Lender "Hijacks" House In Foreclosure Despite Court Order To The Contrary; Judge Orders BofA To Turn Over Keys To Homeowner & Pay Her Legal Fees
In Kissimmee, Florida, WFTV Channel 9 reports:
Eyewitness News found an Osceola County homeowner won her battle in court to save her home from foreclosure, but the bank wouldn't listen. Ana Chavez used to live on Killamanjaro Drive until the Bank of America changed her door locks in violation of a court ruling.
A judge told the bank that if Chavez does not get her keys by noon Thursday, he's is dismissing the foreclosure lawsuit and the bank will face more penalties. In the meantime, the bank couldn't explain why it took over a house it did not own.
Homeowner Ana Chavez is fighting to save her home from going into foreclosure. She is hoping to modify her loan and Chavez thought she was one step closer when a judge ruled in her favor last month. Bank of America asked the judge to set a foreclosure sale date on her Kissimmee home, but the judge denied the request. Despite the judge's ruling, the bank decided to take over Chavez's home. [...] Ana Chavez had been away from her home for a couple of days. When she came home she tried to get into her house, but all the locks had been changed. The bank hired a locksmith, changed the locks and refused to give Chavez access to her home. The bank's attorney even called the bank and said there was a mistake, but those calls were ignored too.
***
Attorney Adam Sudbury says he hopes the punishment sends a message to the banks. "These banks and these attorneys they steam roll over people like there is no tomorrow and unfortunately for them sometimes they run into a road block," said Sudbury. Judge James Stroker wasn't happy with the bank's actions and has now ordered Bank of America to turn over the keys to her within 24 hours, pay for Chavez's attorney's fees and the bank may also have to pay for her living expenses
Friday, June 26, 2009
LENDER SUES FOR JUDGEMENT
First Mortgage Lender Sues For Deficiency Judgment
As a general rule, mortgage lenders have not been pursuing deficiency judgments during the real estate recession. Second mortgage lenders have sued borrowers individually in cases. Until this week I have not spoken with any client who had been sued for a deficiency claim by a first mortgage lender after or as part of a foreclosure. I have spoke to many attorneys who defend mortgage foreclosures none of whom have reported seeing a deficiency claim by a first mortgage lender in any of the cases they are handling. This week, I saw my first deficiency judgment by a first mortgage lender. Whether this is an isolated incident by one bank in one real estate development, or an indication of changing bank policy and greater risk for mortgage borrowers is unclear.
The particular client retained me to file Chapter 7 bankruptcy because of large amounts of unsecured credit card debt. The mortgage deficiency was just one of his credit problems and was not the main problem behind the bankruptcy. The client had borrowed money to buy an investment lot in a Ginn community from Branch Banking and Trust ("BBT") secured by a first mortgage. There was no second mortgage. The lot was unimproved. BBT filed a Motion for Deficiency including a purported property value supported by a copy of an appraisal attached as an appendix to the complaint. The debtor did not respond to the Motion so BBT did not have to prove property value at an evidentiary hearing; the court entered a judgment based on the values alleged in the Motion.
Many of my clients over the past two or three years have been fearful of mortgage deficiency judgments because they had non-exempt assets with equity. These people believed that their relative wealth made them a target for a deficiency judgment. The BBT judgment does not support the theory that mortgage lenders will pick deficiency targets based on whom they believe own collectable assets. This particular debtor is insolvent; he has no non-exempt assets which makes bankruptcy the preferred solution to all his debt problems. This debtor was not targeted based on his net worth.
This case is significant because it shows that at least some lenders involved in some investment projects may pursue investors for individual liability. Whether mortgage lenders will begin pursuing mortgage deficiencies for loans made for primary residences, as opposed to investments, remains to be seen.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
As a general rule, mortgage lenders have not been pursuing deficiency judgments during the real estate recession. Second mortgage lenders have sued borrowers individually in cases. Until this week I have not spoken with any client who had been sued for a deficiency claim by a first mortgage lender after or as part of a foreclosure. I have spoke to many attorneys who defend mortgage foreclosures none of whom have reported seeing a deficiency claim by a first mortgage lender in any of the cases they are handling. This week, I saw my first deficiency judgment by a first mortgage lender. Whether this is an isolated incident by one bank in one real estate development, or an indication of changing bank policy and greater risk for mortgage borrowers is unclear.
The particular client retained me to file Chapter 7 bankruptcy because of large amounts of unsecured credit card debt. The mortgage deficiency was just one of his credit problems and was not the main problem behind the bankruptcy. The client had borrowed money to buy an investment lot in a Ginn community from Branch Banking and Trust ("BBT") secured by a first mortgage. There was no second mortgage. The lot was unimproved. BBT filed a Motion for Deficiency including a purported property value supported by a copy of an appraisal attached as an appendix to the complaint. The debtor did not respond to the Motion so BBT did not have to prove property value at an evidentiary hearing; the court entered a judgment based on the values alleged in the Motion.
Many of my clients over the past two or three years have been fearful of mortgage deficiency judgments because they had non-exempt assets with equity. These people believed that their relative wealth made them a target for a deficiency judgment. The BBT judgment does not support the theory that mortgage lenders will pick deficiency targets based on whom they believe own collectable assets. This particular debtor is insolvent; he has no non-exempt assets which makes bankruptcy the preferred solution to all his debt problems. This debtor was not targeted based on his net worth.
This case is significant because it shows that at least some lenders involved in some investment projects may pursue investors for individual liability. Whether mortgage lenders will begin pursuing mortgage deficiencies for loans made for primary residences, as opposed to investments, remains to be seen.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
NBA STAR ON FORECLOSURES
HOLLYWOOD, Fla. – June 26, 2008 – Frances Rodriguez, 66, who lost around $2,000 in a scam to renegotiate her mortgage, says she wishes she had known there was free help around to get her through the housing meltdown.
“You just grab for every straw, and I never knew there was something that was free,” said Rodriguez, who lives in Hollywood.
To make sure others don’t end up in Rodriguez’s shoes and to raise awareness of free foreclosure assistance, Miami Heat star Dwyane Wade and retired Heat luminary Alonzo Mourning put their celebrity to work Thursday, joining nonprofit and government organizations on a bus tour to raise awareness of free foreclosure assistance.
“It hurts my heart. I know it hurts everyone’s heart in here,” said Wade about the plight of homeowners facing the loss of their homes. “I’m here to help bring awareness to this and to let everyone know that there is an opportunity for them, and that there is hope.”
The bus tour highlighted the existence of nonprofits such as the HOPE NOW Alliance, sponsor of the event, that help homeowners facing foreclosure renegotiate the terms of their loans.
Rodriguez said after she was scammed she sought help from Neighborhood Housing Services of South Florida, which aided her in renegotiating the mortgage payments on her home in Broward County, even though she had fallen 24 months behind.
But many of the 250,000 people that Hope Now has reached out to have refused to respond, often out of embarrassment or mistrust, said Alliance Director Larry Gilmore.
“They’re not responding to mail. They’re not responding to telephone calls,” Gilmore said. “Our goal is to identify trusted advisors in the community [like Mourning and Wade] to encourage them to take action.”
Hit hard by the crash in housing prices and rising unemployment, the metropolitan area that includes Broward, Miami-Dade and Palm Beach counties had the 10th highest metropolitan foreclosure rate in the country last month, according to RealtyTrac, a private foreclosure tracking firm.
The rapid rise in foreclosures has gone hand in hand with a proliferation in loan scams.
Marietta Rodriguez, a director at the nonprofit NeighborWorks America, said schemes run the gamut from guarantees against foreclosure to criminals who pretend to own a property and steal deposits and months of rent from people looking for a place to live.
Warning signs, she said, include demands for payment upfront and absolute guarantees. “They morph everyday.” Rodriguez said. “They’re preying on people’s fears and vulnerabilities and making a buck off that ,” she said.
The Florida attorney general’s office had opened 50 investigations of suspicious loan modification or foreclosure rescue companies as of April 2009 and filed 12 lawsuits, six of those under a new law that took effect in October and aims to protect distressed homeowners. It is also developing a new complaint intake system and a consumer education initiative that warns consumers about the firms’ tactics.
Earlier this year, the office sued four South Florida-based companies, including Lincoln Lending Services, Keep Your Property, Outreach Housing, and Mortgage Crisis Solutions Association for allegedly bilking customers.
After a roundtable discussion Thursday, Mourning and Wade climbed on a bus that took them to the Opa-locka home of James Wilson, a 92-year-old veteran who nearly lost his house to foreclosure. He managed to hang on to it after his daughter, Flora Johnson, sought help from Neighborhood Housing Services of South Florida.
As neighbors gathered outside to catch a glimpse of the basketball stars, Johnson told them what had happened to her father, who is paralyzed and unable to speak.
Between illnesses and an adjustable rate mortgage that climbed steadily higher, Johnson said the family fell behind on payments.
“We both fell ill. In the meantime, the mortgage company gave me a threatening letter. I sent the money in, and I was short two dollars and they didn’t apply it to my account. They held it,” Johnson said. “When I sent the next money order, they took the whole thing [with] late fees and all of that.”
She sought help, and eventually found her way to Neighborhood Housing Services of South Florida.
While her neighbors clamored to have Mourning and Wade sign basketballs or jerseys, Johnson asked the athletes to sign the flier that led her to help at Neighborhood Housing Services.
“You just grab for every straw, and I never knew there was something that was free,” said Rodriguez, who lives in Hollywood.
To make sure others don’t end up in Rodriguez’s shoes and to raise awareness of free foreclosure assistance, Miami Heat star Dwyane Wade and retired Heat luminary Alonzo Mourning put their celebrity to work Thursday, joining nonprofit and government organizations on a bus tour to raise awareness of free foreclosure assistance.
“It hurts my heart. I know it hurts everyone’s heart in here,” said Wade about the plight of homeowners facing the loss of their homes. “I’m here to help bring awareness to this and to let everyone know that there is an opportunity for them, and that there is hope.”
The bus tour highlighted the existence of nonprofits such as the HOPE NOW Alliance, sponsor of the event, that help homeowners facing foreclosure renegotiate the terms of their loans.
Rodriguez said after she was scammed she sought help from Neighborhood Housing Services of South Florida, which aided her in renegotiating the mortgage payments on her home in Broward County, even though she had fallen 24 months behind.
But many of the 250,000 people that Hope Now has reached out to have refused to respond, often out of embarrassment or mistrust, said Alliance Director Larry Gilmore.
“They’re not responding to mail. They’re not responding to telephone calls,” Gilmore said. “Our goal is to identify trusted advisors in the community [like Mourning and Wade] to encourage them to take action.”
Hit hard by the crash in housing prices and rising unemployment, the metropolitan area that includes Broward, Miami-Dade and Palm Beach counties had the 10th highest metropolitan foreclosure rate in the country last month, according to RealtyTrac, a private foreclosure tracking firm.
The rapid rise in foreclosures has gone hand in hand with a proliferation in loan scams.
Marietta Rodriguez, a director at the nonprofit NeighborWorks America, said schemes run the gamut from guarantees against foreclosure to criminals who pretend to own a property and steal deposits and months of rent from people looking for a place to live.
Warning signs, she said, include demands for payment upfront and absolute guarantees. “They morph everyday.” Rodriguez said. “They’re preying on people’s fears and vulnerabilities and making a buck off that ,” she said.
The Florida attorney general’s office had opened 50 investigations of suspicious loan modification or foreclosure rescue companies as of April 2009 and filed 12 lawsuits, six of those under a new law that took effect in October and aims to protect distressed homeowners. It is also developing a new complaint intake system and a consumer education initiative that warns consumers about the firms’ tactics.
Earlier this year, the office sued four South Florida-based companies, including Lincoln Lending Services, Keep Your Property, Outreach Housing, and Mortgage Crisis Solutions Association for allegedly bilking customers.
After a roundtable discussion Thursday, Mourning and Wade climbed on a bus that took them to the Opa-locka home of James Wilson, a 92-year-old veteran who nearly lost his house to foreclosure. He managed to hang on to it after his daughter, Flora Johnson, sought help from Neighborhood Housing Services of South Florida.
As neighbors gathered outside to catch a glimpse of the basketball stars, Johnson told them what had happened to her father, who is paralyzed and unable to speak.
Between illnesses and an adjustable rate mortgage that climbed steadily higher, Johnson said the family fell behind on payments.
“We both fell ill. In the meantime, the mortgage company gave me a threatening letter. I sent the money in, and I was short two dollars and they didn’t apply it to my account. They held it,” Johnson said. “When I sent the next money order, they took the whole thing [with] late fees and all of that.”
She sought help, and eventually found her way to Neighborhood Housing Services of South Florida.
While her neighbors clamored to have Mourning and Wade sign basketballs or jerseys, Johnson asked the athletes to sign the flier that led her to help at Neighborhood Housing Services.
Saturday, June 6, 2009
Wednesday, June 3, 2009
Round two of the foreclosure fight..from Arizona to FLA
By LARRY LOCKHART, Dispatch News Editor June 02, 2009
Brace yourselves. A silver lining to the cloud of bad news surrounding the housing market may be just a mirage. Realtors and lenders are preparing for two more waves of foreclosed homes flooding the market within the next year.
Economists expect any recovery from the nation's economic downturn to be delayed until the foreclosures that helped spark the recession can be cleared out. And the folks at Fannie Mae and Freddie Mac, the federal mortgage agencies, are telling Realtors that we aren't done yet.
Recent reports show that in Casa Grande and western Pinal County, as in much of the state and nation, home sales are rising, but prices continue to fall. The number of foreclosed properties on the market now, and expected on the market soon, seems to be the driving force.
"We've been told [by Fannie Mae and Freddie Mac] that there are thousands and thousands of foreclosures in the pipeline," said Darrah Dremler, an agent with Coldwell Banker Excel Realty who specializes in foreclosure sales. "Banks are starting to price things a lot lower to clean out their inventory before this big rush hits."
Moratorium's effect
Dremler said people have overlooked the fact that lenders essentially had a moratorium on foreclosures the last several months. That allowed bargain-hunters to snap up some of the foreclosed properties on the market, reducing inventory and giving the impression that things were improving as sales numbers rose. But it also built a backlog of foreclosed properties about to inundate the market, and the apparent good news probably was fueled by worries over that next wave of foreclosures. Although sales rose, she said it's false hope given the number of foreclosures in the pipeline.
"What we're hearing is that it will be August, September when they would hit the market," Dremler said.
And that's just the first wave, she said. Another wave is likely by early next year.
"There were a lot of adjustable-rate mortgages sold," Dremler said of the period from 2003 to 2005. "They've hit the three years [before the interest rate could be raised]. They think it will start again when the five years [many ARMs had five-year terms] is up, and that starts this year. It takes about six to eight months of not being able to make payments before they get foreclosed on."
Programs' aid
Federal and state programs to stimulate sales are helping, but only to a point.
"They're definitely making it very enticing for people, it's just difficult to actually qualify for that loan," Dremler explained. "We see a lot of multiple offers, but we see a lot of fallout because buyers can't qualify."
The federal incentive is being offered as an $8,000 tax credit through the Federal Housing Administration under the Federal Recovery and Reinvestment Act. It's aimed at people who haven't owned a home in the last three years. The FHA program is really a tax-free loan, since it must be repaid eventually, and is the lesser of 10 percent of the home's purchase price or $8,000. A recent change allows it to be applied to the down payment through a bridge loan, rather than the homebuyer's having to wait months to receive the credit.
As many as half of all would-be first-time buyers do not have enough cash for a down payment and closing costs, according to building and real estate industry estimates. By advancing prospective buyers as much as $8,000 at closing, many more would be able to afford the purchase. Officials at the National Association of Home Builders say the bridge loan feature could double the total number of home purchases stimulated by the tax credit program to more than 300,000, depending on how many private lenders and state housing agencies participate.
Critics fear the down payment option will attract buyers who really can't afford the homes they are purchasing, prompting another wave of foreclosures later by repeating the process that caused the current problem.
The Arizona Department of Housing also offers help for first-time homebuyers through its Your Way Home AZ program, which provides 22 percent of the purchase price for select foreclosed homes. The assistance is in the form of a second mortgage loan with no interest, no monthly payment and the opportunity to be forgivable after a period of time. Factors for eligibility include median income, current debt-to-income ratio, using the home as a primary residence and attending a homebuyer education class.
Funding for the program is through more than $20 million made available by the U.S. Housing and Urban Development Neighborhood Stabilization Program to help stabilize the state's hardest-hit neighborhoods.
For more information on the state program, visit its Web site at http://yourwayhomeaz.com/index.html. The FHA site for the federal program is http://portal.hud.gov.
Construction slow
The market for new homes continues to lag, locally and nationally. Permits for new homes in Casa Grande are well behind year-ago levels, with only 73 permits for new homes issued during the first four months of this year. That compares to 206 in the same period last year.
Nationally, the Commerce Department said construction of homes and apartments fell 12.8 percent last month to a seasonally adjusted annual rate of 458,000 units. That's the lowest pace on record going back a half-century. Applications for new building permits nationally dropped 3.3 percent to an annual rate of 494,000, also a record low.
Commercial building permits in Casa Grande also are well behind 2008 levels, with 28 permits through April 2009 for a total valuation of nearly $5.4 million. That compares with 66 commercial permits in the first four months of 2008 with a combined valuation of just over $21 million.
Total home sales in Casa Grande and other western Pinal County communities this April were close to April 2008 levels, according to figures from Melissa Data Corp., but prices were running well below year-ago levels. For example, 94 homes sold in the 85222 ZIP Code in Casa Grande this April, compared to 113 in April 2008, but the average price dropped from $166,000 last year to $116,000 this year.
First-quarter home sales figures compiled by Arizona State University's Realty Studies give the same mixed message for all of Pinal County for the first three months of this year compared to 2008: Sales of existing homes are nearly double the previous year, but foreclosed properties continue to make up nearly half of the sales and the median price has dropped precipitously since last year.
Of the 2,960 homes sold in the county in this year's first quarter, 1,260 were foreclosures. That compares with 1,680 sales in the first quarter of 2008, 785 of them foreclosures. The median price of homes sold in the first quarter of 2008 was $156,160, compared to $105,000 in the first quarter this year.
Nearly half of the homes sold in each Pinal County municipality in the first quarter of both years were foreclosures, though total sales roughly doubled over the last year. Prices declined in every city since last year, by thousands of dollars in most cases. Casa Grande's median selling price of an existing home fell from $146,000 to $111,900, the ASU figures showed, Arizona City from $114,500 to $65,450, Coolidge from $119,950 to $77,520, Eloy from $95,939 to $91,290, Florence from $141,660 to $80,000 and Maricopa from $170,000 to $113,250.
Currently, 2,692 homes are in the Multiple Listing Service in the Casa Grande, Maricopa, Stanfield, Arizona City, Eloy, Coolidge and Florence area. Of those, 797 are foreclosures and another 956 are short sales (pre-foreclosures). That means that homes that have been foreclosed, or will be in the next few months, make up 65 percent of the current listings in western Pinal County.
The supply of unsold existing homes nationally at the end of March fell 1.6 percent from a month earlier to 3.7 million, according to the National Association of Realtors, but still remained at elevated levels. With sales sluggish, it would take nearly 10 months to rid the market of those properties, compared with about 6.5 months in 2006, according to the Realtors' data. And that doesn't take into account the two waves of new foreclosures that are projected.
Still looking for a silver lining? It sounds as if we have to look further into the future, but there is hope.
"It will definitely be a cleansing of sorts," Dremler said of what the market is going through now. Not just in getting rid of a lot of bad loans, but also weeding out some lenders and others "who weren't doing the right thing."
©
Brace yourselves. A silver lining to the cloud of bad news surrounding the housing market may be just a mirage. Realtors and lenders are preparing for two more waves of foreclosed homes flooding the market within the next year.
Economists expect any recovery from the nation's economic downturn to be delayed until the foreclosures that helped spark the recession can be cleared out. And the folks at Fannie Mae and Freddie Mac, the federal mortgage agencies, are telling Realtors that we aren't done yet.
Recent reports show that in Casa Grande and western Pinal County, as in much of the state and nation, home sales are rising, but prices continue to fall. The number of foreclosed properties on the market now, and expected on the market soon, seems to be the driving force.
"We've been told [by Fannie Mae and Freddie Mac] that there are thousands and thousands of foreclosures in the pipeline," said Darrah Dremler, an agent with Coldwell Banker Excel Realty who specializes in foreclosure sales. "Banks are starting to price things a lot lower to clean out their inventory before this big rush hits."
Moratorium's effect
Dremler said people have overlooked the fact that lenders essentially had a moratorium on foreclosures the last several months. That allowed bargain-hunters to snap up some of the foreclosed properties on the market, reducing inventory and giving the impression that things were improving as sales numbers rose. But it also built a backlog of foreclosed properties about to inundate the market, and the apparent good news probably was fueled by worries over that next wave of foreclosures. Although sales rose, she said it's false hope given the number of foreclosures in the pipeline.
"What we're hearing is that it will be August, September when they would hit the market," Dremler said.
And that's just the first wave, she said. Another wave is likely by early next year.
"There were a lot of adjustable-rate mortgages sold," Dremler said of the period from 2003 to 2005. "They've hit the three years [before the interest rate could be raised]. They think it will start again when the five years [many ARMs had five-year terms] is up, and that starts this year. It takes about six to eight months of not being able to make payments before they get foreclosed on."
Programs' aid
Federal and state programs to stimulate sales are helping, but only to a point.
"They're definitely making it very enticing for people, it's just difficult to actually qualify for that loan," Dremler explained. "We see a lot of multiple offers, but we see a lot of fallout because buyers can't qualify."
The federal incentive is being offered as an $8,000 tax credit through the Federal Housing Administration under the Federal Recovery and Reinvestment Act. It's aimed at people who haven't owned a home in the last three years. The FHA program is really a tax-free loan, since it must be repaid eventually, and is the lesser of 10 percent of the home's purchase price or $8,000. A recent change allows it to be applied to the down payment through a bridge loan, rather than the homebuyer's having to wait months to receive the credit.
As many as half of all would-be first-time buyers do not have enough cash for a down payment and closing costs, according to building and real estate industry estimates. By advancing prospective buyers as much as $8,000 at closing, many more would be able to afford the purchase. Officials at the National Association of Home Builders say the bridge loan feature could double the total number of home purchases stimulated by the tax credit program to more than 300,000, depending on how many private lenders and state housing agencies participate.
Critics fear the down payment option will attract buyers who really can't afford the homes they are purchasing, prompting another wave of foreclosures later by repeating the process that caused the current problem.
The Arizona Department of Housing also offers help for first-time homebuyers through its Your Way Home AZ program, which provides 22 percent of the purchase price for select foreclosed homes. The assistance is in the form of a second mortgage loan with no interest, no monthly payment and the opportunity to be forgivable after a period of time. Factors for eligibility include median income, current debt-to-income ratio, using the home as a primary residence and attending a homebuyer education class.
Funding for the program is through more than $20 million made available by the U.S. Housing and Urban Development Neighborhood Stabilization Program to help stabilize the state's hardest-hit neighborhoods.
For more information on the state program, visit its Web site at http://yourwayhomeaz.com/index.html. The FHA site for the federal program is http://portal.hud.gov.
Construction slow
The market for new homes continues to lag, locally and nationally. Permits for new homes in Casa Grande are well behind year-ago levels, with only 73 permits for new homes issued during the first four months of this year. That compares to 206 in the same period last year.
Nationally, the Commerce Department said construction of homes and apartments fell 12.8 percent last month to a seasonally adjusted annual rate of 458,000 units. That's the lowest pace on record going back a half-century. Applications for new building permits nationally dropped 3.3 percent to an annual rate of 494,000, also a record low.
Commercial building permits in Casa Grande also are well behind 2008 levels, with 28 permits through April 2009 for a total valuation of nearly $5.4 million. That compares with 66 commercial permits in the first four months of 2008 with a combined valuation of just over $21 million.
Total home sales in Casa Grande and other western Pinal County communities this April were close to April 2008 levels, according to figures from Melissa Data Corp., but prices were running well below year-ago levels. For example, 94 homes sold in the 85222 ZIP Code in Casa Grande this April, compared to 113 in April 2008, but the average price dropped from $166,000 last year to $116,000 this year.
First-quarter home sales figures compiled by Arizona State University's Realty Studies give the same mixed message for all of Pinal County for the first three months of this year compared to 2008: Sales of existing homes are nearly double the previous year, but foreclosed properties continue to make up nearly half of the sales and the median price has dropped precipitously since last year.
Of the 2,960 homes sold in the county in this year's first quarter, 1,260 were foreclosures. That compares with 1,680 sales in the first quarter of 2008, 785 of them foreclosures. The median price of homes sold in the first quarter of 2008 was $156,160, compared to $105,000 in the first quarter this year.
Nearly half of the homes sold in each Pinal County municipality in the first quarter of both years were foreclosures, though total sales roughly doubled over the last year. Prices declined in every city since last year, by thousands of dollars in most cases. Casa Grande's median selling price of an existing home fell from $146,000 to $111,900, the ASU figures showed, Arizona City from $114,500 to $65,450, Coolidge from $119,950 to $77,520, Eloy from $95,939 to $91,290, Florence from $141,660 to $80,000 and Maricopa from $170,000 to $113,250.
Currently, 2,692 homes are in the Multiple Listing Service in the Casa Grande, Maricopa, Stanfield, Arizona City, Eloy, Coolidge and Florence area. Of those, 797 are foreclosures and another 956 are short sales (pre-foreclosures). That means that homes that have been foreclosed, or will be in the next few months, make up 65 percent of the current listings in western Pinal County.
The supply of unsold existing homes nationally at the end of March fell 1.6 percent from a month earlier to 3.7 million, according to the National Association of Realtors, but still remained at elevated levels. With sales sluggish, it would take nearly 10 months to rid the market of those properties, compared with about 6.5 months in 2006, according to the Realtors' data. And that doesn't take into account the two waves of new foreclosures that are projected.
Still looking for a silver lining? It sounds as if we have to look further into the future, but there is hope.
"It will definitely be a cleansing of sorts," Dremler said of what the market is going through now. Not just in getting rid of a lot of bad loans, but also weeding out some lenders and others "who weren't doing the right thing."
©
Tuesday, April 21, 2009
HARDSHIP LETTER (SAMPLE)
1.One of the items your lender or servicer will ask for during the loan workout or loan modification process is a hardship letter. A hardship letter is a written explanation as to what “event” has caused you to fall behind on your mortgage and it vital in helping you stop foreclosure.
This letter acts much like an outline or biography of your current “life” issues that are affecting your ability to meet your financial obligations.
Please keep in mind that your are composing the hardship letter for your lender or servicer and because of the foreclosure crisis, they are extremely busy and back logged. Do not write a book because most likely it will not get the attention of an over worked, $12 an hour loss mitigation employee. Keep it short and to the point.
*Usually 1 or at maximum 2 pages is more than enough to get your point across.Here is an example list of hardships that lenders consider during the loan workout process:<
1.Adjustable Rate Mortgage Reset- Payment jumps we will see more lenders accept this in the future)
2.Illness
3.Loss of Job
4.Reduced Income
5.Failed Business
6.Job Relocation
7.Death of Spouse or C0-Borrower
8.Death
9.Incarceration
10.Divorce
11.Marital Separation
12.Military Duty
13.Reduced Income
14.Medical Bills
15.Damage to Property (natural disaster or unnatural)
16.Other (Please Specify)
Now that you understand what your lender or servicer is looking for, it’s time to sit down and write a hardship letter. I made it easy for you by giving you a couple templates below that you can use as a boiler plate for your own letter. Make sure you make it unique to your situation.
Remember that your hardship letter is only one piece of the loan workout process, but key in helping you avoid foreclosure. You will still need to jump a few hurdles with your lender before they will approve you any kind of work out plan.
EXAMPLE HARDSHIP LETTER:
Name: (Your Name)
Address: (Your Address)
Lender Name: (Your Lender)
Loan #: (your Loan #)
To Whom It May Concern:
I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home and we would really appreciate the opportunity to do that.
The main reason that caused us to be late is (insert reason here and don’t be too lengthy and long winded) Soon after being late and our income not being nearly enough, we had fallen further and further behind. Now, it’s to the point where we cannot afford to pay what is owed to (lender). It is our full intention to pay what we owe. But at this time we have exhausted all of our income and resources so we are turning to you for help.
(The approximate date of hardship and we believe that our situation is Temporary or will be Permanent.)
Our situation has got better because (reason here) and we feel that a loan modification would benefit us both. We would appreciate if you can work with us to lower or delinquent amount owed and or payment so we can keep our home and also afford to make amends with your firm.
We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on.
Sincerely and Respectfully,
Borrower’s Signature
Date
Co-Borrower’s Signature
Date
Hardship Letter Contributed by LoanSafe.org Forum Member
September 7, 2007
To: Countrywide Mortgage account # 058989482
Re: Mortgage modification program
Due to the recent adjustment to the mortgage I currently have with your company, I am finding it very difficult to afford the new payment. I have a 3 year fixed rate which is now adjustable and is schedule to adjust again in Feb. 2008.
Considering my current income, there will be no way I can afford the increased payments come February. Hopefully there is way to renegotiate the terms of my current mortgage to avoid default and help stop foreclosure on my home.
Is it possible to have my current adjustable rate mortgage converted to a fixed rate? If this is not possible can the next rate change be postponed to a future date to allow me to hopefully refinance. Any other solutions you could provide would be greatly appreciated.
I have had no problem making my payments for over three years now and do not want that to change. My mortgage was originally written by another company and bought by Countrywide. The original mortgage terms are terrible but it was the only loan I was qualified for at the time. I was assured that refinancing would be no problem but that turned out not to be true due to the downturn of the housing industry.
The main problem is that my property is now worth about 5-10% less than what I paid e
This letter acts much like an outline or biography of your current “life” issues that are affecting your ability to meet your financial obligations.
Please keep in mind that your are composing the hardship letter for your lender or servicer and because of the foreclosure crisis, they are extremely busy and back logged. Do not write a book because most likely it will not get the attention of an over worked, $12 an hour loss mitigation employee. Keep it short and to the point.
*Usually 1 or at maximum 2 pages is more than enough to get your point across.Here is an example list of hardships that lenders consider during the loan workout process:<
1.Adjustable Rate Mortgage Reset- Payment jumps we will see more lenders accept this in the future)
2.Illness
3.Loss of Job
4.Reduced Income
5.Failed Business
6.Job Relocation
7.Death of Spouse or C0-Borrower
8.Death
9.Incarceration
10.Divorce
11.Marital Separation
12.Military Duty
13.Reduced Income
14.Medical Bills
15.Damage to Property (natural disaster or unnatural)
16.Other (Please Specify)
Now that you understand what your lender or servicer is looking for, it’s time to sit down and write a hardship letter. I made it easy for you by giving you a couple templates below that you can use as a boiler plate for your own letter. Make sure you make it unique to your situation.
Remember that your hardship letter is only one piece of the loan workout process, but key in helping you avoid foreclosure. You will still need to jump a few hurdles with your lender before they will approve you any kind of work out plan.
EXAMPLE HARDSHIP LETTER:
Name: (Your Name)
Address: (Your Address)
Lender Name: (Your Lender)
Loan #: (your Loan #)
To Whom It May Concern:
I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home and we would really appreciate the opportunity to do that.
The main reason that caused us to be late is (insert reason here and don’t be too lengthy and long winded) Soon after being late and our income not being nearly enough, we had fallen further and further behind. Now, it’s to the point where we cannot afford to pay what is owed to (lender). It is our full intention to pay what we owe. But at this time we have exhausted all of our income and resources so we are turning to you for help.
(The approximate date of hardship and we believe that our situation is Temporary or will be Permanent.)
Our situation has got better because (reason here) and we feel that a loan modification would benefit us both. We would appreciate if you can work with us to lower or delinquent amount owed and or payment so we can keep our home and also afford to make amends with your firm.
We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on.
Sincerely and Respectfully,
Borrower’s Signature
Date
Co-Borrower’s Signature
Date
Hardship Letter Contributed by LoanSafe.org Forum Member
September 7, 2007
To: Countrywide Mortgage account # 058989482
Re: Mortgage modification program
Due to the recent adjustment to the mortgage I currently have with your company, I am finding it very difficult to afford the new payment. I have a 3 year fixed rate which is now adjustable and is schedule to adjust again in Feb. 2008.
Considering my current income, there will be no way I can afford the increased payments come February. Hopefully there is way to renegotiate the terms of my current mortgage to avoid default and help stop foreclosure on my home.
Is it possible to have my current adjustable rate mortgage converted to a fixed rate? If this is not possible can the next rate change be postponed to a future date to allow me to hopefully refinance. Any other solutions you could provide would be greatly appreciated.
I have had no problem making my payments for over three years now and do not want that to change. My mortgage was originally written by another company and bought by Countrywide. The original mortgage terms are terrible but it was the only loan I was qualified for at the time. I was assured that refinancing would be no problem but that turned out not to be true due to the downturn of the housing industry.
The main problem is that my property is now worth about 5-10% less than what I paid e
BANKING INDUSTRY EITHER GREEDY,STUDIP OR BOTH...SAYS JUDGE IN MIAMI...
Florida Bankruptcy Judge Questions Judgment Of Lenders Opposing Proposed Loan Modification Legislation
In Miami, Florida, the Miami Daily Business Review reports:
U.S. Bankruptcy Judge A. Jay Cristol said the banking and mortgage lending industry is either greedy, stupid or both when it comes to opposing legislation that would allow mortgage modifications for homeowners who declare Chapter 13 bankruptcy. “Everyone’s best interest would be served by stabilizing the situation and keeping people in their homes,” said Cristol, chief judge emeritus of U.S. Bankruptcy Court in Miami.
***
In Miami, Florida, the Miami Daily Business Review reports:
U.S. Bankruptcy Judge A. Jay Cristol said the banking and mortgage lending industry is either greedy, stupid or both when it comes to opposing legislation that would allow mortgage modifications for homeowners who declare Chapter 13 bankruptcy. “Everyone’s best interest would be served by stabilizing the situation and keeping people in their homes,” said Cristol, chief judge emeritus of U.S. Bankruptcy Court in Miami.
***
SAMPLE FORMS COURTESY OF APRIL CHARNEY
Sample Foreclosure Legal Documents
For those who want some idea of what the legal documents in a foreclosure action look like, Broken Credit Blog has made available some of the documents filed in a Duval County, Florida case involving foreclosure defense attorney April Charney from Jacksonville Area Legal Aid. Among the documents that were filed on behalf of the homeowner facing a foreclosure action are:
copy and paste
http://homeequitytheft.blogspot.com/2009/02/sample-foreclosure-documents.html
Motion to Enlarge Time,
Motion to Dismiss Complaint,
Defendant’s Motion to Enlarge Time to Respond to Amended Complaint,
Defendant’s Answer to Amended Complaint; Motion to Dismiss; Affirmative Defenses; Counterclaims; and Demand for Jury Trial,
Defendant’s Memorandum in Opposition to Plaintiff’s Motion to Strike.
For those who want some idea of what the legal documents in a foreclosure action look like, Broken Credit Blog has made available some of the documents filed in a Duval County, Florida case involving foreclosure defense attorney April Charney from Jacksonville Area Legal Aid. Among the documents that were filed on behalf of the homeowner facing a foreclosure action are:
copy and paste
http://homeequitytheft.blogspot.com/2009/02/sample-foreclosure-documents.html
Motion to Enlarge Time,
Motion to Dismiss Complaint,
Defendant’s Motion to Enlarge Time to Respond to Amended Complaint,
Defendant’s Answer to Amended Complaint; Motion to Dismiss; Affirmative Defenses; Counterclaims; and Demand for Jury Trial,
Defendant’s Memorandum in Opposition to Plaintiff’s Motion to Strike.
GROUP RATES FOR SOLAR POWER IN CALIF.
Green for less: Group rates for solar installation for homeowners
Aaron Crowe
Apr 21st 2009 at 7:00AMText SizeAAAFiled under: Home, Real Estate, Green
Recently, 83 homeowners in the San Francisco Bay Area got together and decided to have solar power installed on the roofs of their homes.
While 83 homes in an area with more than 6 million people might not sound like much, together their 83 homes and combined 274 kilowatts would equal more carbon savings than 1.2 million miles driven in a car.
Actually, the homeowners didn't get together on their own. They were coordinated by 1BOG.org, or One Block Off the Grid, a San Francisco company that takes groups of homeowners and works with a solar power company to get them a group discount.
Participants save 17% through the program, according to 1BOG, which started with getting cheaper solar power for 100 homes in San Francisco.
Sticker shock is usually the main obstacle stopping people from getting solar power installed in their homes. With $20,000 being the typical cost to enter the market, heavy electricity users benefit the most because their bills drop quickly with solar and it takes less time -- typically 10 years -- for the system to pay for itself in savings.
1BOG gets 25 cents per kilowatt installed, but the contractors aren't pushy. I asked for an estimate a few months ago as part of 1BOG's Bay Area installation drive, but was told it wouldn't be worth it for me to install solar power because my roof is shaded by too many trees behind my house and doesn't get enough sunlight to make it cost effective. I would have gone to cut the trees down, but they weren't in my yard, and besides, the contractor told me that it probably wouldn't be worth the cost anyway because my house doesn't use a lot of electricity.
That's one of the rubs in getting solar power. Because power companies charge higher rates to heavy electricity users, the light users wouldn't see their power bill drop as much as a heavy user would. My solar bill wouldn't drop much if I got solar power.
1BOG takes away the unknown when buying solar. Unlike a new roof or garage door, where you can easily find out the price by asking a neighbor or someone down the street how much they recently paid, solar installation is so new that homeowners don't have a benchmark for what it costs. By bringing buyers together and making the cost scalable with a group discount, everybody knows what everyone in the neighborhood is paying for the solar installation and shouldn't feel ripped off.
Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.AaronCrowe.net
Source
Aaron Crowe
Apr 21st 2009 at 7:00AMText SizeAAAFiled under: Home, Real Estate, Green
Recently, 83 homeowners in the San Francisco Bay Area got together and decided to have solar power installed on the roofs of their homes.
While 83 homes in an area with more than 6 million people might not sound like much, together their 83 homes and combined 274 kilowatts would equal more carbon savings than 1.2 million miles driven in a car.
Actually, the homeowners didn't get together on their own. They were coordinated by 1BOG.org, or One Block Off the Grid, a San Francisco company that takes groups of homeowners and works with a solar power company to get them a group discount.
Participants save 17% through the program, according to 1BOG, which started with getting cheaper solar power for 100 homes in San Francisco.
Sticker shock is usually the main obstacle stopping people from getting solar power installed in their homes. With $20,000 being the typical cost to enter the market, heavy electricity users benefit the most because their bills drop quickly with solar and it takes less time -- typically 10 years -- for the system to pay for itself in savings.
1BOG gets 25 cents per kilowatt installed, but the contractors aren't pushy. I asked for an estimate a few months ago as part of 1BOG's Bay Area installation drive, but was told it wouldn't be worth it for me to install solar power because my roof is shaded by too many trees behind my house and doesn't get enough sunlight to make it cost effective. I would have gone to cut the trees down, but they weren't in my yard, and besides, the contractor told me that it probably wouldn't be worth the cost anyway because my house doesn't use a lot of electricity.
That's one of the rubs in getting solar power. Because power companies charge higher rates to heavy electricity users, the light users wouldn't see their power bill drop as much as a heavy user would. My solar bill wouldn't drop much if I got solar power.
1BOG takes away the unknown when buying solar. Unlike a new roof or garage door, where you can easily find out the price by asking a neighbor or someone down the street how much they recently paid, solar installation is so new that homeowners don't have a benchmark for what it costs. By bringing buyers together and making the cost scalable with a group discount, everybody knows what everyone in the neighborhood is paying for the solar installation and shouldn't feel ripped off.
Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.AaronCrowe.net
Source
NO NEWS FROM SENATOR MARTINEZ...YOU MEAN !
OK- WHERES THE REPLY ON THE FINANCIAL ISSUES FACING ALL FLORIDIANS? ALTHOUGH YOUR PICTURE WITH THE COAST GUARD IS CUTE...
April 21, 2009
News from Senator Martinez
Pictured Above: Senator Martinez and members of the Coast Guard Auxiliary Group aboard the USCGC Diamondback. Senator Martinez recently received a briefing and demonstration of current Coast Guard activities.
Panama City Federal Courthouse on Fast Track. Senator Martinez called on the U.S. General Services Administration (GSA) to study the consolidation of all federal agencies in the Panama City and Bay County area under one new roof. "The Panama City area needs a new courthouse and federal building to meet the long-term operational and security needs of the District Court," Martinez said. Read More...
Homeowner Preservation Forum. In an effort to connect lenders with constituents facing foreclosure and assist them with keeping their home, the Office of Senator Martinez hosted a homeowner preservation workshop on Saturday, April 18th in the Ft. Myers area. More than 400 constituents attended. If you missed the workshop, but are interested in assistance, please contact Senator Martinez's Orlando Office at (407) 254-2573.
2009 Academy Applications Now Available. Senator Martinez is accepting applications from outstanding Florida students who wish to attend the U.S. Service Academies; the Air Force Academy at Colorado Springs, the Merchant Marine Academy at Kings Point, the Military Academy at West Point, and the Naval Academy at Annapolis. The 2009 Academy Application as well as general information, helpful hints and other required forms are now available online. For more information, click here.
Change to Cuba Policy. President Obama recently announced his intention to ease family travel restrictions to Cuba and relax limitations on family-to-family remittances sent to the country. In response, Martinez said, "The announcement today is important for Cuban families separated by the lack of freedom in Cuba. Likewise the change in remittances should provide help to families in need. Given these changes will benefit the regime in Havana, it would be wise in the implementation to place some reasonable limits on this type of travel and the amounts that can be sent to Cuba." Read More...
Celebrating South Florida's History. Senator Martinez celebrated the unveiling of the restored Old World navigational map in the Freedom Tower in downtown Miami. The Freedom Tower was the processing center for nearly half a million Cuban refugees during the 1960s and, for Cuban immigrants, serves as a symbol of freedom from the Castro regime. "The Freedom Tower means many things to many people, and for many Cubans, it is where their life in America began," Martinez said. "To me, it is the place where my parents and my brother passed through before our family was reunited in America." Read More...
Casework Corner
Peter Allen incurred a debt from Servicemembers' Group Life Insurance, a life insurance company that serves active duty military members. Since Mr. Allen was no longer in the military, his debt was erroneous. He attempted to fix this problem for two years but was unsuccessful. As a result, the debt was passed on to the Department of the Treasury. Mr. Allen turned to the Office of Senator Martinez for assistance.
A caseworker contacted Defense Finance and Accounting Services, the agency responsible for finance and accounting services for the military, and inquired about Mr. Allen's debt. After providing the agency with the proper documentation, the error was immediately recognized. As a result, the Defense Finance and Accounting Services immediately corrected Mr. Allen's records to show no debt. Additionally, the Department of Treasury and the credit reporting bureaus were notified of the error. Mr. Allen's debt was successfully cleared.
If you have questions about a federal agency, please contact the Orlando Regional Office by calling (407) 254-2573 to speak with a member of the Casework Department. The toll-free number for Florida residents is (866) 630-7106. To find out more about how my office can help you, go to http://martinez.senate.gov or stop by one of our scheduled Community Office Hours in your area.
*Casework Corner is a real account of assistance provided to constituents. The names of those involved are changed to protect the privacy of the constituent.
Official Website | Privacy Policy | Unsubscribe
April 21, 2009
News from Senator Martinez
Pictured Above: Senator Martinez and members of the Coast Guard Auxiliary Group aboard the USCGC Diamondback. Senator Martinez recently received a briefing and demonstration of current Coast Guard activities.
Panama City Federal Courthouse on Fast Track. Senator Martinez called on the U.S. General Services Administration (GSA) to study the consolidation of all federal agencies in the Panama City and Bay County area under one new roof. "The Panama City area needs a new courthouse and federal building to meet the long-term operational and security needs of the District Court," Martinez said. Read More...
Homeowner Preservation Forum. In an effort to connect lenders with constituents facing foreclosure and assist them with keeping their home, the Office of Senator Martinez hosted a homeowner preservation workshop on Saturday, April 18th in the Ft. Myers area. More than 400 constituents attended. If you missed the workshop, but are interested in assistance, please contact Senator Martinez's Orlando Office at (407) 254-2573.
2009 Academy Applications Now Available. Senator Martinez is accepting applications from outstanding Florida students who wish to attend the U.S. Service Academies; the Air Force Academy at Colorado Springs, the Merchant Marine Academy at Kings Point, the Military Academy at West Point, and the Naval Academy at Annapolis. The 2009 Academy Application as well as general information, helpful hints and other required forms are now available online. For more information, click here.
Change to Cuba Policy. President Obama recently announced his intention to ease family travel restrictions to Cuba and relax limitations on family-to-family remittances sent to the country. In response, Martinez said, "The announcement today is important for Cuban families separated by the lack of freedom in Cuba. Likewise the change in remittances should provide help to families in need. Given these changes will benefit the regime in Havana, it would be wise in the implementation to place some reasonable limits on this type of travel and the amounts that can be sent to Cuba." Read More...
Celebrating South Florida's History. Senator Martinez celebrated the unveiling of the restored Old World navigational map in the Freedom Tower in downtown Miami. The Freedom Tower was the processing center for nearly half a million Cuban refugees during the 1960s and, for Cuban immigrants, serves as a symbol of freedom from the Castro regime. "The Freedom Tower means many things to many people, and for many Cubans, it is where their life in America began," Martinez said. "To me, it is the place where my parents and my brother passed through before our family was reunited in America." Read More...
Casework Corner
Peter Allen incurred a debt from Servicemembers' Group Life Insurance, a life insurance company that serves active duty military members. Since Mr. Allen was no longer in the military, his debt was erroneous. He attempted to fix this problem for two years but was unsuccessful. As a result, the debt was passed on to the Department of the Treasury. Mr. Allen turned to the Office of Senator Martinez for assistance.
A caseworker contacted Defense Finance and Accounting Services, the agency responsible for finance and accounting services for the military, and inquired about Mr. Allen's debt. After providing the agency with the proper documentation, the error was immediately recognized. As a result, the Defense Finance and Accounting Services immediately corrected Mr. Allen's records to show no debt. Additionally, the Department of Treasury and the credit reporting bureaus were notified of the error. Mr. Allen's debt was successfully cleared.
If you have questions about a federal agency, please contact the Orlando Regional Office by calling (407) 254-2573 to speak with a member of the Casework Department. The toll-free number for Florida residents is (866) 630-7106. To find out more about how my office can help you, go to http://martinez.senate.gov or stop by one of our scheduled Community Office Hours in your area.
*Casework Corner is a real account of assistance provided to constituents. The names of those involved are changed to protect the privacy of the constituent.
Official Website | Privacy Policy | Unsubscribe
Monday, April 20, 2009
OH WHERE OR WHERE DID THAT LITTLE NOTE GO...OH WHERE OH WHERE IS IT NOW?
It’s a story right off the national news: Homeowners fighting to prevent foreclosure on their property ask a lender to produce the original promissory note in legal proceedings. But in Levy County, it is the estate of Kathryn F. Causey, an accountant who died in January 2008, that is trying to stave off foreclosure by having the lender produce the promissory note.
***
The attorneys for Wells Fargo were a no-show for a hearing on their suit to enforce a missing promissory note so the judge dismissed it. For the estate of Kathryn F. Causey, a Cedar Key accountant who died in January 2008, it’s a victory in staving off a foreclosure attempt by the lender who cannot produce the original promissory note.
***
In June 2008, Wells Fargo filed suit asking 8th Judicial Circuit Judge David O. Glant to grant it “an action to enforce a lost, destroyed or stolen promissory note and mortgage.” [...] Glant scheduled a 10-minute telephone hearing in his chambers [last] Monday, but because Wells Fargo’s lawyers did not call in he granted a motion by Hamill’s attorney to dismiss the case.
***
The attorneys for Wells Fargo were a no-show for a hearing on their suit to enforce a missing promissory note so the judge dismissed it. For the estate of Kathryn F. Causey, a Cedar Key accountant who died in January 2008, it’s a victory in staving off a foreclosure attempt by the lender who cannot produce the original promissory note.
***
In June 2008, Wells Fargo filed suit asking 8th Judicial Circuit Judge David O. Glant to grant it “an action to enforce a lost, destroyed or stolen promissory note and mortgage.” [...] Glant scheduled a 10-minute telephone hearing in his chambers [last] Monday, but because Wells Fargo’s lawyers did not call in he granted a motion by Hamill’s attorney to dismiss the case.
Friday, April 17, 2009
APRIL WHO ??? ARPIL CHARNEY SUPERHERO THATS WHO
April Charney comes to Tampa again, blasts “sloppiness, deception and outright fraud.”
The St. Pete Times reports on April Charney coming to town again:
At the start of class, April Charney makes one thing clear.
“This is very dense, complicated work,” she warns. “If you don’t get it, raise your hand and ask questions because the chances are others don’t get it either.”
[She's speaking to] lawyers and judges [...]
April Charney Trains Tampa Lawers to Fight Foreclosure
nationally-recognized foreclosure expert April Charney came to Tampa to train Bay Area lawyers how to fight foreclosures and help homeowners save their homes.
If the lender can’t prove it owns the loan, judges will sometimes throw out the foreclosure. If the wrong lender forecloses, Charney said, homeowners could face another lawsuit later.
Charney said her strategies [...]
Who owns your loan? MSNBC asks April Charney the tough questions.
MSNBC has posted its interview with April Charney, the Jacksonville Area Legal Aid lawyer who has pioneered the field of foreclosure defense here in Florida.
“You ever look into a place where snakes hang out?” she asks in the middle of a conversation about the loan officers, appraisers, investment bankers, attorneys and others that she [...]
The St. Pete Times reports on April Charney coming to town again:
At the start of class, April Charney makes one thing clear.
“This is very dense, complicated work,” she warns. “If you don’t get it, raise your hand and ask questions because the chances are others don’t get it either.”
[She's speaking to] lawyers and judges [...]
April Charney Trains Tampa Lawers to Fight Foreclosure
nationally-recognized foreclosure expert April Charney came to Tampa to train Bay Area lawyers how to fight foreclosures and help homeowners save their homes.
If the lender can’t prove it owns the loan, judges will sometimes throw out the foreclosure. If the wrong lender forecloses, Charney said, homeowners could face another lawsuit later.
Charney said her strategies [...]
Who owns your loan? MSNBC asks April Charney the tough questions.
MSNBC has posted its interview with April Charney, the Jacksonville Area Legal Aid lawyer who has pioneered the field of foreclosure defense here in Florida.
“You ever look into a place where snakes hang out?” she asks in the middle of a conversation about the loan officers, appraisers, investment bankers, attorneys and others that she [...]
Wednesday, April 15, 2009
FTC AND THE FDCPA=CHANGE
The Federal Trade Commission has proposed changes to the Fair Debt Collection Practices Act (FDCPA) that could have a major impact on the debt collection industry, including increasing damages for FDCPA suits, restricting collectors from calling mobile phones or texting, and laying out specific criteria for information in a debt validation notice.
To bring the FDCPA current with changes in the industry, the FTC made a number of proposals for changes to the law that governs collector behavior:
Debt collectors should provide better information in debt validation notices, including: (1) the name of the original creditor; and (2) itemization of: the principal, the total of all interest, and the total of all fees and other charges
The statutory damages awarded under the FDCPA should be increased to account for inflation.
The FTC should have regulatory authority under the FDCPA.
The law should generally prohibit debt collectors from contacting consumers via cell phones unless they have obtained prior express consent to such contacts.
Although the FTC recommended that statutory damages under the FDCPA be updated to reflect inflation, it did not offer a suggested amount. The report did note that the $1,000 cap put on violations in 1977 would be about $3,600 in 2008 dollars. The FTC said that it still believes the FDCPA is best enforced by private suits and class actions, a central rationale for increasing damages.
To bring the FDCPA current with changes in the industry, the FTC made a number of proposals for changes to the law that governs collector behavior:
Debt collectors should provide better information in debt validation notices, including: (1) the name of the original creditor; and (2) itemization of: the principal, the total of all interest, and the total of all fees and other charges
The statutory damages awarded under the FDCPA should be increased to account for inflation.
The FTC should have regulatory authority under the FDCPA.
The law should generally prohibit debt collectors from contacting consumers via cell phones unless they have obtained prior express consent to such contacts.
Although the FTC recommended that statutory damages under the FDCPA be updated to reflect inflation, it did not offer a suggested amount. The report did note that the $1,000 cap put on violations in 1977 would be about $3,600 in 2008 dollars. The FTC said that it still believes the FDCPA is best enforced by private suits and class actions, a central rationale for increasing damages.
Tuesday, April 14, 2009
LETTER FROM SENATOR MARTINEZ
Dear Ms. Newton:
Thank you for contacting me regarding the housing crisis. I appreciate hearing from you and would like to take this opportunity to respond.
As you may know, on January 6, 2009, Senator Durbin (D-IL) introduced the Helping Families Save Their Homes in Bankruptcy Act (S. 61). This legislation would allow a bankruptcy judge to modify the terms of a debtor’s primary residence and reduce the principal owed on a mortgage to avoid home foreclosure. S. 61 has been referred to the Senate Committee on the Judiciary where it awaits further consideration. Although I do not serve on this committee, I can assure you that I will keep your concerns in mind should this legislation be brought before the full Senate.
I have heard from thousands of Floridians in recent weeks who are worried about this economic crisis and are concerned about the actions that Congress, and the Administration, may take in addressing these problems. I believe our country is facing a very serious situation, and I share many Floridian’s concerns about the consequences to our country if we fail to act appropriately. I assure you that I am committed to working with all of my colleagues to address this crisis and enact meaningful reforms to protect homeowners and ensure the long-term economic prosperity for our country.
Again, thank you for sharing your views with me on this important issue. For more information about issues and activities important to Florida, please sign up for my newsletter at http://martinez.senate.gov.
Sincerely,
Mel Martinez
United States Senator
Thank you for contacting me regarding the housing crisis. I appreciate hearing from you and would like to take this opportunity to respond.
As you may know, on January 6, 2009, Senator Durbin (D-IL) introduced the Helping Families Save Their Homes in Bankruptcy Act (S. 61). This legislation would allow a bankruptcy judge to modify the terms of a debtor’s primary residence and reduce the principal owed on a mortgage to avoid home foreclosure. S. 61 has been referred to the Senate Committee on the Judiciary where it awaits further consideration. Although I do not serve on this committee, I can assure you that I will keep your concerns in mind should this legislation be brought before the full Senate.
I have heard from thousands of Floridians in recent weeks who are worried about this economic crisis and are concerned about the actions that Congress, and the Administration, may take in addressing these problems. I believe our country is facing a very serious situation, and I share many Floridian’s concerns about the consequences to our country if we fail to act appropriately. I assure you that I am committed to working with all of my colleagues to address this crisis and enact meaningful reforms to protect homeowners and ensure the long-term economic prosperity for our country.
Again, thank you for sharing your views with me on this important issue. For more information about issues and activities important to Florida, please sign up for my newsletter at http://martinez.senate.gov.
Sincerely,
Mel Martinez
United States Senator
FIRE YOUR CLIENTS....YOU KNOW WHICH ONES !!!!
Being selective with your clients will help you optimize your business performance and steer you and your staff away from energy-draining clients.
Consider how the 80/20 rule applies. You earn 80% of your profits from the top 20% of your clients. The other 80% of your clients generate only 20% of your profits but most of your headaches and problems come from them.
If prospects clearly don’t fit and will become the energy-draining client, learn to say no. And work on saying goodbye to unpleasant and unprofitable clients. If they are a real burden to your employees and organization, have the courage to “fire” them.
By freeing up your staff and resources, your business can focus on attracting the profitable client and providing more time, attention and value to existing clients.
Consider how the 80/20 rule applies. You earn 80% of your profits from the top 20% of your clients. The other 80% of your clients generate only 20% of your profits but most of your headaches and problems come from them.
If prospects clearly don’t fit and will become the energy-draining client, learn to say no. And work on saying goodbye to unpleasant and unprofitable clients. If they are a real burden to your employees and organization, have the courage to “fire” them.
By freeing up your staff and resources, your business can focus on attracting the profitable client and providing more time, attention and value to existing clients.
OOPS SORRY WE FORECLOSED BY MISTAKE
Another Mortgage Servicer Screw-Up Throws Tennessee Woman's Home In Foreclosure, Despite Proof Of Payments
In Wilson County, Tennessee, WSMV-TV Channel 4 reports on another case of a mortgage lender/servicer screw-up that resulted in a homeowner being thrown into foreclosure, despite the fact that she was current on her payments and had her bank statements to prove it. Channel 4 tried to intervene in the case; however, phone calls to the lender, Saxon Mortgage, and the attorneys handling the case, Johnson and Freedman, were not returned.
For the story, see Woman's Home Foreclosed, Sold By Mistake (Mortgage Statements Show Payments Current) (read story) (watch video).
Go here and go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc. ScrewUpsLockOutsInForeclosure
In Wilson County, Tennessee, WSMV-TV Channel 4 reports on another case of a mortgage lender/servicer screw-up that resulted in a homeowner being thrown into foreclosure, despite the fact that she was current on her payments and had her bank statements to prove it. Channel 4 tried to intervene in the case; however, phone calls to the lender, Saxon Mortgage, and the attorneys handling the case, Johnson and Freedman, were not returned.
For the story, see Woman's Home Foreclosed, Sold By Mistake (Mortgage Statements Show Payments Current) (read story) (watch video).
Go here and go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc. ScrewUpsLockOutsInForeclosure
FYI MONEY SAVER FOR RENTAL CARS
Fly to Florida, drive back for $3 per day
It's that time of year again. When rental car companies work to shift their fleets from southern areas of the U.S. to the northeast for the lucrative summer car rental season.
Bestfares.com points out this deal from Hertz, which is offering an economy car rental for just $14.99 a week - or $3 per day if you don't want to keep it that long - provided you drive the car out of Florida and drop it off somewhere else. Where? Pick a city. St. Louis. Dallas. Phoenix. New York. Baltimore. There are some exceptions: no drop-offs in California, Iowa, Nevada, West Virginia, Oregon or Washington state.
This is a quick offer though - you have to book by Sunday using the code 1WAY for travel through June 30.
Posted by Michelle Deal-Zimmerman at 3:36 PM in
It's that time of year again. When rental car companies work to shift their fleets from southern areas of the U.S. to the northeast for the lucrative summer car rental season.
Bestfares.com points out this deal from Hertz, which is offering an economy car rental for just $14.99 a week - or $3 per day if you don't want to keep it that long - provided you drive the car out of Florida and drop it off somewhere else. Where? Pick a city. St. Louis. Dallas. Phoenix. New York. Baltimore. There are some exceptions: no drop-offs in California, Iowa, Nevada, West Virginia, Oregon or Washington state.
This is a quick offer though - you have to book by Sunday using the code 1WAY for travel through June 30.
Posted by Michelle Deal-Zimmerman at 3:36 PM in
Vacant Houses according to Census
Three year housing recovery
The U.S. Census Bureau says one in every nine homes in the United States is
sitting vacant, and economists predict that it won't change nationwide for at
least three years. The number of housing units in the United States increased
by 8.65 million from 2002 to 2007, but during that period the number of U.S.
households rose by only 6.7 million. Subtract a half-million homes that will be
torn down or lost to fire, and that leaves 1.3 million units.
Arthur C. Nelson, director of the University of Utah's Metropolitan Research
Center identifies three factors that ensure a slow recovery: the recession and
a slowdown in immigration, the relatively small Gen X numbers (most of who are
within the age range when people tend to have the most children), and the number
of new homes being built--about 700,000 this year. Nelson predicts that
hard-hit housing markets in the West and South will start to bounce back later
this year, but that the Northeast and Midwest will have the slowest comeback,
possibly extending beyond 2012.
The U.S. Census Bureau says one in every nine homes in the United States is
sitting vacant, and economists predict that it won't change nationwide for at
least three years. The number of housing units in the United States increased
by 8.65 million from 2002 to 2007, but during that period the number of U.S.
households rose by only 6.7 million. Subtract a half-million homes that will be
torn down or lost to fire, and that leaves 1.3 million units.
Arthur C. Nelson, director of the University of Utah's Metropolitan Research
Center identifies three factors that ensure a slow recovery: the recession and
a slowdown in immigration, the relatively small Gen X numbers (most of who are
within the age range when people tend to have the most children), and the number
of new homes being built--about 700,000 this year. Nelson predicts that
hard-hit housing markets in the West and South will start to bounce back later
this year, but that the Northeast and Midwest will have the slowest comeback,
possibly extending beyond 2012.
unemployment leads to defaults...DUH
Unemployment: Big factor in home defaults
Report indicates unemployment is a major driver of missed mortgage payments, and raises concerns that Presidential plan to modify loans may miss the mark.
NEW YORK (Reuters) -- Unemployment is a bigger reason for missed mortgage payments than high interest rates, according to a study from the Boston Federal Reserve that raises questions about President Obama's plan to stem foreclosures by modifying loans.
Borrowers are more likely to default on their payments because they have lost their jobs or because the price of their homes has plummeted than because of tough terms on their mortgages, the study found.
Loan modifications are not necessarily a better deal for investors either, wrote Boston Fed economists Christopher Foote and Paul Willen, Atlanta Fed economist Kristopher Gerardi and Lorenz Goette, a professor at the University of Geneva.
Their research found that policies that directly help homeowners overcome setbacks such as losing their jobs may be more effective in combating foreclosures.
0:00 /0:48Should I sell my house short?
"Foreclosure-prevention policy should focus on the most important source of defaults," the economists wrote in a study released on the Boston Fed's Web site late last week.
The findings challenge the thinking behind a White House plan announced in February that would give up to 9 million families the chance to refinance their mortgages. President Obama's administration has made loan modifications a central plank of its efforts to tackle the housing crisis.
"One of the most influential strands of thought contends that the crisis can be attenuated by changing the terms of 'unaffordable' mortgages," the economists wrote. But policies that focus on loan modification "face important hurdles in addressing the current foreclosure crisis," they wrote.
0:00 /1:37Housing agency scrutiny
The economists suggest that the government could instead replace part of an individual homeowner's lost income from a job loss through loans and grants and help those whose predicament is more permanent become renters.
In addition, investors do not necessarily stand to gain if foreclosure is avoided, they said, and that could help explain the relatively small number of loan modifications to date. Estimates that total gains for investors from modifying rather than foreclosing can run to $180 billion may not take into account a number of key factors.
Investors can lose money when they modify mortgages for borrowers who would have repaid anyway. Borrowers with modified loans may default again later, especially if the reason they were driven to default remains, the economists said.
First Published: April 13, 2009: 12:40 PM ET
Miami housing: The power of cheap
Foreclosure prevention: Don't get scammed
Out of work 6 months. Now what?
Find mortgage rates in your area
Features
Money & Main Street
Miami on the cheap
House prices in Miami soared, then crashed. Now buyers, like the Lamuses, are venturing back. More
Malls shed stores
Vacancy rates accelerate as retailers confront spending slump. More
Credit card relief?
Will Congress finally approve consumer-oriented legislation that has stalled for years? More
California comeback
Real estate deals on the coast may indicate a reawakening of the market. More
Detroit bargains
From great mansions to humble cottages, 7 great deals on homes in the Motor City. More
Buy, sell, hold?
Experts tell these 3 families how to score big in their real estate markets, from Miami to Atlanta. More
2010 Camaro
There's a lot to love about the new "General" - and it might just remind America of what GM can be. MoreTop
Stories
Most Popular
Stories
Most Popular
Videos
Uncle Sam won't make ends meet
Goldman on way to repaying bailout
Stocks slip in early trade
Stores suffer big drop in March sales
Bernanke sees 'signs' decline is easing
Stocks slip in early trade
Stores suffer big drop in March sales
Warren Buffett takes charge
GM recalls nearly 1.5 million vehicles
Fed's Fisher: China cannot abandon U.S.
Don't get caught in a tax scam
Driving the Chevy Volt
An affordable electric car
Roubini: 'Bear market rally'
Should I sell my house short?
US Indexes
Fortune 500 Movers
Markets Last Change
Dow Jones 8,021.65 -36.16 / -0.45%
Nasdaq 1,649.60 -3.71 / -0.22%
S&P 500 856.01 -2.72 / -0.32%
10-year Bond 99 10/32 Yield: 2.82%
U.S.Dollar 1 euro = $1.325 -0.012
April 14, 2009 10:44 AM ET
Company Price % Change
American International Group Inc 1.72 21.12%
Citigroup Inc 4.39 15.53%
Freddie Mac 1.02 14.61%
MGM Mirage 7.16 14.56%
Apr 14 10:40am ET †
Sponsored by
symbol lookupMore Galleries
First drive: Chevy Volt test
A few laps behind the wheel of an early version of GM's electric car shows the strengths - and possible weaknesses - of the technology. More
Startup stories: 'How we got the cash'
Small businesses are struggling to find banks willing to lend. Here's how - and where - 6 entrepreneurs got the loans and credit lines they need. More The 7 new rules of financial security
In a world turned upside down, you must re-examine some basic assumptions. A good place to start: understanding the true nature of risk. More Original Shows
Corner Office
An affordable electric car
The CEO of Detroit Electric says that the U.S. can expect to see an electric car by 2010. Play Best Advice
Negotiating, key to business
Know where the other person is coming from and look for the win-win, says Christie Hefner. Play CNNMoney Reports
Soros: Slow recovery ahead
The billionaire investor says we have seen the bottom, but recovery will not be quick. PlayAll CNNMoney.com Original Shows
Ask the Expert Best Advice Bing! Business of Green B.T.W. The Buzz CNNMoney Reports Conscious Capitalism Corner Office C-Suite Disruptors Energy Fix Help Desk How We Got Started Inside the Brain Kids & Money Look Ahead New Money Revell on Retirement The Score Small & Global Small Biz Tips Street Life Strategy Sessions Small Biz Makeover Tech Talk Tech Transformation
Outside the U.S. and
Canada, click here.
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Report indicates unemployment is a major driver of missed mortgage payments, and raises concerns that Presidential plan to modify loans may miss the mark.
NEW YORK (Reuters) -- Unemployment is a bigger reason for missed mortgage payments than high interest rates, according to a study from the Boston Federal Reserve that raises questions about President Obama's plan to stem foreclosures by modifying loans.
Borrowers are more likely to default on their payments because they have lost their jobs or because the price of their homes has plummeted than because of tough terms on their mortgages, the study found.
Loan modifications are not necessarily a better deal for investors either, wrote Boston Fed economists Christopher Foote and Paul Willen, Atlanta Fed economist Kristopher Gerardi and Lorenz Goette, a professor at the University of Geneva.
Their research found that policies that directly help homeowners overcome setbacks such as losing their jobs may be more effective in combating foreclosures.
0:00 /0:48Should I sell my house short?
"Foreclosure-prevention policy should focus on the most important source of defaults," the economists wrote in a study released on the Boston Fed's Web site late last week.
The findings challenge the thinking behind a White House plan announced in February that would give up to 9 million families the chance to refinance their mortgages. President Obama's administration has made loan modifications a central plank of its efforts to tackle the housing crisis.
"One of the most influential strands of thought contends that the crisis can be attenuated by changing the terms of 'unaffordable' mortgages," the economists wrote. But policies that focus on loan modification "face important hurdles in addressing the current foreclosure crisis," they wrote.
0:00 /1:37Housing agency scrutiny
The economists suggest that the government could instead replace part of an individual homeowner's lost income from a job loss through loans and grants and help those whose predicament is more permanent become renters.
In addition, investors do not necessarily stand to gain if foreclosure is avoided, they said, and that could help explain the relatively small number of loan modifications to date. Estimates that total gains for investors from modifying rather than foreclosing can run to $180 billion may not take into account a number of key factors.
Investors can lose money when they modify mortgages for borrowers who would have repaid anyway. Borrowers with modified loans may default again later, especially if the reason they were driven to default remains, the economists said.
First Published: April 13, 2009: 12:40 PM ET
Miami housing: The power of cheap
Foreclosure prevention: Don't get scammed
Out of work 6 months. Now what?
Find mortgage rates in your area
Features
Money & Main Street
Miami on the cheap
House prices in Miami soared, then crashed. Now buyers, like the Lamuses, are venturing back. More
Malls shed stores
Vacancy rates accelerate as retailers confront spending slump. More
Credit card relief?
Will Congress finally approve consumer-oriented legislation that has stalled for years? More
California comeback
Real estate deals on the coast may indicate a reawakening of the market. More
Detroit bargains
From great mansions to humble cottages, 7 great deals on homes in the Motor City. More
Buy, sell, hold?
Experts tell these 3 families how to score big in their real estate markets, from Miami to Atlanta. More
2010 Camaro
There's a lot to love about the new "General" - and it might just remind America of what GM can be. MoreTop
Stories
Most Popular
Stories
Most Popular
Videos
Uncle Sam won't make ends meet
Goldman on way to repaying bailout
Stocks slip in early trade
Stores suffer big drop in March sales
Bernanke sees 'signs' decline is easing
Stocks slip in early trade
Stores suffer big drop in March sales
Warren Buffett takes charge
GM recalls nearly 1.5 million vehicles
Fed's Fisher: China cannot abandon U.S.
Don't get caught in a tax scam
Driving the Chevy Volt
An affordable electric car
Roubini: 'Bear market rally'
Should I sell my house short?
US Indexes
Fortune 500 Movers
Markets Last Change
Dow Jones 8,021.65 -36.16 / -0.45%
Nasdaq 1,649.60 -3.71 / -0.22%
S&P 500 856.01 -2.72 / -0.32%
10-year Bond 99 10/32 Yield: 2.82%
U.S.Dollar 1 euro = $1.325 -0.012
April 14, 2009 10:44 AM ET
Company Price % Change
American International Group Inc 1.72 21.12%
Citigroup Inc 4.39 15.53%
Freddie Mac 1.02 14.61%
MGM Mirage 7.16 14.56%
Apr 14 10:40am ET †
Sponsored by
symbol lookupMore Galleries
First drive: Chevy Volt test
A few laps behind the wheel of an early version of GM's electric car shows the strengths - and possible weaknesses - of the technology. More
Startup stories: 'How we got the cash'
Small businesses are struggling to find banks willing to lend. Here's how - and where - 6 entrepreneurs got the loans and credit lines they need. More The 7 new rules of financial security
In a world turned upside down, you must re-examine some basic assumptions. A good place to start: understanding the true nature of risk. More Original Shows
Corner Office
An affordable electric car
The CEO of Detroit Electric says that the U.S. can expect to see an electric car by 2010. Play Best Advice
Negotiating, key to business
Know where the other person is coming from and look for the win-win, says Christie Hefner. Play CNNMoney Reports
Soros: Slow recovery ahead
The billionaire investor says we have seen the bottom, but recovery will not be quick. PlayAll CNNMoney.com Original Shows
Ask the Expert Best Advice Bing! Business of Green B.T.W. The Buzz CNNMoney Reports Conscious Capitalism Corner Office C-Suite Disruptors Energy Fix Help Desk How We Got Started Inside the Brain Kids & Money Look Ahead New Money Revell on Retirement The Score Small & Global Small Biz Tips Street Life Strategy Sessions Small Biz Makeover Tech Talk Tech Transformation
Outside the U.S. and
Canada, click here.
State/PrAAABAEAKALAPARASAZBCCACOCTDCDEFLGAGUHIIAIDILINKSKYLAMAMBMDMEMIMNMOMSMTNBNCNDNENHNJNLNMNSNTNUNVNYOHOKONORPAPEPRQCRISCSDSKTNTXUTVAVIVTWAWIWVWYYT
Privacy Policy
Copyright 2009 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
© 2009 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy
Home Portfolio Calculators Contact Us Newsletters Podcasts RSS Mobile Widgets Press Center Site Map User Preferences
Advertise with Us Magazine Customer Service Download Fortune Lists Reprints Career Opportunities Special Sections Conferences Business Leader Council
Live Quotes automatically refresh, but individual equities are delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET.
* : Time reflects local markets trading time. † - Intraday data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. Disclaimer
Copyright © 2009 BigCharts.com Inc. All rights reserved. Please see our Terms of Use.
MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc.
Intraday data provided by Interactive Data Real-Time Services and subject to the Terms of Use.
Intraday data is at least 20-minutes delayed. All times are ET.
Historical, current end-of-day data, and splits data provided by Interactive Data Pricing and Reference Data.
Fundamental data provided by Morningstar, Inc..
SEC Filings data provided by Edgar Online Inc..
Earnings data provided by FactSet CallStreet, LLC.
NEW TARP HEAD TAPPED
WASHINGTON -- President Barack Obama is expected to tap Fannie Mae Chief Executive Herb Allison to head the government's $700 billion financial-rescue program, people familiar with the matter say.
In choosing Mr. Allison to head the Troubled Asset Relief Program, the administration is turning to an experienced manager at a time when it is having trouble filling key finance posts. Mr. Allison, 65 years old, is the former chairman of investment company TIAA-CREF and was a Merrill Lynch & Co. executive for years. In September, he agreed to run Fannie Mae after the U.S. took over the mortgage giant and its sister firm, Freddie Mac.
Mr. Obama could announce his intention to nominate Mr. Allison as assistant secretary for the Office of Financial Stability as early as this week. Mr. Allison would replace Neel Kashkari, a holdover from the Bush administration, who was asked by Treasury Secretary Timothy Geithner to stay on until a replacement was found.
The selection will leave the administration searching for permanent leaders of both Fannie and Freddie. David Moffett, Freddie's CEO, announced his resignation last month.
The Obama administration has had difficulty finding executives willing to serve as directors and executives of companies in the government's embrace, in part because of intense scrutiny of companies receiving government aid.
Mr. Geithner has been searching for months for someone to run TARP. Various candidates either have not made it through the vetting process or have pulled out of consideration. Last month, the leading candidate, hedge-fund manager Frank Brosens, withdrew for personal reasons.
Mr. Allison has been on the short list from the beginning. His selection was complicated by several factors, including the need to replace him at Fannie, people familiar with the matter say. He spent most of his career at Merrill Lynch, eventually serving as president and COO. He became chairman of TIAA-CREF in 2002. As Fannie's CEO, he opted to take no salary or bonus.
If confirmed, Mr. Allison will become point person for what has become an unpopular program. He'll have to defend plans for spending the program's remaining cash, and would likely represent the administration if it requests more bailout funds, which many observers expect.
Write to Deborah Solomon at deborah.solomon@wsj.com
In choosing Mr. Allison to head the Troubled Asset Relief Program, the administration is turning to an experienced manager at a time when it is having trouble filling key finance posts. Mr. Allison, 65 years old, is the former chairman of investment company TIAA-CREF and was a Merrill Lynch & Co. executive for years. In September, he agreed to run Fannie Mae after the U.S. took over the mortgage giant and its sister firm, Freddie Mac.
Mr. Obama could announce his intention to nominate Mr. Allison as assistant secretary for the Office of Financial Stability as early as this week. Mr. Allison would replace Neel Kashkari, a holdover from the Bush administration, who was asked by Treasury Secretary Timothy Geithner to stay on until a replacement was found.
The selection will leave the administration searching for permanent leaders of both Fannie and Freddie. David Moffett, Freddie's CEO, announced his resignation last month.
The Obama administration has had difficulty finding executives willing to serve as directors and executives of companies in the government's embrace, in part because of intense scrutiny of companies receiving government aid.
Mr. Geithner has been searching for months for someone to run TARP. Various candidates either have not made it through the vetting process or have pulled out of consideration. Last month, the leading candidate, hedge-fund manager Frank Brosens, withdrew for personal reasons.
Mr. Allison has been on the short list from the beginning. His selection was complicated by several factors, including the need to replace him at Fannie, people familiar with the matter say. He spent most of his career at Merrill Lynch, eventually serving as president and COO. He became chairman of TIAA-CREF in 2002. As Fannie's CEO, he opted to take no salary or bonus.
If confirmed, Mr. Allison will become point person for what has become an unpopular program. He'll have to defend plans for spending the program's remaining cash, and would likely represent the administration if it requests more bailout funds, which many observers expect.
Write to Deborah Solomon at deborah.solomon@wsj.com
Saturday, March 21, 2009
GO BOCA GO BOCA !!!!!!
Squeezed Homeowners In South Florida "Country Club"
Communities Fight Back
In Boca Raton, Florida, the South Florida Daily Business Review reports:
Almost a decade after Howard Cohan moved into Devon Place, a neighborhood within Boca’s Woodfield Country Club, he was told he would be required to establish a social membership in the golf and tennis club and pay annual dues of more than $10,000 to continue living in the community.
He also was told he would be required to spend a minimum of $2,500 per year in food and beverages at the club. That was in 2003, and despite his displeasure with the homeowners association, Cohan paid his dues each year.
Finally, Cohan had enough and recently filed a lawsuit challenging the club’s mandatory membership. Cohan’s attorney, Andrew Bray, is seeking class action status for the suit against the Woodfield Country Club Homeowners’ Association.
And Cohan isn’t the only homeowner fighting mandatory fees.(1)
For more, see Country club living putting squeeze on some homeowners.
For Mr. Cohan's lawsuit, see Cohan v. Woodfield Country Club Homeowners Association Inc.
For another similar lawsuit by a homeowner against a homeowner association offering "country club living," see:
Nichols v. The Hamlet Residents Association, Inc.
(1) In another similar lawsuit, Palm Beach Circuit Judge David French late last year ruled the membership fee requirement was “unreasonable” and “unenforceable” for new buyers. The suit is before the 4th District Court of Appeal. The appeal claims French should not have ruled in the case because he lives in a country club community. Go here for Judge French's ruling.
Communities Fight Back
In Boca Raton, Florida, the South Florida Daily Business Review reports:
Almost a decade after Howard Cohan moved into Devon Place, a neighborhood within Boca’s Woodfield Country Club, he was told he would be required to establish a social membership in the golf and tennis club and pay annual dues of more than $10,000 to continue living in the community.
He also was told he would be required to spend a minimum of $2,500 per year in food and beverages at the club. That was in 2003, and despite his displeasure with the homeowners association, Cohan paid his dues each year.
Finally, Cohan had enough and recently filed a lawsuit challenging the club’s mandatory membership. Cohan’s attorney, Andrew Bray, is seeking class action status for the suit against the Woodfield Country Club Homeowners’ Association.
And Cohan isn’t the only homeowner fighting mandatory fees.(1)
For more, see Country club living putting squeeze on some homeowners.
For Mr. Cohan's lawsuit, see Cohan v. Woodfield Country Club Homeowners Association Inc.
For another similar lawsuit by a homeowner against a homeowner association offering "country club living," see:
Nichols v. The Hamlet Residents Association, Inc.
(1) In another similar lawsuit, Palm Beach Circuit Judge David French late last year ruled the membership fee requirement was “unreasonable” and “unenforceable” for new buyers. The suit is before the 4th District Court of Appeal. The appeal claims French should not have ruled in the case because he lives in a country club community. Go here for Judge French's ruling.
FICO SHOULD GO BYE-BYE
Should FICO scores ignore recent foreclosures?
Zac Bissonnette
The unprecedented wave of foreclosures is certainly weakening the social stigma that comes with giving up a home, and Todd J. Zywicki, a professor of law at George Mason University says that it may also result in a dulling of the impact foreclosure has on credit scores.
''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''
While providing FICO score relief to victims of foreclosure has a certain intuitive appeal to it, it actually might be a terrible idea. First, it would make FICO scores even more useless than they already are. Second, it would eliminate the one remaining reason that people have not to give up homes they're underwater on.
One of the primary motives behind all the housing stimulus programs has been to reduce the amount of inventory on the market in distressed areas. If you give people on more reason to give up their homes, the hardest-hit markets could be even more flooded than ever. About 52% of Nevada mortgages are underwater, followed by 32% in Arizona and 30% in Florida and California, according to First American CoreLogic.
Without the FICO score deterrent, 52% of Nevada home owners with mortgages would have every reason to abandon their homes. That would spell disaster for that housing market.
A better solution is for the FICO score's treatment of foreclosures to remain unchanged -- or present two numbers, one that reflects the foreclosure and one that doesn't. Then leave it to the lender to decide how much he cares about the foreclosure.
Source
Zac Bissonnette
The unprecedented wave of foreclosures is certainly weakening the social stigma that comes with giving up a home, and Todd J. Zywicki, a professor of law at George Mason University says that it may also result in a dulling of the impact foreclosure has on credit scores.
''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''
While providing FICO score relief to victims of foreclosure has a certain intuitive appeal to it, it actually might be a terrible idea. First, it would make FICO scores even more useless than they already are. Second, it would eliminate the one remaining reason that people have not to give up homes they're underwater on.
One of the primary motives behind all the housing stimulus programs has been to reduce the amount of inventory on the market in distressed areas. If you give people on more reason to give up their homes, the hardest-hit markets could be even more flooded than ever. About 52% of Nevada mortgages are underwater, followed by 32% in Arizona and 30% in Florida and California, according to First American CoreLogic.
Without the FICO score deterrent, 52% of Nevada home owners with mortgages would have every reason to abandon their homes. That would spell disaster for that housing market.
A better solution is for the FICO score's treatment of foreclosures to remain unchanged -- or present two numbers, one that reflects the foreclosure and one that doesn't. Then leave it to the lender to decide how much he cares about the foreclosure.
Source
Saturday, March 14, 2009
CALL TO HELP !
The banking industry is swarming over Capitol Hill in an effort to gut or defeat S. 61, the Helping Families Save Their Homes Act. The latest tactic is to try to limit the loans that can be modified in bankruptcy to sub prime loans.
These Senators are thought to be undecided or subject to being swayed one way or the other:
Max Baucus – Montana
Robert Byrd – West Virginia
Tom Carper – Delaware
Tim Johnson – South Dakota
Mary Landrieu – Louisiana
Joe Lieberman – Connecticut
Blanche Lincoln – Arkansas
Claire McCaskill – Missouri
Ben Nelson – Nebraska
Mark Pryor – Arkansas
Jon Tester – Montana
The freshman Democratic Senators have no history with this issue:
Mark Begich — Alaska
Michael Bennett – Colorado
Roland Burris – Illinois
Kirsten Gillibrand — New York
Kay Hagan – North Carolina
Ted Kaufman – Delaware
Mark Udall – Colorado
Tom Udall – New Mexico
Mark Warner – Virginia
A few Republicans
Bob Corker – Tennessee
Richard Lugar — Indiana
Mel Martinez – Florida
Arlen Specter — Pennsylvania
George Voinovich — Ohio
If you or family or friends are constituents of any of these lawmakers, give them a call or email in support of a no cost opportunity to stop the housing collapse.
Call them toll free: 877.354.4958
Or email at: www.nacba.org/TellCongress
Ask them to support a strong and comprehensive judicial mortgage modification buill.
These Senators are thought to be undecided or subject to being swayed one way or the other:
Max Baucus – Montana
Robert Byrd – West Virginia
Tom Carper – Delaware
Tim Johnson – South Dakota
Mary Landrieu – Louisiana
Joe Lieberman – Connecticut
Blanche Lincoln – Arkansas
Claire McCaskill – Missouri
Ben Nelson – Nebraska
Mark Pryor – Arkansas
Jon Tester – Montana
The freshman Democratic Senators have no history with this issue:
Mark Begich — Alaska
Michael Bennett – Colorado
Roland Burris – Illinois
Kirsten Gillibrand — New York
Kay Hagan – North Carolina
Ted Kaufman – Delaware
Mark Udall – Colorado
Tom Udall – New Mexico
Mark Warner – Virginia
A few Republicans
Bob Corker – Tennessee
Richard Lugar — Indiana
Mel Martinez – Florida
Arlen Specter — Pennsylvania
George Voinovich — Ohio
If you or family or friends are constituents of any of these lawmakers, give them a call or email in support of a no cost opportunity to stop the housing collapse.
Call them toll free: 877.354.4958
Or email at: www.nacba.org/TellCongress
Ask them to support a strong and comprehensive judicial mortgage modification buill.
THANK YOU JUDGE DONNA PADAR BERLIN !!!!
Sarasota Judge Cancels Foreclosure Sale
As a foreclosure defense attorney in Sarasota, I am glad to say that Sarasota Circuit Court Judge Donna Padar Berlin recently issued an Order canceling a foreclosure sale in a mortgage foreclosure case. Sarasota is now, in my opinion, taking a firmer stance against abuse in the mortgage foreclosure system by the mortgage companies. This is an excellent step in the right direction.
Prior to the Court's March 6, 2009 Order canceling the March 30th sale date, the Court had issued a prior Order on February 6, 2009 which stated that the mortgage company could not set another sale date. Despite that Order, The sale date on the defendant's home had been set for March 30, 2009. The Sarasota Judge canceled the sale when she found out that the mortgage company represented to the homeowner that she could modify her mortgage and that the mortgage foreclosure lawsuit would be abandoned.
Kudos to Judge Donna Pader Berlin for putting a stop to a practice that is all too prevalent in today's economy.
As a foreclosure defense attorney in Sarasota, I am glad to say that Sarasota Circuit Court Judge Donna Padar Berlin recently issued an Order canceling a foreclosure sale in a mortgage foreclosure case. Sarasota is now, in my opinion, taking a firmer stance against abuse in the mortgage foreclosure system by the mortgage companies. This is an excellent step in the right direction.
Prior to the Court's March 6, 2009 Order canceling the March 30th sale date, the Court had issued a prior Order on February 6, 2009 which stated that the mortgage company could not set another sale date. Despite that Order, The sale date on the defendant's home had been set for March 30, 2009. The Sarasota Judge canceled the sale when she found out that the mortgage company represented to the homeowner that she could modify her mortgage and that the mortgage foreclosure lawsuit would be abandoned.
Kudos to Judge Donna Pader Berlin for putting a stop to a practice that is all too prevalent in today's economy.
CHANGES TO FAIR DEBT COLLECTION...ITS ABOUT D____-TIME !
The Federal Trade Commission has proposed changes to the Fair Debt Collection Practices Act (FDCPA) that could have a major impact on the debt collection industry, including increasing damages for FDCPA suits, restricting collectors from calling mobile phones or texting, and laying out specific criteria for information in a debt validation notice.
To bring the FDCPA current with changes in the industry, the FTC made a number of proposals for changes to the law that governs collector behavior:
Debt collectors should provide better information in debt validation notices, including: (1) the name of the original creditor; and (2) itemization of: the principal, the total of all interest, and the total of all fees and other charges
The statutory damages awarded under the FDCPA should be increased to account for inflation.
The FTC should have regulatory authority under the FDCPA.
The law should generally prohibit debt collectors from contacting consumers via cell phones unless they have obtained prior express consent to such contacts.
Although the FTC recommended that statutory damages under the FDCPA be updated to reflect inflation, it did not offer a suggested amount. The report did note that the $1,000 cap put on violations in 1977 would be about $3,600 in 2008 dollars. The FTC said that it still believes the FDCPA is best enforced by private suits and class actions, a central rationale for increasing damages.
The report is the result of comments and testimony provided in a two day workshop held in Washington in October 2007. Read the full FTC report: http://tinyurl.com/bfflr3.
To bring the FDCPA current with changes in the industry, the FTC made a number of proposals for changes to the law that governs collector behavior:
Debt collectors should provide better information in debt validation notices, including: (1) the name of the original creditor; and (2) itemization of: the principal, the total of all interest, and the total of all fees and other charges
The statutory damages awarded under the FDCPA should be increased to account for inflation.
The FTC should have regulatory authority under the FDCPA.
The law should generally prohibit debt collectors from contacting consumers via cell phones unless they have obtained prior express consent to such contacts.
Although the FTC recommended that statutory damages under the FDCPA be updated to reflect inflation, it did not offer a suggested amount. The report did note that the $1,000 cap put on violations in 1977 would be about $3,600 in 2008 dollars. The FTC said that it still believes the FDCPA is best enforced by private suits and class actions, a central rationale for increasing damages.
The report is the result of comments and testimony provided in a two day workshop held in Washington in October 2007. Read the full FTC report: http://tinyurl.com/bfflr3.
NAACP STARTS SUING BANKS
NAACP sues major lenders
The lawsuit alleges that HSBC and Wells Fargo gave subprime rates to African-Americans who qualified for better rates.
NEW YORK (CNN) -- The NAACP filed lawsuits Friday against two of the nation's largest mortgage lenders -- HSBC and Wells Fargo -- alleging "systematic, institutionalized racism" in their sub-prime lending.
"We have targeted these banks because we have gone through what we can get our hands on, and it seems like there's a real problem here," NAACP CEO Benjamin Jealous told CNN.
He added that the group wants "transparency. We want to see the books. We are not seeking damages, we just want them to fix the problem."
Both companies denied the allegations.
HSBC (HBC) spokeswoman Kate Durham said the company does not comment on litigation, but she added, "We stand by our lending practices."
Wells Fargo (WFC, Fortune 500) spokeswoman Melissa Murray issued a statement saying, "The NAACP's allegations are totally unfounded and reckless. We have never tolerated, and will never tolerate, discrimination in any way, shape or form in any of our business practices, products, or services."
She went on to say that the company has been "working with the NAACP for the past two years to develop a partnership that would benefit the NAACP, its constituents, and our communities, so we are dismayed that the NAACP has chosen to abandon that constructive dialogue in order to pursue this litigation."
Under subprime lending, people who don't qualify for lower interest rates can borrow money at higher rates. The NAACP lawsuits argue that the companies gave subprime rates to African-Americans who qualified for better rates, and gave better rates to white customers with similar credit histories.
The lawsuits, filed in U.S. District Court in central California, note several studies showing African-Americans have been disproportionately affected by subprime lending.
"These statistical disparities are not mere happenstance, but instead result from the systematic and predatory targeting of African-Americans, as well as facially neutral lending policies and practices that have a disparate adverse impact on African-Americans," the lawsuits say.
The NAACP previously launched similar suits against numerous other lenders. In its statement Friday, the nation's oldest civil-rights group said, "One lender has already entered into a preliminary settlement agreement with the NAACP, and a number of other lenders are engaged in similar discussions."
The lawsuit alleges that HSBC and Wells Fargo gave subprime rates to African-Americans who qualified for better rates.
NEW YORK (CNN) -- The NAACP filed lawsuits Friday against two of the nation's largest mortgage lenders -- HSBC and Wells Fargo -- alleging "systematic, institutionalized racism" in their sub-prime lending.
"We have targeted these banks because we have gone through what we can get our hands on, and it seems like there's a real problem here," NAACP CEO Benjamin Jealous told CNN.
He added that the group wants "transparency. We want to see the books. We are not seeking damages, we just want them to fix the problem."
Both companies denied the allegations.
HSBC (HBC) spokeswoman Kate Durham said the company does not comment on litigation, but she added, "We stand by our lending practices."
Wells Fargo (WFC, Fortune 500) spokeswoman Melissa Murray issued a statement saying, "The NAACP's allegations are totally unfounded and reckless. We have never tolerated, and will never tolerate, discrimination in any way, shape or form in any of our business practices, products, or services."
She went on to say that the company has been "working with the NAACP for the past two years to develop a partnership that would benefit the NAACP, its constituents, and our communities, so we are dismayed that the NAACP has chosen to abandon that constructive dialogue in order to pursue this litigation."
Under subprime lending, people who don't qualify for lower interest rates can borrow money at higher rates. The NAACP lawsuits argue that the companies gave subprime rates to African-Americans who qualified for better rates, and gave better rates to white customers with similar credit histories.
The lawsuits, filed in U.S. District Court in central California, note several studies showing African-Americans have been disproportionately affected by subprime lending.
"These statistical disparities are not mere happenstance, but instead result from the systematic and predatory targeting of African-Americans, as well as facially neutral lending policies and practices that have a disparate adverse impact on African-Americans," the lawsuits say.
The NAACP previously launched similar suits against numerous other lenders. In its statement Friday, the nation's oldest civil-rights group said, "One lender has already entered into a preliminary settlement agreement with the NAACP, and a number of other lenders are engaged in similar discussions."
Friday, March 13, 2009
revamp bk reporting??/DUH
Court Ruling: Credit Bureaus Must Revamp Their Bankruptcy Reporting
By Sonya Smith-Valentine
Millions of consumers who have filed for bankruptcy are about to get a second chance at a fresh start.
A recent federal court order required the three major credit reporting bureaus to clean up the credit files of millions of consumers who have filed for Chapter 7 bankruptcy. The problem: old debts that were discharged by the courts in a bankruptcy filing are still being reported as active on many consumers’ credit reports. The court-mandated changes come at a time when more consumers are filing for bankruptcy amid rising loan defaults and tighter credit standards.
This ruling is expected to clean up the credit files – and potentially boost the credit scores – of an estimated 6 to 10 million people who filed for Chapter 7 bankruptcy but still had errors in their credit report files. Consumers with old debt are likely to get some relief if those debts were discharged under Chapter 7 protection.
Current reporting systems
arnt as accurate as they should be and errors in credit reports are common. Credit report inaccuracies can result in lower credit scores, credit denials and higher interest rates.
Current reporting systems aren’t as accurate as they should be and errors in credit reports are common. Credit report inaccuracies can result in lower credit scores, credit denials and higher interest rates. In many cases, old discharged debts linger on credit reports if lenders don’t update their records or if collection agencies ignore the fact that debts were discharged in bankruptcy. Also, some creditors or buyers of debt will not report the bankruptcy discharge to the credit bureaus and will instead “park the debt” during the bankruptcy and then try to collect the debt after it has been legally discharged. The new court-mandated procedures should ensure that anyone who files for bankruptcy in the future will have more accurate credit reports.
The court order stems from a class action lawsuit alleging that each of the credit bureaus violated the Fair Credit Reporting Act by failing to maintain reasonable procedures to assure the accurate reporting of debts that were discharged in bankruptcy. The lawsuit could now move to a trial to determine liability and damages if the court decides to give the damages portion of the case a class action status.
The ruling is significant because the credit bureaus will have to make wholesale changes to the way they report key credit information related to bankruptcy filings. It used to be that the credit bureaus would remove/update pre-bankruptcy debts on consumers’ credit files only if the creditors updated their accounts. Now, accounts included in a Chapter 7 bankruptcy will be required to show a zero balance. It appears the credit bureaus were showing the “included in bankruptcy” accounts as having balances and, in some cases, showing active history which could keep the account on a credit file for longer than the seven-year limit. A bankruptcy on the credit report is bad, but when there is a bankruptcy and there are also debts showing up as overdue and not paid — that’s a double hit.
Once a consumer has completed the bankruptcy process, they should request a copy of their credit report from all three credit bureaus. The credit report should indicate a zero balance next to all creditors listed in their bankruptcy petition, unless they acquired new debt during or subsequent to their bankruptcy or re-affirmed the existing debt during the bankruptcy. If their credit report indicates an error, they should send to the credit bureaus a dispute letter with proof the debt was discharged in bankruptcy. If the credit bureau does not correct the error in the credit report and the consumer then suffers some harm, the consumer can file a lawsuit for damages for violations of the Fair Credit Reporting Act.
Sonya Smith-Valentine is a member of the Valentine Legal Group, LLC. She concentrates her practice on personal finance litigation: credit reporting errors, debt collection disputes and banking problems.
previous next
Publications : Bar Bulletin: February 2009
By Sonya Smith-Valentine
Millions of consumers who have filed for bankruptcy are about to get a second chance at a fresh start.
A recent federal court order required the three major credit reporting bureaus to clean up the credit files of millions of consumers who have filed for Chapter 7 bankruptcy. The problem: old debts that were discharged by the courts in a bankruptcy filing are still being reported as active on many consumers’ credit reports. The court-mandated changes come at a time when more consumers are filing for bankruptcy amid rising loan defaults and tighter credit standards.
This ruling is expected to clean up the credit files – and potentially boost the credit scores – of an estimated 6 to 10 million people who filed for Chapter 7 bankruptcy but still had errors in their credit report files. Consumers with old debt are likely to get some relief if those debts were discharged under Chapter 7 protection.
Current reporting systems
arnt as accurate as they should be and errors in credit reports are common. Credit report inaccuracies can result in lower credit scores, credit denials and higher interest rates.
Current reporting systems aren’t as accurate as they should be and errors in credit reports are common. Credit report inaccuracies can result in lower credit scores, credit denials and higher interest rates. In many cases, old discharged debts linger on credit reports if lenders don’t update their records or if collection agencies ignore the fact that debts were discharged in bankruptcy. Also, some creditors or buyers of debt will not report the bankruptcy discharge to the credit bureaus and will instead “park the debt” during the bankruptcy and then try to collect the debt after it has been legally discharged. The new court-mandated procedures should ensure that anyone who files for bankruptcy in the future will have more accurate credit reports.
The court order stems from a class action lawsuit alleging that each of the credit bureaus violated the Fair Credit Reporting Act by failing to maintain reasonable procedures to assure the accurate reporting of debts that were discharged in bankruptcy. The lawsuit could now move to a trial to determine liability and damages if the court decides to give the damages portion of the case a class action status.
The ruling is significant because the credit bureaus will have to make wholesale changes to the way they report key credit information related to bankruptcy filings. It used to be that the credit bureaus would remove/update pre-bankruptcy debts on consumers’ credit files only if the creditors updated their accounts. Now, accounts included in a Chapter 7 bankruptcy will be required to show a zero balance. It appears the credit bureaus were showing the “included in bankruptcy” accounts as having balances and, in some cases, showing active history which could keep the account on a credit file for longer than the seven-year limit. A bankruptcy on the credit report is bad, but when there is a bankruptcy and there are also debts showing up as overdue and not paid — that’s a double hit.
Once a consumer has completed the bankruptcy process, they should request a copy of their credit report from all three credit bureaus. The credit report should indicate a zero balance next to all creditors listed in their bankruptcy petition, unless they acquired new debt during or subsequent to their bankruptcy or re-affirmed the existing debt during the bankruptcy. If their credit report indicates an error, they should send to the credit bureaus a dispute letter with proof the debt was discharged in bankruptcy. If the credit bureau does not correct the error in the credit report and the consumer then suffers some harm, the consumer can file a lawsuit for damages for violations of the Fair Credit Reporting Act.
Sonya Smith-Valentine is a member of the Valentine Legal Group, LLC. She concentrates her practice on personal finance litigation: credit reporting errors, debt collection disputes and banking problems.
previous next
Publications : Bar Bulletin: February 2009
Friday, March 6, 2009
CRAM IT ... IS NOW A GOOD THING !
House OKs mortgage reductions in bankruptcy cases
Legislation would allow bankruptcy judges to modify loans of struggling owners
By Jim Puzzanghera | Washington Bureau
March 6, 2009
WASHINGTON—In an attempt to ease the foreclosure crisis, the House on Thursday approved a major change to bankruptcy law, giving judges new powers to modify home mortgages.
The revision, which was approved 234-191 as part of a broader housing bill, would allow bankruptcy judges to reduce or "cram down" the principal owed on an existing mortgage for a primary residence. First, however, a homeowner would have to seek a voluntary modification from their lender and share any profit if they sell the house within five years.
The legislation faces a tougher road in the Senate, although supporters were optimistic that the nationwide surge in foreclosures would help them pass it as early as next week.
Since 1978, when major changes were made in the bankruptcy laws, judges have had the authority to reduce the principal on loans backed by almost all forms of property, including second homes, cars and boats but not on primary residences. Supporters of the legislation said it should be extended to primary residences.
"This is the same opportunity that owners of vacation homes, investment properties, private jets [and] luxury yachts have long enjoyed," said Rep. Zoe Lofgren (D-Calif.). "I think it's only fair that we offer it now to average families as well."
Supporters hope the threat that a bankruptcy judge could reduce the mortgage principal would induce lenders to work with homeowners to modify mortgages to reduce monthly payments and avoid foreclosure.
But most of the mortgage industry and many Republicans oppose the legislation. They argue it would make bankruptcy too easy for struggling homeowners. That would lead to a flood of filings to reorganize debt under Chapter 13 and to higher mortgage rates as lenders try to offset losses they might suffer if a loan were later modified, opponents said.
"It is a classic example of the law of unintended consequences," said Rep. Dan Lungren (D-Calif.). "When you introduce additional risk … you are going to jeopardize the accessibility and eligibility of these mortgages to everybody."
The House vote came as the Mortgage Bankers Association released a survey showing a record 5.4 million U.S. homeowners, or nearly 12 percent, were at least a month behind in their payments or in foreclosure. In Illinois, the percentage was higher, at 12.3 percent, or 218,000 homeowners.
President Barack Obama has called for the change in bankruptcy law as part of his broader plan to reduce foreclosures, which continue to drive down housing prices and infect the economy.
Legislation would allow bankruptcy judges to modify loans of struggling owners
By Jim Puzzanghera | Washington Bureau
March 6, 2009
WASHINGTON—In an attempt to ease the foreclosure crisis, the House on Thursday approved a major change to bankruptcy law, giving judges new powers to modify home mortgages.
The revision, which was approved 234-191 as part of a broader housing bill, would allow bankruptcy judges to reduce or "cram down" the principal owed on an existing mortgage for a primary residence. First, however, a homeowner would have to seek a voluntary modification from their lender and share any profit if they sell the house within five years.
The legislation faces a tougher road in the Senate, although supporters were optimistic that the nationwide surge in foreclosures would help them pass it as early as next week.
Since 1978, when major changes were made in the bankruptcy laws, judges have had the authority to reduce the principal on loans backed by almost all forms of property, including second homes, cars and boats but not on primary residences. Supporters of the legislation said it should be extended to primary residences.
"This is the same opportunity that owners of vacation homes, investment properties, private jets [and] luxury yachts have long enjoyed," said Rep. Zoe Lofgren (D-Calif.). "I think it's only fair that we offer it now to average families as well."
Supporters hope the threat that a bankruptcy judge could reduce the mortgage principal would induce lenders to work with homeowners to modify mortgages to reduce monthly payments and avoid foreclosure.
But most of the mortgage industry and many Republicans oppose the legislation. They argue it would make bankruptcy too easy for struggling homeowners. That would lead to a flood of filings to reorganize debt under Chapter 13 and to higher mortgage rates as lenders try to offset losses they might suffer if a loan were later modified, opponents said.
"It is a classic example of the law of unintended consequences," said Rep. Dan Lungren (D-Calif.). "When you introduce additional risk … you are going to jeopardize the accessibility and eligibility of these mortgages to everybody."
The House vote came as the Mortgage Bankers Association released a survey showing a record 5.4 million U.S. homeowners, or nearly 12 percent, were at least a month behind in their payments or in foreclosure. In Illinois, the percentage was higher, at 12.3 percent, or 218,000 homeowners.
President Barack Obama has called for the change in bankruptcy law as part of his broader plan to reduce foreclosures, which continue to drive down housing prices and infect the economy.
FORECLOSURE NATION
by Scott Van Voorhis March 6, 2009 09:00 AM
Looks like the foreclosure epidemic is getting its second wind.
The first wave of foreclosures featured homeowners duped into buying homes they couldn’t afford with goofy, subprime loans. Not to mention a whole lot of small-time investors who bought units in hopes of flipping them for big profits, as well as a just outright fraudsters who used straw buyers to create artificial sales.
But much of that first wave of crazy subprime mortgages gone bad has already crashed into the housing market and economy. Now we are starting to see the second wave, regular homeowners who are losing their jobs and their homes due to the economic downturn, of course triggered in part by the subprime fiasco.
Anyway, that is the way some are reading the latest foreclosure stats, with the number of troubled mortgages rising to 7.8 percent of all home loans, the highest since 1972, Bloomberg reports. Loans actually in foreclosure now amount to 3.3 percent of all mortgages in the country, an all-time high.
The Mortgage Bankers Association is pointing to the deepening recession and job losses as a key factor behind the growing number of bad loans.
Let’s just hope President Obama’s $75 billion lifeline to homeowners in trouble works a bit better than the now long list of previous multibillion-dollar rescue plans rolled out by the federal government and several states, including Massachusetts.
Still, even the president’s ambitious effort won’t help you if you’ve lost your job and have no money at all to pay your mortgage.
Comment Permalink Email ShareThis« Back to Front Page Previous Entry Next Entry 16 comments so far...
It's not like it matters, since the government insists on just giving these people the houses that they're living in at the expense of the rest of us who worked hard, saved to buy a home, and then got slapped in the face the first time by being locked out within the last 10 years. Now this second slap in the face. It's disgusting and wrong on so many levels. Maybe I'll stop making my car payment and just have all of you pay the bill. Why not? While we're at it, I'll go get a free house of my own..
Foreclose on them all.
Posted by Foreclose on these lowlives March 6, 09 09:22 AMThat's a big joke, buyers who were duped. They were stupid, plain and simple - NOT DUPED.
Posted by chris March 6, 09 09:30 AMI wonder what the percentage of 30 year fixed rate mortgages where the buyer put 20% or more down are in foreclosure?
Posted by CambridgeLandlord March 6, 09 09:54 AMI totally trust in Obama but we are experiencing a fundamental breakdown of some major systems. I don't expect one administration or even one term to be able to set this right. We will see many waves of foreclosures, whether there is a bailout or not.
Posted by Rhea March 6, 09 09:58 AMWhen people lose their jobs or are in serious fear of losing their jobs they Do Not Buy Homes. End of Story. We are going through an enormous shift. No longer will people reach or extend themselves for a home. The negative look on renting is going away quickly. Millions of homeowners now wish they were renting (including me). Housing will continue to Free-Fall and in fact pick up steam to the downside for years to come. We are seeing such Wealth Destruction that we will not recover for years in the stock market. Housing will revert back to shelter.
I am a lifelong Democrat and what Obama did since about July is say the economy is terrible and kept scaring people. Now Of course it was and is terrible, but you cant have the president yelling in everyones face of how dire it is. The economy is largely psychological and he has really shaken people along with his terrible leadership to the capital markets and Wall St. People will not nor should they invest if they dont knwo what the rules are. They are making things up as we go. No wonder everyone is in 3 month treasuries yileding barely over .15 of a % point.......
My children who are 6 and 11 and your children are getting royaly screwed over by the leadership of this country.
Posted by Fearful March 6, 09 10:18 AMwe haven't seen anything yet, especially here in Boston, which will go the way of CA...
Posted by Hung Wang March 6, 09 10:44 AMprime mortgages are now starting to see really high default rates - as some of us have been saying all along, calling it a subprime problem was never accurate.
Subprime was more the canary in the coal mine than the cause - the cause was over-leveraging the economy, spending way beyond our means.
Posted by charles March 6, 09 10:55 AMYou said that the second wave of foreclosures is due to people losing their jobs. Then, at the end, you say that the gov lifeline won't help you if you've lost your job.
So, it's like trying to bail water with a dixie cup while the Titanic is sinking.
I don't know, I didn't read all the details about Obama's plan.
Posted by julio March 6, 09 11:50 AMObama, are you listening??!!
Posted by Jeff March 6, 09 12:00 PMI think the hike in foreclosures will now be driven by unemployment. While there is still a significant amount of toxic mortgages out there, the problem is that if households lose their income they may lose their homes. Responsible people that saved, stayed debt free, and have equity are feeling the brunt of the economy on their savings and jobs. The rule of thumb for 6 mos - 12 mos of saving means nothing today. You need 24 mos. Where 401ks may have been a last resort, they are so depleted it is a joke. We are in a downward spiral in housing, but it is way beyond that now.
Posted by Mish March 6, 09 01:25 PMSubprime buyers were not duped into buying houses they could not afford. Other than a potential hit to their credit rating if foreclosure happened, which was probably bad to begin with, they were basically given a call option with maximum upside and zero downside by banks who were then offloading these loans via securitization. Who would not take such an option ?
The tragic thing now is that conservative tax payers, including those who preserved capital by opting out of the housing boom, are seeing their tax dollars subsidize losses by banks and homeowners alike, at the opportunity cost of what these tax dollars could have otherwise be spent on.
Posted by Thien March 6, 09 04:20 PM"Obama, are you listening??!!"
No, unfortunately he's busy having petty arguements with right-wing radio hosts and newspeople. If I didn't hear it, I wouldn't believe it.
Posted by lama March 6, 09 05:13 PMThe overall economic decline is snowballing and it is due to many factors, of which the subprime issue is just one part. People are losing homes now due to loss of their jobs and income, with inability to pay mortgages, but not all these people purchased homes in the past 5 years. Alot of responsible people simply lost their jobs throught no fault of their own. A sinking ship carries everyone down.
Posted by bostonrunner March 6, 09 06:21 PM"I totally trust in Obama ....."
Another sucker who trusts our politicians. The monitary policy is of more importance than the bailout Porkage. Poring money down AIG and Citi rat holes is another great loss to bail out the cronies....
Posted by Dan H March 6, 09 06:48 PMObama does not have the courage or conviction to stand up and actually implement the promises he made to us during the campaign. The first and foremose is earmark reform. He told us that he would veto bills laden with pork, and has already let us down. I voted for this man because I believed in his platform and long for the promise of change.
The very first legislation of substance that he signed was the stimulus bill. This bill contains more pork than anu other bill in our nations history, and the Omnibus spending bill [our regular budget] contains just as much, yet he will sign it anyway. Nancy Pelosi, Harry Reid and Barney "The Big Joke" Frank are running the Government and I think Obama is afraid of them.
This tragedy that is our current Government will do nothing more than be the cause of millions of starving people, massive civil unrest and the transformation of our good republic into a fascist police state.
What a tragedy. I weep for my children.
Posted by Mark A. March 6, 09 07:44 PM"Obama, are you listening". No, he is orating while watching the tennis match.It is becoming apparent that he is more orater than decision maker.
Looks like the foreclosure epidemic is getting its second wind.
The first wave of foreclosures featured homeowners duped into buying homes they couldn’t afford with goofy, subprime loans. Not to mention a whole lot of small-time investors who bought units in hopes of flipping them for big profits, as well as a just outright fraudsters who used straw buyers to create artificial sales.
But much of that first wave of crazy subprime mortgages gone bad has already crashed into the housing market and economy. Now we are starting to see the second wave, regular homeowners who are losing their jobs and their homes due to the economic downturn, of course triggered in part by the subprime fiasco.
Anyway, that is the way some are reading the latest foreclosure stats, with the number of troubled mortgages rising to 7.8 percent of all home loans, the highest since 1972, Bloomberg reports. Loans actually in foreclosure now amount to 3.3 percent of all mortgages in the country, an all-time high.
The Mortgage Bankers Association is pointing to the deepening recession and job losses as a key factor behind the growing number of bad loans.
Let’s just hope President Obama’s $75 billion lifeline to homeowners in trouble works a bit better than the now long list of previous multibillion-dollar rescue plans rolled out by the federal government and several states, including Massachusetts.
Still, even the president’s ambitious effort won’t help you if you’ve lost your job and have no money at all to pay your mortgage.
Comment Permalink Email ShareThis« Back to Front Page Previous Entry Next Entry 16 comments so far...
It's not like it matters, since the government insists on just giving these people the houses that they're living in at the expense of the rest of us who worked hard, saved to buy a home, and then got slapped in the face the first time by being locked out within the last 10 years. Now this second slap in the face. It's disgusting and wrong on so many levels. Maybe I'll stop making my car payment and just have all of you pay the bill. Why not? While we're at it, I'll go get a free house of my own..
Foreclose on them all.
Posted by Foreclose on these lowlives March 6, 09 09:22 AMThat's a big joke, buyers who were duped. They were stupid, plain and simple - NOT DUPED.
Posted by chris March 6, 09 09:30 AMI wonder what the percentage of 30 year fixed rate mortgages where the buyer put 20% or more down are in foreclosure?
Posted by CambridgeLandlord March 6, 09 09:54 AMI totally trust in Obama but we are experiencing a fundamental breakdown of some major systems. I don't expect one administration or even one term to be able to set this right. We will see many waves of foreclosures, whether there is a bailout or not.
Posted by Rhea March 6, 09 09:58 AMWhen people lose their jobs or are in serious fear of losing their jobs they Do Not Buy Homes. End of Story. We are going through an enormous shift. No longer will people reach or extend themselves for a home. The negative look on renting is going away quickly. Millions of homeowners now wish they were renting (including me). Housing will continue to Free-Fall and in fact pick up steam to the downside for years to come. We are seeing such Wealth Destruction that we will not recover for years in the stock market. Housing will revert back to shelter.
I am a lifelong Democrat and what Obama did since about July is say the economy is terrible and kept scaring people. Now Of course it was and is terrible, but you cant have the president yelling in everyones face of how dire it is. The economy is largely psychological and he has really shaken people along with his terrible leadership to the capital markets and Wall St. People will not nor should they invest if they dont knwo what the rules are. They are making things up as we go. No wonder everyone is in 3 month treasuries yileding barely over .15 of a % point.......
My children who are 6 and 11 and your children are getting royaly screwed over by the leadership of this country.
Posted by Fearful March 6, 09 10:18 AMwe haven't seen anything yet, especially here in Boston, which will go the way of CA...
Posted by Hung Wang March 6, 09 10:44 AMprime mortgages are now starting to see really high default rates - as some of us have been saying all along, calling it a subprime problem was never accurate.
Subprime was more the canary in the coal mine than the cause - the cause was over-leveraging the economy, spending way beyond our means.
Posted by charles March 6, 09 10:55 AMYou said that the second wave of foreclosures is due to people losing their jobs. Then, at the end, you say that the gov lifeline won't help you if you've lost your job.
So, it's like trying to bail water with a dixie cup while the Titanic is sinking.
I don't know, I didn't read all the details about Obama's plan.
Posted by julio March 6, 09 11:50 AMObama, are you listening??!!
Posted by Jeff March 6, 09 12:00 PMI think the hike in foreclosures will now be driven by unemployment. While there is still a significant amount of toxic mortgages out there, the problem is that if households lose their income they may lose their homes. Responsible people that saved, stayed debt free, and have equity are feeling the brunt of the economy on their savings and jobs. The rule of thumb for 6 mos - 12 mos of saving means nothing today. You need 24 mos. Where 401ks may have been a last resort, they are so depleted it is a joke. We are in a downward spiral in housing, but it is way beyond that now.
Posted by Mish March 6, 09 01:25 PMSubprime buyers were not duped into buying houses they could not afford. Other than a potential hit to their credit rating if foreclosure happened, which was probably bad to begin with, they were basically given a call option with maximum upside and zero downside by banks who were then offloading these loans via securitization. Who would not take such an option ?
The tragic thing now is that conservative tax payers, including those who preserved capital by opting out of the housing boom, are seeing their tax dollars subsidize losses by banks and homeowners alike, at the opportunity cost of what these tax dollars could have otherwise be spent on.
Posted by Thien March 6, 09 04:20 PM"Obama, are you listening??!!"
No, unfortunately he's busy having petty arguements with right-wing radio hosts and newspeople. If I didn't hear it, I wouldn't believe it.
Posted by lama March 6, 09 05:13 PMThe overall economic decline is snowballing and it is due to many factors, of which the subprime issue is just one part. People are losing homes now due to loss of their jobs and income, with inability to pay mortgages, but not all these people purchased homes in the past 5 years. Alot of responsible people simply lost their jobs throught no fault of their own. A sinking ship carries everyone down.
Posted by bostonrunner March 6, 09 06:21 PM"I totally trust in Obama ....."
Another sucker who trusts our politicians. The monitary policy is of more importance than the bailout Porkage. Poring money down AIG and Citi rat holes is another great loss to bail out the cronies....
Posted by Dan H March 6, 09 06:48 PMObama does not have the courage or conviction to stand up and actually implement the promises he made to us during the campaign. The first and foremose is earmark reform. He told us that he would veto bills laden with pork, and has already let us down. I voted for this man because I believed in his platform and long for the promise of change.
The very first legislation of substance that he signed was the stimulus bill. This bill contains more pork than anu other bill in our nations history, and the Omnibus spending bill [our regular budget] contains just as much, yet he will sign it anyway. Nancy Pelosi, Harry Reid and Barney "The Big Joke" Frank are running the Government and I think Obama is afraid of them.
This tragedy that is our current Government will do nothing more than be the cause of millions of starving people, massive civil unrest and the transformation of our good republic into a fascist police state.
What a tragedy. I weep for my children.
Posted by Mark A. March 6, 09 07:44 PM"Obama, are you listening". No, he is orating while watching the tennis match.It is becoming apparent that he is more orater than decision maker.
DEPRESSION OR ARE WE DEPRESSED?
The comparison to the 1920's and today are everywhere and since my profession is real estate I tend to hear this alot.
Banks are going under, Americans are waiting in lines for jobs and it really is bleak . All of this depression talk is causing folks to be depressed...clinically I mean !
Stock of the drugs company's making these anti depressant look good now. (this may be a good time to buy stock in Merck,Pfiser and who ever else provides these pills). Remember penny stocks?
In the 20's people were forced to live with their relatives...without reality tv,videos,computers,cell phones,appliances and cars. That is NOT likely to happen again ... there are just some things that Americans wont do.
People grew there own food-now this is a good idea ! However we may not have houses with yards or even houses (there was no mortgage sub prime meltdown in the 20's). So a trip to the grocery store is more feasible.
In the 20's simple pleasures were canning jams ,playing the guitar on the porch,and reading the good book.
Church and god are popular again (for some of us it always was) but in 2009 we want to connect to a power greater than our selves and praying just seems right now.When all else fails...PRAY.
We may not be jumping out of windows but the call of nature (beach,lakes,parks and playgrounds) are are simple pleasures again.
Back to the depression issue..we live on drugs to keep us healthy,drugs to keep us slim,drugs to help with pain ,drugs to make us lose weight but yes the real difference between depression then and depression now is a visit to your local pharmacy...
Banks are going under, Americans are waiting in lines for jobs and it really is bleak . All of this depression talk is causing folks to be depressed...clinically I mean !
Stock of the drugs company's making these anti depressant look good now. (this may be a good time to buy stock in Merck,Pfiser and who ever else provides these pills). Remember penny stocks?
In the 20's people were forced to live with their relatives...without reality tv,videos,computers,cell phones,appliances and cars. That is NOT likely to happen again ... there are just some things that Americans wont do.
People grew there own food-now this is a good idea ! However we may not have houses with yards or even houses (there was no mortgage sub prime meltdown in the 20's). So a trip to the grocery store is more feasible.
In the 20's simple pleasures were canning jams ,playing the guitar on the porch,and reading the good book.
Church and god are popular again (for some of us it always was) but in 2009 we want to connect to a power greater than our selves and praying just seems right now.When all else fails...PRAY.
We may not be jumping out of windows but the call of nature (beach,lakes,parks and playgrounds) are are simple pleasures again.
Back to the depression issue..we live on drugs to keep us healthy,drugs to keep us slim,drugs to help with pain ,drugs to make us lose weight but yes the real difference between depression then and depression now is a visit to your local pharmacy...
Monday, February 23, 2009
HERE COMES THE CLASS ACTIONS !
Home owners file class action against Wachovia over option ARMs
2/19/2009 12:54 PM
By Kelly Holleran
A class action lawsuit has been filed against three financial corporations, including banking giant Wachovia, alleging Illinois homebuyers were forced into negative amortization after the banks deceived them when they issued option adjustable rate mortgages.
Lead class plaintiffs Michael and Jayme Brunkhorst claim the lenders and brokers that sold them an option ARM mortgage on Aug. 18, 2005, touted the minimum payment and downplayed or failed to disclose the negative amortization that could result from making such payments, according to the suit filed Feb. 17 in U.S. District Court.
In option ARM mortgages, borrowers can choose to make mortgage payments one of four ways - to make a minimum payment amount, an interest-only payment, a payment based on a 30-year amortization or a payment based on a 15-year amortization.
The Brunkhorsts chose to pay the minimum monthly payment, believing it would pay both principal and interest due on the loan.
Up to 80 percent of borrowers, like the Brunkhorsts, make only the minimum payment each month, the suit claims. However, the minimum payment does not pay off any of the principal balance and only pays a portion of the interest that accrues on a monthly basis.
The unpaid interest is added to the balance of the mortgage, resulting in negative amortization.
Once that negative balance reaches 125 percent of the original loan, the mortgage is reset and the homeowners are forced to pay a much higher monthly payment than what they had been previously making.
As a result, borrowers are also forced to pay a greater interest rate on the original principal than what was originally set forth in the loan, according to the complaint.
"Option ARM loans have been called 'the riskiest and most complicated home loan product ever created' and have been termed a 'neutron bomb' that will kill all the people but leave the houses standing' by an economist at the Ford Foundation," the suit states.
However, when the Brunkhorsts entered into the pick-a-payment loans, they were not informed of the various risks, including negative amortization and the fact that the minimum payment did not represent the full cost of the loan, they claim.
"Defendants, through the standardized loan contracts they created and supplied to Plaintiffs, stated that negative amortization was only a mere possibility," the suit states. "Defendants also failed to inform the Plaintiffs and the Class Members that when the principal balance increased to a certain level they could no longer select the minimum payment option."
Lenders frequently try to push the ARM loans on borrowers because the loans are profitable to companies, the Brunkhorsts claim.
"Under generally accepted accounting principles the entire interest payment due could be booked as income even when only the minimum payment was made," the suit states. "This accounting practice enabled lendors to use Option ARM loans as a means to generate phantom profits, thereby boosting their stock price."
Because the Brunkhorsts and other class plaintiffs decided to use the Option ARM loans, they are forced to incur additional interest charges that have resulted from negative amortization, they claim.
In addition, they faced an increased chance of losing their homes through foreclosure and have limited ability to make future house payments or obtain alternative home loan financing, according to the complaint.
The Brunkhorsts and the putative class are seeking unspecified declaratory relief, compensatory damages, rescission, restitutionary disgorgement of all profits the banks obtained, plus costs, interest, attorneys' fees and other relief the court deems just.
They are also asking the court grant equitable relief to restructure their loans through rate buy downs, principal reduction and conversion into conventional fixed rate loans.
They are represented by Evan D. Buxner of The Buxner Law Firm in St. Louis. Daniel O. Myers, A Hoyt Rowell, III, Robert S. Wood and Catherine H. McElveen of Richardson Patrick, Westbrook and Brickman in Mt. Pleasant, S.C., will serve of counsel.
U.S. District Court case number: 09-129-GPM
2/19/2009 12:54 PM
By Kelly Holleran
A class action lawsuit has been filed against three financial corporations, including banking giant Wachovia, alleging Illinois homebuyers were forced into negative amortization after the banks deceived them when they issued option adjustable rate mortgages.
Lead class plaintiffs Michael and Jayme Brunkhorst claim the lenders and brokers that sold them an option ARM mortgage on Aug. 18, 2005, touted the minimum payment and downplayed or failed to disclose the negative amortization that could result from making such payments, according to the suit filed Feb. 17 in U.S. District Court.
In option ARM mortgages, borrowers can choose to make mortgage payments one of four ways - to make a minimum payment amount, an interest-only payment, a payment based on a 30-year amortization or a payment based on a 15-year amortization.
The Brunkhorsts chose to pay the minimum monthly payment, believing it would pay both principal and interest due on the loan.
Up to 80 percent of borrowers, like the Brunkhorsts, make only the minimum payment each month, the suit claims. However, the minimum payment does not pay off any of the principal balance and only pays a portion of the interest that accrues on a monthly basis.
The unpaid interest is added to the balance of the mortgage, resulting in negative amortization.
Once that negative balance reaches 125 percent of the original loan, the mortgage is reset and the homeowners are forced to pay a much higher monthly payment than what they had been previously making.
As a result, borrowers are also forced to pay a greater interest rate on the original principal than what was originally set forth in the loan, according to the complaint.
"Option ARM loans have been called 'the riskiest and most complicated home loan product ever created' and have been termed a 'neutron bomb' that will kill all the people but leave the houses standing' by an economist at the Ford Foundation," the suit states.
However, when the Brunkhorsts entered into the pick-a-payment loans, they were not informed of the various risks, including negative amortization and the fact that the minimum payment did not represent the full cost of the loan, they claim.
"Defendants, through the standardized loan contracts they created and supplied to Plaintiffs, stated that negative amortization was only a mere possibility," the suit states. "Defendants also failed to inform the Plaintiffs and the Class Members that when the principal balance increased to a certain level they could no longer select the minimum payment option."
Lenders frequently try to push the ARM loans on borrowers because the loans are profitable to companies, the Brunkhorsts claim.
"Under generally accepted accounting principles the entire interest payment due could be booked as income even when only the minimum payment was made," the suit states. "This accounting practice enabled lendors to use Option ARM loans as a means to generate phantom profits, thereby boosting their stock price."
Because the Brunkhorsts and other class plaintiffs decided to use the Option ARM loans, they are forced to incur additional interest charges that have resulted from negative amortization, they claim.
In addition, they faced an increased chance of losing their homes through foreclosure and have limited ability to make future house payments or obtain alternative home loan financing, according to the complaint.
The Brunkhorsts and the putative class are seeking unspecified declaratory relief, compensatory damages, rescission, restitutionary disgorgement of all profits the banks obtained, plus costs, interest, attorneys' fees and other relief the court deems just.
They are also asking the court grant equitable relief to restructure their loans through rate buy downs, principal reduction and conversion into conventional fixed rate loans.
They are represented by Evan D. Buxner of The Buxner Law Firm in St. Louis. Daniel O. Myers, A Hoyt Rowell, III, Robert S. Wood and Catherine H. McElveen of Richardson Patrick, Westbrook and Brickman in Mt. Pleasant, S.C., will serve of counsel.
U.S. District Court case number: 09-129-GPM
APRILS HITS THE BIG APPLE
Traveling Foreclosure Defense Seminar Featuring Florida Legal Aid Attorney To Make "Broadway Debut" Next Month
The New York Post recently ran a story on Florida foreclosure defense attorney April Charney from Jacksonville Area Legal Aid, who is traveling the country spreading the word on a well publicized strategy(1) for hammering lenders and servicers in foreclosure actions.
[C]harney has held seminars in Ohio, Oregon, South Carolina and throughout Florida to educate lawyers on how to implement the courtroom defense. [...] She is scheduled to [...] hold her first New York seminar next month.
For the story, see THE LOAN RANGER (Lawyer Outwits Banks In Foreclosure Battles).
Go here for a diagram of the complicated, convoluted mortgage securitization process that is now making it difficult for foreclosing entities to prove they actually own the promissory notes.
(1) According to the story, she asserts that the loan servicers bringing most of the foreclosure actions in the country don't own the mortgages and have no standing to take away a person's home. The strategy has spread virally around the country and now thousands of foreclosure lawsuits are sitting idly - in legal limbo. "I have one case from 2004 where the bank has not returned to court and where my client now has deposited more money into a trust account than the house is worth," Charney noted. The legal issue is that banks turn the mortgages into bonds, which are put into trusts, like collateralized debt obligations, or CDOs. The bank "sells" the CDOs the right to collect the revenue stream but, according to Charney, not the right of ownership of the loan/promissory note itself. ThetaMissingDocsMtg
The New York Post recently ran a story on Florida foreclosure defense attorney April Charney from Jacksonville Area Legal Aid, who is traveling the country spreading the word on a well publicized strategy(1) for hammering lenders and servicers in foreclosure actions.
[C]harney has held seminars in Ohio, Oregon, South Carolina and throughout Florida to educate lawyers on how to implement the courtroom defense. [...] She is scheduled to [...] hold her first New York seminar next month.
For the story, see THE LOAN RANGER (Lawyer Outwits Banks In Foreclosure Battles).
Go here for a diagram of the complicated, convoluted mortgage securitization process that is now making it difficult for foreclosing entities to prove they actually own the promissory notes.
(1) According to the story, she asserts that the loan servicers bringing most of the foreclosure actions in the country don't own the mortgages and have no standing to take away a person's home. The strategy has spread virally around the country and now thousands of foreclosure lawsuits are sitting idly - in legal limbo. "I have one case from 2004 where the bank has not returned to court and where my client now has deposited more money into a trust account than the house is worth," Charney noted. The legal issue is that banks turn the mortgages into bonds, which are put into trusts, like collateralized debt obligations, or CDOs. The bank "sells" the CDOs the right to collect the revenue stream but, according to Charney, not the right of ownership of the loan/promissory note itself. ThetaMissingDocsMtg
Wednesday, February 18, 2009
FDICIA =HELP
Could little-known banking law fix this mess?
A former director of the Atlanta Fed’s research department says troubled banks should be taken over under a law that dates back to the S&L crisis
By Ronald Fink
February 16, 2009 12:01 AM ET
(Bloomberg) While the Treasury busily fills in the gaps in its latest plan to save the banking industry, a former Federal Reserve official says that regulators should instead apply a law enacted in the wake of the savings and loan meltdown.
The law, the Federal Deposit Insurance Corporation Improvement Act, was signed into law in 1991. In an interview with Financial Week, Bob Eisenbeis, a former research director of the Federal Reserve Bank of Atlanta, said the FDICIA contains more than enough tools for regulators to help stem the current financial crisis.
If regulators had applied FDICIA’s provisions once the solvency of major banks was first called into question, Mr. Eisenbeis said, many would already have been taken over by Uncle Sam.
That would mean that their good assets would have been separated from their bad and sold off to healthy institutions or other investors.
This, he claims, would have gone a long way toward solving the credit crisis.
The most obvious candidate for such a takeover is Citigroup, which is considered by many analysts to be insolvent because its liabilities are worth vastly more than its assets.
Christopher Whalen, principal in the financial consulting firm Institutional Risk Analytics, estimated on Friday that Citi needs roughly $200 billion in additional capital, and that this would become apparent after the bank reports further losses in the first quarter of this year.
“When the Q1 numbers for the financials come out, the children’s hour in DC will end,” Mr. Whalen wrote in a note posted on the blog, The Big Picture. “The markets will react and Washington will finally be forced to have an adult conversation with the global community as to how much we haircut the bondholders.”
Mr. Eisenbeis insists that such a haircut should already have been provided, as FDICIA stipulates that the federal banking agencies “facilitate early resolution of troubled insured depository institutions whenever feasible if early resolution would have the least possible long-term cost to the deposit insurance fund.”
Instead, said Mr. Eisenbeis, the Treasury’s new Financial Stability Plan further delays such resolution.
A spokesman for the Treasury Department did not respond to a request for comment.
The Treasury’s Financial Stability Plan does call for all banks with at least $100 billion in assets to undergo a stress test to determine whether they have enough capital. The New York Times on Thursday reported that regulators have begun applying those tests, and are assuming a worse-case scenario to evaluate whether the banks’ common equity was equal to less that 3% of their assets.
If the equity does not meet that minimum threshold, the banks would have to raise more capital from investors. Barring that, they could take convertible preferred shares from the Treasury under the Capital Assistance Program of the FSP.
That program has onerous limits on recipients’ dividends, stock buybacks, acquisitions and executive compensation, however, which has led some observers to liken the program to a plan for gradual nationalization of troubled banks.
But Mr. Eisenbeis, for one, is skeptical that the Treasury’s stress test will lead to that, since the plan also provides for up to $1 trillion in financing from the Federal Reserve to help take bad assets off of banks’ balance sheets through a so-called “public/private partnership.” Essentially, the partnership is an investment fund that would warehouse the bad assets until they can be sold off to investors.
In theory, the offloading might remove enough assets from a banks’ balance sheet that it would qualify as sound under the Treasury’s stress test.
Without government help, Mr. Eisenbeis doubts many of the banks in question could meet any of FDICIA’s capital adequacy tests. “I don’t think they could pass even a modest shock,” he said.
Indeed, he said the Treasury’s approach suggests regulators have forgotten that the earlier law is in place, since the capital injections the department has provided since the Troubled Asset Relief Program was authorized by Congress last October reflect what Mr. Eisenbeis calls “regulatory forbearance.” Rather than apply FDICIA’s numerous capital adequacy tests, he said, regulators seem intent “to throw it out and start over.”
While that may buy the banks time in hopes that they won’t need further capital injections, Mr. Eisenbeis is skeptical. He said both the stress test and the plan to relieve banks of their toxic assets would only mask their losses—that is, if the banks aren’t required to value the assets on a mark-to-market basis.
Bank executives insist that they shouldn’t have to do that, because the banks intend to hold the assets until maturity rather than trade them. And some analysts suggest that skeptics such as Messrs Eisenbeis and Whalen are overstating the industry’s problems.
After the Times report, analyst Richard Bove of Ladenburg Thalmann issued a research note saying that all of the 18 banks subject to the Treasury’s stress test would have common equity of at least 3% of assets (based on values reported as of last Dec. 31). But Mr. Eisenbeis insists such a view flies in the face of FDICIA’s capital adequacy requirements.
“The flaw is that it’s all based on book value,” he said. Indeed, he contends that the failure of regulators to force banks to write down their losses based on actual market conditions—and then deal with the consequences—has merely delayed the solution to the financial crisis.
Mr. Eisenbeis isn’t alone. In a research note put out late last week, analysts at research firm, Friedman, Billings, Ramsey & Co. said the Treasury’s plan “does not adequately address the toxic assets on bank balance sheets,” since private investors in the proposed investment fund “will want to buy assets at distressed prices and the banks will only sell assets at above-market prices.”
The analysts, Paul Miller, Bob Ramsey and Annett Franke, echoed Mr. Eisenbeis’ preference for the government to take over troubled banks and restructure them.
“We would prefer to see the government take bold steps now, either putting the much-needed capital into financials or providing a closed-bank solution, in which the government briefly takes over the weakest financials (regardless of size), strips out the bad assets, and sells the good back to public markets.”
Nationalization? FDICIA stipulates that when the government bails out troubled institutions “preexisting owners and debt-holders of any troubled institution or its holding company should make substantial concessions,” and that “directors and senior management should not include individuals substantially responsible for the troubled institution’s problems.”
Until such an approach is taken, Mr. Eisenbeis fears regulatory policy will just go in circles, and that insolvent banks will keep getting taxpayer support but won’t return to health.
He noted that Mr. Geithner’s proposed new investment fund isn’t much different from the Master Liquidity Enhancement Conduit that his predecessor, Henry Paulson, proposed back in the fall of 2007. At the time, Citi’s problems with assets taken off its balance sheet through so-called Structured Investment Vehicles were first coming to light. Mr. Paulson’s Super SIV was abandoned within a few weeks of its debut because it failed to attract enough investors.
“We’re back to Paulson’s Super SIV reincarnated—with no specifics.”
Write to Ronald Fink at rfink@financialweek.com. Or write to the editors at fw_editor@financialweek.com.
A former director of the Atlanta Fed’s research department says troubled banks should be taken over under a law that dates back to the S&L crisis
By Ronald Fink
February 16, 2009 12:01 AM ET
(Bloomberg) While the Treasury busily fills in the gaps in its latest plan to save the banking industry, a former Federal Reserve official says that regulators should instead apply a law enacted in the wake of the savings and loan meltdown.
The law, the Federal Deposit Insurance Corporation Improvement Act, was signed into law in 1991. In an interview with Financial Week, Bob Eisenbeis, a former research director of the Federal Reserve Bank of Atlanta, said the FDICIA contains more than enough tools for regulators to help stem the current financial crisis.
If regulators had applied FDICIA’s provisions once the solvency of major banks was first called into question, Mr. Eisenbeis said, many would already have been taken over by Uncle Sam.
That would mean that their good assets would have been separated from their bad and sold off to healthy institutions or other investors.
This, he claims, would have gone a long way toward solving the credit crisis.
The most obvious candidate for such a takeover is Citigroup, which is considered by many analysts to be insolvent because its liabilities are worth vastly more than its assets.
Christopher Whalen, principal in the financial consulting firm Institutional Risk Analytics, estimated on Friday that Citi needs roughly $200 billion in additional capital, and that this would become apparent after the bank reports further losses in the first quarter of this year.
“When the Q1 numbers for the financials come out, the children’s hour in DC will end,” Mr. Whalen wrote in a note posted on the blog, The Big Picture. “The markets will react and Washington will finally be forced to have an adult conversation with the global community as to how much we haircut the bondholders.”
Mr. Eisenbeis insists that such a haircut should already have been provided, as FDICIA stipulates that the federal banking agencies “facilitate early resolution of troubled insured depository institutions whenever feasible if early resolution would have the least possible long-term cost to the deposit insurance fund.”
Instead, said Mr. Eisenbeis, the Treasury’s new Financial Stability Plan further delays such resolution.
A spokesman for the Treasury Department did not respond to a request for comment.
The Treasury’s Financial Stability Plan does call for all banks with at least $100 billion in assets to undergo a stress test to determine whether they have enough capital. The New York Times on Thursday reported that regulators have begun applying those tests, and are assuming a worse-case scenario to evaluate whether the banks’ common equity was equal to less that 3% of their assets.
If the equity does not meet that minimum threshold, the banks would have to raise more capital from investors. Barring that, they could take convertible preferred shares from the Treasury under the Capital Assistance Program of the FSP.
That program has onerous limits on recipients’ dividends, stock buybacks, acquisitions and executive compensation, however, which has led some observers to liken the program to a plan for gradual nationalization of troubled banks.
But Mr. Eisenbeis, for one, is skeptical that the Treasury’s stress test will lead to that, since the plan also provides for up to $1 trillion in financing from the Federal Reserve to help take bad assets off of banks’ balance sheets through a so-called “public/private partnership.” Essentially, the partnership is an investment fund that would warehouse the bad assets until they can be sold off to investors.
In theory, the offloading might remove enough assets from a banks’ balance sheet that it would qualify as sound under the Treasury’s stress test.
Without government help, Mr. Eisenbeis doubts many of the banks in question could meet any of FDICIA’s capital adequacy tests. “I don’t think they could pass even a modest shock,” he said.
Indeed, he said the Treasury’s approach suggests regulators have forgotten that the earlier law is in place, since the capital injections the department has provided since the Troubled Asset Relief Program was authorized by Congress last October reflect what Mr. Eisenbeis calls “regulatory forbearance.” Rather than apply FDICIA’s numerous capital adequacy tests, he said, regulators seem intent “to throw it out and start over.”
While that may buy the banks time in hopes that they won’t need further capital injections, Mr. Eisenbeis is skeptical. He said both the stress test and the plan to relieve banks of their toxic assets would only mask their losses—that is, if the banks aren’t required to value the assets on a mark-to-market basis.
Bank executives insist that they shouldn’t have to do that, because the banks intend to hold the assets until maturity rather than trade them. And some analysts suggest that skeptics such as Messrs Eisenbeis and Whalen are overstating the industry’s problems.
After the Times report, analyst Richard Bove of Ladenburg Thalmann issued a research note saying that all of the 18 banks subject to the Treasury’s stress test would have common equity of at least 3% of assets (based on values reported as of last Dec. 31). But Mr. Eisenbeis insists such a view flies in the face of FDICIA’s capital adequacy requirements.
“The flaw is that it’s all based on book value,” he said. Indeed, he contends that the failure of regulators to force banks to write down their losses based on actual market conditions—and then deal with the consequences—has merely delayed the solution to the financial crisis.
Mr. Eisenbeis isn’t alone. In a research note put out late last week, analysts at research firm, Friedman, Billings, Ramsey & Co. said the Treasury’s plan “does not adequately address the toxic assets on bank balance sheets,” since private investors in the proposed investment fund “will want to buy assets at distressed prices and the banks will only sell assets at above-market prices.”
The analysts, Paul Miller, Bob Ramsey and Annett Franke, echoed Mr. Eisenbeis’ preference for the government to take over troubled banks and restructure them.
“We would prefer to see the government take bold steps now, either putting the much-needed capital into financials or providing a closed-bank solution, in which the government briefly takes over the weakest financials (regardless of size), strips out the bad assets, and sells the good back to public markets.”
Nationalization? FDICIA stipulates that when the government bails out troubled institutions “preexisting owners and debt-holders of any troubled institution or its holding company should make substantial concessions,” and that “directors and senior management should not include individuals substantially responsible for the troubled institution’s problems.”
Until such an approach is taken, Mr. Eisenbeis fears regulatory policy will just go in circles, and that insolvent banks will keep getting taxpayer support but won’t return to health.
He noted that Mr. Geithner’s proposed new investment fund isn’t much different from the Master Liquidity Enhancement Conduit that his predecessor, Henry Paulson, proposed back in the fall of 2007. At the time, Citi’s problems with assets taken off its balance sheet through so-called Structured Investment Vehicles were first coming to light. Mr. Paulson’s Super SIV was abandoned within a few weeks of its debut because it failed to attract enough investors.
“We’re back to Paulson’s Super SIV reincarnated—with no specifics.”
Write to Ronald Fink at rfink@financialweek.com. Or write to the editors at fw_editor@financialweek.com.
GOT THE NOTE?
Homeowners’ rallying cry: Produce the note
ZEPHYRHILLS, Fla. – Feb.18, 2009 – Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.
And just like that, the foreclosure proceedings came to a standstill.
Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.
During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.
Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.
“I’m going to hang on for dear life until they can prove to me it belongs to them,” said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. “I’ll try everything I can because it’s all I have left.”
In interviews with The Associated Press, lawyers, homeowners and advocates outlined the produce-the-note strategy. Exactly how many homeowners have employed it is unknown. Nor is it clear how successful it has been; some judges are more sympathetic than others.
More than 2.3 million homeowners faced foreclosure proceedings last year and millions more are in danger of losing their homes. On Wednesday, President Obama will unveil a plan to spend at least $50 billion to help homeowners fend off foreclosure.
Chris Hoyer, a Tampa lawyer whose Consumer Warning Network Web site offers the free court documents Lovelace used to file her request, has played a major role in promoting the produce-the-note strategy.
“We knew early on that the only relief that would ever come to people would be to the people who were in their houses,” Hoyer said. “Nobody was going to fashion any relief for people who have already lost their houses. So your only hope was to hang on any way you could.”
Tom Deutsch, deputy executive director of the American Securitization Forum, a group that represents banks, law firms and investors, dismissed the strategy as merely a stalling tactic, saying homeowners are “making lawyers jump through procedural hoops to delay what’s likely to be inevitable.”
Deutsch said the original note is almost always electronically retained and can eventually be found.
Judges are often willing to accept electronic documentation. And lenders are sometimes allowed to produce other paperwork to establish they are the holder of a loan. Still, assembling such documents to a judge’s satisfaction takes time, which to homeowners is the point.
Lovelace filed her produce-the-note demand last fall after the bank acknowledged that her original mortgage document had been lost or destroyed. Since then, there has been no activity on the foreclosure - no letters from the lender, no court filings.
The law firm handling the foreclosure for the lender refused to comment.
A University of Iowa study last year suggested that companies servicing mortgages are often negligent when it comes to producing the documentation to support foreclosure. In the study of more than 1,700 bankruptcy cases stemming from home foreclosures, the original note was missing more than 40 percent of the time, and other pieces of required documentation also were routinely left out.
The first big success of the produce-the-note movement came in 2007 when a federal judge in Cleveland threw out 14 foreclosures by Deutsche Bank National Trust Co. because the bank failed to produce the original notes.
Michael Silver, a lawyer for two of the families in that case, said at least one eventually lost their home. Still, he considers that a success.
“From the perspective of the person who’s in the home, you may have kept them in the house another 10 or 12 months,” he said. “If I can get a result with economic benefits to a client, then I think I won.”
Democratic Rep. Marcy Kaptur of Ohio endorsed the strategy in a fiery speech on the House floor during debate on the federal bank bailout last month.
“Don’t leave your home,” she said. “Because you know what? When those companies say they have your mortgage, unless you have a lawyer that can put his or her finger on that mortgage, you don’t have that mortgage, and you are going to find they can’t find the paper up there on Wall Street.”
April Charney, head of foreclosure defense for Jacksonville Area Legal Aid in Florida, said the strategy has been so successful for her that she now travels around the country to train other lawyers in how to use it. She said she has gotten cases delayed for years by demanding that lenders produce paperwork they cannot find.
“This is an army of lawyers getting out there to stop foreclosures so we can get to the serious business of creating solutions,” Charney said. “Nothing good is going to happen as long as we continue to bleed homeowners.”
ZEPHYRHILLS, Fla. – Feb.18, 2009 – Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.
And just like that, the foreclosure proceedings came to a standstill.
Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.
During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.
Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.
“I’m going to hang on for dear life until they can prove to me it belongs to them,” said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. “I’ll try everything I can because it’s all I have left.”
In interviews with The Associated Press, lawyers, homeowners and advocates outlined the produce-the-note strategy. Exactly how many homeowners have employed it is unknown. Nor is it clear how successful it has been; some judges are more sympathetic than others.
More than 2.3 million homeowners faced foreclosure proceedings last year and millions more are in danger of losing their homes. On Wednesday, President Obama will unveil a plan to spend at least $50 billion to help homeowners fend off foreclosure.
Chris Hoyer, a Tampa lawyer whose Consumer Warning Network Web site offers the free court documents Lovelace used to file her request, has played a major role in promoting the produce-the-note strategy.
“We knew early on that the only relief that would ever come to people would be to the people who were in their houses,” Hoyer said. “Nobody was going to fashion any relief for people who have already lost their houses. So your only hope was to hang on any way you could.”
Tom Deutsch, deputy executive director of the American Securitization Forum, a group that represents banks, law firms and investors, dismissed the strategy as merely a stalling tactic, saying homeowners are “making lawyers jump through procedural hoops to delay what’s likely to be inevitable.”
Deutsch said the original note is almost always electronically retained and can eventually be found.
Judges are often willing to accept electronic documentation. And lenders are sometimes allowed to produce other paperwork to establish they are the holder of a loan. Still, assembling such documents to a judge’s satisfaction takes time, which to homeowners is the point.
Lovelace filed her produce-the-note demand last fall after the bank acknowledged that her original mortgage document had been lost or destroyed. Since then, there has been no activity on the foreclosure - no letters from the lender, no court filings.
The law firm handling the foreclosure for the lender refused to comment.
A University of Iowa study last year suggested that companies servicing mortgages are often negligent when it comes to producing the documentation to support foreclosure. In the study of more than 1,700 bankruptcy cases stemming from home foreclosures, the original note was missing more than 40 percent of the time, and other pieces of required documentation also were routinely left out.
The first big success of the produce-the-note movement came in 2007 when a federal judge in Cleveland threw out 14 foreclosures by Deutsche Bank National Trust Co. because the bank failed to produce the original notes.
Michael Silver, a lawyer for two of the families in that case, said at least one eventually lost their home. Still, he considers that a success.
“From the perspective of the person who’s in the home, you may have kept them in the house another 10 or 12 months,” he said. “If I can get a result with economic benefits to a client, then I think I won.”
Democratic Rep. Marcy Kaptur of Ohio endorsed the strategy in a fiery speech on the House floor during debate on the federal bank bailout last month.
“Don’t leave your home,” she said. “Because you know what? When those companies say they have your mortgage, unless you have a lawyer that can put his or her finger on that mortgage, you don’t have that mortgage, and you are going to find they can’t find the paper up there on Wall Street.”
April Charney, head of foreclosure defense for Jacksonville Area Legal Aid in Florida, said the strategy has been so successful for her that she now travels around the country to train other lawyers in how to use it. She said she has gotten cases delayed for years by demanding that lenders produce paperwork they cannot find.
“This is an army of lawyers getting out there to stop foreclosures so we can get to the serious business of creating solutions,” Charney said. “Nothing good is going to happen as long as we continue to bleed homeowners.”
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