September 13, 2011, 3:15 PM ET
Associated Press
By Eric Morath
Link to Article: http://blogs.wsj.com/bankruptcy/2011/09/13/marriage-college-job-wont-ward-off-bankruptcy/
A wedding ring, college degree and a well-paying job: the American dream or a recipe for bankruptcy?
Some of the factors often associated with financial success are increasingly becoming correlated with personal bankruptcy filings, a study released Tuesday by the Institute for Financial Literacy found.
The study found that from 2006 to 2010, bankruptcy filings increased among college graduates and those earning $60,000 a year or more. What’s more, last year, 64% of bankruptcy filers surveyed were married—a number that also increased from five years ago.
“The Great Recession has had a dramatic impact on the bankruptcy filings of American consumers across the economic spectrum—including college educated, high income earners,” said Leslie E. Linfield, executive director the institute. “While less educated, low income individuals continue to represent the typical bankruptcy filer, this report underscores sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups.”
The survey collected responses from some 50,000 of individuals that filed for bankruptcy in the past five years. All respondents had sought credit counseling.
The study found that those holding a bachelor’s degree accounted for 13.58% of filings last year, up from 11.2% in 2006—a 21% increase. Those holding high school degrees still accounted for the largest percentage of filers, 36.27%, but their proportion of all filers fell by 8.6%.
Those most at risk for a bankruptcy filing were individuals who attended college but did not complete a degree, the study said. They accounted for 28.7% of filings last year.
“This we suspect is because they have all the burdens of school related debt and none of the rewards of an actual degree,” the study said.
While those earning less than $20,000 per year accounted for nearly 40% of all filings, higher-income earners saw their ranks grow in the past five years, the study found.
Those earning $60,000 or more accounted for 9.2% of all filings last years, up from 5.5% in 2006, a 67% increase.
The study found that the number of filers who were married jumped above 60% in the past five years, from 57.2% in 2006. That out paces the 50.3% of U.S. adults that are married, according to the Census.
Based in Maine, the Institute for Financial Literacy is a nonprofit organization that promotes effective financial education and counseling.
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
Monday, September 26, 2011
Renting to the Foreclosed
Renting to the Foreclosed
By Marilyn Kennedy Melia
Published September 26, 2011 | Bankrate.com
Article link: http://www.foxbusiness.com/personal-finance/2011/09/26/renting-to-foreclosed/
Investors are buying foreclosed single-family homes and renting them out -- and they often rent them to families who have lost homes to foreclosure.
"Families that have gotten used to single-family property living typically prefer renting a home as opposed to an apartment," says Evan Gentry, president and CEO of G8 Capital, a Ladera Ranch, Calif., private equity fund that has bought 3,000 homes, leasing many to renters.
Investors -- individuals and large-scale funds -- are buying with the aim of offering the houses for rent because selling at a quick profit isn't possible.
Families who have been through foreclosure are not alone in preferring a backyard to an apartment courtyard, says Claire Williams, 2011 president of the Michigan Association of Realtors. "Transferees are looking to rent the home they've left and rent another where they're relocating. They don't want to sell because of the decline in values," Williams says.
Finding Properties
Neighborhoods that have been hit hard by foreclosure or big price drops are especially likely to have single-family homes for rent, says Mike Bowman, owner of Century 21 Mike Bowman, in Dallas.
Moreover, there could be an increase in single-family homes for rent. In August, the Obama administration called for studying how homes owned by Fannie Mae and Freddie Mac could be rented.
One idea being studied, says Josh Fuhrman, senior vice president of the nonprofit Homeownership Preservation Foundation, is for banks to acquire a property and quickly sell to an investor who could then rent it out -- possibly to the family who never left the house, even after foreclosure proceedings began.
Many of the current homes for rent are managed and listed by real estate firms, Bowman says. Additionally, the same channels that list apartments, such as Craigslist.com, are likely to advertise homes for rent, says Aaron Murray, vice president of G8Capital.
Meeting Landlords' Requirements
Investors buying vacant properties often know families recovering from foreclosure are a significant force in the market, and many have adjusted their requirements for eligible tenants. "A careful review of someone's credit history can often help landlords determine the difference between someone caught upside down on a home or who had a temporary job loss versus someone who has a long history of late or nonpayments," Murray says.
Bowman says he advises renters to prepare a letter explaining the circumstances that led to foreclosure and how they have recovered financially.
Some landlords "still insist on a credit score of 720," says Williams. But in some areas, she says, landlords realize the market demands more flexible standards.
Setting Rent Rates
With today's low mortgage interest rates, it's possible foreclosed families could pay more in rent than someone with good credit and cash for a down payment would pay for his or her monthly mortgage payment, says Christopher Thornberg, founding principal of Beacon Economics, a Los Angeles real estate and economic consulting firm.
Many families, not just those who have been through foreclosure, says Williams, find that renting is the only financially viable option for them -- either because they can't sell a former home, have poor credit or fear further home price declines.
Planning to Purchase?
When house prices stabilize, Gentry says, their firm and others might offer plans for renters to buy the houses they occupy.
One such method, called "lease option to buy," involves charging a renter a premium on top of the regular rent rate. The premium, which may be $100 or more monthly, guarantees the renter can buy the home at a certain price at a certain date -- for example, two years after the contract is signed.
Another method is the "contract purchase" whereby the renter pays the investor holding the house a mortgage payment for a few years, with the agreement that in a certain number of years, such as three or four, the renter will get a mortgage from a regular lender and be able to assume ownership from the investor. The mortgage payments paid during the contract period are used to reduce the purchase price when the renter gets regular financing.
"It depends on individual circumstances whether these plans will work for the family," says Barry Zigas, housing analyst for the Consumer Federation of America.
For one thing, "people often misjudge that they'll be in a house for a certain amount of time. In this volatile job market, you could find you need to move," Zigas says. He believes individuals are in a poor position to predict what house prices will be.
Moreover, he likes to see part of the premium on a lease option contract to be put in escrow, allowing the money to be used toward the down payment on the purchase.
Individuals should call a housing counselor, says Fuhrman, to analyze whether these purchase plans are viable for them.
By Marilyn Kennedy Melia
Published September 26, 2011 | Bankrate.com
Article link: http://www.foxbusiness.com/personal-finance/2011/09/26/renting-to-foreclosed/
Investors are buying foreclosed single-family homes and renting them out -- and they often rent them to families who have lost homes to foreclosure.
"Families that have gotten used to single-family property living typically prefer renting a home as opposed to an apartment," says Evan Gentry, president and CEO of G8 Capital, a Ladera Ranch, Calif., private equity fund that has bought 3,000 homes, leasing many to renters.
Investors -- individuals and large-scale funds -- are buying with the aim of offering the houses for rent because selling at a quick profit isn't possible.
Families who have been through foreclosure are not alone in preferring a backyard to an apartment courtyard, says Claire Williams, 2011 president of the Michigan Association of Realtors. "Transferees are looking to rent the home they've left and rent another where they're relocating. They don't want to sell because of the decline in values," Williams says.
Finding Properties
Neighborhoods that have been hit hard by foreclosure or big price drops are especially likely to have single-family homes for rent, says Mike Bowman, owner of Century 21 Mike Bowman, in Dallas.
Moreover, there could be an increase in single-family homes for rent. In August, the Obama administration called for studying how homes owned by Fannie Mae and Freddie Mac could be rented.
One idea being studied, says Josh Fuhrman, senior vice president of the nonprofit Homeownership Preservation Foundation, is for banks to acquire a property and quickly sell to an investor who could then rent it out -- possibly to the family who never left the house, even after foreclosure proceedings began.
Many of the current homes for rent are managed and listed by real estate firms, Bowman says. Additionally, the same channels that list apartments, such as Craigslist.com, are likely to advertise homes for rent, says Aaron Murray, vice president of G8Capital.
Meeting Landlords' Requirements
Investors buying vacant properties often know families recovering from foreclosure are a significant force in the market, and many have adjusted their requirements for eligible tenants. "A careful review of someone's credit history can often help landlords determine the difference between someone caught upside down on a home or who had a temporary job loss versus someone who has a long history of late or nonpayments," Murray says.
Bowman says he advises renters to prepare a letter explaining the circumstances that led to foreclosure and how they have recovered financially.
Some landlords "still insist on a credit score of 720," says Williams. But in some areas, she says, landlords realize the market demands more flexible standards.
Setting Rent Rates
With today's low mortgage interest rates, it's possible foreclosed families could pay more in rent than someone with good credit and cash for a down payment would pay for his or her monthly mortgage payment, says Christopher Thornberg, founding principal of Beacon Economics, a Los Angeles real estate and economic consulting firm.
Many families, not just those who have been through foreclosure, says Williams, find that renting is the only financially viable option for them -- either because they can't sell a former home, have poor credit or fear further home price declines.
Planning to Purchase?
When house prices stabilize, Gentry says, their firm and others might offer plans for renters to buy the houses they occupy.
One such method, called "lease option to buy," involves charging a renter a premium on top of the regular rent rate. The premium, which may be $100 or more monthly, guarantees the renter can buy the home at a certain price at a certain date -- for example, two years after the contract is signed.
Another method is the "contract purchase" whereby the renter pays the investor holding the house a mortgage payment for a few years, with the agreement that in a certain number of years, such as three or four, the renter will get a mortgage from a regular lender and be able to assume ownership from the investor. The mortgage payments paid during the contract period are used to reduce the purchase price when the renter gets regular financing.
"It depends on individual circumstances whether these plans will work for the family," says Barry Zigas, housing analyst for the Consumer Federation of America.
For one thing, "people often misjudge that they'll be in a house for a certain amount of time. In this volatile job market, you could find you need to move," Zigas says. He believes individuals are in a poor position to predict what house prices will be.
Moreover, he likes to see part of the premium on a lease option contract to be put in escrow, allowing the money to be used toward the down payment on the purchase.
Individuals should call a housing counselor, says Fuhrman, to analyze whether these purchase plans are viable for them.
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.
San Diego default filings surge in August
San Diego default filings surge in August
The month-to-month increase was largely due to two major banks
By Lily Leung, Reporter - Real estate
Link to article: http://www.signonsandiego.com/news/2011/sep/19/foreclosure-numbers/
Monday, September 19, 2011 at 12:56 p.m.
SAN DIEGO COUNTY — The number of default notices, the first step in the foreclosure process, ballooned in August, largely due to activity from Bank of New York Mellon and Bank of America, figures from La Jolla-based DataQuick show.
Bank of New York Mellon filings in San Diego County increased from 76 in July to 403 in August, or 430 percent. Meanwhile, Bank of America pushed through more than two times as many defaults during that same time period.
The two lenders, known as beneficiaries in public records, accounted for the bulk of the county’s most recent month-to-month increase. Notices rose from 1,274 in July to 2,094 in August, or 64.4 percent. That’s the largest month-to-month percentage increase since December 2008.
Similar jumps were evident throughout the state, including Los Angeles and Orange counties.
"It appears they're working through their backlogs of delinquent loans," said DataQuick analyst Andrew LePage. "But why and why all of a sudden. It's not clear."
In a statement, Bank of America spokeswoman Jumana Bauwens said the company has been seeing "continued increases" in foreclosure referrals in several parts of the U.S. due to the backlog of foreclosures that were on hold in late 2010 and early 2011.
What does August's sudden upsurge in default notices mean for county home values?
That also is unclear, said LePage of DataQuick.
"We don't know the magnitude and duration" of filings in the months ahead, he said.
The number of trustee deeds, which signal a foreclosure, also increased last month. There were 835 foreclosures in August, up 4.6 percent from July.
The month-to-month increase was largely due to two major banks
By Lily Leung, Reporter - Real estate
Link to article: http://www.signonsandiego.com/news/2011/sep/19/foreclosure-numbers/
Monday, September 19, 2011 at 12:56 p.m.
SAN DIEGO COUNTY — The number of default notices, the first step in the foreclosure process, ballooned in August, largely due to activity from Bank of New York Mellon and Bank of America, figures from La Jolla-based DataQuick show.
Bank of New York Mellon filings in San Diego County increased from 76 in July to 403 in August, or 430 percent. Meanwhile, Bank of America pushed through more than two times as many defaults during that same time period.
The two lenders, known as beneficiaries in public records, accounted for the bulk of the county’s most recent month-to-month increase. Notices rose from 1,274 in July to 2,094 in August, or 64.4 percent. That’s the largest month-to-month percentage increase since December 2008.
Similar jumps were evident throughout the state, including Los Angeles and Orange counties.
"It appears they're working through their backlogs of delinquent loans," said DataQuick analyst Andrew LePage. "But why and why all of a sudden. It's not clear."
In a statement, Bank of America spokeswoman Jumana Bauwens said the company has been seeing "continued increases" in foreclosure referrals in several parts of the U.S. due to the backlog of foreclosures that were on hold in late 2010 and early 2011.
What does August's sudden upsurge in default notices mean for county home values?
That also is unclear, said LePage of DataQuick.
"We don't know the magnitude and duration" of filings in the months ahead, he said.
The number of trustee deeds, which signal a foreclosure, also increased last month. There were 835 foreclosures in August, up 4.6 percent from July.
Friday, June 24, 2011
Kerry Steigerwalt's Broke Law Firm Trying to Make Deals -SAN DIEGO READER
Kerry Steigerwalt's Broke Law Firm Trying to Make Deals
By Don Bauder | Published Wednesday, June 22, 2011 SAN DIEGO READER
link to Article: http://www.sandiegoreader.com/news/2011/jun/22/citylights1-kerry-steigerwalt/
1. David Weil: Former Steigerwalt crony has started a new bankruptcy firm. 2. Kerry Steigerwalt: Thousands of his clients paid but received no service. 3. Gary Sehnert: Local attorney helped stiffed Steigerwalt client.
On March 24, San Diegan Laura Perry received a letter from Kerry Steigerwalt’s Pacific Law Center, once San Diego’s best known, most notorious, and most aggressively advertised law firm. Perry, 73, had paid $2000 to the firm to handle a Chapter 7 bankruptcy for her. She had received no service — one of thousands who allegedly paid money up front but got little or no legal help.
The Steigerwalt law firm, which went out of business last year, offered her a refund amount of $252, to be paid in installments. “The agreed amount will be paid, but [the firm] is financially unable to pay it ‘today,’” lamented the letter, which included a check for $42 signed by Steigerwalt. Perry’s attorney Gary Sehnert, who successfully handled her bankruptcy after Steigerwalt’s lawyers failed to act, advised her not to cash the check. “Once you do that, then they can argue that you agreed to the settlement,” says Sehnert, who did not charge her for any of his work.
On April 18, Perry got a second letter, fretting that the law firm’s “financial condition has worsened.” She would not get the promised April check. She also got a solicitation phone call from one Joe Rivera, representing the law firm, who wanted her to take a lowball settlement of $105. “I said that is a rip-off,” says Perry. “Every time I think of [this] it makes my blood pressure rise.” Rivera would not reply to my questions.
Pacific Law Center was founded by Larry Majors, a nonlawyer convicted felon who vamoosed from Texas after a judge called a law firm he operated “a borderline criminal enterprise,” according to a 2009 San Diego lawsuit, since dismissed. After getting into trouble running several law firms, Majors set up Pacific Law Center in 1993 with his son Austin Majors, also a nonlawyer, as executive director, according to the lawsuit. Steigerwalt, who had been with the public defender’s office for 6 years and in private practice for 18 years, took over the firm in 2008 and attached his name to the front. The firm specialized in drunk driving, personal injury, defective product, loan modification, and bankruptcy cases. Taking over the Pacific Law Center “was the worst decision of my life,” says Steigerwalt, who once again has his own firm. “It cost me millions.”
That April 18 letter to Laura Perry stated, “Vendors and creditors of [the defunct legal institution] claim the firm owes them more than $3 million.”
The sum could be larger than that. Steigerwalt hired the Chicago law office of J. Kevin Benjamin, who set up a Mission Valley office. Steigerwalt pays Benjamin $250 to take over each client who has not been provided service. Benjamin explains to the people that he is not replacing the shuttered law firm. He will take the case himself for a very low fee of, say, $395 for a Chapter 7.
Benjamin says he saw the closed law firm’s records: there were more than 6000 people who had paid some money and not received their service — a number that Steigerwalt, although conceding the firm is insolvent, says is too high. “Some had paid in full, some had not,” Benjamin says. Depending on the average amount shelled out, the money owed to nonserviced clients could exceed $3 million, he says. And that doesn’t include vendors and other creditors.
San Diego attorney Scott Harris feels sorry for “all the people that got screwed, that paid $1500 to $3000 and never got service. Lawyers at [the law firm] had retainer agreements that permitted them to get out of the liability responsibility on the cases they were handling.”
In his frequent trips to San Diego, Benjamin and an assistant handle “70 to 100 people a week who had paid and not gotten services,” he says, asserting that he is losing money on the arrangement. Initially, “people were calling every five minutes. I had to get a separate receptionist and a different line. Some were saying I was a crook. I said, ‘I don’t have your money.’” Clients thought that the up-front fees paid to Kerry Steigerwalt’s Pacific Law Center were paid to Benjamin, and that wasn’t so. He must stress to each cuckolded client that he is not taking over the Steigerwalt firm or the clients’ files. He has to begin every case anew. “This has been going on for a year, and I am debating if I will do it anymore.”
Benjamin says that investigators from the U.S. trustee’s office in San Diego, which oversees bankruptcy cases, have been looking into Steigerwalt customers who did not get served. The probers went over Benjamin’s files and interviewed one of his assistants. “They have their own investigation going of Kerry Steigerwalt,” Benjamin says. “They were asking us about Kerry and about our own operations.” Also, Benjamin says he talked briefly with an agent of the Federal Bureau of Investigation who later checked with Benjamin’s lawyer. But the subject of those inquiries was loan modifications, in which Benjamin is not involved. Steigerwalt’s firm got into the controversial loan modification business.
Steigerwalt says he is not aware of any Federal Bureau of Investigation probe. As is traditional, the agency will not confirm or deny the existence of a probe. The U.S. trustee’s office, while not confirming a formal investigation, did reveal that it has been actively involved, stating: “The U.S. Trustee’s office responded to inquiries from individuals who had concerns about their legal representation in bankruptcy cases after the closure of Kerry Steigerwalt’s Pacific Law Center.”
“Benjamin is making a grand effort to do what is right,” says Sehnert. However, “It would be really nice to have an accounting of that $3 million.” He notes that the check that Laura Perry received was from “Kerry Steigerwalt’s Pacific Law Center Client Trust Account.” Money in client trust accounts belongs to clients, not to the lawyers, who should follow strict accounting procedures, he says. However, a former member of the firm says that in this instance the money paid up front did not have to go into client trust accounts.
Meanwhile, a firm named Golden State Law Group is now advertising heavily, à la Steigerwalt’s deceased enterprise. Golden State’s marketing director is Austin Majors, former executive director of Pacific Law Center. After Steigerwalt’s firm closed, Golden State was launched by two former members of that concern, Don Bokovoy, who is going into semiretirement, and David Weil. On its website, Golden State says it is responding to “unanswered complaints with Kerry Steigerwalt’s Pacific Law Center. Many of Mr. Steigerwalt’s clients have called Golden State Law Group seeking help with their bankruptcy case after complaining to Mr. Steigerwalt that they paid him a retainer to file their bankruptcies and he has, in many cases, failed to do so.” Those who unsuccessfully went to Benjamin’s Chicago law firm “felt cheated and scammed,” says the website.
Steigerwalt says he is disappointed by the criticism, given Weil’s and Bokovoy’s “involvement in the bankruptcy department at [Kerry Steigerwalt’s Pacific Law Center].”
Benjamin is more succinct: Golden State “can go fk themselves
By Don Bauder | Published Wednesday, June 22, 2011 SAN DIEGO READER
link to Article: http://www.sandiegoreader.com/news/2011/jun/22/citylights1-kerry-steigerwalt/
1. David Weil: Former Steigerwalt crony has started a new bankruptcy firm. 2. Kerry Steigerwalt: Thousands of his clients paid but received no service. 3. Gary Sehnert: Local attorney helped stiffed Steigerwalt client.
On March 24, San Diegan Laura Perry received a letter from Kerry Steigerwalt’s Pacific Law Center, once San Diego’s best known, most notorious, and most aggressively advertised law firm. Perry, 73, had paid $2000 to the firm to handle a Chapter 7 bankruptcy for her. She had received no service — one of thousands who allegedly paid money up front but got little or no legal help.
The Steigerwalt law firm, which went out of business last year, offered her a refund amount of $252, to be paid in installments. “The agreed amount will be paid, but [the firm] is financially unable to pay it ‘today,’” lamented the letter, which included a check for $42 signed by Steigerwalt. Perry’s attorney Gary Sehnert, who successfully handled her bankruptcy after Steigerwalt’s lawyers failed to act, advised her not to cash the check. “Once you do that, then they can argue that you agreed to the settlement,” says Sehnert, who did not charge her for any of his work.
On April 18, Perry got a second letter, fretting that the law firm’s “financial condition has worsened.” She would not get the promised April check. She also got a solicitation phone call from one Joe Rivera, representing the law firm, who wanted her to take a lowball settlement of $105. “I said that is a rip-off,” says Perry. “Every time I think of [this] it makes my blood pressure rise.” Rivera would not reply to my questions.
Pacific Law Center was founded by Larry Majors, a nonlawyer convicted felon who vamoosed from Texas after a judge called a law firm he operated “a borderline criminal enterprise,” according to a 2009 San Diego lawsuit, since dismissed. After getting into trouble running several law firms, Majors set up Pacific Law Center in 1993 with his son Austin Majors, also a nonlawyer, as executive director, according to the lawsuit. Steigerwalt, who had been with the public defender’s office for 6 years and in private practice for 18 years, took over the firm in 2008 and attached his name to the front. The firm specialized in drunk driving, personal injury, defective product, loan modification, and bankruptcy cases. Taking over the Pacific Law Center “was the worst decision of my life,” says Steigerwalt, who once again has his own firm. “It cost me millions.”
That April 18 letter to Laura Perry stated, “Vendors and creditors of [the defunct legal institution] claim the firm owes them more than $3 million.”
The sum could be larger than that. Steigerwalt hired the Chicago law office of J. Kevin Benjamin, who set up a Mission Valley office. Steigerwalt pays Benjamin $250 to take over each client who has not been provided service. Benjamin explains to the people that he is not replacing the shuttered law firm. He will take the case himself for a very low fee of, say, $395 for a Chapter 7.
Benjamin says he saw the closed law firm’s records: there were more than 6000 people who had paid some money and not received their service — a number that Steigerwalt, although conceding the firm is insolvent, says is too high. “Some had paid in full, some had not,” Benjamin says. Depending on the average amount shelled out, the money owed to nonserviced clients could exceed $3 million, he says. And that doesn’t include vendors and other creditors.
San Diego attorney Scott Harris feels sorry for “all the people that got screwed, that paid $1500 to $3000 and never got service. Lawyers at [the law firm] had retainer agreements that permitted them to get out of the liability responsibility on the cases they were handling.”
In his frequent trips to San Diego, Benjamin and an assistant handle “70 to 100 people a week who had paid and not gotten services,” he says, asserting that he is losing money on the arrangement. Initially, “people were calling every five minutes. I had to get a separate receptionist and a different line. Some were saying I was a crook. I said, ‘I don’t have your money.’” Clients thought that the up-front fees paid to Kerry Steigerwalt’s Pacific Law Center were paid to Benjamin, and that wasn’t so. He must stress to each cuckolded client that he is not taking over the Steigerwalt firm or the clients’ files. He has to begin every case anew. “This has been going on for a year, and I am debating if I will do it anymore.”
Benjamin says that investigators from the U.S. trustee’s office in San Diego, which oversees bankruptcy cases, have been looking into Steigerwalt customers who did not get served. The probers went over Benjamin’s files and interviewed one of his assistants. “They have their own investigation going of Kerry Steigerwalt,” Benjamin says. “They were asking us about Kerry and about our own operations.” Also, Benjamin says he talked briefly with an agent of the Federal Bureau of Investigation who later checked with Benjamin’s lawyer. But the subject of those inquiries was loan modifications, in which Benjamin is not involved. Steigerwalt’s firm got into the controversial loan modification business.
Steigerwalt says he is not aware of any Federal Bureau of Investigation probe. As is traditional, the agency will not confirm or deny the existence of a probe. The U.S. trustee’s office, while not confirming a formal investigation, did reveal that it has been actively involved, stating: “The U.S. Trustee’s office responded to inquiries from individuals who had concerns about their legal representation in bankruptcy cases after the closure of Kerry Steigerwalt’s Pacific Law Center.”
“Benjamin is making a grand effort to do what is right,” says Sehnert. However, “It would be really nice to have an accounting of that $3 million.” He notes that the check that Laura Perry received was from “Kerry Steigerwalt’s Pacific Law Center Client Trust Account.” Money in client trust accounts belongs to clients, not to the lawyers, who should follow strict accounting procedures, he says. However, a former member of the firm says that in this instance the money paid up front did not have to go into client trust accounts.
Meanwhile, a firm named Golden State Law Group is now advertising heavily, à la Steigerwalt’s deceased enterprise. Golden State’s marketing director is Austin Majors, former executive director of Pacific Law Center. After Steigerwalt’s firm closed, Golden State was launched by two former members of that concern, Don Bokovoy, who is going into semiretirement, and David Weil. On its website, Golden State says it is responding to “unanswered complaints with Kerry Steigerwalt’s Pacific Law Center. Many of Mr. Steigerwalt’s clients have called Golden State Law Group seeking help with their bankruptcy case after complaining to Mr. Steigerwalt that they paid him a retainer to file their bankruptcies and he has, in many cases, failed to do so.” Those who unsuccessfully went to Benjamin’s Chicago law firm “felt cheated and scammed,” says the website.
Steigerwalt says he is disappointed by the criticism, given Weil’s and Bokovoy’s “involvement in the bankruptcy department at [Kerry Steigerwalt’s Pacific Law Center].”
Benjamin is more succinct: Golden State “can go fk themselves
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
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