From the San Diego Union Tribune February 29,2012
http://www.utsandiego.com/news/2012/feb/27/calif-ag-asks-freddie-fannie-stop-foreclosures/
California Attorney General Kamala Harris has asked the regulator of mortgage giants Fannie Mae and Freddie Mac to stop foreclosure sales in the state until it reviews whether principal reductions could help homeowners with Fannie- and Freddie-backed mortgages.
Harris made the request to Federal Housing Finance Agency Director Edward DeMarco in a Feb. 24 letter, roughly two weeks after Harris announced her involvement in a historic mortgage settlement between 49 attorneys general and the nation's largest lenders.
The settlement, which still needs judge approval, could help an estimated 466,000 borrowers in California. However, loans backed by Fannie Mae and Freddie Mac would not be affected by the attorney generals' mortgage deal.
"You have consistently declined to authorize principal reduction programs by those government-sponsored enterprises," said Harris in the letter to DeMarco.
Harris' office estimates more than 60 percent of home loans in the state are owned or held by Fannie and Freddie, a significant portion of borrowers who could benefit from having their principal balances reduced.
The Federal Housing Finance Agency could not immediately be reached for comment.
DeMarco, during an oversight committee hearing hearing on Nov. 16, said the FHFA has concluded that reducing principal balances is "not going to be the least-cost approach for the taxpayer" when compared to other alternative-foreclosure programs including principal forbearance, which "zeroes out the interest rate charged on the underwater portion of the mortgage."
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 bankrupcty. Show all posts
Showing posts with label bankrupcty. Show all posts
Wednesday, February 29, 2012
Tuesday, December 20, 2011
Preparing For Bankruptcy
by Adrian Lapas, Eastern North Carolina Bankruptcy Attorney
Link to article: http://www.bankruptcylawnetwork.com/preparing-for-bankruptcy/
When you are considering a trip, usually, you make substantial preparations in anticipation of that trip. You make travel arrangements; you make sure you have a place to stay; you make reservations for any activities in which you wish to participate. You will often make significant plans and preparations for any “big” event. Bankruptcy is no different. It is a significant life event that demands some thought and preparation before you embark on it.
In talking with potential bankruptcy clients, it seems that a lot of them wait until the last minute before contacting a bankruptcy lawyer to find out how bankruptcy may help them. While visiting a bankruptcy lawyer most likely does not rank high on most people’s “bucket list,” if you are struggling financially, it most likely makes sense to determine if and how bankruptcy can help you sooner rather than later.
So, how can “preparing” for bankruptcy help? First, you will need to have the fees for the lawyer and for the court available. For now, for a chapter 7 filing, just the filing fee is $306.00. Additionally, before you file, you must complete a consumer credit counseling session and get the certification that must be filed with the court. If you “fail to plan” for your bankruptcy filing by finding out what you need ahead of time, when your car is on the verge of getting repo’d, you may not have the time and/or money to retain a bankruptcy lawyer.
Second, you can carefully go over your income and expenses and see where the trouble lies. Certainly a bankruptcy lawyer can help you identify the problem (with appropriate information) but you also need to know how you got into this financial mess. Some problems are easy to identify–temporary loss of income; extraordinary medical bills; overspending for a bit, etc. Bankruptcy can assist in overcoming those past problems but you need to be aware of the problem so that you can avoid it in the future. Bankruptcy is designed to be a “fresh start.” You can greatly assist in obtaining that “fresh start” by breaking or modifying some of the habits that perhaps got you here in the first place.
Third, make sure you know who you owe and how much. Find out if there is any collateral associated with the debts and gather up loan documents. Your lawyer will need this but, more importantly, you need to know your own financial picture. Credit reports are freely available and can be a big help. Also, if lawsuits or foreclosures have been filed against you, make sure you have that paperwork–all of it! It is important!
Finally, change your mindset. In dealing with individuals facing financial problems, it is often much more difficult instead of dealing with distressed businesses. That is because a business looks at assets and liabilities and can make a rational decision as to whether keeping an asset is worth the corresponding liability. Understandably, people are attached to their “things.” But, after all, they are just “things” and you have to consider carefully whether retaining a “thing” is worth the potential stress and headache. As an example, if you suffered a decrease in income and you have two relatively late model cars. No one wants to give up one or two cars but sometimes it is better to surrender a vehicle or two in order to keep your house (if that is important to you). There will be some emotional attachment to some “things” but it is imperative that you do this. Determining what is important to you is important for your bankruptcy lawyer in setting achievable goals for your bankruptcy filing.
Finally, do some research. There is a lot of information about bankruptcy that is freely available. However, you should exercise extreme caution in considering the information. Not that the information is inaccurate (some info may be outdated or simply inapplicable) but it takes an experienced profession to know what is appropriate and what is not. But, by familiarizing yourself with some basic bankruptcy information, you will be in a better position to appreciate and assist your bankruptcy lawyer in setting realistic and achievable goals.
After all, the real goal of a bankruptcy filing is a “fresh start.”
Link to article: http://www.bankruptcylawnetwork.com/preparing-for-bankruptcy/
When you are considering a trip, usually, you make substantial preparations in anticipation of that trip. You make travel arrangements; you make sure you have a place to stay; you make reservations for any activities in which you wish to participate. You will often make significant plans and preparations for any “big” event. Bankruptcy is no different. It is a significant life event that demands some thought and preparation before you embark on it.
In talking with potential bankruptcy clients, it seems that a lot of them wait until the last minute before contacting a bankruptcy lawyer to find out how bankruptcy may help them. While visiting a bankruptcy lawyer most likely does not rank high on most people’s “bucket list,” if you are struggling financially, it most likely makes sense to determine if and how bankruptcy can help you sooner rather than later.
So, how can “preparing” for bankruptcy help? First, you will need to have the fees for the lawyer and for the court available. For now, for a chapter 7 filing, just the filing fee is $306.00. Additionally, before you file, you must complete a consumer credit counseling session and get the certification that must be filed with the court. If you “fail to plan” for your bankruptcy filing by finding out what you need ahead of time, when your car is on the verge of getting repo’d, you may not have the time and/or money to retain a bankruptcy lawyer.
Second, you can carefully go over your income and expenses and see where the trouble lies. Certainly a bankruptcy lawyer can help you identify the problem (with appropriate information) but you also need to know how you got into this financial mess. Some problems are easy to identify–temporary loss of income; extraordinary medical bills; overspending for a bit, etc. Bankruptcy can assist in overcoming those past problems but you need to be aware of the problem so that you can avoid it in the future. Bankruptcy is designed to be a “fresh start.” You can greatly assist in obtaining that “fresh start” by breaking or modifying some of the habits that perhaps got you here in the first place.
Third, make sure you know who you owe and how much. Find out if there is any collateral associated with the debts and gather up loan documents. Your lawyer will need this but, more importantly, you need to know your own financial picture. Credit reports are freely available and can be a big help. Also, if lawsuits or foreclosures have been filed against you, make sure you have that paperwork–all of it! It is important!
Finally, change your mindset. In dealing with individuals facing financial problems, it is often much more difficult instead of dealing with distressed businesses. That is because a business looks at assets and liabilities and can make a rational decision as to whether keeping an asset is worth the corresponding liability. Understandably, people are attached to their “things.” But, after all, they are just “things” and you have to consider carefully whether retaining a “thing” is worth the potential stress and headache. As an example, if you suffered a decrease in income and you have two relatively late model cars. No one wants to give up one or two cars but sometimes it is better to surrender a vehicle or two in order to keep your house (if that is important to you). There will be some emotional attachment to some “things” but it is imperative that you do this. Determining what is important to you is important for your bankruptcy lawyer in setting achievable goals for your bankruptcy filing.
Finally, do some research. There is a lot of information about bankruptcy that is freely available. However, you should exercise extreme caution in considering the information. Not that the information is inaccurate (some info may be outdated or simply inapplicable) but it takes an experienced profession to know what is appropriate and what is not. But, by familiarizing yourself with some basic bankruptcy information, you will be in a better position to appreciate and assist your bankruptcy lawyer in setting realistic and achievable goals.
After all, the real goal of a bankruptcy filing is a “fresh start.”
Thursday, December 8, 2011
Bankruptcy is the Best Way to Save Your Home
Bankruptcy is the Best Way to Save Your Home
by Brett Weiss, Maryland Bankruptcy Attorney
Link to article: http://www.bankruptcylawnetwork.com/bankruptcy-is-the-best-way-to-save-your-home/
You want to save your home. Which is the best way to stop a foreclosure, get caught up on your monthly payments, and save your home? Is it loan modification? A workout? Or a bankruptcy?
A recent article, “The Home Ownership Experience of Households in Bankruptcy” by Professor Sarah W. Carroll, of the University of Pennsylvania Law School and Wenli Li, of the Federal Reserve Bank of Philadelphia, provided the first in-depth analysis of the home ownership experience of home owners in Chapter 13. Its conclusions mirror what most bankruptcy attorneys’ personal experience has been: Chapter 13 is one of the most effective ways to let you save your home.
The study followed homeowners who filed for Chapter 13 between 2001 and 2002 in New Castle County, Delaware, from the time of their filing to October 2007. (Since most Chapter 13 plans last five years, this was a fair trial period.) After analyzing the data, it found two important results:
First, the Chapter 13 filing was not always the solution: 27.9 percent of filers lost their houses in foreclosure despite filing for bankruptcy. This is typically a result of poor cashflow. If job loss, or illness continues and there is not enough money coming into the household, the house will be lost regardless of filing bankruptcy or not. Many of the homeowners in this group will end up converting their cases to one under Chapter 7, so that they can wipe out any personal liability for the mortgage(s), as well as most of their other debts.
However, when compared with homeowners who did not file, debtors who filed for bankruptcy were able to stay in their homes for, on average, 27.7 additional months, over two years. This figure includes those who ended up losing their homes.
So, if you’re behind on mortgage payments, consider a Chapter 13–it may let you stay in your home a lot longer than other options.
by Brett Weiss, Maryland Bankruptcy Attorney
Link to article: http://www.bankruptcylawnetwork.com/bankruptcy-is-the-best-way-to-save-your-home/
You want to save your home. Which is the best way to stop a foreclosure, get caught up on your monthly payments, and save your home? Is it loan modification? A workout? Or a bankruptcy?
A recent article, “The Home Ownership Experience of Households in Bankruptcy” by Professor Sarah W. Carroll, of the University of Pennsylvania Law School and Wenli Li, of the Federal Reserve Bank of Philadelphia, provided the first in-depth analysis of the home ownership experience of home owners in Chapter 13. Its conclusions mirror what most bankruptcy attorneys’ personal experience has been: Chapter 13 is one of the most effective ways to let you save your home.
The study followed homeowners who filed for Chapter 13 between 2001 and 2002 in New Castle County, Delaware, from the time of their filing to October 2007. (Since most Chapter 13 plans last five years, this was a fair trial period.) After analyzing the data, it found two important results:
First, the Chapter 13 filing was not always the solution: 27.9 percent of filers lost their houses in foreclosure despite filing for bankruptcy. This is typically a result of poor cashflow. If job loss, or illness continues and there is not enough money coming into the household, the house will be lost regardless of filing bankruptcy or not. Many of the homeowners in this group will end up converting their cases to one under Chapter 7, so that they can wipe out any personal liability for the mortgage(s), as well as most of their other debts.
However, when compared with homeowners who did not file, debtors who filed for bankruptcy were able to stay in their homes for, on average, 27.7 additional months, over two years. This figure includes those who ended up losing their homes.
So, if you’re behind on mortgage payments, consider a Chapter 13–it may let you stay in your home a lot longer than other options.
Friday, October 21, 2011
Don't use your retirement account to pay off creditors
"Keep Your Nest Egg" by Douglas Jacobs
Link to article: http://www.bankruptcylawnetwork.com/keep-your-nest-egg/
Don’t take money out of your retirement account to ease a temporary economic crunch.
Difficult times come and go; and sometimes they seem insurmountable. When that happens, it might appear wise to tap into the 401k or the IRA and borrow or take some of the funds. Don’t do it!
I see bankruptcy clients every day who have used their 401k or their IRA to cover bills. They come to see me after they have reduced or spent all of their retirement! It’s too bad they didn’t see a bankruptcy attorney or competent financial adviser before that money was gone.
Almost all retirement accounts are considered exempt property. That means that even after filing a bankruptcy, you’ll still have it. But your debts, or most of them, will be gone.
Your retirement account is probably the only hope you have for the future. None of us will work forever, and if you deplete the account today, you may well find yourself unable to retire; or not able to afford anything more than a meager existence at that time. And don’t expect the Social Security system to bail you out. At the top rate, the monthly pay-out is barely enough to afford reasonable housing and food, much less travel money to see the grandkids or go fishing.
You should also remember that any money you withdraw from a retirement account gets taxed now. And there’s a 10% penalty for early withdrawals from an IRA. Those taxes won’t go away in the bankruptcy. Not only will you lose an exempt asset you could have kept, but you will incur a new debt too.
So, don’t deplete your retirement. Leave it for when you really need it. See a competent bankruptcy attorney in your state before you make the decision.
Link to article: http://www.bankruptcylawnetwork.com/keep-your-nest-egg/
Don’t take money out of your retirement account to ease a temporary economic crunch.
Difficult times come and go; and sometimes they seem insurmountable. When that happens, it might appear wise to tap into the 401k or the IRA and borrow or take some of the funds. Don’t do it!
I see bankruptcy clients every day who have used their 401k or their IRA to cover bills. They come to see me after they have reduced or spent all of their retirement! It’s too bad they didn’t see a bankruptcy attorney or competent financial adviser before that money was gone.
Almost all retirement accounts are considered exempt property. That means that even after filing a bankruptcy, you’ll still have it. But your debts, or most of them, will be gone.
Your retirement account is probably the only hope you have for the future. None of us will work forever, and if you deplete the account today, you may well find yourself unable to retire; or not able to afford anything more than a meager existence at that time. And don’t expect the Social Security system to bail you out. At the top rate, the monthly pay-out is barely enough to afford reasonable housing and food, much less travel money to see the grandkids or go fishing.
You should also remember that any money you withdraw from a retirement account gets taxed now. And there’s a 10% penalty for early withdrawals from an IRA. Those taxes won’t go away in the bankruptcy. Not only will you lose an exempt asset you could have kept, but you will incur a new debt too.
So, don’t deplete your retirement. Leave it for when you really need it. See a competent bankruptcy attorney in your state before you make the decision.
Thursday, October 20, 2011
Number of Californians entering foreclosure jumps in third quarter
Link to article: http://latimesblogs.latimes.com/money_co/2011/10/california-foreclosures.html?source=patrick.net
A big August surge in foreclosure actions by Bank of America and Bank of New York sent the number of California homeowners entering foreclosure to levels not seen in a year.
The third-quarter jump in notices of default, the first formal step in the foreclosure process, came after such filings had dropped to a three-year low earlier this year. Defaults were up 25.9% from the prior quarter, according to according to San Diego-based DataQuick, a real estate information service.
Banks have fired up the foreclosure-processing machinery in recent months after a long lull as they tried to negotiate settlements with regulators over faulty foreclosure practices. That slowdown created a backlog after a slew of investigations were launched following last year’s so-called robo-signing scandal, where banks used improper practices and documents to foreclose on troubled homeowners.
“Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively,” DataQuick president John Walsh said in a statement.
California properties received an estimated 71,275 notices of default during the three months ended Sept. 30, with some properties receiving multiple notices due to more than one loan. The majority of those loans were from the peak bubble years of 2005, 2006 and 2007, when lending practices were at their loosest, DataQuick said.
Separate third-quarter data released earlier this month by the Irvine-based firm RealtyTrac showed the number of homes entering foreclosure surged in states where repossessions take place largely outside of the courtroom. These nonjudicial states include California, Nevada, Arizona, Oregon and Washington.
Experts said that these Western states would experience any foreclosure surge first, as it is easier to get the process rolling again in these places.
While more California homes entered the foreclosure process in the third quarter, the number of homes taken back by banks continued to decline, according to DataQuick. The number of filed trustees deeds -- which are the papers that record the repossession of a home -- declined 8.4% from the prior quarter and dropped 14.3% from the third quarter of 2010. A total of 38,895 trustees deeds were filed in the third quarter.
Experts said that banks are probably waiting for some kind of settlement to be hammered out before really picking up the pace on foreclosures again. The increase in new California proceedings comes as talks over a broad foreclosure settlement by state attorneys general with the nation's five-largest mortgage servicers have experienced setbacks -- dragging on far longer than expected.
California recently stepped out of those discussions, declaring it would pursue its own path.
A big August surge in foreclosure actions by Bank of America and Bank of New York sent the number of California homeowners entering foreclosure to levels not seen in a year.
The third-quarter jump in notices of default, the first formal step in the foreclosure process, came after such filings had dropped to a three-year low earlier this year. Defaults were up 25.9% from the prior quarter, according to according to San Diego-based DataQuick, a real estate information service.
Banks have fired up the foreclosure-processing machinery in recent months after a long lull as they tried to negotiate settlements with regulators over faulty foreclosure practices. That slowdown created a backlog after a slew of investigations were launched following last year’s so-called robo-signing scandal, where banks used improper practices and documents to foreclose on troubled homeowners.
“Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively,” DataQuick president John Walsh said in a statement.
California properties received an estimated 71,275 notices of default during the three months ended Sept. 30, with some properties receiving multiple notices due to more than one loan. The majority of those loans were from the peak bubble years of 2005, 2006 and 2007, when lending practices were at their loosest, DataQuick said.
Separate third-quarter data released earlier this month by the Irvine-based firm RealtyTrac showed the number of homes entering foreclosure surged in states where repossessions take place largely outside of the courtroom. These nonjudicial states include California, Nevada, Arizona, Oregon and Washington.
Experts said that these Western states would experience any foreclosure surge first, as it is easier to get the process rolling again in these places.
While more California homes entered the foreclosure process in the third quarter, the number of homes taken back by banks continued to decline, according to DataQuick. The number of filed trustees deeds -- which are the papers that record the repossession of a home -- declined 8.4% from the prior quarter and dropped 14.3% from the third quarter of 2010. A total of 38,895 trustees deeds were filed in the third quarter.
Experts said that banks are probably waiting for some kind of settlement to be hammered out before really picking up the pace on foreclosures again. The increase in new California proceedings comes as talks over a broad foreclosure settlement by state attorneys general with the nation's five-largest mortgage servicers have experienced setbacks -- dragging on far longer than expected.
California recently stepped out of those discussions, declaring it would pursue its own path.
Monday, October 3, 2011
You Just Got Sued–What Should You Do?
by Dana Wilkinson, Attorney at Law
Link to article: http://www.bankruptcylawnetwork.com/you-just-got-sued-what-should-you-do/
So far this morning, I’ve gotten two calls from clients who received suit papers over the weekend. Credit card companies (or the debt buyers who bought the accounts) have filed civil suits in state court, seeking a judgment for the amount owed. One of the suits was accompanied by a letter from the law firm that filed the suit, insisting that the client contact them immediately. Getting sued is a scary thing. So, should you hit the panic button? What does it mean, and what can you do?
A civil suit is nothing more than a request that a court decide that you owe the plaintiff money. That’s it. You are being put on notice, and you have the right to respond and dispute that you owe the money, or that the amount is incorrect, or that you don’t owe that particular claimant. It is not an arrest warrant (there are no debtors’ prisons in this country–remember 9th grade civics class?).
If you don’t file a response to the suit (called, appropriately enough, an Answer) the court will usually find in favor of the plaintiff, granting them a civil judgment in the amount they requested. If you don’t respond, you don’t usually have to attend court. Once the court grants the plaintiff a civil judgment, however, you may effectively lose the right to challenge that the amount is correct, or that you actually owe the money. As far as I know, the effect of a civil judgment in all fifty states is to become a lien on real property that you own in that jurisdiction. But that’s pretty much it. If you don’t dispute that you owe the debt, a judgment is pretty much a piece of paper that says you owe what you already knew you owed.
What comes after a judgment is granted depends on where you live and what you own. If you want to know how a civil judgment will affect you and your property, you have to consult a lawyer in your state. There is no other way to be sure, so I’m not even going to generalize here. Go see someone who can tell you about your situation. Don’t rely on your internet research skills or your brother-in-law (unless your brother-in-law is a lawyer) because every state is different, and your situation is not exactly like anyone else.
In fact, my advice to my two clients this morning was different. One is what lawyers call “judgment-proof.” That means what it sounds like–a judgment doesn’t change anything, because there is nothing the judgment creditor can do, no property for the judgment creditor to take, that will change anything for my client. The second client, who owns real property, may need to respond differently.
Bankruptcy may also be a solution. A bankruptcy can stop a suit that has been filed, and prevent a judgment from being granted. Bankruptcy can also sometimes alleviate the affect of a judgment that has already been issued. Whether is is necessary or advisable, again, depends on your situation. Only an experienced bankruptcy lawyer can tell for sure.
Oh, remember that letter I mentioned, insisting that my client contact the creditor’s lawyer immediately? The language of the letter suggested that dire consequences could result if she did not contact them. Leaving aside whether the letter is itself actionable, if you get such a letter (or phone call), remember that they are trying to get you to pay them money. Their stock in trade is to create a sense of urgency, and stampede you into making a commitment that you wouldn’t otherwise make. Again, your best defense is to consult with someone who is on your side, who can tell what you really need to worry about, and what is, as my Daddy used to say, “all bark and no bite.”
And, as a final note, don’t delay. It may be tempting to just stick your head in the sand and wait to see what happens, but remember what part of your anatomy that strategy leaves exposed. (If you need a reminder, see photo above.) Check it out, and make sure you know what can happen, and what you can do about it. You may be pleasantly surprised by the advice you receive.
Link to article: http://www.bankruptcylawnetwork.com/you-just-got-sued-what-should-you-do/
So far this morning, I’ve gotten two calls from clients who received suit papers over the weekend. Credit card companies (or the debt buyers who bought the accounts) have filed civil suits in state court, seeking a judgment for the amount owed. One of the suits was accompanied by a letter from the law firm that filed the suit, insisting that the client contact them immediately. Getting sued is a scary thing. So, should you hit the panic button? What does it mean, and what can you do?
A civil suit is nothing more than a request that a court decide that you owe the plaintiff money. That’s it. You are being put on notice, and you have the right to respond and dispute that you owe the money, or that the amount is incorrect, or that you don’t owe that particular claimant. It is not an arrest warrant (there are no debtors’ prisons in this country–remember 9th grade civics class?).
If you don’t file a response to the suit (called, appropriately enough, an Answer) the court will usually find in favor of the plaintiff, granting them a civil judgment in the amount they requested. If you don’t respond, you don’t usually have to attend court. Once the court grants the plaintiff a civil judgment, however, you may effectively lose the right to challenge that the amount is correct, or that you actually owe the money. As far as I know, the effect of a civil judgment in all fifty states is to become a lien on real property that you own in that jurisdiction. But that’s pretty much it. If you don’t dispute that you owe the debt, a judgment is pretty much a piece of paper that says you owe what you already knew you owed.
What comes after a judgment is granted depends on where you live and what you own. If you want to know how a civil judgment will affect you and your property, you have to consult a lawyer in your state. There is no other way to be sure, so I’m not even going to generalize here. Go see someone who can tell you about your situation. Don’t rely on your internet research skills or your brother-in-law (unless your brother-in-law is a lawyer) because every state is different, and your situation is not exactly like anyone else.
In fact, my advice to my two clients this morning was different. One is what lawyers call “judgment-proof.” That means what it sounds like–a judgment doesn’t change anything, because there is nothing the judgment creditor can do, no property for the judgment creditor to take, that will change anything for my client. The second client, who owns real property, may need to respond differently.
Bankruptcy may also be a solution. A bankruptcy can stop a suit that has been filed, and prevent a judgment from being granted. Bankruptcy can also sometimes alleviate the affect of a judgment that has already been issued. Whether is is necessary or advisable, again, depends on your situation. Only an experienced bankruptcy lawyer can tell for sure.
Oh, remember that letter I mentioned, insisting that my client contact the creditor’s lawyer immediately? The language of the letter suggested that dire consequences could result if she did not contact them. Leaving aside whether the letter is itself actionable, if you get such a letter (or phone call), remember that they are trying to get you to pay them money. Their stock in trade is to create a sense of urgency, and stampede you into making a commitment that you wouldn’t otherwise make. Again, your best defense is to consult with someone who is on your side, who can tell what you really need to worry about, and what is, as my Daddy used to say, “all bark and no bite.”
And, as a final note, don’t delay. It may be tempting to just stick your head in the sand and wait to see what happens, but remember what part of your anatomy that strategy leaves exposed. (If you need a reminder, see photo above.) Check it out, and make sure you know what can happen, and what you can do about it. You may be pleasantly surprised by the advice you receive.
Facing Foreclosure? How Bankruptcy Can Help
Link to article: http://bankruptcy.findlaw.com/bankruptcy/is-bankruptcy-right/bankruptcy-foreclosure-help.html
Many Americans fall behind on their mortgage payments. Some lenders and mortgage companies may be willing to work out deals with the homeowners, such as a short sale or loan modification. Most lenders are not. In that case, the lender will most likely begin the foreclosure process, as set out in the mortgage contract. The foreclosure process involves the creditor repossessing and usually selling the house at a public auction. The proceeds from that auction are used to repay the mortgage and any legal costs.
The foreclosure process takes time. Most creditors do not begin foreclosing until the homeowner is two to three months behind on their mortgage payments. This gives the homeowner some time to consider alternatives to foreclosure, such as a loan forbearance, short sale, or deed in lieu of foreclosure. Should all of these alternatives fail, bankruptcy may help in several different ways.
How to Delay Foreclosure with an Automatic Stay:
Bankruptcy and foreclosure are both words that the average person dreads hearing. If you are facing foreclosure, however, bankruptcy can become a tool to help you keep your house.
Once you file bankruptcy, either Chapter 13 or Chapter 7, the court automatically issues an Order for Relief. This order grants you an "automatic stay", that directs your creditors to immediately cease their collection attempts, no matter what. So, if a foreclosure sale has been scheduled for your home, it will be postponed, by law, until the bankruptcy is finalized. This usually takes about three to four months.
There are two exceptions to this buying time rule:
If the Lender Files a Motion to Lift the Stay: Unfortunately, the lender can file a motion to lift the stay, which asks permission from the bankruptcy court to continue with the foreclosure sale. If this is granted, you may not receive the extra three to four months of time. However, bankruptcy normally still postpones the sale by about two months or more, or even longer if the lender does not act fast in filing the motion to lift the stay.
If the Foreclosure Notice has Already Been Filed: Most states have laws that require lenders to give homeowners a certain amount of notice before selling their property. A bankruptcy's automatic stay will NOT stop the clock on this advance notice. For instance, California law requires a lender to give the homeowner at least three months notice before selling the home. If a California resident receives this three month notice, and then files for bankruptcy two months later, the three month period would have passed after being in bankruptcy for only one month. As a result, the lender could file a motion to lift the stay and ask the court's permission to schedule the foreclosure.
How to Use Chapter 13 Bankruptcy to Help You:
What Chapter 13 Means for Bankruptcy and Foreclosure: Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments, or "arrearage". You can propose the length of time for repayment, but keep in mind that you'll need sufficient income to pay BOTH your past due payments AND your current mortgage payments at the same time. So long as you make all of the required payments for the length of the repayment plan, you will avoid foreclosure and be able to stay in your home.
2nd and 3rd Mortgage Payments: Chapter 13 can also help eliminate payments on second or third mortgages. Typically, Chapter 13 entitles bankruptcy courts to recategorize second and third mortgages as unsecured debt. Under Chapter 13, unsecured debt takes last priority and usually does not have to be paid back. This recategorizing process is possible if your first mortgage is secured by the entire value of your home since this means that there is no remaining equity in your home to secure the second and third mortgages.
How to Use Chapter 7 Bankruptcy to Help You:
Chapter 7 bankruptcy also cancels all the debt secured by the home, including mortgages and home equity loans. Furthermore, Chapter 7 goes a step further. Thanks to a new law, Chapter 7 also forgives the homeowner for tax liability for losses the mortgage or home-improvement lender incurs as a result of the homeowner's default. This tax law applies to the 2007, 2008, and 2009 tax years. However, the new tax law does NOT cancel the homeowner's tax liability for the lender's losses at foreclosure if:
* The loan is not a mortgage or was not used for home improvements (like a loan used to pay for a vacation or automobile). The mortgage or home equity loan is secured by property other than your principal residence (like a vacation home or rental property).
Cautionary Notes about Chapter 7:
You Could Still Lose Your Home : All of this debt and tax liability forgiveness is great, but note that Chapter 7 will not keep you from losing your home. Chapter 7 forgives your debt, and that is all it does. When you enter into a mortgage, you are agreeing to use your home as a type of collateral in case you default on your payments. Chapter 13 enables you to pause action on that lien, while you catch up on your payments; hence, you may save your home. Chapter 7 forgives your debt, but it will not lift the lien, and hence will not lift the foreclosure on your home. Therefore, you will probably still lose your home.
You Could Lose Other Valuables: Because the courts typically want to make the creditors whole again from their loss, the bankruptcy trustee may award money from the sale of certain other valuables of yours to the creditors. For example, if you have a valuable wedding ring that's value exceeds the dollar amount you are allowed to keep during bankruptcy, under the "jewelry exemption", you could lose your wedding ring.
You May Not Be Eligible: The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 provides that anyone whose average gross income for the six-month period before the bankruptcy filing exceeds the state median income for the same sized household is ineligible for Chapter 7 bankruptcy. Additionally, if your income is sufficient enough for you to pay your living expenses AND fund a reasonable Chapter 13 repayment plan, you are also ineligible for Chapter 7.
How Bankruptcy Will Affect Your Credit:
Although bankruptcy and foreclosure are both extremely damaging to your credit, sometimes filing bankruptcy can be a wise choice when trying to rebuild credit. A foreclosure not only damages your credit score for years, but you are still left with the mortgage debt. Most mortgage creditors will not consider you for future mortgages if you have a foreclosure on your credit history. In contrast, bankruptcy lets you start fresh. It still is damages to your credit, but because you are debt free, you immediately begin rebuilding good credit sooner.
Although bankruptcy has a few negative consequences, and may not save you from losing your home, it can be the best option in starting fresh with no debt, getting back on your feet, and saving money.
Worst Case Scenario: Losing the House, but Also the Debt
Sometimes bankruptcy can't prevent the loss of your home, so you may start to think that a bankruptcy filing is pointless. There are other benefits to filing for bankruptcy besides the interplay between bankruptcy and foreclosure, however.
Even if you can't keep your home, bankruptcy can help to shovel out from under mortgage debts and tax liability. This is an important first step towards getting back on your feet. Bankruptcy can also help you to put away money for the tough times ahead.
Many Americans fall behind on their mortgage payments. Some lenders and mortgage companies may be willing to work out deals with the homeowners, such as a short sale or loan modification. Most lenders are not. In that case, the lender will most likely begin the foreclosure process, as set out in the mortgage contract. The foreclosure process involves the creditor repossessing and usually selling the house at a public auction. The proceeds from that auction are used to repay the mortgage and any legal costs.
The foreclosure process takes time. Most creditors do not begin foreclosing until the homeowner is two to three months behind on their mortgage payments. This gives the homeowner some time to consider alternatives to foreclosure, such as a loan forbearance, short sale, or deed in lieu of foreclosure. Should all of these alternatives fail, bankruptcy may help in several different ways.
How to Delay Foreclosure with an Automatic Stay:
Bankruptcy and foreclosure are both words that the average person dreads hearing. If you are facing foreclosure, however, bankruptcy can become a tool to help you keep your house.
Once you file bankruptcy, either Chapter 13 or Chapter 7, the court automatically issues an Order for Relief. This order grants you an "automatic stay", that directs your creditors to immediately cease their collection attempts, no matter what. So, if a foreclosure sale has been scheduled for your home, it will be postponed, by law, until the bankruptcy is finalized. This usually takes about three to four months.
There are two exceptions to this buying time rule:
If the Lender Files a Motion to Lift the Stay: Unfortunately, the lender can file a motion to lift the stay, which asks permission from the bankruptcy court to continue with the foreclosure sale. If this is granted, you may not receive the extra three to four months of time. However, bankruptcy normally still postpones the sale by about two months or more, or even longer if the lender does not act fast in filing the motion to lift the stay.
If the Foreclosure Notice has Already Been Filed: Most states have laws that require lenders to give homeowners a certain amount of notice before selling their property. A bankruptcy's automatic stay will NOT stop the clock on this advance notice. For instance, California law requires a lender to give the homeowner at least three months notice before selling the home. If a California resident receives this three month notice, and then files for bankruptcy two months later, the three month period would have passed after being in bankruptcy for only one month. As a result, the lender could file a motion to lift the stay and ask the court's permission to schedule the foreclosure.
How to Use Chapter 13 Bankruptcy to Help You:
What Chapter 13 Means for Bankruptcy and Foreclosure: Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments, or "arrearage". You can propose the length of time for repayment, but keep in mind that you'll need sufficient income to pay BOTH your past due payments AND your current mortgage payments at the same time. So long as you make all of the required payments for the length of the repayment plan, you will avoid foreclosure and be able to stay in your home.
2nd and 3rd Mortgage Payments: Chapter 13 can also help eliminate payments on second or third mortgages. Typically, Chapter 13 entitles bankruptcy courts to recategorize second and third mortgages as unsecured debt. Under Chapter 13, unsecured debt takes last priority and usually does not have to be paid back. This recategorizing process is possible if your first mortgage is secured by the entire value of your home since this means that there is no remaining equity in your home to secure the second and third mortgages.
How to Use Chapter 7 Bankruptcy to Help You:
Chapter 7 bankruptcy also cancels all the debt secured by the home, including mortgages and home equity loans. Furthermore, Chapter 7 goes a step further. Thanks to a new law, Chapter 7 also forgives the homeowner for tax liability for losses the mortgage or home-improvement lender incurs as a result of the homeowner's default. This tax law applies to the 2007, 2008, and 2009 tax years. However, the new tax law does NOT cancel the homeowner's tax liability for the lender's losses at foreclosure if:
* The loan is not a mortgage or was not used for home improvements (like a loan used to pay for a vacation or automobile). The mortgage or home equity loan is secured by property other than your principal residence (like a vacation home or rental property).
Cautionary Notes about Chapter 7:
You Could Still Lose Your Home : All of this debt and tax liability forgiveness is great, but note that Chapter 7 will not keep you from losing your home. Chapter 7 forgives your debt, and that is all it does. When you enter into a mortgage, you are agreeing to use your home as a type of collateral in case you default on your payments. Chapter 13 enables you to pause action on that lien, while you catch up on your payments; hence, you may save your home. Chapter 7 forgives your debt, but it will not lift the lien, and hence will not lift the foreclosure on your home. Therefore, you will probably still lose your home.
You Could Lose Other Valuables: Because the courts typically want to make the creditors whole again from their loss, the bankruptcy trustee may award money from the sale of certain other valuables of yours to the creditors. For example, if you have a valuable wedding ring that's value exceeds the dollar amount you are allowed to keep during bankruptcy, under the "jewelry exemption", you could lose your wedding ring.
You May Not Be Eligible: The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 provides that anyone whose average gross income for the six-month period before the bankruptcy filing exceeds the state median income for the same sized household is ineligible for Chapter 7 bankruptcy. Additionally, if your income is sufficient enough for you to pay your living expenses AND fund a reasonable Chapter 13 repayment plan, you are also ineligible for Chapter 7.
How Bankruptcy Will Affect Your Credit:
Although bankruptcy and foreclosure are both extremely damaging to your credit, sometimes filing bankruptcy can be a wise choice when trying to rebuild credit. A foreclosure not only damages your credit score for years, but you are still left with the mortgage debt. Most mortgage creditors will not consider you for future mortgages if you have a foreclosure on your credit history. In contrast, bankruptcy lets you start fresh. It still is damages to your credit, but because you are debt free, you immediately begin rebuilding good credit sooner.
Although bankruptcy has a few negative consequences, and may not save you from losing your home, it can be the best option in starting fresh with no debt, getting back on your feet, and saving money.
Worst Case Scenario: Losing the House, but Also the Debt
Sometimes bankruptcy can't prevent the loss of your home, so you may start to think that a bankruptcy filing is pointless. There are other benefits to filing for bankruptcy besides the interplay between bankruptcy and foreclosure, however.
Even if you can't keep your home, bankruptcy can help to shovel out from under mortgage debts and tax liability. This is an important first step towards getting back on your feet. Bankruptcy can also help you to put away money for the tough times ahead.
Wednesday, September 28, 2011
Bill to Improve U.S. Trustee’s Power To Protect Homeowners in Bankruptcy Revealed
by Elizabeth Brennon on Sep 23, 2011
Link to article: http://www.newsjunkyjournal.com/bill-to-improve-u-s-trustees-power-to-protect-homeowners-in-bankruptcy-revealed/2519663/
Just last year, more than one million Americans lost homes to foreclosure, and the foreclosure crisis is only expected to worsen. Distressed homeowners facing bankruptcy and foreclosure deserve to be treated fairly. Banks should not attempt to profit from these hard times with improper mortgage fees and other types of fraud. Apparently, however, this is exactly what may have been happening.
The United States Trustee Program and Executive Office of the U.S. Bankruptcy Trustee (EOUST) are part of the Department of Justice. The U.S. trustee oversees the administration of federal bankruptcy cases and works to protect the integrity of the system. Recently, EOUST reviewed 10,000 proofs of claim filed with bankruptcy courts by mortgagees or mortgage servicers.
Errors found in the claims included mortgage servicers charging unsubstantiated fees, overstating the amount homeowners owe on properties, and providing inadequate documentation to the bankruptcy court.
The U.S. trustee discovered that the errors in claims submitted by mortgage providers were both more serious and more frequent than the mortgage servicing industry previously asserted. Specifically, mortgage servicers claimed such errors occurred in less than one percent of bankruptcy cases. EOUST, however, discovered errors were occurring at 10 times that rate.
Although the U.S. Trustee Program attempted to combat these patterns of defective and fraudulent filings, those efforts have been slowed by legal challenges to the trustee’s power and authority to take such actions. Mortgage servicers are challenging the trustee’s ability to act on bankruptcy filers’ behalf by asking for additional documents or requesting sanctions for incorrect or fraudulent filings. Essentially mortgage servicers don’t believe the U.S. Trustee has the power to hold them accountable for their actions.
The Fighting Fraud in Bankruptcy Act
These legal challenges by mortgage servicers prompted three Senators, Patrick Leahy (D-Vt), Richard Blumenthal (D-Conn.), and Sheldon Whitehouse (D-R.I.) to sponsor legislation to strengthen and clarify the U.S. Trustee’s power to protect homeowners in the bankruptcy system from fraud. In late May the Fighting Fraud in Bankruptcy Act of 2011 (S. 1054) was introduced on the Senate floor, and the bill has now been referred to committee.
Senator Leahy explained the importance of the bill this way: “As Congress looks at ways to mitigate the foreclosure crisis to reduce its impact on homeowners and the economy, I hope all Senators can agree that the foreclosure process for Americans should be a fair one and one in which there is accountability for fraud or other misconduct. And I hope we can all agree that the integrity of our judicial system is something worth protecting.”
The Fighting Fraud in Bankruptcy Act has four main goals. First and foremost, it clarifies that the U.S. Trustee has the power and duty to take action when abuse of the bankruptcy process by creditors is detected.
In conjunction with this power, the Act authorizes the trustee to conduct audits and investigations to confirm creditors are acting in accordance with the law. If fraud or misconduct is detected, the Act allows the bankruptcy court to correct errors or impose sanctions for misconduct. These actions can be taken in response to a motion by the trustee, or the bankruptcy court may make its own motion.
Finally, the Act mandates that mortgage servicers certify under penalty of perjury that foreclosure actions against deployed and active duty military homeowners comply with the Servicemembers Civil Relief Act (SCRA). The SCRA serves to protect those in the military by staying foreclosure actions if they are currently deployed, and requiring manageable and stable interest rates for military servicemembers. A report by the Government Accountability Office (GAO) found that among only two of the 14 large mortgage servicing organizations that supplied data to regulators, 50 foreclosure cases violated the protections of the SCRA.
If the Fighting Fraud in Bankruptcy Act passes into law it will hopefully clarify and strengthen the U.S. Trustee Program’s power to remedy creditor abuse. This may prevent mortgage servicers from unfairly profiting from homeowners facing bankruptcy and foreclosure by submitting incorrect or fraudulent claims.
If you are overwhelmed by debt, or struggling to keep your home, contact an experienced personal bankruptcy and foreclosure attorney. A knowledgeable lawyer will work to protect your rights and advocate on your behalf throughout any bankruptcy or foreclosure proceedings.
Link to article: http://www.newsjunkyjournal.com/bill-to-improve-u-s-trustees-power-to-protect-homeowners-in-bankruptcy-revealed/2519663/
Just last year, more than one million Americans lost homes to foreclosure, and the foreclosure crisis is only expected to worsen. Distressed homeowners facing bankruptcy and foreclosure deserve to be treated fairly. Banks should not attempt to profit from these hard times with improper mortgage fees and other types of fraud. Apparently, however, this is exactly what may have been happening.
The United States Trustee Program and Executive Office of the U.S. Bankruptcy Trustee (EOUST) are part of the Department of Justice. The U.S. trustee oversees the administration of federal bankruptcy cases and works to protect the integrity of the system. Recently, EOUST reviewed 10,000 proofs of claim filed with bankruptcy courts by mortgagees or mortgage servicers.
Errors found in the claims included mortgage servicers charging unsubstantiated fees, overstating the amount homeowners owe on properties, and providing inadequate documentation to the bankruptcy court.
The U.S. trustee discovered that the errors in claims submitted by mortgage providers were both more serious and more frequent than the mortgage servicing industry previously asserted. Specifically, mortgage servicers claimed such errors occurred in less than one percent of bankruptcy cases. EOUST, however, discovered errors were occurring at 10 times that rate.
Although the U.S. Trustee Program attempted to combat these patterns of defective and fraudulent filings, those efforts have been slowed by legal challenges to the trustee’s power and authority to take such actions. Mortgage servicers are challenging the trustee’s ability to act on bankruptcy filers’ behalf by asking for additional documents or requesting sanctions for incorrect or fraudulent filings. Essentially mortgage servicers don’t believe the U.S. Trustee has the power to hold them accountable for their actions.
The Fighting Fraud in Bankruptcy Act
These legal challenges by mortgage servicers prompted three Senators, Patrick Leahy (D-Vt), Richard Blumenthal (D-Conn.), and Sheldon Whitehouse (D-R.I.) to sponsor legislation to strengthen and clarify the U.S. Trustee’s power to protect homeowners in the bankruptcy system from fraud. In late May the Fighting Fraud in Bankruptcy Act of 2011 (S. 1054) was introduced on the Senate floor, and the bill has now been referred to committee.
Senator Leahy explained the importance of the bill this way: “As Congress looks at ways to mitigate the foreclosure crisis to reduce its impact on homeowners and the economy, I hope all Senators can agree that the foreclosure process for Americans should be a fair one and one in which there is accountability for fraud or other misconduct. And I hope we can all agree that the integrity of our judicial system is something worth protecting.”
The Fighting Fraud in Bankruptcy Act has four main goals. First and foremost, it clarifies that the U.S. Trustee has the power and duty to take action when abuse of the bankruptcy process by creditors is detected.
In conjunction with this power, the Act authorizes the trustee to conduct audits and investigations to confirm creditors are acting in accordance with the law. If fraud or misconduct is detected, the Act allows the bankruptcy court to correct errors or impose sanctions for misconduct. These actions can be taken in response to a motion by the trustee, or the bankruptcy court may make its own motion.
Finally, the Act mandates that mortgage servicers certify under penalty of perjury that foreclosure actions against deployed and active duty military homeowners comply with the Servicemembers Civil Relief Act (SCRA). The SCRA serves to protect those in the military by staying foreclosure actions if they are currently deployed, and requiring manageable and stable interest rates for military servicemembers. A report by the Government Accountability Office (GAO) found that among only two of the 14 large mortgage servicing organizations that supplied data to regulators, 50 foreclosure cases violated the protections of the SCRA.
If the Fighting Fraud in Bankruptcy Act passes into law it will hopefully clarify and strengthen the U.S. Trustee Program’s power to remedy creditor abuse. This may prevent mortgage servicers from unfairly profiting from homeowners facing bankruptcy and foreclosure by submitting incorrect or fraudulent claims.
If you are overwhelmed by debt, or struggling to keep your home, contact an experienced personal bankruptcy and foreclosure attorney. A knowledgeable lawyer will work to protect your rights and advocate on your behalf throughout any bankruptcy or foreclosure proceedings.
Number of college grads who end up filing for bankruptcy jumps 20% over past five years: report
BY ELIZABETH LAZAROWITZ
DAILY NEWS BUSINESS WRITER
Wednesday, September 14, 2011
Link to article: http://articles.nydailynews.com/2011-09-14/news/30173751_1_filers-personal-bankruptcies-institute-for-financial-literacy
These days, book smarts may not add up to financial success.
The number of bankruptcy filers who have college degrees has swelled more than 20% over the past five years as the impact of the economic downturn broadens, a new study showed.
Those with just a high school diploma still account for the biggest proportion of bankruptcy filers, making up more than a third of them, according to a report by the Institute for Financial Literacy.
But bankruptcy filers with college diplomas climbed to 13.6% in 2010 from 11.2% in 2006. Those with an associate's or graduate degree also climbed, while those with just a high school diploma slipped.
"There's this mythology out there that if you go to college and you get a degree, you're going to do financially better," said Leslie Linfield, the institute's executive director. "I think this data is starting to erode at this myth."
Last year, personal bankruptcies rose to 1.5 million, according to government data.
While bankruptcy filers are becoming better educated, they're also increasingly well-heeled. The percentage of filers making more than $60,000 jumped 66% in the past five years, the survey showed.
Linfield pegged the trend largely on big losses in white-collar jobs. More consumers surveyed blamed a reduction of income or job loss as a reason for their financial distress.
Still, the biggest reason for their money problems remained being overextended on credit - more than 70% of filers gave that as the main cause.
A particularly worrisome trend, Linfield said, is that bankruptcy filers are aging. Consumers aged 45 to 54 made up the highest proportion of them in 2010, a shift from the prior year, when those aged 35 to 44 held the top spot.
That could leave many older Americans in a tight financial spot as they approach retirement.
"At 54, do they really have enough time in front of them to start over?" Linfield said. "They are at risk."
The group surveyed more than 50,000 debtors in credit counseling or money management courses.
DAILY NEWS BUSINESS WRITER
Wednesday, September 14, 2011
Link to article: http://articles.nydailynews.com/2011-09-14/news/30173751_1_filers-personal-bankruptcies-institute-for-financial-literacy
These days, book smarts may not add up to financial success.
The number of bankruptcy filers who have college degrees has swelled more than 20% over the past five years as the impact of the economic downturn broadens, a new study showed.
Those with just a high school diploma still account for the biggest proportion of bankruptcy filers, making up more than a third of them, according to a report by the Institute for Financial Literacy.
But bankruptcy filers with college diplomas climbed to 13.6% in 2010 from 11.2% in 2006. Those with an associate's or graduate degree also climbed, while those with just a high school diploma slipped.
"There's this mythology out there that if you go to college and you get a degree, you're going to do financially better," said Leslie Linfield, the institute's executive director. "I think this data is starting to erode at this myth."
Last year, personal bankruptcies rose to 1.5 million, according to government data.
While bankruptcy filers are becoming better educated, they're also increasingly well-heeled. The percentage of filers making more than $60,000 jumped 66% in the past five years, the survey showed.
Linfield pegged the trend largely on big losses in white-collar jobs. More consumers surveyed blamed a reduction of income or job loss as a reason for their financial distress.
Still, the biggest reason for their money problems remained being overextended on credit - more than 70% of filers gave that as the main cause.
A particularly worrisome trend, Linfield said, is that bankruptcy filers are aging. Consumers aged 45 to 54 made up the highest proportion of them in 2010, a shift from the prior year, when those aged 35 to 44 held the top spot.
That could leave many older Americans in a tight financial spot as they approach retirement.
"At 54, do they really have enough time in front of them to start over?" Linfield said. "They are at risk."
The group surveyed more than 50,000 debtors in credit counseling or money management courses.
Wednesday, September 21, 2011
Medical Bills, Debt Sends Many into Bankruptcy
By Cynthia Hsu on August 31, 2011 8:46 AM
Link to article: http://blogs.findlaw.com/law_and_life/2011/08/medical-bills-debt-sends-many-into-bankruptcy.html#more
What would you do if you were saddled with high medical bill debt? Would you declare bankruptcy? With the rising cost of healthcare, it seems that high medical bills and bankruptcy are starting to go hand-in-hand.
About 20% of Americans cite medical bills as the reason behind their bankruptcy when they seek financial consulting, according to a recent study by CredAbility.
This is an increase from just a few years ago, when about 12-13% of Americans cited medical debt as the reason behind their bankruptcy, according to The New York Times.
Why? With the rough economy, more Americans have gone through periods of unemployment, leaving gaps in their medical insurance coverage.
Plus, Americans who purchase insurance themselves might opt for cheaper plans with lower premiums in an effort to save money.
Lower premiums, however, often mean that there are high deductibles, making consumers more vulnerable to incurring high costs before their insurance kicks in, The New York Times reports.
It also seems medical debt is simply the kind of debt that Americans feel obligated to pay off. Some might even turn to opening up a new credit card, according to The New York Times.
This, unfortunately, may only lead to more debt.
Is bankruptcy right for consumers who are weighed down by medical bill debts?
It could be, but consumers should do their due diligence and carefully research their options before considering bankruptcy. There are alternatives, such as debt management plans that allow credit card holders to pay off their debt over a set period, reports The New York Times.
And, consumers looking to erase their medical bill debt through bankruptcy will need to figure out which bankruptcy is right for them. Is it Chapter 7, which erases many debts but may liquidate a consumer's assets? Or Chapter 13? Consulting an attorney to discuss your medical bills and bankruptcy might be a prudent option, as bankruptcy law is complicated and can be difficult to navigate without some expert guidance.
Link to article: http://blogs.findlaw.com/law_and_life/2011/08/medical-bills-debt-sends-many-into-bankruptcy.html#more
What would you do if you were saddled with high medical bill debt? Would you declare bankruptcy? With the rising cost of healthcare, it seems that high medical bills and bankruptcy are starting to go hand-in-hand.
About 20% of Americans cite medical bills as the reason behind their bankruptcy when they seek financial consulting, according to a recent study by CredAbility.
This is an increase from just a few years ago, when about 12-13% of Americans cited medical debt as the reason behind their bankruptcy, according to The New York Times.
Why? With the rough economy, more Americans have gone through periods of unemployment, leaving gaps in their medical insurance coverage.
Plus, Americans who purchase insurance themselves might opt for cheaper plans with lower premiums in an effort to save money.
Lower premiums, however, often mean that there are high deductibles, making consumers more vulnerable to incurring high costs before their insurance kicks in, The New York Times reports.
It also seems medical debt is simply the kind of debt that Americans feel obligated to pay off. Some might even turn to opening up a new credit card, according to The New York Times.
This, unfortunately, may only lead to more debt.
Is bankruptcy right for consumers who are weighed down by medical bill debts?
It could be, but consumers should do their due diligence and carefully research their options before considering bankruptcy. There are alternatives, such as debt management plans that allow credit card holders to pay off their debt over a set period, reports The New York Times.
And, consumers looking to erase their medical bill debt through bankruptcy will need to figure out which bankruptcy is right for them. Is it Chapter 7, which erases many debts but may liquidate a consumer's assets? Or Chapter 13? Consulting an attorney to discuss your medical bills and bankruptcy might be a prudent option, as bankruptcy law is complicated and can be difficult to navigate without some expert guidance.
Tuesday, September 20, 2011
If you are facing foreclosure, San Diego Bankruptcy Law Firm can help protect your home.
It is common for people to fall behind on their mortgage payments. If you find yourself in this position, there are ways you can find relief.
Filing for bankruptcy can delay foreclosure.
When a person files for Chapter 13 or Chapter 7 bankruptcy, they usually receive immediate protection from creditors through a special court order known as an “automatic stay”. This means creditors must immediately stop their collection attempts.
If a foreclosure sale has been scheduled for your home, it will be postponed until the bankruptcy is finalized. Sometimes there are exceptions to this rule, so it is important to contact San Diego Bankruptcy Law Firm so we may discuss all of your options. Your initial consultation is free.
Filing for Chapter 13 bankruptcy can help you avoid foreclosure and keep you in your home. Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments.
A short sale can stop foreclosure.
It is important to remember a short sale can stop foreclosure, but it also has serious tax and credit consequences. In addition, some lenders and mortgage companies will refuse to do a short sale. Filing for bankruptcy can help you keep your house.
A short sale is when lender agrees to take less than the total amount owed on the loan in a voluntary sale to a third party. But a short sale is anything but short—it is usually a very lengthy and complex process.
Contact San Diego Bankruptcy Law Firm to help you through this process or negotiate a short sale settlement.
Filing for bankruptcy can delay foreclosure.
When a person files for Chapter 13 or Chapter 7 bankruptcy, they usually receive immediate protection from creditors through a special court order known as an “automatic stay”. This means creditors must immediately stop their collection attempts.
If a foreclosure sale has been scheduled for your home, it will be postponed until the bankruptcy is finalized. Sometimes there are exceptions to this rule, so it is important to contact San Diego Bankruptcy Law Firm so we may discuss all of your options. Your initial consultation is free.
Filing for Chapter 13 bankruptcy can help you avoid foreclosure and keep you in your home. Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments.
A short sale can stop foreclosure.
It is important to remember a short sale can stop foreclosure, but it also has serious tax and credit consequences. In addition, some lenders and mortgage companies will refuse to do a short sale. Filing for bankruptcy can help you keep your house.
A short sale is when lender agrees to take less than the total amount owed on the loan in a voluntary sale to a third party. But a short sale is anything but short—it is usually a very lengthy and complex process.
Contact San Diego Bankruptcy Law Firm to help you through this process or negotiate a short sale settlement.
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."
Wednesday, March 2, 2011
Calif. distressed homes sell at 39% discount. OC Register
Source: http://www.ocregister.com/articles/sell-290148-foreclosure-homes.html?source=patrick.net#ArticleHeader
According to RealtyTrac, there were 211,839 foreclosure-related sales in 2010 in California – a third-party sale of a distressed property that occurs while the property is actively in some stage of foreclosure, from default to bank-owned.
According to the Irvine-based foreclosure tracking firm’s year-end study:
ADVERTISEMENT More from Business
Laguna home has lots of house for price
Hippie Chipotle-style burrito chain lands in O.C.
Is 6.7% unemployment the new normal?
The state’s 2010 foreclosure-related selling pace was 42% below 2009 and 30% below 2008. Nationally, foreclosure sales were 31% below 2009 and 14% less than 2008′s pace.
California foreclosure sales accounted for 44 percent of all sales in 2010, the third highest of any state but also down from a peak of 57 percent in 2009. Fourth quarter foreclosure sales in California accounted for 45 percent of all sales, up from 40 percent in the third quarter. foreclosure homes accounted for nearly 26 percent of all U.S. residential sales during the year, down from 29 percent of all sales in 2009 but up from 23 percent of all sales in 2008.
The average selling price of a California foreclosure-related home was $251,693 – that is a 39% “foreclosure discount,” the percentage difference between average sales price of foreclosure sales vs. average sales price of non-foreclosure sales. Nationally, the foreclosure discount was 28%
These discounts in California ranged in 2010 from 46% for bank-owned properties to 29% for homes sold before lenders seized a property. National foreclosure discount was 36% for bank-owned homes and 15% for homes sold before lenders seized a property.
RealtyTrac notes: “Foreclosures continue to represent a substantial percentage of all U.S. residential sales and continue to sell at an average sales price that is significantly below the average sales price of properties not in foreclosure — the result of a bloated supply of foreclosures and weak demand from homebuyers. The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices.”
According to RealtyTrac, there were 211,839 foreclosure-related sales in 2010 in California – a third-party sale of a distressed property that occurs while the property is actively in some stage of foreclosure, from default to bank-owned.
According to the Irvine-based foreclosure tracking firm’s year-end study:
ADVERTISEMENT More from Business
Laguna home has lots of house for price
Hippie Chipotle-style burrito chain lands in O.C.
Is 6.7% unemployment the new normal?
The state’s 2010 foreclosure-related selling pace was 42% below 2009 and 30% below 2008. Nationally, foreclosure sales were 31% below 2009 and 14% less than 2008′s pace.
California foreclosure sales accounted for 44 percent of all sales in 2010, the third highest of any state but also down from a peak of 57 percent in 2009. Fourth quarter foreclosure sales in California accounted for 45 percent of all sales, up from 40 percent in the third quarter. foreclosure homes accounted for nearly 26 percent of all U.S. residential sales during the year, down from 29 percent of all sales in 2009 but up from 23 percent of all sales in 2008.
The average selling price of a California foreclosure-related home was $251,693 – that is a 39% “foreclosure discount,” the percentage difference between average sales price of foreclosure sales vs. average sales price of non-foreclosure sales. Nationally, the foreclosure discount was 28%
These discounts in California ranged in 2010 from 46% for bank-owned properties to 29% for homes sold before lenders seized a property. National foreclosure discount was 36% for bank-owned homes and 15% for homes sold before lenders seized a property.
RealtyTrac notes: “Foreclosures continue to represent a substantial percentage of all U.S. residential sales and continue to sell at an average sales price that is significantly below the average sales price of properties not in foreclosure — the result of a bloated supply of foreclosures and weak demand from homebuyers. The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices.”
Thursday, February 10, 2011
Foreclosures Ramp Up 30% of mortgages are underwater
San Diego Bankruptcies Sure to Increase says Bankruptcy Attorney from The San Diego Bankruptcy Law Firm.
CNN: Foreclosures Ramp Up, 30% of Mortages Underwater.
According to CNN: http://money.cnn.com/2011/02/09/real_estate/underwater_mortgages_rising/index.htm?source=patrick.net#storyBrandingBanner
By Les Christie, staff writerFebruary 9, 2011: 10:48 AM ET
NEW YORK (CNNMoney) -- Sometime, somehow, the foreclosure crisis will ease. But probably not anytime soon.
Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.
273Email Print
Foreclosure Fiasco
Foreclosures are falling - but it's a fake out
30% of mortgages are underwater
Whose house is being saved by Obama?
Las Vegas: Still the foreclosure king
Home price slump deepens
Now 27% of homeowners with mortgages owe more than their homes are worth. That's up from 23.2% a quarter earlier.
That will surely lead to higher foreclosure rates soon. That's because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow's chief economist, Stan Humphries.
Additionally, the report found that more than one-third of all homes were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes.
The so-called "robo-signing" events of the fall also forced the number of underwater mortgages higher.
When banks' foreclosure paperwork came under scrutiny, many halted all repossessions until they could straighten things out. With foreclosures no longer being cleaned out of the system, more homes stayed underwater rather than moving on to foreclosure.
10 foreclosure hotspots
The moratoriums have been only temporary, however, and the defaults that had been stopped up in the foreclosure pipeline could come out in a gush over the next few months.
And any bump in the number of foreclosures adds to the likelihood that more homes will be dumped onto an already bloated market. That would just further depress home prices, continuing the vicious cycle that has plagued the industry for several years.
CNN: Foreclosures Ramp Up, 30% of Mortages Underwater.
According to CNN: http://money.cnn.com/2011/02/09/real_estate/underwater_mortgages_rising/index.htm?source=patrick.net#storyBrandingBanner
By Les Christie, staff writerFebruary 9, 2011: 10:48 AM ET
NEW YORK (CNNMoney) -- Sometime, somehow, the foreclosure crisis will ease. But probably not anytime soon.
Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.
273Email Print
Foreclosure Fiasco
Foreclosures are falling - but it's a fake out
30% of mortgages are underwater
Whose house is being saved by Obama?
Las Vegas: Still the foreclosure king
Home price slump deepens
Now 27% of homeowners with mortgages owe more than their homes are worth. That's up from 23.2% a quarter earlier.
That will surely lead to higher foreclosure rates soon. That's because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow's chief economist, Stan Humphries.
Additionally, the report found that more than one-third of all homes were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes.
The so-called "robo-signing" events of the fall also forced the number of underwater mortgages higher.
When banks' foreclosure paperwork came under scrutiny, many halted all repossessions until they could straighten things out. With foreclosures no longer being cleaned out of the system, more homes stayed underwater rather than moving on to foreclosure.
10 foreclosure hotspots
The moratoriums have been only temporary, however, and the defaults that had been stopped up in the foreclosure pipeline could come out in a gush over the next few months.
And any bump in the number of foreclosures adds to the likelihood that more homes will be dumped onto an already bloated market. That would just further depress home prices, continuing the vicious cycle that has plagued the industry for several years.
Friday, February 4, 2011
Rich, Famous & In Foreclosure (Nickolas Cage, etc.)
Site: http://money.msn.com/home-loans/rich-famous-and-in-foreclosure-bankrate.aspx
Rich, famous . . . and in foreclosureStar status won't pay the mortgage -- and some celebrities have seen the foreclosure epidemic firsthand. Here are 5 who lost their homes.
Related topics: homes, home financing, foreclosure, property taxes, luxury
How does Nicolas Cage get behind on his mortgage payments? The same way other rich and famous people do.
"They've stretched themselves higher than they probably should have," says John Anderson, owner of Twin Oaks Realty in Minneapolis and a National Association of Realtors expert in foreclosures. Some couldn't keep up when the rates on their adjustable rate mortgages shot up, Anderson says. Price drops at the high end of the market were so steep that a sale wouldn't cover the debt. In other words, high-end homeowners face the same problems that plague the rest of us.
Buy a foreclosed home
Find the best home mortgage rates
Here are five of the biggest names on the of list homeowners falling to foreclosure. We've included a bit of info about the current markets where these stars once lived. -- you know, in case you'd like to hunt for a foreclosure deal in one of those tony neighborhoods.
Nicolas Cage
The star: He's an Academy Award-winning actor (for "Leaving Las Vegas"), nephew of multiple-Oscar-winning filmmaker Francis Ford Coppola and the former son-in-law of Elvis (he was briefly married to Lisa Presley).
The house: Make that "houses." In November 2009, Cage lost two New Orleans homes -- one in the French Quarter, the other in the Garden District -- worth a combined $6.8 million, according to a CNNMoney.com report. Cage was behind $5.5 million in mortgage payments, and he owed $151,730 in property taxes to the city of New Orleans. Regions Bank paid $4.5 million for the properties.
MSN Real Estate: Need a zero-down mortgage? Look outside the city
The market: One in 720 homes in Orleans Parish had foreclosure filings in November 2010, according to RealtyTrac. The average foreclosure sales price in the city was close to $110,000.
Erin Moran
The star: She's best known as Richie Cunningham's freckle-faced little sister Joanie on the 1970s sitcom "Happy Days" and co-star of the spinoff "Joanie Loves Chachi."
The house: Los Angeles County court records posted on the entertainment website TMZ.com show that Moran, also known by her married name Erin Fleishmann, owed $315,930 on the Palmdale, Calif., home. The Bank of New York Mellon Trust bought the house at auction for $291,150 in July 2010. According to TMZ, Moran stayed in the home after losing it to the bank and was evicted.
The market: Palmdale, just north of Los Angeles, posted foreclosure filings in November 2010 on one in 80 housing units. The average foreclosure sales price was around $154,000.
Lisa Wu-Hartwell
The star: Viewers of Bravo's "Real Housewives of Atlanta," may remember Wu-Hartwell from the first season as one of the network's touted "six fabulous women from Atlanta's social elite." Hubby Edgerton Hartwell, the former Oakland Raiders linebacker, made frequent appearances.
The house: According to court records posted on TMZ.com, the couple borrowed $2.9 million to buy their suburban mansion in June 2007. Just more than two years later, Bank of America paid $1.9 million for the house at a foreclosure sale at the Forsyth County, Ga., courthouse, after the Hartwells defaulted on their adjustable-rate mortgage.
Is it time to refinance?
The market: RealtyTrac reports there were foreclosure filings on one in 248 housing units in Forsyth County in November 2010. The average foreclosure sales price was around $210,000.
Lenny Dykstra
The star: Nicknamed "Nails," the former Major League Baseball pro was an outfielder for the Mets and the Phillies during the late 1980s and early 1990s. After filing for Chapter 11 bankruptcy in 2009, Dykstra -- in a move many found ironic -- started an online financial advisory firm in 2010 called Nails Investments.
The house: Dykstra bought the 6.5-acre property in Thousand Oaks, Calif., from hockey pro Wayne Gretzky for $18.5 million in 2007, according to the Los Angeles Times. He lost the house in a Ventura County foreclosure sale in November 2010 to a winning bid of $760,712, the newspaper reported. Dykstra owed about $12 million to JPMorgan Chase.
MSN Real Estate: Find a foreclosure
The market: One in 201 homes in Ventura County received a foreclosure filing in November 2010, according to RealtyTrac. The average foreclosure sales price was in the neighborhood of $382,000.
Veronica Hearst
The star: The name is Hearst's claim to fame. She's the widow of newspaper heir Randolph Hearst and stepmother of Patricia Hearst, who was kidnapped by left-wing guerrillas in 1974.
The house: Located Manalapan, Fla., near Palm Beach, the Villa Venezia was originally built for the great-grandson of railroad tycoon Cornelius Vanderbilt. According to The Palm Beach Post, the 52-room, 28,000-square-foot mansion sold to New Stream Capital for $22 million at a Palm Beach County auction in February 2008.
The market: One in 211 housing units in Palm Beach County received a foreclosure filing in November 2010, reports RealtyTrac. The average foreclosure sales price was about $137,000.
Rich, famous . . . and in foreclosureStar status won't pay the mortgage -- and some celebrities have seen the foreclosure epidemic firsthand. Here are 5 who lost their homes.
Related topics: homes, home financing, foreclosure, property taxes, luxury
How does Nicolas Cage get behind on his mortgage payments? The same way other rich and famous people do.
"They've stretched themselves higher than they probably should have," says John Anderson, owner of Twin Oaks Realty in Minneapolis and a National Association of Realtors expert in foreclosures. Some couldn't keep up when the rates on their adjustable rate mortgages shot up, Anderson says. Price drops at the high end of the market were so steep that a sale wouldn't cover the debt. In other words, high-end homeowners face the same problems that plague the rest of us.
Buy a foreclosed home
Find the best home mortgage rates
Here are five of the biggest names on the of list homeowners falling to foreclosure. We've included a bit of info about the current markets where these stars once lived. -- you know, in case you'd like to hunt for a foreclosure deal in one of those tony neighborhoods.
Nicolas Cage
The star: He's an Academy Award-winning actor (for "Leaving Las Vegas"), nephew of multiple-Oscar-winning filmmaker Francis Ford Coppola and the former son-in-law of Elvis (he was briefly married to Lisa Presley).
The house: Make that "houses." In November 2009, Cage lost two New Orleans homes -- one in the French Quarter, the other in the Garden District -- worth a combined $6.8 million, according to a CNNMoney.com report. Cage was behind $5.5 million in mortgage payments, and he owed $151,730 in property taxes to the city of New Orleans. Regions Bank paid $4.5 million for the properties.
MSN Real Estate: Need a zero-down mortgage? Look outside the city
The market: One in 720 homes in Orleans Parish had foreclosure filings in November 2010, according to RealtyTrac. The average foreclosure sales price in the city was close to $110,000.
Erin Moran
The star: She's best known as Richie Cunningham's freckle-faced little sister Joanie on the 1970s sitcom "Happy Days" and co-star of the spinoff "Joanie Loves Chachi."
The house: Los Angeles County court records posted on the entertainment website TMZ.com show that Moran, also known by her married name Erin Fleishmann, owed $315,930 on the Palmdale, Calif., home. The Bank of New York Mellon Trust bought the house at auction for $291,150 in July 2010. According to TMZ, Moran stayed in the home after losing it to the bank and was evicted.
The market: Palmdale, just north of Los Angeles, posted foreclosure filings in November 2010 on one in 80 housing units. The average foreclosure sales price was around $154,000.
Lisa Wu-Hartwell
The star: Viewers of Bravo's "Real Housewives of Atlanta," may remember Wu-Hartwell from the first season as one of the network's touted "six fabulous women from Atlanta's social elite." Hubby Edgerton Hartwell, the former Oakland Raiders linebacker, made frequent appearances.
The house: According to court records posted on TMZ.com, the couple borrowed $2.9 million to buy their suburban mansion in June 2007. Just more than two years later, Bank of America paid $1.9 million for the house at a foreclosure sale at the Forsyth County, Ga., courthouse, after the Hartwells defaulted on their adjustable-rate mortgage.
Is it time to refinance?
The market: RealtyTrac reports there were foreclosure filings on one in 248 housing units in Forsyth County in November 2010. The average foreclosure sales price was around $210,000.
Lenny Dykstra
The star: Nicknamed "Nails," the former Major League Baseball pro was an outfielder for the Mets and the Phillies during the late 1980s and early 1990s. After filing for Chapter 11 bankruptcy in 2009, Dykstra -- in a move many found ironic -- started an online financial advisory firm in 2010 called Nails Investments.
The house: Dykstra bought the 6.5-acre property in Thousand Oaks, Calif., from hockey pro Wayne Gretzky for $18.5 million in 2007, according to the Los Angeles Times. He lost the house in a Ventura County foreclosure sale in November 2010 to a winning bid of $760,712, the newspaper reported. Dykstra owed about $12 million to JPMorgan Chase.
MSN Real Estate: Find a foreclosure
The market: One in 201 homes in Ventura County received a foreclosure filing in November 2010, according to RealtyTrac. The average foreclosure sales price was in the neighborhood of $382,000.
Veronica Hearst
The star: The name is Hearst's claim to fame. She's the widow of newspaper heir Randolph Hearst and stepmother of Patricia Hearst, who was kidnapped by left-wing guerrillas in 1974.
The house: Located Manalapan, Fla., near Palm Beach, the Villa Venezia was originally built for the great-grandson of railroad tycoon Cornelius Vanderbilt. According to The Palm Beach Post, the 52-room, 28,000-square-foot mansion sold to New Stream Capital for $22 million at a Palm Beach County auction in February 2008.
The market: One in 211 housing units in Palm Beach County received a foreclosure filing in November 2010, reports RealtyTrac. The average foreclosure sales price was about $137,000.
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