Both completed foreclosures and the number of San Diego property owners who started the foreclosure process increased in January from the end of 2011, but those numbers are down compared to figures from a year ago, real estate tracker DataQuick reported Tuesday.
San Diego County recorded 726 foreclosures in January, up 2.3 percent from December but down 24.3 percent from January 2011, the latest numbers show. The county's peak was 2,004 in July 2008.
The movement of foreclosures, which depend on the banks, have long been erratic. But by analyzing the average number of foreclosures in certain time increments, it appears that foreclosures may be easing. (Please refer to the first table.)
The same thing may be happening with notices of defaults, the document that signals the start of a foreclosure. (Please refer to the second table.)
There were 1,407 default filings in January, up 13 percent from December but down 9.1 percent from January 2011. The county is about 63 percent below its default-notice peak of 3,832 in March 2009.
DataQuick analyst Andrew LePage said the short- to mid-term view of the distressed market in San Diego is "cloudy."
The long-term picture, however, "continues to brighten slowly" alongside slight job growth and fewer mortgage delinquencies.
Another new factor in the world of foreclosures is a recently announced settlement involving 49 state attorneys general and the country's Top 5 banks over questionable foreclosure practices, LePage added.
The $25 billion mortgage settlement, which still needs judge approval, could help about 466,000 Californians by reducing principal balances, refinancing mortgages and offering restitution in cash.
This blog is updated by the San Diego Bankruptcy Law Firm. The blog is designed to illuminate, update and educate consumers about their bankruptcy rights. Our staff of Bankruptcy Attorneys help consumers file for bankruptcy protection under Chapter 7 and 13 of the Bankruptcy Code. Feel free to contact our Bankruptcy Lawyers for a free consultation at 619-260-1800 or visit us at www.gobksandiego.com
Showing posts with label San Diego Bankrupty Law Firm. Show all posts
Showing posts with label San Diego Bankrupty Law Firm. Show all posts
Wednesday, February 29, 2012
Tuesday, November 15, 2011
San Diego Bankruptcy Law Firm to Offer Free Bankruptcy Services to San Diego Veterans.
Link: http://news.yahoo.com/san-diego-bankruptcy-law-firm-offer-free-bankruptcy-160845474.html
San Diego Bankruptcy Law Firm to Offer Free Bankruptcy Services to San Diego Veterans.
PRWeb – Wed, Nov 9, 2011...
San Diego Bankruptcy Law Firm is proud to announce that it has agreed to offer free bankruptcy services to San Diego veterans by partnering with Thomas Jefferson School of Law Veterans Legal Assistance Clinic.
San Diego, CA (PRWEB) November 09, 2011
San Diego Bankruptcy Law Firm, located in Mission Valley, is proud to announce that it has agreed to offer bankruptcy services to San Diego Veterans free of charge. San Diego Bankruptcy Law Firm has partnered with Thomas Jefferson School of Law Veterans Legal Assistance Clinic. The Veterans Clinic will pre-screen eligible veterans and refer those who qualify to San Diego Bankruptcy Law Firm.
San Diego Bankruptcy Law Firm was founded by Thomas Jefferson School of Law alumni Todd F. Williams and Scott M. Schlegel and is managed by Maureen A. Enmark. “We were looking for a way to give back to our community and veterans have been particularly affected by the downturn in the economy. This is our way of saying thank you for their service,” says bankruptcy attorney -Todd Williams.
The Veterans Clinic provides limited legal assistance, as well as full service legal representation, to the residents and alumni of Veterans Village of San Diego. Thomas Jefferson School of Law students represent the veterans under supervision of the law school faculty. Veterans Village is a highly successful, residential program that provides housing, substance abuse, mental health, and job training services to formerly homeless veterans.
Bankruptcy can help veterans by stopping foreclosure, eliminating debt and protecting assets. “Sometimes filing bankruptcy is all it takes to provide a little breathing room that will help veterans get back on track,” says bankrupcy lawyer -Scott Schlegel.
The Veterans Clinic will pre-screen potential candidates and refer those who qualify to San Diego Bankruptcy Law Firm. According to Steve Berenson, a professor at Thomas Jefferson School of Law, who runs the Veterans Clinic: “we hit our capacity fairly quickly each semester and have to turn away some cases that we might otherwise be able to handle.”
“This is not the first time San Diego Bankruptcy Law Firm has stepped up to help San Diegans in need,” says Maureen Enmark. When Kerry Steigerwalt’s Pacific Law Center closed its doors, San Diego Bankruptcy Law Firm offered to take over cases and charge the client only the remainder of what they owed to Pacific Law Center.
San Diego Bankruptcy Law Firm is a Better Business Bureau Accredited Business with an A+ rating. They are located in Mission Valley and can be reached at 877-GOBK619 or 619-260-1800. You can also visit their website at http://www.gobksandiego.com
San Diego Bankruptcy Law Firm to Offer Free Bankruptcy Services to San Diego Veterans.
PRWeb – Wed, Nov 9, 2011...
San Diego Bankruptcy Law Firm is proud to announce that it has agreed to offer free bankruptcy services to San Diego veterans by partnering with Thomas Jefferson School of Law Veterans Legal Assistance Clinic.
San Diego, CA (PRWEB) November 09, 2011
San Diego Bankruptcy Law Firm, located in Mission Valley, is proud to announce that it has agreed to offer bankruptcy services to San Diego Veterans free of charge. San Diego Bankruptcy Law Firm has partnered with Thomas Jefferson School of Law Veterans Legal Assistance Clinic. The Veterans Clinic will pre-screen eligible veterans and refer those who qualify to San Diego Bankruptcy Law Firm.
San Diego Bankruptcy Law Firm was founded by Thomas Jefferson School of Law alumni Todd F. Williams and Scott M. Schlegel and is managed by Maureen A. Enmark. “We were looking for a way to give back to our community and veterans have been particularly affected by the downturn in the economy. This is our way of saying thank you for their service,” says bankruptcy attorney -Todd Williams.
The Veterans Clinic provides limited legal assistance, as well as full service legal representation, to the residents and alumni of Veterans Village of San Diego. Thomas Jefferson School of Law students represent the veterans under supervision of the law school faculty. Veterans Village is a highly successful, residential program that provides housing, substance abuse, mental health, and job training services to formerly homeless veterans.
Bankruptcy can help veterans by stopping foreclosure, eliminating debt and protecting assets. “Sometimes filing bankruptcy is all it takes to provide a little breathing room that will help veterans get back on track,” says bankrupcy lawyer -Scott Schlegel.
The Veterans Clinic will pre-screen potential candidates and refer those who qualify to San Diego Bankruptcy Law Firm. According to Steve Berenson, a professor at Thomas Jefferson School of Law, who runs the Veterans Clinic: “we hit our capacity fairly quickly each semester and have to turn away some cases that we might otherwise be able to handle.”
“This is not the first time San Diego Bankruptcy Law Firm has stepped up to help San Diegans in need,” says Maureen Enmark. When Kerry Steigerwalt’s Pacific Law Center closed its doors, San Diego Bankruptcy Law Firm offered to take over cases and charge the client only the remainder of what they owed to Pacific Law Center.
San Diego Bankruptcy Law Firm is a Better Business Bureau Accredited Business with an A+ rating. They are located in Mission Valley and can be reached at 877-GOBK619 or 619-260-1800. You can also visit their website at http://www.gobksandiego.com
Wednesday, May 11, 2011
Foreclosures Crush Home Prices...Down 30% Plus @www.money.cnn.com"
Foreclosures crush home prices
By Les Christie, staff writer May 10, 2011: 5:01 PM ET
Click This Link to Read the Article: http://money.cnn.com/2011/05/09/real_estate/metro_home_prices/index.htm?source=patrick.net#0_undefined,0_
NEW YORK (CNNMoney) -- Home prices continued to plummet during the first three months of 2011, falling 4.6% from a year earlier.
The U.S. median price, according to the National Association of Realtors (NAR), dropped to $158,700 for a single family house. Condo prices fell even harder -- 10.4% to $152,900.
0Email Print The median home price has now slumped 30% from its 2006 high of $227,100, and prices have fallen nearly 7% so far this year.
"We're seeing prices dropping faster than they did in 2010," said Pat Newport, an analyst with IHS Global Insight. "That's troubling. Falling home prices precipitated the recession and are slowing the recovery."
NAR blamed much of the latest price drop on sales of foreclosed properties. These "distressed" property sales accounted for 39% of the market, up from 36% from a year earlier.
Distressed properties, often in poor condition and are priced to move, sell for about 20% less than conventional home sales.
Those sales attract speculators, investors and cash buyers who gravitate toward lower priced homes, said Lawrence Yun, chief economist for NAR. (How to buy a foreclosure)
The market for distressed properties may further expand over the next few months. Falling prices have sent more mortgage borrowers underwater, owing more on their mortgage balances than their homes are worth. That makes them more likely to default on loans.
"That's a key problem," said Newport. "There are a lot of bad loans in the foreclosure pipeline and we don't know how many strategic defaults [people walking away from their mortgages] will result."
Of the 153 home markets covered by the report, Honolulu recorded the highest median price, $579,300. San Jose, Calif., the heart of Silicon Valley, was second at $545,000, and Anaheim-Santa Ana, Calif. was third at $511,800.
The lowest priced markets were in the Rust-Belt: Youngstown, Ohio ($55,400); Lansing, Mich. ($64,400); and Toledo, Ohio ($64,900).
The biggest losers were Gulfport, Miss. (down 22.8% to $99,400); Akron, Ohio (off 21.4% to $74,900); and Salem, Ore.(down 20.6% to $153,500).
Check out prices in your home town
By Les Christie, staff writer May 10, 2011: 5:01 PM ET
Click This Link to Read the Article: http://money.cnn.com/2011/05/09/real_estate/metro_home_prices/index.htm?source=patrick.net#0_undefined,0_
NEW YORK (CNNMoney) -- Home prices continued to plummet during the first three months of 2011, falling 4.6% from a year earlier.
The U.S. median price, according to the National Association of Realtors (NAR), dropped to $158,700 for a single family house. Condo prices fell even harder -- 10.4% to $152,900.
0Email Print The median home price has now slumped 30% from its 2006 high of $227,100, and prices have fallen nearly 7% so far this year.
"We're seeing prices dropping faster than they did in 2010," said Pat Newport, an analyst with IHS Global Insight. "That's troubling. Falling home prices precipitated the recession and are slowing the recovery."
NAR blamed much of the latest price drop on sales of foreclosed properties. These "distressed" property sales accounted for 39% of the market, up from 36% from a year earlier.
Distressed properties, often in poor condition and are priced to move, sell for about 20% less than conventional home sales.
Those sales attract speculators, investors and cash buyers who gravitate toward lower priced homes, said Lawrence Yun, chief economist for NAR. (How to buy a foreclosure)
The market for distressed properties may further expand over the next few months. Falling prices have sent more mortgage borrowers underwater, owing more on their mortgage balances than their homes are worth. That makes them more likely to default on loans.
"That's a key problem," said Newport. "There are a lot of bad loans in the foreclosure pipeline and we don't know how many strategic defaults [people walking away from their mortgages] will result."
Of the 153 home markets covered by the report, Honolulu recorded the highest median price, $579,300. San Jose, Calif., the heart of Silicon Valley, was second at $545,000, and Anaheim-Santa Ana, Calif. was third at $511,800.
The lowest priced markets were in the Rust-Belt: Youngstown, Ohio ($55,400); Lansing, Mich. ($64,400); and Toledo, Ohio ($64,900).
The biggest losers were Gulfport, Miss. (down 22.8% to $99,400); Akron, Ohio (off 21.4% to $74,900); and Salem, Ore.(down 20.6% to $153,500).
Check out prices in your home town
Wednesday, March 9, 2011
Filing for Bankruptcy could save your home from foreclosure
Filing for bankruptcy could save your home
For some struggling homeowners, desperate step could stop a foreclosure
FROM CNBC: http://www.msnbc.msn.com/id/41787682/ns/business-personal_finance/
By the time the foreclosure notice arrives, most struggling homeowners figure they are out of options. But there is one more step, often overlooked but sometimes effective: bankruptcy.
It's not a move to be taken lightly. But the impact — especially on your chances of getting a loan — may not be as dire as many consumers assume. In fact, homeowners facing foreclosure may be able to improve their credit with a bankruptcy filing.
Bankruptcy is not the best first choice for anyone struggling to pay the bills. The first step is to approach lenders or others to whom you owe money and see if you can work out a more affordable payment plan. If you're unable to do so on your own, an accredited credit counselor may be able to intervene with lenders on your behalf.
More must-see stories
Reuters Heroes need not apply
Your Career: There was public outrage recently when four employees at a Walmart lost their jobs for safely disarming a gun-toting shoplifter. But no one should be too surprised
Life Inc.: Yes, smart guy, you have to pay taxes NFL labor dispute is typical, only with way more money ConsumerMan: Fat fingers and phone fraud Homeowners facing foreclosure also have several options to minimize the long-term impact on their credit — even if they ultimately lose the house. If the lender agrees to a short sale, for example, you may be able to sell your home for less then you owe. In a so-called "deed in lieu" of foreclosure, you give the lender the deed to your home and avoid a formal foreclosure proceeding. By doing so, you'll avoid the devastating damage to your credit brought by a foreclosure.
If none of those steps work, bankruptcy may provide relief for the worst case of a foreclosure judgment - and inflict less damage to your credit.
"In the eyes of lenders, you're making an attempt to pay back what is owed and keeping up with your payments," said Raquel Price, a bankruptcy attorney in State College, Pa. "With a foreclosure, you simply just walk away after not paying for a period of time."
Bankruptcy laws, after all, were established to provide an orderly process for people in financial trouble to reorganize their debts, start fresh and rebuild their lives.
Advertise | AdChoicesAdvertise | AdChoicesAdvertise | AdChoices"Most people who file bankruptcy don't file because they are poor managers of credit," said John Ulzheimer, president of consumer education for SmartCredit.com. "Most people file because of some other incident that is out of their control - like a divorce, or loss of job, or the death of an earner in the family or some major medical event that zaps out their savings."
With home prices falling, unemployment near 9 percent and wages stagnant, the volume of fillings continues to rise. Last year, some 1.5 million consumer filings were reported — up 9 percent following double digit gains in each of the previous three years, according to the American Bankruptcy Institute.
As government mortgage relief programs have fallen well short of their goals and lenders struggle to find solutions, bankruptcy has become a potent weapon for those hoping to save their home from foreclosure.
Last year, foreclosure filings were reported on a record 2.9 million homes in the U.S., up nearly 2 percent from 2009 and 23 percent from 2008, according to RealtyTrac. More than one in five homeowners with a mortgage owe more than their house is worth, according to the latest figures from CoreLogic. That number of so-called "underwater" mortgages is expected to increase if home prices continue the current trend of edging lower.
A bankruptcy filing won't guarantee you'll be able to keep your home. But it stops the process and buys time while the court reviews your finances and tries to work out a payment plan with lenders.
The mortgage industry supports the current bankruptcy process because it frees many borrowers from some unsecured debts, making it easier for them to support a home loan. But the industry has strenuously fought legislative proposals to change the law to allow judges to alter the terms of a mortgage, including writing down the principal owed — a process known as a "cramdown."
Contrary to widely-held belief, bankruptcy doesn't necessarily leave the filer without access to credit.
"I hear that every day from people coming to my office: 'I thought it takes seven years to rebuild your credit,'" said Michael Fakhoury, a bankruptcy attorney in Poughkeepsie, N.Y. "It's not true."
Credit card offers
Though the record of a filing typically remains on your credit report for seven years, many filers begin getting credit card offers within a year or two after the process is completed.
Personal bankruptcy takes two forms. In a so-called Chapter 13 bankruptcy, debts are consolidated and a payment plan is arranged — typically over three to five years. This process allows you to retain assets like a house or car and some savings (the rules vary somewhat state to state). Chapter 13 is required for those whose income falls above a "means test." Once you've filed, you're not allowed to file Chapter 13 again for another two years.
A Chapter 7 bankruptcy discharges most forms of debt — usually within six months. To qualify, you have to be current on secured debt payments such as a mortgage.Some debts, including student loans, alimony or child support, can't be discharged. With Chapter 7, you can't file again for eight years.
Once the process is complete, credit card companies will likely come calling again within a year or two offering credit, according to Fakoury.
Advertise | AdChoicesAdvertise | AdChoicesAdvertise | AdChoices"They know that you don't have any more debt — you just got rid of all your debt," he said. "So you're a good credit risk."
Opening new accounts and establishing a solid record of timely payments will help improve your chances of getting more credit, according to Ulzheimer.
"The most predictive item on your credit report is the item that's less than 24 months old," he said. "So if you can start populating your credit reports with good things, you're going to accelerate your score improvement much more aggressively than if you just sat there and waited for your score to improve as you put time between yourself and the bankruptcy filing."
Getting a mortgage after a bankruptcy filing is a little tougher, largely because underwriting guidelines have tightened for all borrowers since the housing bust. To qualify for a so-called "conforming" loan backed by government mortgage sponsors Fannie Mae or Freddie Mac, you'll need to wait four years after a bankruptcy filing.
But you'll be ineligible for seven years after a foreclosure — another reason it might make more sense for some homeowners to file for bankruptcy rather than wait for a foreclosure.
For an FHA-backed mortgage, you may be able to qualify within three years of a foreclosure, or two years after completing a bankruptcy. For Chapter 7, the clock on FHA eligibility starts when your discharge is complete, usually within six months of the filing. For a Chapter 13, you'll have to wait two years after the payment plan is completed, usually three to five years.
Lenders are also going to want to know why you ended up in bankruptcy court, according to Chad Smith, senior vice president of sales at Lending Tree, a mortgage lender.
"Most underwriters are going to want to know what happened in a detailed letter of explanation," he said. "If it’s a life event, that's going to be reflected differently than if it's excessive spending."
Filling for bankruptcy won't guarantee you'll be able to save your home. For some homeowners, the financial hole is just too deep.
"That is a very hard talk to have with them — explaining that no matter what I try to do they won't be able to sustain their residence," said Price. "For some clients that is a very tough thing to accept."
For some struggling homeowners, desperate step could stop a foreclosure
FROM CNBC: http://www.msnbc.msn.com/id/41787682/ns/business-personal_finance/
By the time the foreclosure notice arrives, most struggling homeowners figure they are out of options. But there is one more step, often overlooked but sometimes effective: bankruptcy.
It's not a move to be taken lightly. But the impact — especially on your chances of getting a loan — may not be as dire as many consumers assume. In fact, homeowners facing foreclosure may be able to improve their credit with a bankruptcy filing.
Bankruptcy is not the best first choice for anyone struggling to pay the bills. The first step is to approach lenders or others to whom you owe money and see if you can work out a more affordable payment plan. If you're unable to do so on your own, an accredited credit counselor may be able to intervene with lenders on your behalf.
More must-see stories
Reuters Heroes need not apply
Your Career: There was public outrage recently when four employees at a Walmart lost their jobs for safely disarming a gun-toting shoplifter. But no one should be too surprised
Life Inc.: Yes, smart guy, you have to pay taxes NFL labor dispute is typical, only with way more money ConsumerMan: Fat fingers and phone fraud Homeowners facing foreclosure also have several options to minimize the long-term impact on their credit — even if they ultimately lose the house. If the lender agrees to a short sale, for example, you may be able to sell your home for less then you owe. In a so-called "deed in lieu" of foreclosure, you give the lender the deed to your home and avoid a formal foreclosure proceeding. By doing so, you'll avoid the devastating damage to your credit brought by a foreclosure.
If none of those steps work, bankruptcy may provide relief for the worst case of a foreclosure judgment - and inflict less damage to your credit.
"In the eyes of lenders, you're making an attempt to pay back what is owed and keeping up with your payments," said Raquel Price, a bankruptcy attorney in State College, Pa. "With a foreclosure, you simply just walk away after not paying for a period of time."
Bankruptcy laws, after all, were established to provide an orderly process for people in financial trouble to reorganize their debts, start fresh and rebuild their lives.
Advertise | AdChoicesAdvertise | AdChoicesAdvertise | AdChoices"Most people who file bankruptcy don't file because they are poor managers of credit," said John Ulzheimer, president of consumer education for SmartCredit.com. "Most people file because of some other incident that is out of their control - like a divorce, or loss of job, or the death of an earner in the family or some major medical event that zaps out their savings."
With home prices falling, unemployment near 9 percent and wages stagnant, the volume of fillings continues to rise. Last year, some 1.5 million consumer filings were reported — up 9 percent following double digit gains in each of the previous three years, according to the American Bankruptcy Institute.
As government mortgage relief programs have fallen well short of their goals and lenders struggle to find solutions, bankruptcy has become a potent weapon for those hoping to save their home from foreclosure.
Last year, foreclosure filings were reported on a record 2.9 million homes in the U.S., up nearly 2 percent from 2009 and 23 percent from 2008, according to RealtyTrac. More than one in five homeowners with a mortgage owe more than their house is worth, according to the latest figures from CoreLogic. That number of so-called "underwater" mortgages is expected to increase if home prices continue the current trend of edging lower.
A bankruptcy filing won't guarantee you'll be able to keep your home. But it stops the process and buys time while the court reviews your finances and tries to work out a payment plan with lenders.
The mortgage industry supports the current bankruptcy process because it frees many borrowers from some unsecured debts, making it easier for them to support a home loan. But the industry has strenuously fought legislative proposals to change the law to allow judges to alter the terms of a mortgage, including writing down the principal owed — a process known as a "cramdown."
Contrary to widely-held belief, bankruptcy doesn't necessarily leave the filer without access to credit.
"I hear that every day from people coming to my office: 'I thought it takes seven years to rebuild your credit,'" said Michael Fakhoury, a bankruptcy attorney in Poughkeepsie, N.Y. "It's not true."
Credit card offers
Though the record of a filing typically remains on your credit report for seven years, many filers begin getting credit card offers within a year or two after the process is completed.
Personal bankruptcy takes two forms. In a so-called Chapter 13 bankruptcy, debts are consolidated and a payment plan is arranged — typically over three to five years. This process allows you to retain assets like a house or car and some savings (the rules vary somewhat state to state). Chapter 13 is required for those whose income falls above a "means test." Once you've filed, you're not allowed to file Chapter 13 again for another two years.
A Chapter 7 bankruptcy discharges most forms of debt — usually within six months. To qualify, you have to be current on secured debt payments such as a mortgage.Some debts, including student loans, alimony or child support, can't be discharged. With Chapter 7, you can't file again for eight years.
Once the process is complete, credit card companies will likely come calling again within a year or two offering credit, according to Fakoury.
Advertise | AdChoicesAdvertise | AdChoicesAdvertise | AdChoices"They know that you don't have any more debt — you just got rid of all your debt," he said. "So you're a good credit risk."
Opening new accounts and establishing a solid record of timely payments will help improve your chances of getting more credit, according to Ulzheimer.
"The most predictive item on your credit report is the item that's less than 24 months old," he said. "So if you can start populating your credit reports with good things, you're going to accelerate your score improvement much more aggressively than if you just sat there and waited for your score to improve as you put time between yourself and the bankruptcy filing."
Getting a mortgage after a bankruptcy filing is a little tougher, largely because underwriting guidelines have tightened for all borrowers since the housing bust. To qualify for a so-called "conforming" loan backed by government mortgage sponsors Fannie Mae or Freddie Mac, you'll need to wait four years after a bankruptcy filing.
But you'll be ineligible for seven years after a foreclosure — another reason it might make more sense for some homeowners to file for bankruptcy rather than wait for a foreclosure.
For an FHA-backed mortgage, you may be able to qualify within three years of a foreclosure, or two years after completing a bankruptcy. For Chapter 7, the clock on FHA eligibility starts when your discharge is complete, usually within six months of the filing. For a Chapter 13, you'll have to wait two years after the payment plan is completed, usually three to five years.
Lenders are also going to want to know why you ended up in bankruptcy court, according to Chad Smith, senior vice president of sales at Lending Tree, a mortgage lender.
"Most underwriters are going to want to know what happened in a detailed letter of explanation," he said. "If it’s a life event, that's going to be reflected differently than if it's excessive spending."
Filling for bankruptcy won't guarantee you'll be able to save your home. For some homeowners, the financial hole is just too deep.
"That is a very hard talk to have with them — explaining that no matter what I try to do they won't be able to sustain their residence," said Price. "For some clients that is a very tough thing to accept."
Thursday, January 13, 2011
Banks repossess 1 million homes in 2010
With foreclosures rising, bankruptcies will too. If you are facing foreclosure, a san diego bankruptcy attorney can stop the foreclosure immediately, eliminate your debt and protect your assets. Credit counseling and loan modifications don't stop a foreclosure. If you have questions, contact a San Diego Bankruptcy Lawyer at the San Diego Bankruptcy Law Firm. 619-260-1800.
Click this link to view the article: http://www.cbs8.com/Global/story.asp?S=13837459
NEW YORK (AP) — The bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.
"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.
One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009.
For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.
However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.
Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.
The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.
Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.
Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.
One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.
California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.
More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
Copyright 2011 The Associated Press.
NEW YORK (AP) — The bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.
"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.
One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009.
For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.
However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.
Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.
The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.
Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.
Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.
One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.
California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.
More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
Copyright 2011 The Associated Press.
Click this link to view the article: http://www.cbs8.com/Global/story.asp?S=13837459
NEW YORK (AP) — The bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.
"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.
One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009.
For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.
However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.
Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.
The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.
Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.
Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.
One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.
California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.
More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
Copyright 2011 The Associated Press.
NEW YORK (AP) — The bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.
"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.
One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009.
For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.
However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.
Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.
The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.
Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.
Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.
One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.
California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.
More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
Copyright 2011 The Associated Press.
Thursday, October 28, 2010
Rebuilding Your Credit after Bankruptcy
Here is a great article I found on MSN Money
Make sure to read it at: http://articles.moneycentral.msn.com/Banking/BankruptcyGuide/BounceBackFastAfterBankruptcy.aspx?page=all
Bounce back fast after bankruptcy
Carefully rebuild your credit, and you could qualify for almost normal rates, even a mortgage, in a year or two. Here's what you need to do.
By Liz Pulliam Weston
Almost anyone can get credit soon after a bankruptcy. It's just a matter of knowing how.
It's true that bankruptcy deals a devastating blow to your credit and your credit score, the three-digit number lenders use to gauge your creditworthiness. But the effects don't have to be lasting.
Long before the bankruptcy drops off your credit report, you could be qualifying for loans with good rates and terms.
Nothing is forever
Ken from Chicago filed Chapter 7 liquidation after unemployment and overspending caused him to rack up more than $20,000 in credit card and other unsecured debt. Four years later, his credit scores ranged from 655 to 719, decent numbers that are just below the cutoff to get most lenders' very best rates.
"I . . . applied for a secured credit card (usually reserved for people with troubled credit) and was informed that I qualified for an unsecured card -- a possibility I hadn't even considered," Ken said. "While I am going to be very careful with my new credit (card), I am heartened that creditors consider me an acceptable risk."If you're recently bankrupted, here are two things you need to keep in mind:
Nothing in credit is "forever." A bankruptcy legally can remain on your credit report for up to 10 years, but its effect on your credit score can start to diminish the day your case is closed -- if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once.
You have to get and use credit to build your credit score. Living on a cash-only basis may be a smart choice for those who really can't handle credit. But if you want to rebuild your credit score, you can't sit on the sidelines.
Learn from your mistakes
Although repeat bankrupts show that getting credit after a Chapter 7 or 13 filing is possible, you shouldn't want to emulate those who file more than once.
At first glance, people who file more than one bankruptcy seem to be beating the system: They run up big bills and then walk away.
Video on MSN Money
Video: How's your credit?
Where to go to get free reports -- and how to interpret them when you've got one.Think about it a little more, though, and you'll see these multiple bankrupts are really defeating themselves. Their debts and credit history often mean they're paying out big bucks in high interest payments during the time when they're prohibited from filing another bankruptcy. (The 2005 bankruptcy law provides that, under Chapter 7, eight years must elapse before you can refile. If you go for Chapter 13 after a Chapter 7, you must wait four years. Going from one Chapter 13 to another, two years must elapse.)
And most people can't file for Chapter 7 liquidation if they have significant assets to protect, such as home equity or savings. So these folks who are repeatedly going broke often have little to show for all the money that's leaving their pockets. Instead of building wealth over time, they're losing ground.
Instead, use your bankruptcy as a wake-up call to figure out what's wrong with your finances and fix it.
If your problem was overspending, you'll find plenty of information on this site about creating and sticking to a budget (see "Your 5 minute guide to budgeting").
If you didn't have enough savings to survive a job loss or other setback, get serious about establishing an emergency fund.
If you were sunk by medical bills, seek a job with insurance coverage or check to see if your state offers coverage.
Clean up your credit report
One common problem people emerging from bankruptcy often face is that credit reports frequently show accounts as open and overdue -- when in fact they were closed and the obligations wiped out as part of the bankruptcy.
If you encounter this, you need to contact the credit bureaus and insist that those accounts be properly reported as "included in bankruptcy." It's the only way your credit can recover.
If you have other serious mistakes on your credit report, those need to be corrected as well. Your credit score is based on information in your credit report, so errors on your report can seriously dampen your score.
Get a secured credit card
You need two types of credit to quickly rebuild your credit score:
Installment: auto loans, student loans or mortgages
Revolving: credit cards or home equity lines of credit
Continued: Light credit card use builds credit
Most recent bankrupts have trouble qualifying for a regular, unsecured credit card. So the best solution usually is a secured card, which generally gives you a credit limit that's equal to an amount you deposit at the issuing bank.
Typically, that's $200 to $500, which may seem like a pittance compared with the credit limits you enjoyed before your bankruptcy. But don't make the mistake of using your available credit. Maxing out your credit cards hurts your credit score.
You don't want to charge more than 30% or so of your credit limit, and you want to pay the balance off in full each month. Light, regular use of a credit card is what helps build your credit.
And contrary to what you might have heard, you typically don't need to carry a balance or pay credit card interest to build your score, since the leading credit scoring formula doesn't distinguish between balances that are paid off and balances that are carried month to month. Get in the habit now of not charging more than you can pay off every month; your credit score and your finances will be the better for it.
You also shouldn't grab just any secured card. Look for the following:
No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don't need to pay these to build your credit.
Reports to the major credit bureaus. You're not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Before you apply for a card, call and ask if the issuer regularly reports to all three.
Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.
Get an installment loan
If you still have student loans (which typically aren't dischargeable in bankruptcy), you can use them to rebuild your score. Make your payments on time, all the time, and try to pay more than you owe whenever possible. Next to making on-time payments, paying down your existing debt is one of the best ways to improve your credit score.
Ken of Chicago took this to heart, making double or triple the minimum payments required to retire his $23,500 student loan debt within three years of his bankruptcy filing.
"The fact that I had to repay my student loans (rather than having them discharged) might have helped me in the long run," he said.
It's unlikely in the current credit climate, but you may be able to qualify for a high-rate mortgage as little as six months after a bankruptcy. You're probably better off waiting until you can qualify for an FHA loan, though. You can typically get one just two years after your bankruptcy case has closed, as long as you've maintained good credit habits since then. FHA loans have interest rates that are usually only half a percentage point higher than regular mortgage rates.
Just make sure you really can afford a home before you buy one. Many people wind up in bankruptcy court because they stretched too far to buy a house and can't keep up with all the attendant costs of homeownership, said bankruptcy expert Elizabeth Warren of Harvard University. (See "Don't bite off too much house" for more details.)
Video on MSN Money
Video: How's your credit?
Where to go to get free reports -- and how to interpret them when you've got one.Auto loans can also help you rebuild your credit -- just be prepared to pay nose-bleeding rates at first.
"My first vehicle out of bankruptcy (had an interest rate of) 21%," said Chance Nelson of Indianapolis, who applied for the loan just a few months after his debts were discharged. "After paying this for about two years, I went and traded it in and purchased another (at) 13.99%."
Nelson refinanced this second loan a year later at 7.95%. Five years after his bankruptcy filing, Nelson was paying a reasonable 6% rate for his auto loan.
If you go this route, try to make a big down payment and choose a loan that doesn't have a prepayment penalty. That way, you can refinance the car to a lower interest rate as your credit improves.
Liz Pulliam Weston's latest book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.
Make sure to read it at: http://articles.moneycentral.msn.com/Banking/BankruptcyGuide/BounceBackFastAfterBankruptcy.aspx?page=all
Bounce back fast after bankruptcy
Carefully rebuild your credit, and you could qualify for almost normal rates, even a mortgage, in a year or two. Here's what you need to do.
By Liz Pulliam Weston
Almost anyone can get credit soon after a bankruptcy. It's just a matter of knowing how.
It's true that bankruptcy deals a devastating blow to your credit and your credit score, the three-digit number lenders use to gauge your creditworthiness. But the effects don't have to be lasting.
Long before the bankruptcy drops off your credit report, you could be qualifying for loans with good rates and terms.
Nothing is forever
Ken from Chicago filed Chapter 7 liquidation after unemployment and overspending caused him to rack up more than $20,000 in credit card and other unsecured debt. Four years later, his credit scores ranged from 655 to 719, decent numbers that are just below the cutoff to get most lenders' very best rates.
"I . . . applied for a secured credit card (usually reserved for people with troubled credit) and was informed that I qualified for an unsecured card -- a possibility I hadn't even considered," Ken said. "While I am going to be very careful with my new credit (card), I am heartened that creditors consider me an acceptable risk."If you're recently bankrupted, here are two things you need to keep in mind:
Nothing in credit is "forever." A bankruptcy legally can remain on your credit report for up to 10 years, but its effect on your credit score can start to diminish the day your case is closed -- if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once.
You have to get and use credit to build your credit score. Living on a cash-only basis may be a smart choice for those who really can't handle credit. But if you want to rebuild your credit score, you can't sit on the sidelines.
Learn from your mistakes
Although repeat bankrupts show that getting credit after a Chapter 7 or 13 filing is possible, you shouldn't want to emulate those who file more than once.
At first glance, people who file more than one bankruptcy seem to be beating the system: They run up big bills and then walk away.
Video on MSN Money
Video: How's your credit?
Where to go to get free reports -- and how to interpret them when you've got one.Think about it a little more, though, and you'll see these multiple bankrupts are really defeating themselves. Their debts and credit history often mean they're paying out big bucks in high interest payments during the time when they're prohibited from filing another bankruptcy. (The 2005 bankruptcy law provides that, under Chapter 7, eight years must elapse before you can refile. If you go for Chapter 13 after a Chapter 7, you must wait four years. Going from one Chapter 13 to another, two years must elapse.)
And most people can't file for Chapter 7 liquidation if they have significant assets to protect, such as home equity or savings. So these folks who are repeatedly going broke often have little to show for all the money that's leaving their pockets. Instead of building wealth over time, they're losing ground.
Instead, use your bankruptcy as a wake-up call to figure out what's wrong with your finances and fix it.
If your problem was overspending, you'll find plenty of information on this site about creating and sticking to a budget (see "Your 5 minute guide to budgeting").
If you didn't have enough savings to survive a job loss or other setback, get serious about establishing an emergency fund.
If you were sunk by medical bills, seek a job with insurance coverage or check to see if your state offers coverage.
Clean up your credit report
One common problem people emerging from bankruptcy often face is that credit reports frequently show accounts as open and overdue -- when in fact they were closed and the obligations wiped out as part of the bankruptcy.
If you encounter this, you need to contact the credit bureaus and insist that those accounts be properly reported as "included in bankruptcy." It's the only way your credit can recover.
If you have other serious mistakes on your credit report, those need to be corrected as well. Your credit score is based on information in your credit report, so errors on your report can seriously dampen your score.
Get a secured credit card
You need two types of credit to quickly rebuild your credit score:
Installment: auto loans, student loans or mortgages
Revolving: credit cards or home equity lines of credit
Continued: Light credit card use builds credit
Most recent bankrupts have trouble qualifying for a regular, unsecured credit card. So the best solution usually is a secured card, which generally gives you a credit limit that's equal to an amount you deposit at the issuing bank.
Typically, that's $200 to $500, which may seem like a pittance compared with the credit limits you enjoyed before your bankruptcy. But don't make the mistake of using your available credit. Maxing out your credit cards hurts your credit score.
You don't want to charge more than 30% or so of your credit limit, and you want to pay the balance off in full each month. Light, regular use of a credit card is what helps build your credit.
And contrary to what you might have heard, you typically don't need to carry a balance or pay credit card interest to build your score, since the leading credit scoring formula doesn't distinguish between balances that are paid off and balances that are carried month to month. Get in the habit now of not charging more than you can pay off every month; your credit score and your finances will be the better for it.
You also shouldn't grab just any secured card. Look for the following:
No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don't need to pay these to build your credit.
Reports to the major credit bureaus. You're not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Before you apply for a card, call and ask if the issuer regularly reports to all three.
Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.
Get an installment loan
If you still have student loans (which typically aren't dischargeable in bankruptcy), you can use them to rebuild your score. Make your payments on time, all the time, and try to pay more than you owe whenever possible. Next to making on-time payments, paying down your existing debt is one of the best ways to improve your credit score.
Ken of Chicago took this to heart, making double or triple the minimum payments required to retire his $23,500 student loan debt within three years of his bankruptcy filing.
"The fact that I had to repay my student loans (rather than having them discharged) might have helped me in the long run," he said.
It's unlikely in the current credit climate, but you may be able to qualify for a high-rate mortgage as little as six months after a bankruptcy. You're probably better off waiting until you can qualify for an FHA loan, though. You can typically get one just two years after your bankruptcy case has closed, as long as you've maintained good credit habits since then. FHA loans have interest rates that are usually only half a percentage point higher than regular mortgage rates.
Just make sure you really can afford a home before you buy one. Many people wind up in bankruptcy court because they stretched too far to buy a house and can't keep up with all the attendant costs of homeownership, said bankruptcy expert Elizabeth Warren of Harvard University. (See "Don't bite off too much house" for more details.)
Video on MSN Money
Video: How's your credit?
Where to go to get free reports -- and how to interpret them when you've got one.Auto loans can also help you rebuild your credit -- just be prepared to pay nose-bleeding rates at first.
"My first vehicle out of bankruptcy (had an interest rate of) 21%," said Chance Nelson of Indianapolis, who applied for the loan just a few months after his debts were discharged. "After paying this for about two years, I went and traded it in and purchased another (at) 13.99%."
Nelson refinanced this second loan a year later at 7.95%. Five years after his bankruptcy filing, Nelson was paying a reasonable 6% rate for his auto loan.
If you go this route, try to make a big down payment and choose a loan that doesn't have a prepayment penalty. That way, you can refinance the car to a lower interest rate as your credit improves.
Liz Pulliam Weston's latest book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.
Wednesday, October 27, 2010
How to Avoid Bankruptcy with Debt Settlement, Debt Negotiation or Debt Relief
AVOID BANKRUPTCY WITH DEBT SETTLEMENT, DEBT NEGOTIATION, OR DEBT RELIEF
Debt settlement, debt negotiation and debt relief all mean the same thing. It is a process by which the debtor negotiates an agreement to pay a portion of the debt owed in exchange for relief from the remainder of the debt. If a credit card company or other creditor agrees to a debt settlement the rest of the debt is eliminated forever, avoiding Bankruptcy.
Most consumers have tried to negotiate a settlement on their own but have failed. Choosing to retain the San Diego Bankruptcy Law Firm to negotiate your debt relief can help protect your rights and will generally result in a better offer from the credit companies who know that they will receive nothing if you file for Bankruptcy.
The San Diego Bankruptcy Law Firm can you help you avoid bankruptcy and attempt to negotiate a debt settlement on your behalf.
What is Debt Settlement, Debt Negotiation or Debt Relief?
Debt Settlement, Debt Negotiation and Debt Relief all refer to the same thing it is the process of negotiation with creditors by a professional agency or law firm which results in having to payback only a percentage of the debt you owe while wiping out the rest of your debt.
How does a Debt Negotiation program work?
The San Diego Bankruptcy Law Firm and its team of attorneys will negotiate with your creditors. Typically, if a creditor cannot collect on the debt, they write it off as a loss on their taxes; however they may still pursue a law suit to recover their money. Therefore, it is in their best interest to negotiate or settle the debt for a fraction of what you owe, rather than receive nothing. Working with the San Diego Bankruptcy Law Firm can help protect your rights and in the event that a lawsuit is threatened or filed, we can help you pursue Bankruptcy as a last resort. Creditors may reach agreements to settle debt in order to recover a portion of monies they often would not of have been able to collect.
Will Debt Relief affect my credit?
This depends on your current situation. Typically, you must stop making your payments so that the Credit Card Company will negotiate your debt. Your credit may be adversely affected due to non-payment of existing debt that you wish to settle. In the process of reaching an agreement with your creditors, many items can be negotiated such as removing negative remarks. This depends on the creditor. However, once your Credit Card Debt has been settled you can begin to rebuild your credit.
How Much does it Cost?
Every case is different and the cost will depend upon how much you owe and how much we are able to save you. Contact us today to see if you qualify for debt settlement. We can be reached 24 hours a day at 619-260-1800 or 877-GOBK619.
Debt settlement, debt negotiation and debt relief all mean the same thing. It is a process by which the debtor negotiates an agreement to pay a portion of the debt owed in exchange for relief from the remainder of the debt. If a credit card company or other creditor agrees to a debt settlement the rest of the debt is eliminated forever, avoiding Bankruptcy.
Most consumers have tried to negotiate a settlement on their own but have failed. Choosing to retain the San Diego Bankruptcy Law Firm to negotiate your debt relief can help protect your rights and will generally result in a better offer from the credit companies who know that they will receive nothing if you file for Bankruptcy.
The San Diego Bankruptcy Law Firm can you help you avoid bankruptcy and attempt to negotiate a debt settlement on your behalf.
What is Debt Settlement, Debt Negotiation or Debt Relief?
Debt Settlement, Debt Negotiation and Debt Relief all refer to the same thing it is the process of negotiation with creditors by a professional agency or law firm which results in having to payback only a percentage of the debt you owe while wiping out the rest of your debt.
How does a Debt Negotiation program work?
The San Diego Bankruptcy Law Firm and its team of attorneys will negotiate with your creditors. Typically, if a creditor cannot collect on the debt, they write it off as a loss on their taxes; however they may still pursue a law suit to recover their money. Therefore, it is in their best interest to negotiate or settle the debt for a fraction of what you owe, rather than receive nothing. Working with the San Diego Bankruptcy Law Firm can help protect your rights and in the event that a lawsuit is threatened or filed, we can help you pursue Bankruptcy as a last resort. Creditors may reach agreements to settle debt in order to recover a portion of monies they often would not of have been able to collect.
Will Debt Relief affect my credit?
This depends on your current situation. Typically, you must stop making your payments so that the Credit Card Company will negotiate your debt. Your credit may be adversely affected due to non-payment of existing debt that you wish to settle. In the process of reaching an agreement with your creditors, many items can be negotiated such as removing negative remarks. This depends on the creditor. However, once your Credit Card Debt has been settled you can begin to rebuild your credit.
How Much does it Cost?
Every case is different and the cost will depend upon how much you owe and how much we are able to save you. Contact us today to see if you qualify for debt settlement. We can be reached 24 hours a day at 619-260-1800 or 877-GOBK619.
California Foreclosure Basics. How to Stop a Foreclosure
The Bankruptcy Attorneys at the San Diego Bankruptcy Law Firm are always looking for helpful information for individuals struggling with keeping their home. Here is some information on foreclosure from a great website: http://preventingforeclosure.org/help-stop-foreclosure/california-foreclosure-basics/
For more information on stopping a foreclosure with a bunkruptcy please contact us at 877-GOBK619 or 619-260-1800 or visit our website at www.gobksandiego.com. Speak to an attorney today, there is no charge for an initial consultation.
California Foreclosure Basics
Definition of Foreclosure
Foreclosure is a process, governed by California state law, by which a home is sold to satisfy an unpaid debt such as a home mortgage, a tax lien or other debt.
What Causes a Foreclosure
A foreclosure is initiated once a default occurs. A default can be triggered by a failure to make a payment on a deed of trust or mortgage, or, for example, can also happen if a property is sold without permission or if property taxes aren’t paid. The note and mortgage will stipulate what the lender considers a default.
California Foreclosure Process
The California foreclosure process typically takes about 200 days starting from the time that a homeowner misses their first payment to the point when the home is auctioned off in a foreclosure sale. Though this might seem like a lot of time, the four month process moves very quickly and a homeowner must act immediately in order to take advantage of as many options as possible to avoid foreclosure.
Foreclosures in California are typically non-judicial under power of sale in deed of trust. This means that the foreclosure process occurs without any court intervention, with requirements for the foreclosure process set by state statute. The lender will typically send a Notice of Intent to Accelerate after 60 days. Next, the lender will contact the homeowner 30 days before sending the first of two notices in the foreclosure process, a Notice of Default. The Notice of Default gives the homeowner a 90-day window until the lender takes the next step, which is a Notice of Sale, the second notice required by California law. The Notice of Sale then gives the homeowner 20 days before the foreclosure sale takes place.
A homeowner has a right to cure the default up to within 5 days before the sale. In a non-judicial foreclosure, commonplace in California, a lender is not able to seek a deficiency judgment*. (*A deficiency judgment allows a bank or lender to obtain a judgment lien against a homeowner when a foreclosure sale does not produce enough to cover the full amount due on a home loan.) Without a deficiency judgment a homeowner is not given a redemption period. What all this basically means is that not having a redemption period available after the foreclosure sale makes the foreclosure sale date the deadline for a California homeowner to rescue his home. (You can find more information pertaining to California foreclosure statutes, Cal. Civ. Code §§ 2924 to 2924l, on the California Legislative Information website, but the reading contains a lot of legalese, so be forewarned.)
However, after the foreclosure sale, a homeowner may still remain in the home for some time while the legal eviction process churns on. After a foreclosure sale happens, if the foreclosed homeowner has not moved out of the home, the lender/bank or new owner is required to produce a 3-Day Notice to Quit. Once the three days expire and a homeowner still has not moved, then the new owner is required to start the legal eviction process by filing an unlawful detainer, which basically means that the foreclosed homeowner has 30 days still before the sheriff will come out to force an eviction.
California Foreclosure Timeline
From the day that a homeowner first misses their mortgage payment, they have 200 days until a foreclosure sale, and 233 days total until a foreclosed homeowner is evicted.
Avoiding a Foreclosure in California
Delaying or stopping a foreclosure may be possible if the foreclosure was based on false information (for example, the lender substantially overstated the amount you had to pay to reinstate your mortgage, depriving you of your reinstatement rights under California law). Other reasons why you might be able to prevent a foreclosure include:
bringing a case to court that could delay or stop the foreclosure because
a loan origination didn’t abide by fair lending practices or other required mortgage regulations according to federal and California law,
failure by the foreclosing party to follow the requirements of a non-judicial foreclosure in California, for example, not properly serving the homeowner with a notice of default, or
the party attempting to foreclose is not legally entitled to do so,
you are able to short-sale the home, and
you are able to qualify for a loan workout or bankruptcy protection.
This list is not all inclusive, there are other options and reasons why you may be entitled to preventing a foreclosure. We encourage you to ultimately seek professional help since these situations can be mentally and emotionally taxing on a homeowner, not to mention extremely time-sensitive. Start by educating yourself through the foreclosure prevention resources available on this website to help you understand what it is exactly that you are facing in a foreclosure, and in the end that will help you to make better decisions with how you will save your home.
Next Step…
Make sure you understand the tax implications and what the results may be if you pursue a foreclosure defense strategy or solution.
For more information on stopping a foreclosure with a bunkruptcy please contact us at 877-GOBK619 or 619-260-1800 or visit our website at www.gobksandiego.com. Speak to an attorney today, there is no charge for an initial consultation.
California Foreclosure Basics
Definition of Foreclosure
Foreclosure is a process, governed by California state law, by which a home is sold to satisfy an unpaid debt such as a home mortgage, a tax lien or other debt.
What Causes a Foreclosure
A foreclosure is initiated once a default occurs. A default can be triggered by a failure to make a payment on a deed of trust or mortgage, or, for example, can also happen if a property is sold without permission or if property taxes aren’t paid. The note and mortgage will stipulate what the lender considers a default.
California Foreclosure Process
The California foreclosure process typically takes about 200 days starting from the time that a homeowner misses their first payment to the point when the home is auctioned off in a foreclosure sale. Though this might seem like a lot of time, the four month process moves very quickly and a homeowner must act immediately in order to take advantage of as many options as possible to avoid foreclosure.
Foreclosures in California are typically non-judicial under power of sale in deed of trust. This means that the foreclosure process occurs without any court intervention, with requirements for the foreclosure process set by state statute. The lender will typically send a Notice of Intent to Accelerate after 60 days. Next, the lender will contact the homeowner 30 days before sending the first of two notices in the foreclosure process, a Notice of Default. The Notice of Default gives the homeowner a 90-day window until the lender takes the next step, which is a Notice of Sale, the second notice required by California law. The Notice of Sale then gives the homeowner 20 days before the foreclosure sale takes place.
A homeowner has a right to cure the default up to within 5 days before the sale. In a non-judicial foreclosure, commonplace in California, a lender is not able to seek a deficiency judgment*. (*A deficiency judgment allows a bank or lender to obtain a judgment lien against a homeowner when a foreclosure sale does not produce enough to cover the full amount due on a home loan.) Without a deficiency judgment a homeowner is not given a redemption period. What all this basically means is that not having a redemption period available after the foreclosure sale makes the foreclosure sale date the deadline for a California homeowner to rescue his home. (You can find more information pertaining to California foreclosure statutes, Cal. Civ. Code §§ 2924 to 2924l, on the California Legislative Information website, but the reading contains a lot of legalese, so be forewarned.)
However, after the foreclosure sale, a homeowner may still remain in the home for some time while the legal eviction process churns on. After a foreclosure sale happens, if the foreclosed homeowner has not moved out of the home, the lender/bank or new owner is required to produce a 3-Day Notice to Quit. Once the three days expire and a homeowner still has not moved, then the new owner is required to start the legal eviction process by filing an unlawful detainer, which basically means that the foreclosed homeowner has 30 days still before the sheriff will come out to force an eviction.
California Foreclosure Timeline
From the day that a homeowner first misses their mortgage payment, they have 200 days until a foreclosure sale, and 233 days total until a foreclosed homeowner is evicted.
Avoiding a Foreclosure in California
Delaying or stopping a foreclosure may be possible if the foreclosure was based on false information (for example, the lender substantially overstated the amount you had to pay to reinstate your mortgage, depriving you of your reinstatement rights under California law). Other reasons why you might be able to prevent a foreclosure include:
bringing a case to court that could delay or stop the foreclosure because
a loan origination didn’t abide by fair lending practices or other required mortgage regulations according to federal and California law,
failure by the foreclosing party to follow the requirements of a non-judicial foreclosure in California, for example, not properly serving the homeowner with a notice of default, or
the party attempting to foreclose is not legally entitled to do so,
you are able to short-sale the home, and
you are able to qualify for a loan workout or bankruptcy protection.
This list is not all inclusive, there are other options and reasons why you may be entitled to preventing a foreclosure. We encourage you to ultimately seek professional help since these situations can be mentally and emotionally taxing on a homeowner, not to mention extremely time-sensitive. Start by educating yourself through the foreclosure prevention resources available on this website to help you understand what it is exactly that you are facing in a foreclosure, and in the end that will help you to make better decisions with how you will save your home.
Next Step…
Make sure you understand the tax implications and what the results may be if you pursue a foreclosure defense strategy or solution.
Thursday, July 22, 2010
We Take Abandoned Kerry Steigerwalt Pacific Law Center Clients
San Diego Bankruptcy Law Firm at www.gobksandiego.com will take clients abandoned by Kerry Steigerwalt's Pacific Law Center. We will only charge you what you owe to Pacific Law Center. Call us today as this offer is limited. Please see the latest article to surface about Kerry Steigerwalt's Pacific Law Center in the San Diego Reader. 619-260-1800
SAN DIEGO READER
It Wasn’t the Economy, Stupid
By Don Bauder | Published Wednesday, July 21, 2010
lINK: http://www.sandiegoreader.com/news/2010/jul/21/city-light-1/
The heavily advertised Pacific Law Center was once San Diego’s best-known law firm, but its most controversial. Two years ago, Kerry Steigerwalt, a criminal lawyer who is regularly quoted on local television, gained control of the firm and changed its name to Kerry Steigerwalt’s Pacific Law Center. It became a household name.
In a deposition for a lawsuit filed against the center last year, Steigerwalt claimed that the firm’s previous owners had wooed him and fed him false information. He said he was the “fall guy.”
Steigerwalt has indeed fallen. The firm, which specializes in driving-under-the-influence, personal injury, and defective-product cases, while purportedly counseling those with financial woes, intends to take no new cases but will wrap up old ones and eventually close down. Just recently, the Yellow Book sued the firm, saying it hasn’t paid for more than $200,000 in advertising. UTC Properties has also sued, saying the firm hasn’t paid rent at its posh La Jolla suite since the beginning of the year and owes almost $200,000.
Tom Slattery, a former lawyer at the firm, filed a massive complaint about its practices with the California State Bar, sending copies to state officials including the attorney general’s office. Some current and former lawyers say that the bar is probing the matter, but the bar won’t confirm that. Last week, Slattery filed suit against the firm, claiming that early this year, Steigerwalt’s firm was trying to stave off an “imminent collapse.”
The law firm has a D+ rating with the Better Business Bureau, generating 79 complaints in three years. That D+ is a slight improvement on an earlier F rating. Since 2004, there have been more than 40 superior court suits filed against the firm under both its names.
Steigerwalt blames most of his problems on the weak economy forcing criminal defendants to go to public defenders. But the inescapable truth is that he didn’t do his homework when taking over Pacific Law Center. On June 30, a new law firm registered with the secretary of state: Steigerwalt Law Firm, APC.
One key suit was filed in 2008 by Carl Hancock, who worked for Pacific Law Center for only nine months. The suit charged that Steigerwalt’s entrance into the firm was a “sham sales transaction for the purpose of protecting the assets” of the firm’s founders, Larry Majors, his son Austin Majors, and son-in-law Jeffrey Phillips, a Phoenix attorney. Hancock settled the suit early this year.
Another suit was filed last year by Dagoberto Llamas, who alleged he was blatantly cheated by the firm, which took big bucks from him to handle a criminal case in which he was charged with driving under the influence, battery, hit and run, and contempt of court. He was initially assured he could win the case but subsequently told it was hopeless. Llamas’s case against the law firm was handled by well-known criminal attorney Michael Pancer, his son Ian, and Doug Gilliland.
The suit says that the business model of both Kerry Steigerwalt’s Pacific Law Center and its predecessor “is the brainchild of a convicted felon and car dealer from Arizona named Larry Majors. After serving time for fraud in Arizona, Majors, a non-lawyer, opened a law firm in San Antonio, Texas, using a down-on-his-luck lawyer.… Majors launched a massive television advertising campaign to attract clients.” But Majors fled Texas after a bankruptcy judge called the firm “a borderline criminal enterprise.”
Then, according to the Pancer team’s account, Majors set up shop in San Diego with a lawyer who was eventually disbarred. Majors vamoosed when Texas authorities charged him with absconding with clients’ money. In 1993, Pacific Law Center opened in San Diego with son Austin Majors as executive director. The office was in La Jolla, but the listed address was that of son-in-law Jeffrey Phillips’s Phoenix law firm.
There has always been controversy about who owned and ran Pacific Law Center. According to Slattery’s testimony, Phillips was the owner. When Steigerwalt came in two years ago, he put in no money and got 51 percent of the firm, although at around the same time he gave part of his own practice to Phillips. Steigerwalt claims that Robert Arentz, then a member of Phillips’s Arizona firm and also one who hung around the La Jolla firm, had 100 percent of Pacific Law Center and then 49 percent of the successor after Steigerwalt took control. In any case, Phillips basically ran Pacific Law Center, according to the Llamas and Slattery suits. Phillips did not respond to calls, and Arentz would not comment.
Phillips and Arentz have run into trouble with the State Bar of Arizona for using the same tactics that the San Diego firm used, both pre- and post-Steigerwalt. Phillips was censured and placed on two years of intensive probation by the Arizona bar in 2002. One of the reasons: so-called “intake personnel at his firm” who interviewed potential clients and failed to identify themselves as non-lawyers.
Late last year, the Arizona bar acted again: it recommended that Phillips be suspended for six months and a day and Arentz be suspended for 60 days. The bar said that the two “acted for their own immense financial benefit, overusing non-attorney employees for inappropriate tasks…to squeeze every last penny out of their clients.”
The Arizona Supreme Court upheld Arentz’s suspension but agreed to review Phillips’s. The bar had investigated 22 complaints, mainly on aggressive sales practices of non-attorney personnel.
And that goes to the heart of the complaints against Kerry Steigerwalt’s Pacific Law Center and its predecessor, both of which spent almost $5 million a year on advertising, according to Llamas’s suit. So-called “intake coordinators,” later called “legal administrators” (similar to those used by Larry Majors in Texas and Phillips in Arizona), greet the often impecunious people who have been swayed by the advertising.
According to the Pancer team, the intake coordinators are often former car salesmen who con the clients, asking initially for a high price and then coming down when meeting resistance. “The fee is based on how much the client is able to pay, not on traditionally recognized criteria such as complexity or novelty of legal issues and consumption of attorney time,” says the suit, which was dismissed on summary judgment and is now on appeal. Pacific Law Center’s intake coordinator told Llamas that the firm wins 90 percent of its Department of Motor Vehicles hearings, when the figure is actually 25 percent.
If Llamas would pay the firm’s price, the coordinator said he could guarantee Llamas would not lose his driver’s license, according to the suit. But in the end, an attorney told Llamas his case was indefensible and he should plead guilty.
The Llamas, Slattery, and Hancock suits stress that the sales personnel engage in the unauthorized practice of law.
Under rules of the California bar, a lawyer has to sign a retainer agreement in front of a client. But at Pacific Law Center, the lawyer who signed the document would say he was not the one who would handle the case. Thus, the potential client did not learn his rights or the strength of the case from an attorney handling it. Steigerwalt said in his deposition that he changed this procedure but couldn’t remember when.
In his deposition, Steigerwalt said Pacific Law Center lawyers “were schleps,” according to the Llamas suit. Also, Steigerwalt admitted that he knew of the pressure tactics used by the intake coordinators. But he didn’t change things significantly, say the Llamas and Slattery suits. Indeed, Steigerwalt, said in the Slattery suit to make $900,000 yearly, was constantly checking to see if the firm was bringing in the daily gross receipts it needed to keep its head above water.
Says Steigerwalt, “In forming [Kerry Steigerwalt’s Pacific Law Center] I realized there were challenges. I just did not realize the extent of those challenges.”
He won’t answer questions about the Llamas suit because it was dismissed. Ripostes Michael Pancer, “It is true that the summary judgment motion was granted, but that does not affect the validity of statements made under oath in support of our lawsuit.” That includes deposition statements made by Steigerwalt.
Says Pancer, “I will give Kerry Steigerwalt the benefit of the doubt when he claims he wanted to turn [Pacific Law Center] around. But it was obvious to those of us who practice criminal defense that the business model was ethically flawed and could not be saved no matter what his best intentions were.” Steigerwalt’s adventure represented a “desire for profit overwhelming good judgment.”
SAN DIEGO READER
It Wasn’t the Economy, Stupid
By Don Bauder | Published Wednesday, July 21, 2010
lINK: http://www.sandiegoreader.com/news/2010/jul/21/city-light-1/
The heavily advertised Pacific Law Center was once San Diego’s best-known law firm, but its most controversial. Two years ago, Kerry Steigerwalt, a criminal lawyer who is regularly quoted on local television, gained control of the firm and changed its name to Kerry Steigerwalt’s Pacific Law Center. It became a household name.
In a deposition for a lawsuit filed against the center last year, Steigerwalt claimed that the firm’s previous owners had wooed him and fed him false information. He said he was the “fall guy.”
Steigerwalt has indeed fallen. The firm, which specializes in driving-under-the-influence, personal injury, and defective-product cases, while purportedly counseling those with financial woes, intends to take no new cases but will wrap up old ones and eventually close down. Just recently, the Yellow Book sued the firm, saying it hasn’t paid for more than $200,000 in advertising. UTC Properties has also sued, saying the firm hasn’t paid rent at its posh La Jolla suite since the beginning of the year and owes almost $200,000.
Tom Slattery, a former lawyer at the firm, filed a massive complaint about its practices with the California State Bar, sending copies to state officials including the attorney general’s office. Some current and former lawyers say that the bar is probing the matter, but the bar won’t confirm that. Last week, Slattery filed suit against the firm, claiming that early this year, Steigerwalt’s firm was trying to stave off an “imminent collapse.”
The law firm has a D+ rating with the Better Business Bureau, generating 79 complaints in three years. That D+ is a slight improvement on an earlier F rating. Since 2004, there have been more than 40 superior court suits filed against the firm under both its names.
Steigerwalt blames most of his problems on the weak economy forcing criminal defendants to go to public defenders. But the inescapable truth is that he didn’t do his homework when taking over Pacific Law Center. On June 30, a new law firm registered with the secretary of state: Steigerwalt Law Firm, APC.
One key suit was filed in 2008 by Carl Hancock, who worked for Pacific Law Center for only nine months. The suit charged that Steigerwalt’s entrance into the firm was a “sham sales transaction for the purpose of protecting the assets” of the firm’s founders, Larry Majors, his son Austin Majors, and son-in-law Jeffrey Phillips, a Phoenix attorney. Hancock settled the suit early this year.
Another suit was filed last year by Dagoberto Llamas, who alleged he was blatantly cheated by the firm, which took big bucks from him to handle a criminal case in which he was charged with driving under the influence, battery, hit and run, and contempt of court. He was initially assured he could win the case but subsequently told it was hopeless. Llamas’s case against the law firm was handled by well-known criminal attorney Michael Pancer, his son Ian, and Doug Gilliland.
The suit says that the business model of both Kerry Steigerwalt’s Pacific Law Center and its predecessor “is the brainchild of a convicted felon and car dealer from Arizona named Larry Majors. After serving time for fraud in Arizona, Majors, a non-lawyer, opened a law firm in San Antonio, Texas, using a down-on-his-luck lawyer.… Majors launched a massive television advertising campaign to attract clients.” But Majors fled Texas after a bankruptcy judge called the firm “a borderline criminal enterprise.”
Then, according to the Pancer team’s account, Majors set up shop in San Diego with a lawyer who was eventually disbarred. Majors vamoosed when Texas authorities charged him with absconding with clients’ money. In 1993, Pacific Law Center opened in San Diego with son Austin Majors as executive director. The office was in La Jolla, but the listed address was that of son-in-law Jeffrey Phillips’s Phoenix law firm.
There has always been controversy about who owned and ran Pacific Law Center. According to Slattery’s testimony, Phillips was the owner. When Steigerwalt came in two years ago, he put in no money and got 51 percent of the firm, although at around the same time he gave part of his own practice to Phillips. Steigerwalt claims that Robert Arentz, then a member of Phillips’s Arizona firm and also one who hung around the La Jolla firm, had 100 percent of Pacific Law Center and then 49 percent of the successor after Steigerwalt took control. In any case, Phillips basically ran Pacific Law Center, according to the Llamas and Slattery suits. Phillips did not respond to calls, and Arentz would not comment.
Phillips and Arentz have run into trouble with the State Bar of Arizona for using the same tactics that the San Diego firm used, both pre- and post-Steigerwalt. Phillips was censured and placed on two years of intensive probation by the Arizona bar in 2002. One of the reasons: so-called “intake personnel at his firm” who interviewed potential clients and failed to identify themselves as non-lawyers.
Late last year, the Arizona bar acted again: it recommended that Phillips be suspended for six months and a day and Arentz be suspended for 60 days. The bar said that the two “acted for their own immense financial benefit, overusing non-attorney employees for inappropriate tasks…to squeeze every last penny out of their clients.”
The Arizona Supreme Court upheld Arentz’s suspension but agreed to review Phillips’s. The bar had investigated 22 complaints, mainly on aggressive sales practices of non-attorney personnel.
And that goes to the heart of the complaints against Kerry Steigerwalt’s Pacific Law Center and its predecessor, both of which spent almost $5 million a year on advertising, according to Llamas’s suit. So-called “intake coordinators,” later called “legal administrators” (similar to those used by Larry Majors in Texas and Phillips in Arizona), greet the often impecunious people who have been swayed by the advertising.
According to the Pancer team, the intake coordinators are often former car salesmen who con the clients, asking initially for a high price and then coming down when meeting resistance. “The fee is based on how much the client is able to pay, not on traditionally recognized criteria such as complexity or novelty of legal issues and consumption of attorney time,” says the suit, which was dismissed on summary judgment and is now on appeal. Pacific Law Center’s intake coordinator told Llamas that the firm wins 90 percent of its Department of Motor Vehicles hearings, when the figure is actually 25 percent.
If Llamas would pay the firm’s price, the coordinator said he could guarantee Llamas would not lose his driver’s license, according to the suit. But in the end, an attorney told Llamas his case was indefensible and he should plead guilty.
The Llamas, Slattery, and Hancock suits stress that the sales personnel engage in the unauthorized practice of law.
Under rules of the California bar, a lawyer has to sign a retainer agreement in front of a client. But at Pacific Law Center, the lawyer who signed the document would say he was not the one who would handle the case. Thus, the potential client did not learn his rights or the strength of the case from an attorney handling it. Steigerwalt said in his deposition that he changed this procedure but couldn’t remember when.
In his deposition, Steigerwalt said Pacific Law Center lawyers “were schleps,” according to the Llamas suit. Also, Steigerwalt admitted that he knew of the pressure tactics used by the intake coordinators. But he didn’t change things significantly, say the Llamas and Slattery suits. Indeed, Steigerwalt, said in the Slattery suit to make $900,000 yearly, was constantly checking to see if the firm was bringing in the daily gross receipts it needed to keep its head above water.
Says Steigerwalt, “In forming [Kerry Steigerwalt’s Pacific Law Center] I realized there were challenges. I just did not realize the extent of those challenges.”
He won’t answer questions about the Llamas suit because it was dismissed. Ripostes Michael Pancer, “It is true that the summary judgment motion was granted, but that does not affect the validity of statements made under oath in support of our lawsuit.” That includes deposition statements made by Steigerwalt.
Says Pancer, “I will give Kerry Steigerwalt the benefit of the doubt when he claims he wanted to turn [Pacific Law Center] around. But it was obvious to those of us who practice criminal defense that the business model was ethically flawed and could not be saved no matter what his best intentions were.” Steigerwalt’s adventure represented a “desire for profit overwhelming good judgment.”
Monday, April 19, 2010
Foreclosure rates surge, biggest jump in 5 years. (San Diego Bankruptcy Attorneys & Lawyers)
By ALEX VEIGA, AP Real Estate Writer Alex Veiga, Ap Real Estate Writer – Thu Apr 15, 7:32 am ET: http://news.yahoo.com/s/ap/20100415/ap_on_bi_ge/us_foreclosure_rates?source=patrick.net
LOS ANGELES – A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.
RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.
"We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.
Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.
These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.
"We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," Sharga said. "We expect the pace to accelerate as the year goes on."
In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.
Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.
The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners.
About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.
But another 158,000 homeowners who signed up have dropped out — either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.
Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.
The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.
Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes.
Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.
All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said.
Foreclosure filings rose on an annual and quarterly basis in Arizona, however.
One in every 49 homes there received a foreclosure-related notice during the quarter.
Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing.
California accounted for the biggest slice overall of homes facing foreclosure — roughly 23 percent of the nation's total. One in every 62 properties received a foreclosure filing in the first quarter.
(San Diego Bankruptcy Law Firm has Bankruptcy Lawyers and Bankruptcy Attorneys available 24 hours a day to answer your questions at www.gobksandiego.com.
LOS ANGELES – A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.
RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.
"We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.
Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.
These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.
"We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," Sharga said. "We expect the pace to accelerate as the year goes on."
In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.
Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.
The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners.
About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.
But another 158,000 homeowners who signed up have dropped out — either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.
Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.
The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.
Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes.
Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.
All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said.
Foreclosure filings rose on an annual and quarterly basis in Arizona, however.
One in every 49 homes there received a foreclosure-related notice during the quarter.
Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing.
California accounted for the biggest slice overall of homes facing foreclosure — roughly 23 percent of the nation's total. One in every 62 properties received a foreclosure filing in the first quarter.
(San Diego Bankruptcy Law Firm has Bankruptcy Lawyers and Bankruptcy Attorneys available 24 hours a day to answer your questions at www.gobksandiego.com.
Wednesday, March 24, 2010
Notices of Default up 24% in San Diego. Bankruptcy Lawyers
Notices of default up 24% in county
Analyst says February numbers might be fluke
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Friday, March 19, 2010 at 9:11 p.m.
Homeowners in San Diego County defaulted at their highest monthly rate in more than a year in February, MDA DataQuick reported Friday.
Defaults totaled 2,166, up 24.4 percent from January’s 1,741, the biggest one-month jump since the figure jumped 121.3 percent from November to December 2008.
Meanwhile, there were 973 foreclosures, down from 986 in January in the sixth month-to-month decline in the past year. The number was down 21 percent from year-ago levels.
More notices of default normally signal spreading distress in the housing market. As owners fall three months or more behind in their monthly payments, lenders usually file this first formal action that often leads to foreclosure. The number spiked a year ago, when lenders were catching up on a backlog of defaults delayed through extended noticing requirements and moratoriums.
DataQuick analyst Andrew LePage said the default rise last month might be a fluke.
“You can’t just read too much into a single month,” he said. “There’s been a very irregular (pattern) of notice-of-default filings.”
But LePage said he detected a similar uptick in counties throughout the state.
“The bulk was in the areas hit hardest” by economic and housing distress, he said, and did not reflect problems spreading to higher-priced properties as many analysts have been predicting.
“That’s not the way it shaped up,” LePage said. “It was more of the same.”
In his ZIP code breakdown of defaults in the county, LePage reported high percentage increases from January in several higher-priced neighborhoods. The actual numbers remained relatively low.
For example, Del Mar defaults were up 250 percent, but the increase was only from two to seven defaults; Solana Beach was up 120 percent, from five to 11; La Jolla was up 54.5 percent, from 11 to 17.
Meanwhile, some lower-cost areas continued to exhibit greater distress in absolute numbers. Nestor in the South Bay had 83 default notices, up from 53 in January and the highest of any ZIP code, followed by Spring Valley with 70, up from 44, and Encanto at 58, up from 53. All three had median home prices of $240,000 or less in the past 12 months.
LePage said it is possible that defaults will continue rising, given the high number of delinquencies that have been reported in recent months.
But Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said a new program to speed up short sales — homes sold for less than the outstanding mortgage balance — may forestall many defaults as well as foreclosures.
“No one’s walking around with rose-colored glasses thinking it’s the silver bullet,” Hobbs said. “Certainly, it’ll be useful tool.”
He said the market is still unsettled because of the so-called “shadow inventory” of distressed homes that are delinquent or in default.
“It would be catastrophic if all of a sudden they all went to foreclosure,” Hobbs said. “We would have a huge, downward impact on home values, and no one wants that.”
In another report Friday, HomeGain, a Web site based in Emeryville that lists estimated home valuations, said real estate agents nationally are somewhat more optimistic about the market than a year ago.
Twenty-nine percent of industry professionals responding to a survey said prices are likely to decrease in the next six months, compared with 53 percent expecting a decline a year ago.
California was one of 10 states where more agents think prices will go up than down in the next six months.
The breakdown: 42 percent think prices will be unchanged, 36 percent think they will rise and 22 percent think they will fall.
Roger Showley: (619) 293-1286; roger.showley@uniontrib.com
Analyst says February numbers might be fluke
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Friday, March 19, 2010 at 9:11 p.m.
Homeowners in San Diego County defaulted at their highest monthly rate in more than a year in February, MDA DataQuick reported Friday.
Defaults totaled 2,166, up 24.4 percent from January’s 1,741, the biggest one-month jump since the figure jumped 121.3 percent from November to December 2008.
Meanwhile, there were 973 foreclosures, down from 986 in January in the sixth month-to-month decline in the past year. The number was down 21 percent from year-ago levels.
More notices of default normally signal spreading distress in the housing market. As owners fall three months or more behind in their monthly payments, lenders usually file this first formal action that often leads to foreclosure. The number spiked a year ago, when lenders were catching up on a backlog of defaults delayed through extended noticing requirements and moratoriums.
DataQuick analyst Andrew LePage said the default rise last month might be a fluke.
“You can’t just read too much into a single month,” he said. “There’s been a very irregular (pattern) of notice-of-default filings.”
But LePage said he detected a similar uptick in counties throughout the state.
“The bulk was in the areas hit hardest” by economic and housing distress, he said, and did not reflect problems spreading to higher-priced properties as many analysts have been predicting.
“That’s not the way it shaped up,” LePage said. “It was more of the same.”
In his ZIP code breakdown of defaults in the county, LePage reported high percentage increases from January in several higher-priced neighborhoods. The actual numbers remained relatively low.
For example, Del Mar defaults were up 250 percent, but the increase was only from two to seven defaults; Solana Beach was up 120 percent, from five to 11; La Jolla was up 54.5 percent, from 11 to 17.
Meanwhile, some lower-cost areas continued to exhibit greater distress in absolute numbers. Nestor in the South Bay had 83 default notices, up from 53 in January and the highest of any ZIP code, followed by Spring Valley with 70, up from 44, and Encanto at 58, up from 53. All three had median home prices of $240,000 or less in the past 12 months.
LePage said it is possible that defaults will continue rising, given the high number of delinquencies that have been reported in recent months.
But Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said a new program to speed up short sales — homes sold for less than the outstanding mortgage balance — may forestall many defaults as well as foreclosures.
“No one’s walking around with rose-colored glasses thinking it’s the silver bullet,” Hobbs said. “Certainly, it’ll be useful tool.”
He said the market is still unsettled because of the so-called “shadow inventory” of distressed homes that are delinquent or in default.
“It would be catastrophic if all of a sudden they all went to foreclosure,” Hobbs said. “We would have a huge, downward impact on home values, and no one wants that.”
In another report Friday, HomeGain, a Web site based in Emeryville that lists estimated home valuations, said real estate agents nationally are somewhat more optimistic about the market than a year ago.
Twenty-nine percent of industry professionals responding to a survey said prices are likely to decrease in the next six months, compared with 53 percent expecting a decline a year ago.
California was one of 10 states where more agents think prices will go up than down in the next six months.
The breakdown: 42 percent think prices will be unchanged, 36 percent think they will rise and 22 percent think they will fall.
Roger Showley: (619) 293-1286; roger.showley@uniontrib.com
Thursday, March 4, 2010
Union Trib: Hefty tax bill hits those who lost home...short sale or foreclosure
Hefty tax bill may hit those who lost home
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Wednesday, March 3, 2010 at 12:03 a.m.
LINK: http://www.signonsandiego.com/news/2010/mar/03/hefty-tax-bill-may-hit-those-who-lost-home/?source=patrick.net
Charlie Neuman / UNION-TRIBUNE
Phyllis and Jack Roth of Fletcher Hills are facing a California tax bill of up to $20,000 because, they have found, the state treats short-sales differently than the IRS.
San Diegans who have lost their homes through foreclosure or short-sales thought they had emerged from the dark times and could start rebuilding their lives.
Then the state tax man came calling.
With less than six weeks before taxes are due, an estimated 16,000 former homeowners statewide will owe $15 million in extra income taxes this year and $29 million through 2012.
The tax applies to what is called the “cancellation of debt” that occurs when property owners lose their homes through foreclosure or arrange a short-sale in which they sell for less than the mortgage balance. The lender sends them a form itemizing the forgiven debt, and the amount is subject to income tax.
Congress exempted most homeowners from the extra federal tax through 2012, and the state followed suit for 2007 and 2008 but did not extend the provision last year. The state Assembly may vote tomorrow on a bill to repeal the tax, but Gov. Arnold Schwarzenegger vetoed such a bill last year over unrelated provisions.
“They’re probably stuck,” San Diego tax attorney Bob Kevane said of former homeowners facing the tax. “The biggest way around it is if you’re insolvent.”
Brad Nemeth, another tax attorney, said he doubts the tax will be eliminated.
“The state of California is seriously upside down financially, and I think the governor will probably veto it again,” Nemeth said.
H.D. Palmer, a spokesman for the Department of Finance, said Schwarzenegger remains opposed to the bill in its present form but has not announced whether he will veto it again. Other versions of the tax repeal are in the hopper and could be passed next month, legislators’ analysts said.
Failure to halt the tax could cost Jack and Phyllis Roth of Fletcher Hills as much as $20,000 in state income taxes this year — they paid $781 last year — because of the home they sold short in Flinn Springs in November. They bought it in 2004 for $545,000, invested $50,000 in improvements, and then saw its value fall by one-third before they sold it for $410,000. The result was about $190,000 in net loss that was forgiven by the Roths’ lender.
Phyllis Roth, 63, a tax preparer, said she did not realize until recently that the state would treat the short-sale differently than the Internal Revenue Service would. She estimates her state taxes at $15,000 to $20,000.
“I didn’t call anybody,” she said. “I was looking online and didn’t see anything. That’s what happens when you rely on yourself.”
The state Franchise Tax Board has received an increasing number of calls from former homeowners who are discovering the giant tax bills they face, said spokeswoman Denise Azimi. Azimi said the former homeowners can work out a payment schedule, though the state charges 4 percent interest on such stretched-out payments.
If the tax is repealed eventually, the taxpayers could seek a refund, but for now, they have to pay what is due by April 15 or face a penalty.
Not all foreclosures and short-sales are subject to the tax, experts said.
In California, most home buyers get mortgages involving a “nonrecourse” loan — meaning that if the property is foreclosed, the lender has no recourse for recovering lost money except by selling the property itself. Lenders cannot go after the owners’ assets to make up the difference, and no tax is due. These rules apply to principal residences only.
However, when owners refinance or take out a second mortgage or home equity line of credit — as happened often during the housing boom — those loans are written as recourse loans and lenders can seek repayment from the owners’ other resources. Sometimes lenders agree to waive the lost amount, but under current state law, that amount is taxable for homes sold since Jan. 1, 2009.
“It’s one of those little land mines waiting to jump up on people,” Nemeth said.
Taxes also are not due if owners declare insolvency or bankruptcy, the lawyers said. For young homeowners whose main asset was their home, it’s likely they could fall under this provision. For others, the valuation of assets becomes a factor in determining solvency.
“Sometimes if they have other real estate, we try and value the stuff realistically, so that they have as little impact as possible,” Kevane said.
For the Roths, who continue to own a previous home and have other assets, their nearly $200,000 in losses does not cancel out their other holdings. The couple said they normally operate conservatively and only bought the home, which they lived in while their son continued to live in their first house, so they could sell it at a profit and pad their retirement accounts.
“If we have to pay it, we’ll pay it,” Phyllis Roth said of the taxes. “It’s less money to retire on, but it’s not the end of the world.”
Back in Sacramento, the proposal to waive the cancellation of debt tax has passed the Senate and awaits an Assembly vote. Its fate is wrapped up in a larger bill, SB8X-32, by Sen. Lois Wolk, D-Davis, which would bring other state tax provisions into compliance with federal law.
One of those, which prompted Schwarzenegger’s veto last year, relates to “erroneous reporting” of tax liability, by which some large taxpayers seek to avoid penalties for under-reporting of income by overestimating taxes due. Federal law charges a penalty for overestimating without a reasonable explanation, and the state bill would adopt similar penalties.
Wolk, who chairs the Senate Revenue and Taxation Committee, said it was appropriate to group all tax conformance measures into one bill. But if her bill is vetoed again, she indicated she would act to get the cancellation of debt tax repealed.
“We’re certainly not going to allow homeowners to have to pay significantly more tax when they’ve had to relinquish their homes through short-sales (and foreclosures),” Wolk said.
Roger Showley: (619) 293-1286; roger.showley@uniontrib.com
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Wednesday, March 3, 2010 at 12:03 a.m.
LINK: http://www.signonsandiego.com/news/2010/mar/03/hefty-tax-bill-may-hit-those-who-lost-home/?source=patrick.net
Charlie Neuman / UNION-TRIBUNE
Phyllis and Jack Roth of Fletcher Hills are facing a California tax bill of up to $20,000 because, they have found, the state treats short-sales differently than the IRS.
San Diegans who have lost their homes through foreclosure or short-sales thought they had emerged from the dark times and could start rebuilding their lives.
Then the state tax man came calling.
With less than six weeks before taxes are due, an estimated 16,000 former homeowners statewide will owe $15 million in extra income taxes this year and $29 million through 2012.
The tax applies to what is called the “cancellation of debt” that occurs when property owners lose their homes through foreclosure or arrange a short-sale in which they sell for less than the mortgage balance. The lender sends them a form itemizing the forgiven debt, and the amount is subject to income tax.
Congress exempted most homeowners from the extra federal tax through 2012, and the state followed suit for 2007 and 2008 but did not extend the provision last year. The state Assembly may vote tomorrow on a bill to repeal the tax, but Gov. Arnold Schwarzenegger vetoed such a bill last year over unrelated provisions.
“They’re probably stuck,” San Diego tax attorney Bob Kevane said of former homeowners facing the tax. “The biggest way around it is if you’re insolvent.”
Brad Nemeth, another tax attorney, said he doubts the tax will be eliminated.
“The state of California is seriously upside down financially, and I think the governor will probably veto it again,” Nemeth said.
H.D. Palmer, a spokesman for the Department of Finance, said Schwarzenegger remains opposed to the bill in its present form but has not announced whether he will veto it again. Other versions of the tax repeal are in the hopper and could be passed next month, legislators’ analysts said.
Failure to halt the tax could cost Jack and Phyllis Roth of Fletcher Hills as much as $20,000 in state income taxes this year — they paid $781 last year — because of the home they sold short in Flinn Springs in November. They bought it in 2004 for $545,000, invested $50,000 in improvements, and then saw its value fall by one-third before they sold it for $410,000. The result was about $190,000 in net loss that was forgiven by the Roths’ lender.
Phyllis Roth, 63, a tax preparer, said she did not realize until recently that the state would treat the short-sale differently than the Internal Revenue Service would. She estimates her state taxes at $15,000 to $20,000.
“I didn’t call anybody,” she said. “I was looking online and didn’t see anything. That’s what happens when you rely on yourself.”
The state Franchise Tax Board has received an increasing number of calls from former homeowners who are discovering the giant tax bills they face, said spokeswoman Denise Azimi. Azimi said the former homeowners can work out a payment schedule, though the state charges 4 percent interest on such stretched-out payments.
If the tax is repealed eventually, the taxpayers could seek a refund, but for now, they have to pay what is due by April 15 or face a penalty.
Not all foreclosures and short-sales are subject to the tax, experts said.
In California, most home buyers get mortgages involving a “nonrecourse” loan — meaning that if the property is foreclosed, the lender has no recourse for recovering lost money except by selling the property itself. Lenders cannot go after the owners’ assets to make up the difference, and no tax is due. These rules apply to principal residences only.
However, when owners refinance or take out a second mortgage or home equity line of credit — as happened often during the housing boom — those loans are written as recourse loans and lenders can seek repayment from the owners’ other resources. Sometimes lenders agree to waive the lost amount, but under current state law, that amount is taxable for homes sold since Jan. 1, 2009.
“It’s one of those little land mines waiting to jump up on people,” Nemeth said.
Taxes also are not due if owners declare insolvency or bankruptcy, the lawyers said. For young homeowners whose main asset was their home, it’s likely they could fall under this provision. For others, the valuation of assets becomes a factor in determining solvency.
“Sometimes if they have other real estate, we try and value the stuff realistically, so that they have as little impact as possible,” Kevane said.
For the Roths, who continue to own a previous home and have other assets, their nearly $200,000 in losses does not cancel out their other holdings. The couple said they normally operate conservatively and only bought the home, which they lived in while their son continued to live in their first house, so they could sell it at a profit and pad their retirement accounts.
“If we have to pay it, we’ll pay it,” Phyllis Roth said of the taxes. “It’s less money to retire on, but it’s not the end of the world.”
Back in Sacramento, the proposal to waive the cancellation of debt tax has passed the Senate and awaits an Assembly vote. Its fate is wrapped up in a larger bill, SB8X-32, by Sen. Lois Wolk, D-Davis, which would bring other state tax provisions into compliance with federal law.
One of those, which prompted Schwarzenegger’s veto last year, relates to “erroneous reporting” of tax liability, by which some large taxpayers seek to avoid penalties for under-reporting of income by overestimating taxes due. Federal law charges a penalty for overestimating without a reasonable explanation, and the state bill would adopt similar penalties.
Wolk, who chairs the Senate Revenue and Taxation Committee, said it was appropriate to group all tax conformance measures into one bill. But if her bill is vetoed again, she indicated she would act to get the cancellation of debt tax repealed.
“We’re certainly not going to allow homeowners to have to pay significantly more tax when they’ve had to relinquish their homes through short-sales (and foreclosures),” Wolk said.
Roger Showley: (619) 293-1286; roger.showley@uniontrib.com
Wednesday, February 24, 2010
24% of residential homes upside down according to Reuters and CoreLogic
CoreLogic: 24% of residential properties upside down
Feb 23, 2010 17:58 EST
homeownership rate | negative equity
You don’t keep paying for something that you own.
http://blogs.reuters.com/rolfe-winkler/2010/02/23/corelogic-24-of-residential-properties-upside-down/?source=patrick.net
From FirstAmerican Core Logic:
…more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.
Negative equity means the mortgage balance is higher than the value of the home.
The bulk of underwater properties are concentrated in five states: California, Florida, Nevada, Arizona and Michigan. Nevada leads the way in terms of most homes with negative equity at a whopping 70 percent.
“Home-ownership” is badly defined by, for instance, the Census Bureau, which considers all “owner-occupied housing units” in its calculation of the home-ownership rate.
But the rate would be far lower if one simply calculated the amount of equity that Americans have in their homes. Since this is the portion of real estate for which they don’t pay anything, it is the only portion that is truly “owned.”
Subtract folks who owe more on their homes than they are worth and the home-ownership rate drops from 67% to 43%.
This isn’t merely academic. Having equity in their homes is a big reason homeowners keep paying their mortgage, which is necessary for banks to stay solvent.
IF YOU ARE HAVING DIFFICULTY KEEPING UP WITH YOUR BILLS, OR YOU ARE FACING FORECLOSURE, THE SAN DIEGO BANKRUPTCY LAW FIRM CAN HELP. VISIT US AT WWW.GOBKSANDIEGO.COM
Feb 23, 2010 17:58 EST
homeownership rate | negative equity
You don’t keep paying for something that you own.
http://blogs.reuters.com/rolfe-winkler/2010/02/23/corelogic-24-of-residential-properties-upside-down/?source=patrick.net
From FirstAmerican Core Logic:
…more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.
Negative equity means the mortgage balance is higher than the value of the home.
The bulk of underwater properties are concentrated in five states: California, Florida, Nevada, Arizona and Michigan. Nevada leads the way in terms of most homes with negative equity at a whopping 70 percent.
“Home-ownership” is badly defined by, for instance, the Census Bureau, which considers all “owner-occupied housing units” in its calculation of the home-ownership rate.
But the rate would be far lower if one simply calculated the amount of equity that Americans have in their homes. Since this is the portion of real estate for which they don’t pay anything, it is the only portion that is truly “owned.”
Subtract folks who owe more on their homes than they are worth and the home-ownership rate drops from 67% to 43%.
This isn’t merely academic. Having equity in their homes is a big reason homeowners keep paying their mortgage, which is necessary for banks to stay solvent.
IF YOU ARE HAVING DIFFICULTY KEEPING UP WITH YOUR BILLS, OR YOU ARE FACING FORECLOSURE, THE SAN DIEGO BANKRUPTCY LAW FIRM CAN HELP. VISIT US AT WWW.GOBKSANDIEGO.COM
Subscribe to:
Posts (Atom)