow that made so-called “renewables” and electric vehicles viable, so they are now shedding employees and going bankrupt, illustrating that the “clean” industry owed its existence solely to government.

Even with the government money, they are failing. Yesterday Indiana-based Ener1, an energy storage company that received $118.5 million from DOE, filed for Chapter 11 bankruptcy. Despite plans to have 1,400 employees in Indiana by 2015, the company had downsized in the state from 380 to approximately 250 since March. Ener1’s stock price fell from more than $4 a share to under a dollar, and the company was booted from the NASDAQ stock exchange in October, when its stock was trading for less than 20 cents.

The Department of Energy seems to have no limit in its willingness to subsidize electric cars, electric trucks, electric school buses, electric delivery vans, batteries for electric vehicles, and charging stations for EVs. It’s safe to say that without taxpayer support, these companies – or at least the EV-related projects of larger companies like Nissan and GM – don’t exist.

Read the rest of the article at the National Legal and Policy Center

The CEO Bankruptcy Bonus

On the way to bankruptcy court, Lear Corp., a car-parts supplier, closed 28 factories, cut more than 20,000 jobs and wiped out shareholders.

As companies struggle through bankruptcy court, many still pay significant bonuses to top executives - despite a federal rule designed to curb such pay. Mike Spector reports on Lunch Break. Photo: Getty Images.

Still, Lear sought $20.6 million in bonuses for key executives and other employees, including an eventual payout of more than $5.4 million for then-Chief Executive Robert Rossiter.

The Justice Department objected, arguing that the package violated a federal law intended to rein in pay for executives at companies that harmed investors and cut jobs before and during the bankruptcy process.

But a judge approved the payouts, accepting the company's arguments that the executives would deserve them if they met earnings milestones and steered Lear through a quick exit from bankruptcy.

In a statement, a Lear spokesman said the bonuses were "customary" and "fully market competitive." The company has since rebounded, adding more than 23,000 jobs since emerging from bankruptcy in 2009.

Read the rest of the article at the Wall Street Journal

Thursday, January 26, 2012

Gingrich Blasts Romney For Profiting Off Florida Foreclosures

In an exclusive report published yesterday morning, ThinkProgress revealed that Mitt Romney is profiting from thousands of Florida foreclosures through a Goldman Sachs investment fund.
This morning, Newt Gingrich seized on the report, blasting Romney for “owning lots of stock in a part of Goldman Sachs that was explicitly foreclosing on Floridians.”

The ThinkProgress report revealed that Romney and his wife Ann own millions in Goldman Sachs Strategic Income Fund. That fund holds mortgage backed securities from many of the nation’s most prominent subprime lenders, including Countrywide and Washington Mutual. In 2010, the fund was connected to more than 5,000 foreclosure actions in Miami-Dade county alone.

Read the rest of the article at Think Progress

Romney goes after Gingrich on foreclosures

Leapfrogging ahead to Nevada, which holds its presidential caucuses on Feb. 4, Mitt Romney's campaign is running an ad that tries to link Newt Gingrich to the housing foreclosure crisis through his work for federal mortgage agency Freddie Mac. Nevada has the nation's highest foreclosure rate. Florida, where a version of this ad is also running and which holds its primary Tuesday, is in the top 10.

This ad stops short of saying Gingrich lobbied for Freddie Mac — which he says he did not — but it does imply that Gingrich supported the federally backed mortgage agency's making subprime loans while he served as a consultant to it. Gingrich also denies that claim. Freddie Mac was certainly a participant in the subprime mortgage business, but to say it "created" the housing crisis ignores the role of private mortgage lenders and is the subject of debate.

A bigger stretch is the ad's attempt to link Gingrich's resignation from Congress, which was announced in November 1998 and effective Jan. 3, 1999, to his 1997 reprimand and fine for ethics violations. Gingrich resigned because his party lost House seats in the 1998 midterm elections and he was being challenged for the speakership. His departure was described at the time as a sudden and stunning exit in the face of rebellion among his colleagues rather than a disgrace.

Read the rest of the article at USA Today

Bush Administration Memo Says They Almost Pushed Chrysler and GM into Early Bankruptcy

Back in 2008, the economy took what can only be called a nosedive. So much so, that the U.S. auto industry nearly ceased to exist. Based on that catastrophe, one of the last things that President Bush did before he left office was to give General Motors and Chrysler a combined $17.4 billion to keep them afloat.

The money did the trick, allowing the auto automakers to keep their doors open for a few more months. But the Detroit News reports that the Bush administration almost took a different road. Published by The New Yorker, there was a 57-page economic memo written by Larry Summers (economist) for President Elect Obama. The memo mentioned that President Bush was actually working on an earlier bankruptcy for the automakers, with a monetary backing of up to $100 billion in government financing.

Bush (pictured with Chrysler CEO Bob Nardelli) had effectively prolonged the inevitable in giving Chrysler and GM the bridge loans, and pushed the more difficult decision on to the Obama administration. However, Mr. Summers seemingly had the opinion that pushing the automakers into a bankruptcy too soon would more than likely have caused severe damage not only to those two automakers, but the entire auto industry as well.

Read the rest of the article at Automotive Discovery

MSU professor says purported crime, bankruptcies caused by casinos are myths

Speculation has begun as to how a casino planned for downtown Lansing by Mayor Virg Bernero and the Sault Ste. Tribe of Chippewa Indians would impact the area.

Detractors say the casino would under-deliver on jobs, cause financial harm to the vulnerable and, perhaps most of all, attract and increase crime.

But a Michigan State University professor who has long studied casinos and their effects on Michigan communities points to empirical evidence that suggests otherwise.

Read the rest of the article at MLive.com

Illinois lawmaker filed for bankruptcy, then quit

When Republican state Rep. Ron Stephens announced last year he was leaving the Illinois House, he would only say he was doing so for personal reasons.

The Belleville News-Democrat reports (http://bit.ly/wbzcRp ) Stephens filed for Chapter 13 bankruptcy protection before leaving office. Stephens said Wednesday the bankruptcy filing was a contributing factor in his decision to resign.

Stephens, of Greenville, said he is not proud of taking the step. However, he says he and his wife, Lisa, are repaying 100 percent of their debt.

Read the rest of the article at Carma Times

Quiznos Gives Up Control To Stave Off Bankruptcy

Quiznos narrowly avoided bankruptcy this week when the sandwich chain shifted ownership to private equity firm Avenue Capital in exchange for erasing some debt.

The recession and poor management have hit the Denver-based sub-maker hard. The company once boasted more than 5,000 restaurants, but 40 percent of them have now shut their doors.

Andre Bonyadian owns nine Quiznos franchises in and around Los Angeles.

Read the rest of the article at NPR

Monday, January 23, 2012

New Research: Requiring Large Mortgage Down Payments Would Hurt the Economy

As the nation continues to grapple with a weak housing market, policymakers are seeking safeguards to ensure that American families will never again face such massive foreclosures and billion-dollar losses of wealth. Some have suggested that the best guarantee against future housing crises would be to require down payment for many home purchases to be 10 or even 20 percent.

But after the Center for Community Capital and the Center for Responsible Lending analyzed nearly 20 million loans originated between 2000 and 2008, researchers found that while high down payment requirements might lower foreclosure rates somewhat, these larger down payment requirements would prevent a much greater share of credit-worthy borrowers from getting lower-cost mortgages. If mandated down payments were at 20 percent of a home’s purchase price, that requirement alone would exclude 75 percent of qualified African-American and 70 percent of Latino borrowers from lower-priced loans, or from becoming homeowners altogether.

By CRL’s estimates, the average American household earning $50,000 a year would need more than 10 years to save for a 10 percent down payment on a home. For black households, averaging $32,000 a year, the years needed to save would rise to more than 14 years to save for that same down payment.

Read the rest of the article at Black Voice News

Obama admin on verge of horrible bank mortgage fraud settlement deal

Unless and until the banks are forced to pay legal, economic, social and political costs in connection to their foreclosure fraud and securities fraud schemes, there's no reason to expect them to treat homeowners an better and there's no reason to expect that a similar crisis will not happen again in a few years' time.

I've yet to see an explanation of why transferring money from public workers' and retirees to major banks is a good idea. There are other large, constitutional issues at play regarding how this deal mandates the breaking of contracts.

Read the rest of the article at America Blog

Sound Advice for Buying a Foreclosure

Quite naturally, anyone with a bit of cash to spare these days is going to be attracted to some of the big bargains on offer when they look around at all of the foreclosures in their area. But while there’s definitely potential to make money with this kind of investment, a foreclosure transaction can be quite a tricky hurdle for those who are new to this game.
Those who are new to buying foreclosures need to pay attention – there are a number of things to look out for before jumping in headfirst and snatching up the first bargain-basement home they see.
First of all, above all else, make sure that the deal really is good value for money. Before going and making an offer on a home, buyers should carefully review the value of a home by checking comparable sales price data in the local area, says Daren Blomquist of RealtyTrac. Other factors, such as the number of schools nearby and the kind of amenities in the area will also have an impact on a property’s value.

Read the rest of the article at Realty Biz News

How To Prevent A Foreclosure On Your Home

The Federal Reserve Bank Of New York recently stated that over the next two years the U.S. could see another 3.6 million foreclosures. With this in mind, it’s important for homeowners to know that there are things they can do to help delay or stop a foreclosure on their home.
Home owners who occupy the home as their primary residence are given more consideration by their lender. The bank simply does not want to take homes back and have them on their books as an REO. (Real Estate Owned) But, when a borrower is behind on payments, the only real remedy a lender has is foreclosure. Yet, in my personal experience, helping homeowners who are facing foreclosure, I’ve found that lenders are willing to work with sincere homeowners who want to keep their home.
The bank does not want to foreclose if it can be convinced that it’s in their best interest not to. After all, we’re talking about real estate investing here. From the perspective of the lender, your mortgage is an investment. For the lender it’s purely an investment decision. If the lender can be convinced that their best choice is to work with a borrower, they will delay a foreclosure proceeding for as long as it takes, as long as they feel that progress is being made.

Read the rest of the article at Realty Biz News

Top 10 zip codes hardest hit by foreclosures

89031 – Las Vegas, NV
89108 – Las Vegas, NV
89121 – Las Vegas, NV
89123 – Las Vegas, NV
89129 – Las Vegas, NV
93535 – Lancaster, CA
92336 – Fontana, CA
89110 – Las Vegas, NV
93536 – Lancaster, CA
30349 – Atlanta, GA

Read the rest of the article at AGBeat

Making the Most out of your Bankruptcy

When you file for bankruptcy, it is wise to do your due diligence and hired a bankruptcy lawyer. You should also have your records all straightened out as there is a lot of paperwork that needs to be done and everything you declare has to be substantiated. Then your bankruptcy lawyer will advise you on which type of bankruptcy you should file for, either Chapter 7 or Chapter 13 bankruptcy. But whichever bankruptcy you eventually file for, here are some things you can do to make the most out of your bankruptcy.

When under bankruptcy protection, you do not have the stress of dealing with harassing creditors. Sometimes, this reprieve can be a temptation for you to spend more. When you need to spend on credit, you should consult your bankruptcy lawyer first. This is so that the bankruptcy trustee will not have reason to think you are intentionally raking up your debts just to get it discharged eventually. Your spending habits need to change anyway, so when you are under bankruptcy protection is the best time to start. So to make sure you do not unduly arouse the suspicion of your bankruptcy trustee, always consult your bankruptcy lawyer before making special expenses if they are on credit.

Read the rest of the article at JD Supra

Managing Bankruptcy Matters For Athletes: A Case Study

When working with clients who acquired wealth suddenly, how do you help them make solid financial decisions when bankruptcy issues arise?

What are the most common causes of bankruptcy?

How often do injuries and other impediments to their ability to play figure into the sudden drop in income or wealth?

Please talk about the Michael Vick matter.

What are the key concerns for athletes during bankruptcy?

Read the answers at Metropolitan Corporate Counsel

What are the key financial and reputational issues for athletes post-bankruptcy?

How brands survive bankruptcy

The chapter 11 filing of Eastman Kodak could cause the loss of thousands of jobs and bring trouble to the company's hometown of Rochester, New York. In bankruptcy court, Kodak's creditors and the judge will decide whether Kodak will reorganize or liquidate.

Whatever happens, the brand in some form will live on, because it's one of the most recognizable brands in the world. That brand identity could help simply its name land a high sales price.

Read on for seven other brands that outlived the company that built them.

Read the rest of the article at CNN

Filing Chapter 7 bankruptcy in Phoenix: What is the process?

I am a bankruptcy attorney in Arizona ($995/Chapter 7) and find that most people are not aware how simple the process of filing Chapter 7 personal bankruptcy can be. It is not some long convoluted process where you have to itemize every single thing you own. Most of your property will be exempt, meaning you can keep it when you file bankruptcy. Almost all of my clients find that 100% of their property is exempt. In Arizona, you can keep up to $4000 worth of home furnishings and a general itemization of them is fine. $4000 refers to the amount you would get for them if you sold them at a garage sale or through a classified ad, so most people are not going to own more than that much in furnishings.The bankruptcy court is not going to come to your house and go over your property.

To start the process, I will have you fill out a questionnaire with information on it about your assets and debts, and pull a credit report on you to get a full and accurate list of your debts. I use that to fill out the petition for bankruptcy and file it with the court. You are required by law to take 2 financial classes, which can be found online for as inexpensively as $5 and $12.50. They take anywhere from 5 minutes to 2 hours each. Five weeks after filing, you will meet with me and the bankruptcy trustee in what is known as the 341 Meeting of the Creditors. It usually takes about five minutes and is pretty painless, the trustee simply asks you a few questions about your situation. Creditors are invited to show up but rarely do; if your bankruptcy petition has been submitted properly it is unlikely they will seek to try to get anything from you.

Shortly after the meeting, the trustee will issue a statement indicating there are no assets to distribute. A couple of months later, the judge will sign off on the bankruptcy, issuing the discharge.

That is generally the end of it, other than the trustee will want to see your next tax return, because if it is a significant amount of money they may seize it.

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

Friday, January 20, 2012

What can you do with student loans when filing bankruptcy?

Generally student loans are not dischargeable in bankruptcy. However, there are some exceptions. If you can show "undue hardship" you can get them discharged in the bankruptcy. Most courts follow the test from the NY Brunner case (831 F.2d 395). Brunner is a three-part test where you must prove:

1. That the debtor cannot both repay the student loan and maintain a minimal standard of living;
2. That this situation is likely to persist for a significant portion of the repayment period of the student loans; and
3. That the debtor has made good faith efforts to repay the loans.

It sounds difficult to meet this standard, but several people who you wouldn't think met that standard did. Read about them here. Generally, if you are having difficulty keeping well-paying employment, are sick, or have huge financial responsibilities, you might have a shot. Read more here.

A Chapter 13 bankruptcy, which reorganizes your debt, will reduce your loan payments to something manageable while you are in the 3-5 year repayment program. After you finish it, you will probably need to resume your regular loan payments. However, depending on your situation, there is a chance the lender might reduce or forgive the loans.

Never get behind on your student loan payments, because the lenders are not very forgiving. Always call and try to get a forbearance or deferral. Student loan lenders have become really accommodating in recent years in regards to this. As long as you are in one of those two statuses, you'll be ok. However interest accrues rapidly while you are not paying.

After 25 years of paying federal student loans, if you still have not paid them off they will be forgiven. However, that means 300 payments; if you have have forbeared or deferred any of that time it will stretch it out.

There are several loan forgiveness programs available, such as working for a nonprofit or government. Check them out here.

GE Lending Unit Said to be Target of U.S. Probe

Federal authorities are investigating possible fraud at General Electric Co.’s former subprime mortgage arm amid increased public pressure to hold Wall Street accountable for its role in the financial crisis.

The FBI and Justice Department are looking into potentially criminal business practices at WMC Mortgage Corp. in Burbank during the home-loan boom, according to four people with knowledge of the investigation. They declined to be identified because of the sensitivity of the investigation.

The government is asking whether WMC used falsified paperwork, overstated income and other tactics to push through questionable loans, two of the people said. They said the probe appears to be focusing on whether senior managers condoned improper practices that enabled fraudulent loans to be sold to investors.

“It’s mostly about: Did they knowingly sell mortgages into the secondary market that they knew were fraudulent?” said one person with direct knowledge of the investigation.

Read the rest of the article at LoanSafe

‘Robo’ Foreclosure Settlement Turns Political

For over a year now, state attorneys general have been negotiating some kind of settlement deal with the nations four largest lenders, as well as several smaller ones.

The settlement pertains to faulty foreclosure processing, first uncovered in October of 2010 and now commonly referred to as “Robo-signing.”

Rather than dozens of lawsuits, the states initially were looking to assess one great punishment on the lenders and thereby appease borrowers who felt they were wronged. The banks were looking for wider immunity from securitization issues, and that is largely what has held up the negotiations for so long.

Now, suddenly, after umpteen “we’re close to a deal”s, apparently we’re now really close to a deal, largely because the State of the Union address is next Tuesday, and this is an election year. So at a meeting of Mayors Wednesday, the Secretary of Housing and Urban Development, Shaun Donovan, mentioned that a settlement would include principal reduction for about a million borrowers.

Read the rest of the article at CNBC

Foreclosures headed up, mortgage modifications going down

Even as experts brace for a surge in foreclosures this year, the portion of borrowers eligible for modification of their mortgages to help them keep their homes is shrinking, according to the federal agency that regulates national banks.

Most applicants who meet the income and other qualifications for loan modifications that would make their homes more affordable already have received assistance.

The result is that a wave of homes whose owners do not qualify for a loan modification or any other alternative are headed to foreclosure, said the office of the U.S. Comptroller of the Currency.

The rejected include those who don't have enough income to afford their homes even if their loans are modified, housing counselors said. Others turned away are those who can afford their existing mortgage but want a reduction in their loan balance simply because they owe more on a house than it is worth.

Read the rest of the article at Scripps News

Top Justice officials connected to mortgage banks

U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington's biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to the former clients.

Read the rest of the article at Reuters

Financial planner bankruptcies rising

Even certified financial planners are falling prey to bankruptcy.
The Certified Financial Planning Board of Standards, which oversees the nation's 64,000 certified financial planners, held 103 disciplinary hearings in 2010, with 20 involving bankruptcies. In 2011, it held 134 disciplinary hearings with 48 cases bankruptcy related.

In its report Certified Financial Planning Board Disciplinary Trends 2008-2010, an estimated 30 bankruptcy cases came before the CFP Board in a three-year period, with bankruptcy topping other disciplinary categories including fraud, criminal conduct, forgery and misleading advertising.

While CFP member bankruptcy cases may be collateral damage from a prolonged anemic economy, bankruptcy filings have nonetheless steadily climbed the past few years, CFP officials said.

Read the rest of the article at Financial Advisor

Time for a Fresh Approach to Bankruptcy Fees

The executive office of the U.S. Trustee has plans to revise the professional fee guidelines, especially as they apply to lawyers retained in big chapter 11 cases.

Fees are a controversial issue. Context clearly matters: Mergers and acquisitions work probably generates equally large bills (we generally don’t know, since M.&A. bills don’t get filed in court), but Chapter 11 cases take place against a backdrop of employee layoffs, discontinued pension benefits and unpaid suppliers. As such, it is perhaps not surprising, even if it is regrettable, that so much of the debate regarding Chapter 11 fees is overheated.

Read the rest of the article at the New York Times

American Airlines Employees Facing Bankruptcy Ups, Downs

On one hand, the Transport Workers Union hired one of the nation’s top investment banking firms to represent it in the bankruptcy case of American’s parent, AMR Corp.

The downside of the day’s developments was the deficiency in American’s quarterly pension payments due on Jan. 15, federal and company officials said.

American contributed only $6.5 million of the $100 million it was scheduled to pay into the company’s four pension plans this week, officials said.

A company spokesman said AMR was preserving cash in its bankruptcy reorganization.

Read the rest of the article at LoanSafe

Bankruptcy by Kodak emitting an eerie echo

Eastman Kodak Co. of Rochester filed for Chapter 11 bankruptcy protection Thursday, an action that resonates in Buffalo, its sister city on the Thruway that has survived the demise of some its own iconic employers and now battles to adapt to a changing economy.

The struggles of Rochester mainstays such as Kodak call to mind the Buffalo area's loss of companies that once symbolized its manufacturing might, including Trico Products and Bethlehem Steel.

Over the years, Rochester has endured huge job reductions at Kodak, Xerox and Bausch & Lomb, and watched Xerox's corporate headquarters move to Connecticut.

Kodak is trying to reorganize its business, not shut it down, and some observers think the company can withstand the process in some form.

Read the rest of the article at Buffalo News

Dodgers file bankruptcy

The Los Angeles Dodgers filed a proposed bankruptcy reorganization plan Friday, a little more than a week after resolving a court fight with Fox Sports that threatened plans to sell the ball club.

The Dodgers said in court documents filed in U.S. Bankruptcy Court in Wilmington, Del., that the pending sale of the team should satisfy all creditor claims in full, either through cash payments or assumption of the claims by the new team owners.

The Dodgers intend to complete a sale of the team by April 30, as called for in a settlement with Major League Baseball. The April 30 date coincides with the deadline for Dodgers owner Frank McCourt to pay $131 million to his ex-wife, Jamie, as part of their divorce settlement.

Read the rest of the article at Deseret News

Wednesday, January 18, 2012

Wendy Williams finds Twinkie firm’s bankruptcy not sweet at all

Daytime talkshow host Wendy Williams is on a mission to save Twinkies.

She launched the campaign on Tuesday’s show, seen locally on WNYW/Ch. 5, in which she was seen biting into the tasty treat.

Williams’ pitch to save the cream-stuffed snack comes after the recent bankruptcy filing by Hostess, which makes them.

“Like many, I’ve enjoyed the gooey goodness of Twinkies since I was a child,” Williams said in a statement. “The iconic American symbol that drives our salvation is at the risk of being depleted. We, the people, must take action. Embrace a box ... or three. Don’t be a ding dong, save the Twinkie.”

Williams also has posted a public service announcement at facebook.com/savethetwinkie, calling the treat a “golden icon.”

Read the rest of the article at New York Daily News

In defense of Twinkies

Sure, the federal government could save big banks, but where was it when Twinkies needed help? Which of these entities can we least afford to lose: Goldman Sachs, Citicorp, JPMorgan Chase or Twinkies?

Read the rest of the article at the Washington Post

Old Country Buffet owner in bankruptcy; 81 stores to close

Buffets Inc., the Eagan-based parent company of almost 500 restaurants nationwide, filed for Chapter 11 bankruptcy reorganization today.

The filing is a pre-negotiated restructuring plan that Buffets reached with lenders who hold 83 percent of the company's senior debt, the company said in a news release.

The plan includes closing 81 underperforming restaurants, which haven't been identified yet.

"We will recapitalize our balance sheet, eliminate a burdensome debt load and increase our cash flow," said Mike Andrews, Buffets' CEO.

Read the rest of the article at Twin Cities Pioneer Press

Monday, January 16, 2012

Phoenix Bankruptcy Attorney: Can I file bankruptcy but not my spouse?

I am a bankruptcy attorney in Arizona ($995/Chapter 7) and occasionally have clients come to me who want to file bankruptcy without their spouse for various reasons. Depending on your circumstances, sometimes it can be done and can even be a better option.

If you and your spouse have been legally separated for several years, living at separate residences, and the debt you would like to discharge was solely incurred by you, then you may be able to file on your own without your debtors coming after your spouse. If your spouse has a high income and cannot fit into the Chapter 7 income cap, this may really be your only realistic option. You can then list your spouse as a co-signer on any debts that were incurred by both of you, and the bankruptcy should afford your spouse some level of protection. Generally, you will not need to list your spouse's property or debts on your petition.

But if you are still living with your spouse, and only you file bankruptcy, there is a good chance the creditors will come after your spouse after you file bankruptcy.

Even if you are divorced, if you incurred the debt together, there is a good chance your creditors will come after your ex-spouse after you file bankruptcy.

Be sure to go over this thoroughly with a bankruptcy attorney, because the ramifications of filing incorrectly can be disastrous.

NY AG funds $1 million to borrowers contesting foreclosures

New York Attorney General Eric Scheiderman is making $1 million available to nonprofit legal organizations representing homeowners in foreclosures cases.

Scheiderman's office sent out a request for applications this week. The money comes from a 2006 settlement with now defunct subprime lender Ameriquest Mortgage. The firm paid the states participating in the settlement at the time roughly $295 million of which $22 million went to New York.

"This funding will provide thousands of New Yorkers with the legal expertise they desperately need to defend their rights and avoid falling prey to unscrupulous mortgage servicers or foreclosure mill law firms filing fabricated or robo-signed documents," Schneiderman said.

Read the rest of the article at Housing Wire

The five issues keeping US lenders awake

It’s a new year, one full of anxiety for US mortgage lenders. Then again, this year’s worry list may not look so dire. Residential home values appear to have stabilised, although certain hard-hit markets like Las Vegas and Florida still have a way to go before a true floor is declared. Below, I list five key issues on US lending executives’ minds.

The robosigning settlement

The US’ 15 largest home loan servicers, which together control 65% of the receivables market, have yet to strike a deal with state attorney generals to settle allegations that they cut legal corners when foreclosing on many thousands of troubled home owners.

Read the rest of the article at Mortgage Strategy

Mortgage Broker Sentenced to Over Two Years in Prison in Scheme to Defraud Lenders, Family, and Others of Over $1.4 Million

U.S. District Judge Catherine C. Blake sentenced Douglas Skibicki, age 42, of Bethesda, Maryland, today to 33 months in prison followed by three years of supervised release for two counts of mail fraud in connection with a mortgage fraud scheme in which he defrauded lenders, family and others. Judge Blake also ordered that Skibicki forfeit $1.4 million. Judge Blake also ordered that Skibicki pay restitution to the victims, with the exact amount to be determined at a later date.

Read the rest of the article at Mortgage Daily

On the Trail of Mortgage Fraud

Queens has been harder hit by foreclosures than any other New York borough, and the Federal Bureau of Investigation believes it has found a culprit. Last July, the F.B.I. accused Edul Ahmad, a local broker, of a $50 million mortgage fraud, saying he lured fellow immigrants into subprime mortgages, inflated the values of their properties and concealed his involvement in deals that were ruinous for scores, if not hundreds, of borrowers. Mr. Ahmad pleaded not guilty, and posted $2.5 million bail. Now, according to court papers, as reported in The Times, he is plea-bargaining with federal prosecutors.

Whatever Mr. Ahmad did or did not do, one thing is sure: he did not act alone. The attention Mr. Ahmad has drawn highlights the relative lack of scrutiny of the big banks and their senior executives. Big banks created demand and provided credit for dubious mortgage loans, which they bundled into securities and sold to investors. If not for reckless lending and heedless securitizing, there would have been no mortgage bubble and no mortgage bust — and, in all probability, no Edul Ahmad.

There have been some prominent civil suits with settlements and fines, including the $550 million deal between Goldman Sachs and the Securities and Exchange Commission over the misleading of investors in a mortgage-backed investment. Bank of America, which bought Countrywide Financial in 2008, recently agreed to pay $335 million to settle a lawsuit by the Justice Department over Countrywide’s practice of steering black and Hispanic borrowers to subprime loans while similarly qualified white borrowers got better terms. But such cases have been narrowly focused and rarely name top executives.

Read the rest of the article at the New York Times

Housing: The one bailout America could really use

Laurie Goodman is an apolitical number cruncher who has spent most of her 28-year career out of the public view, studying the minutiae of mortgage-backed securities (MBS) for big investment banks. She's long been a star among Wall Street insiders, however. She holds the record for the most top rankings for fixed-in-come research from the trade bible Institutional Investor.
While Goodman concedes she underestimated the impact of the housing bubble's bursting early on, by mid-2007 she was warning investors to prepare for a deep downturn. She prepared herself as well.

After her employer at the time, UBS, shut down its mortgage trading desk in 2008, she jumped to Amherst Securities, a small company that serves as an MBS broker-dealer for big investors. From there she's published research that has raised her profile and made her an oft-cited source by would-be housing reformers in both the private and public sectors. If she is underestimating the problems the housing market has now, we're all in trouble.

Read the rest of the article at CNN

No More Mortgage Insurance Deduction

A key tax deduction for recent home buyers expired on Jan. 1, as Congress declined to extend the write-off for various types of mortgage insurance.

The change affects anyone who bought a home or refinanced a mortgage since 2007 with less than a 20 percent down payment or equity in their existing home. Homeowners who took obtained their current mortgage prior to 2007 were not eligible for the deduction.

The change affects borrowers with private mortgage insurance (PMI), common on Fannie Mae and Freddie Mac-backed loans, as well as those with FHA, VA and USDA loans. The government-backed loans have their own insurance charges instead of PMI.

Eliminates deduction for annual and upfront premiums

Read the rest of the article at Mortgage Loan

Habitat for Humanity, banks, others collaborate on foreclosures

While building homes for low-income families remains a part of Habitat for Humanity’s mission in Sonoma County, local volunteers say they’ve found a cost-effective alternative in the current economy – purchasing and renovating foreclosed houses.

The yet-to-be-named initiative, which officially kicks off on Jan. 25, involves a coordinated effort from local banks, volunteers and the Santa Rosa Housing and Redevelopment Board. Habitat for Humanity of Sonoma County just completed the purchase of its first home, and organization officers said they hope to provide 100 percent, interest-free financing to low-income families for six homes this year.

Read the rest of the article at North Bay Business Journal

Is signing foreclosure documents for others forgery?

The Nevada attorney general calls signing another person’s name on documents used to repossess a home “forgery” and a “scheme.”

Michigan’s attorney general launched a criminal investigation that includes whether “falsified signatures” were used in foreclosure cases.

But Theresa Edwards and June Clarkson were forced to resign their jobs as foreclosure fraud investigators for the Florida Attorney General’s Office, in part, for referring to so-called “surrogate signing” as forgery.

Read the rest of the article at LoanSafe

Top 10 States With Highest Real Estate Foreclosure Rates in 2011

From a recent Realtor Magazine article, the ten states in the U.S. with the highest foreclosure rates in 2011 were ranked. Most of the results weren’t a suprise, as the states that began showing signs of heavy foreclosures years ago continue to lead the pack.

Nationwide, the numbers are actually encouraging. U.S. foreclosure filings dropped from 2.23 percent in 2010 to 1.4 percent in 2011. That was a drop of over 1/3 of the foreclosure filings nationwide in just one year. A few states still carry a large portion of the burden, however.

Nevada came in first again with 6 percent of its homes in some state of foreclosure during 2011. This is a staggering number, with one out of every 16 homes receiving a foreclosure filing. While this number is down somewhat, it puts Nevada at the top of the list for the fifth consecutive year.

Arizona came in second, with 4.14 percent of its homes receiving a foreclosure notice, or one out of every 15 homes. In third was California, at 3.19 percent.

Read the rest of the article at The Seattle Post-Intelligencer

Bankruptcy of former SynCare president sheds light on Medicaid debacle

The president of SynCare, LCC - the Missouri Medicaid contractor ousted last year after a barrage of patient complaints - has filed bankruptcy, leaving a trail of heavy debts to former employees, vendors and its Fortune 500 backer, Centene Corp.
The Chapter 7 filing also sheds new light on SynCare's relationship with Centene, the Clayton-based giant in the field of Medicaid management. Centene, in fact, is listed as the biggest creditor of SynCare's Stephanie DeKemper, who owes Centene nearly $2 million in business loans. Centene is also named as a co-debtor on a $266,735 loan DeKemper obtained from Regions Bank.
DeKemper's personal and business debts are comingled in the bankruptcy, filed on Dec. 29 in federal court in Indianapolis, where her company was based. In all, DeKemper lists $793,661 in assets and debts totaling $5.9 million.

Read the rest of the article at St. Louis Today

Bankruptcy is ‘wreckage’ from years of drinking by Steinberg, the real-life Jerry Maguire

Leigh Steinberg calls them “checkout days,” when he would drink vodka from morning until night, often straight from the bottle.

Divorced and living alone for the first time, he’d drink while sitting on his balcony overlooking Newport Bay or while in bed, sometimes half-conscious.

He was arrested for DUI and again for public intoxication. In and out of rehab, he ended up on the doorstep of a treatment center for indigent alcoholics, but there wasn’t a bed for him.

“So I had the ignominious distinction of not even being able to get into indigent rehab,” Steinberg said.

Steinberg, the super agent who was the inspiration for Tom Cruise’s character in “Jerry Maguire,” had fallen so hard that in October 2008, he was arrested for investigation of being drunk in public after police received reports of a man “screaming and attempting to climb a hill” near Pacific Coast Highway.

Read the rest of the article at The Washington Post

Thursday, January 12, 2012

Chapter 7 bankruptcy: How much property do I really get to keep?

I am a bankruptcy attorney in Arizona ($995/Chapter 7) and one thing clients are always very concerned about is how much property they are permitted to keep when they file Chapter 7 bankruptcy. The truth is, the bankruptcy exemptions are fairly generous, especially here in Arizona. The vast majority of my clients are able to keep their home, home furnishings, their cars, and all of their personal property. Even some things they think they may not be able to keep end up being safe. If you are making payments on something, and have very little equity in it, you can probably keep it through the bankruptcy as long as you agree to continue making payments. Extra vehicles/toys like jetskis, trailers and boats are not protected by bankruptcy statutes in Arizona. But if you owe more money than they're worth, there's a very good chance you can keep them. That is why it is best to consult with an attorney before filing for bankruptcy. I have seen too many people try to file on their own or with non-lawyer assistance and end up in big trouble, they end up losing assets because they did not know how to properly address different types of property when going through the bankruptcy process.



Six Questions on Foreclosure-to-Rental Programs

What is the government considering?
How many homes are we talking about?
Why does the idea of renting out homes have appeal?
What parts of the country could see these types of programs?
Why can’t the private sector do this on its own?
Will this program have any impact on home prices?


Read the answers at the Wall Street Journal

Foreclosures drop in 2011 may be due to back log

The number of homes facing foreclosure in 2011 dropped to the lowest level since 2007.

According to "Realty Trac" 1.9-million homes faced foreclosure last year. That's down 34-percent. But the reason for the drop wasn't more people paying their mortgages, it was procedural delays in the process that kept banks from taking back homes.

A real estate expert says more foreclosures are expected this year as banks clear out the back log.

Read the rest of the article at ABC 30

Foreclosures, bankruptcies fall, but problems remain

The two major markers of financial distress - bankruptcies and foreclosures - declined in 2011 from the previous year, but the good news is a bit deceiving.

The 34 percent decline in foreclosure filings last year was due mainly to processing delays caused by legal concerns about proper documentation of paperwork, according to a new report by RealtyTrac, an online foreclosure database.

Foreclosures in the fourth quarter of 2011 had taken an average of 348 days to complete, compared with 305 days in the last quarter of 2010.

Read the rest of the article at the Kansas City Star

Tuesday, January 10, 2012

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.


2011 mortgage modifications fall short of previous year

Mortgage servicers are on track to modify far fewer loans in 2011 than the previous year, according to the most recent data provided by the Hope Now alliance formed by these firms and others in the industry.

Through November, servicers modified roughly 969,000 mortgages through both private initiatives and the administration's flagship Home Affordable Modification Program. The 639,000 private workouts nearly double the 330,000 under HAMP.

Servicers completed 84,000 permanent modifications in November, up 6.3% from the month before.

With the December data yet to be released, the 2011 total currently stands just more than half of the 1.76 million modifications completed in 2010.

Read the rest of the article at Housing Wire

Mortgage modification scams trap desperate homeowners

The foreclosure crisis that has spread across the country is producing another epidemic: mortgage modification scams that have cost desperate borrowers thousands of dollars — even their homes.
"There are devastating consequences to this fraud," said Christy Romero, deputy special inspector general who monitors potential fraud in the federal Troubled Asset Relief Program (TARP).
In early December, Romero's agency, SIGTARP, joined the U.S. Treasury Department and the federal Consumer Financial Protection Bureau to fight scams targeting homeowners seeking mortgage modifications under the U.S. Home Affordable Modification Program (HAMP).

Read the rest of the article at USA Today

Foreclosures Worsen in New York, New Jersey as Arizona Improves

The number of homes in the foreclosure (HOMFCLOS) pipeline is increasing in states including New York, New Jersey and Connecticut, where the process is slowed by courts, as Arizona, California and Nevada digest their backlog.
Home loans that were delinquent or in foreclosure fell in three states hit hard by the housing market collapse, dropping 19 percent in Nevada, 21 percent in California and 25 percent in Arizona in the year through Nov. 30, Lender Processing Services Inc. reported today. At the same time, they rose 7.4 percent in New Jersey, 5.2 percent in Connecticut and 2 percent in New York, as mandatory judicial procedures delayed seizures.

Read the rest of the article at Bloomberg

Zillow: Home values in November back at 2003 levels

Home values in the United States in November remained flat with the prior month but declined 4.6% from last year, according to the latest real estate markets report from Zillow Inc. (Z: 24.29 +5.47%).

The company's home value index, which measures prices across the nation, shows the average home price was $147,800 in November, the same level recorded in 2003.

Of the 165 housing markets tracked by Zillow, 60% noted appreciating or flat home values in November, including Los Angeles, Washington, Miami-Ft. Lauderdale, Fla., San Francisco and Detroit.

Read the rest of the article at Housing Wire

Is Foreclosure Relief Finally on the Way?

The staggering number of foreclosures on the market has been a big stumbling block for the housing market and has played a huge role in depressing home prices across the country.

But plans to contain the venom of foreclosures are in the works, according to CNBC's Diana Olick. The Obama administration together with government mortgage giants Fannie Mae and Freddie Mac are on the verge of announcing a pilot program to bundle government-owned properties and sell them in bulk to investors as rentals.

The Federal Reserve recently floated the idea around in a white paper delivered to Congress last week, and the general notion of packaging distressed properties in lots to convert into rentals has been tossed around before.

Supporters say such a program could go a long way in helping clear out the inventory of foreclosed properties—now as many as 250,000 between the two government-sponsored enterprises and the Federal Housing Finance Agency—which is expected to swell in coming months as foreclosure proceedings that were delayed by legal issues are re-started.

Read the rest of the article at US News & World Report

White House wants to convert foreclosed houses to rentals

The Obama administration, in conjunction with federal regulators and led by the overseer of Fannie Mae and Freddie Mac, are very close to announcing a pilot program to sell government-owned foreclosures in bulk to investors as rentals, according to administration officials.
There are currently about a quarter of a million foreclosed properties on the books of Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) and millions more are coming.

Read the rest of the article at MSNBC

Bankruptcies And Distress In 2012

When it comes to the topic of corporate distress, the 4th quarter of 2011 was, for all intents and purposes, the quarter of the massive bankruptcy. A variety of economic pressures, such as decreased demand, the impact of rising commodity prices, and concern over the Euro zone contagion, became too much for even some of the biggest American firms to survive.

Read the rest of the article at Business Insider

Corporate Bankruptcies Exepected To Double

Expect the number and size of corporate bankruptcies to double in 2012.
At least that's what Fitch Ratings is saying and experts seem to agree that more will be coming down the pike.
"2011 wasn't a huge restructuring year," said Jonathan Henes, a bankruptcy attorney at Kirkland & Ellis. "A lot of companies found short-term fixes, but when things don't get better you need a restructuring to find a long-term fix."
Restructuring doesn't necessarily mean bankruptcy but Fitch predicts defaults among all corporate bonds will rise to roughly 3% this year, up from 1.4% in 2011 and 1.3% in 2010.

Read the rest of the article at WCTI 12

Do my wife and I need to file bankruptcy together?

I have lots of debt, my wife has a little. Do we need to file bankruptcy together? You are allowed to file bankruptcy together, called filing jointly, but you can also file separately. Which method is best depends on your situation. I'll hit some highlights here about this important subject.

Read the rest of the answer at JD Supra

Lehman Australia Files Chapter 15 Bankruptcy Petition In US

Lehman Brothers Holdings Inc.’s Australian subsidiary is seeking bankruptcy protection under U.S. law and said its assets could include $1.3 billion to cover investors’ losses tied to synthetic collateralized-debt obligations.

In court papers filed Friday with U.S. Bankruptcy Court in Manhattan, Lehman Brothers Australia said it has $1.3 billion in claims against Lehman’s holding company for losses related to structured finance arrangements known as a synthetic collateralized-debt obligations, or CDOs.

Read the rest of the article at the Wall Street Journal

Kodak Refocuses to Avoid Bankruptcy

Eastman Kodak (NYSE:EK) stock is soaring today — well, relatively speaking — on news that the company is restructuring to adapt to the digital age. The company is creating two distinct business units to separate commercial from consumer products and will be streamlining costs even more.

Many folks watching Kodak were expecting a much different announcement: that the once-dominant photography company was declaring bankruptcy, and possibly disappearing forever.

So does this move change anything or secure Kodak’s future? Not really. Like rearranging the deck chairs on the Titanic, the move ignores the core problem. Eastman Kodak is simply a company with way too much debt and not enough profits.

Read the rest of the article at InvestorPlace

Twinkies Maker to File for Bankruptcy Again

Hostess Brands Inc, a wholesale baker, is again preparing to file for Chapter 11 bankruptcy protection this week, The Wall Street Journal reported, citing people familiar with the matter.
This would be second court restructuring for Ripplewood Holdings-owned Hostess, which filed for bankruptcy almost two years ago and had emerged from it last September.


Read the rest of the article at Fox Business

Friday, January 6, 2012

What does the Bible say about bankruptcy?

Prospective clients sometimes express to me guilt about filing for bankruptcy. I usually tell them that the government has artificially forced this economic crisis, by requiring banks to offer home loans to people who could not afford them, then bailing out the banks when the homeowners inevitably started foreclosing. Now, the rest of us are stuck in homes we can't get out of, underwater, with no hope in sight of the real estate market improving for 10 years. Meanwhile, we are bailing out the banks and expected to continue throwing money down the drain on our mortgages to the banks? This situation made me so furious I wrote an article about it last summer, "Bailouts for Big Business, Bankruptcies for the Middle Class."

The way our economic system is set up, those who know the ins and outs of the laws are able to legally weasel the best financial situation for themselves. Those who don't often end up in the worst possible situations through no fault of their own. I like to point to Ron Paul as the classic example. Everyone thinks of him as the highest example of a politician who doesn't like wasteful spending, bailouts, and spending beyond our means. However, he will bring home the bacon with earmarks for his Texas district! The point is, no matter how scrupulous you try to be about spending money, if you don't take an opportunity for yourself, someone else is going to take that money instead. Similarly, if you don't file for bankruptcy when you are at the end of the rope financially, others will, making everyone else's bills go up. For example, all the other people filing for bankruptcy result in situations such as where credit card companies must deal tougher with the remaining clients, refusing to budge one inch with you over the debt you owe them. Right now with the economy in the tank, companies going out of business, and both consumers and businesses filing for bankruptcy at epidemic levels, credit card companies and other creditors are ruthless at negotiating with consumers.

Even the Bible recognizes this kind of situation. Life isn't perfect, things happen that we can't foresee, and God understands that. Deuteronomy 15:1-2 states, "At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD's release." It is no coincidence that bankruptcy laws permit you to file bankruptcy around once every seven years. Read more about what the Bible says about filing bankruptcy here.

Freddie Mac To Give Unemployed Up To 12-Month Break On Mortgages

Unemployed homeowners with loans guaranteed by Freddie Mac (FMCC) could be eligible for reduced or suspended mortgage payments for up to a year, the mortgage-finance company said Friday.

Starting Feb. 1, McLean, Va.-based Freddie Mac said it will allow companies that collect mortgage payments to give borrowers up to a 12-month break on their mortgages, up from a current level of six months. However, the break, also known as forbearance, will only be temporary. Borrowers will still owe their full unpaid loan balances.

Read the rest of the article at NASDAQ

Foreclosures, short sales can sometimes trigger huge income-tax bill

Most homeowners can avoid a big tax bill if their home is sold for less than they owe on it, but others aren’t as fortunate.

Q We were foreclosed upon last summer, and the lender sold the place for about $75,000 less than we owed. How do we deal with this when we begin filling out our 2011 tax return? One friend says the Internal Revenue Service will consider the $75,000 in forgiven debt as “income” to us and that we’ll have to pay taxes on the amount (even though we didn’t earn it), but a real estate agent I talked to says no taxes will be owed. Who is right?

Read the rest of the article at The Daily Herald

Phoenix-area bankruptcy filings fall

The Valley's bankruptcy picture ended 2011 on a clear note of improvement, as the number of filings dropped to its lowest level in nearly three years.

Metro Phoenix logged 1,577 new bankruptcy cases last month, down 33.1 percent from December 2010 and the smallest total since February 2009.

For the year, bankruptcies eased to 26,252, down 15.9 percent from elevated levels in 2010.

The improvement left some observers scratching their heads.

"I'm shocked that bankruptcy rates have come down over the past year," said Valeri James, a certified credit counselor at Simple Solutions Credit Consulting in Gilbert. "We're still seeing clients in desperate shape."

Read the rest of the article at the Arizona Republic

Little-known Tips on Improving Credit Score Post-bankruptcy

Filing for bankruptcy obviously decreases your credit score. Once you have been discharged from bankruptcy, it is time to take steps to improve your credit score. The good news is that it does not have to take at least seven years to get your credit score back to a healthy level as it was before your bankruptcy. But few people know the surefire and proven things to do to restore credit scores. As a result, most people do things that actually damage their credit score even more.

This is because there are several fallacies people have been conditioned to believe or think are correct because they seem logical. For example, many people think that your credit score will improve if you have less debt or that on-time payments will improve your credit score. While there is nothing wrong with both these practices, but they are not the primary factors that improve your credit score. In other words, even if you reduce your debt and pay your debts on time each month, your credit score may not improve.

So what really improves your credit score? Contrary to some of the popular beliefs floating around, your credit score improves with a good credit to debt ratio.

Read the rest of the article at JD Supra

Misconceptions About Bankruptcy Could Be Keeping Away Those Who Need Help

Taking the time to learn about bankruptcy can help dispel myths and make the process easier.
No More Stigma
Do I Have to Sell Everything?
You CAN File Again

Read the rest of the article at Digital Journal

Hooters casino in Vegas up in bankruptcy auction

A company conducting a bankruptcy auction says the Hooters hotel-casino near the Las Vegas Strip will be sold by March.

The Las Vegas Review-Journal reported Thursday ( http://bit.ly/xs6Iz4) that Innovation Capital LLC disclosed the plan to a U.S. bankruptcy judge late Wednesday.

Under the plan, bids for the hotel would be due by Feb. 10 and an auction will be held Feb. 17.

Read the rest of the article at The Sacramento Bee

Borders Gift-Card Holders Demand Payment

Borders closed the last of its giant bookstores in September. But some readers didn’t get the memo.

Despite the retailer’s well-publicized bankruptcy liquidation and months of store-closing sales, at least two gift-card holders recently tried to redeem their plastic for purchases.

“Unfortunately, when the gift-card holders went to use their gift cards this very holiday season, they were advised the gift cards were no longer valid, much to their surprise,” attorneys for the thwarted shoppers wrote in court papers filed Wednesday.

Those attorneys are now coming after Borders, which they said trumpeted the validity of gift cards following its Feb. 16 bankruptcy filing but didn’t quite take the same tactic when it decided to close up shop and stop honoring the cards. At that point, the attorneys say, Borders neglected to tell the gift-card holders that they’d need to file a claim against the company to get their money back.

“Even though the debtors were well aware that thousands of gift cards were outstanding, they did nothing to notify the holders,” wrote the attorneys.

Read the rest of the article at the Wall Street Journal

JK Harris to file bankruptcy - Shutdown fueled by taxpayer complaints

Customer Patricia Ballman said she drove to the Goose Creek location searching for answers from corporate headquarters. The Texas resident was surprised to see workers pushing out desk chairs.

"I think they are scurrilous, I think they are thieves," said Ballman.

Ballman said she hired the company three years ago to help with a tax crisis.

"They never intended to do anything for me. The contract was written erroneously. It was based on resolving state tax issues. We don't have state taxes in Texas. I wanted my money back,” said Ballman.

Read the rest of the article on The Examiner

JD Supra: Top 3 Bankruptcy Blog Posts in 2011

#1 – Late Night Emails to a Bankruptcy Attorney
#2 – Midland Funding, Portfolio Recovery, LVNV Funding. The Debt Buyers and Why You Should Fight
#3 - 7 Benefits of Chapter 7 Bankruptcy

Read about these three blog posts on JD Supra 

Personal bankruptcies fall in 2011 to one out of 175 Americans

Fewer Americans filed for personal bankruptcy last year, though experts said that might change in 2012.

Filings fell 12% in 2011 as 1.35 million Americans entered Chapter 7 or 13, according to an analysis for the National Bankruptcy Research Center by Columbia Law School professor Ronald Mann.

That’s down from more than 1.5 million filings in 2010, or about one out of every 150 people. In 2011, the ratio was one out of every 175 Americans. Chapter 7 liquidation filings were down 17% compared with 2010's figures, while Chapter 13 rehabilitation filings declined 25%.

It’s the first drop since 2006 -- but Mann said filings began increasing again in November and December and could portend yet another rise this year.

Read the rest of the article at the Los Angeles Times

Tuesday, January 3, 2012

Chapter 7 bankruptcy in Arizona: The expense of Christmas and escalating bankruptcy costs


I am a bankruptcy attorney in Arizona ($995/Chapter 7) and know that I will be hearing from many new clients after the holiday season. Those who procrastinated and did not file yet will face fee increases. In 2012, bankruptcy filing fees increased for both Chapter 7 and Chapter 13 bankruptcies. The 2005 federal bankruptcy reform law increased the cost of Chapter 7 bankruptcies by a hefty 51% for those with no assets (the vast majority of my clients have "no assets" - extra property that they cannot keep but must give up to creditors). Attorneys fees have increased by 30% (my fees are still some of the lowest in town). If you spent every last penny on Christmas, and want to know what your options are when it comes to bankruptcy, set up an appointment with us for a free consultation.

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