Thursday, December 30, 2010

Happy New Year

Treating Straddle Tax Claims in Chapter 13

http://www.abiworld.org/committees/newsletters/consumer/vol8num10/treat.html

by: Thomas D. DeCarlo

Chapter 13 Trustee Office; Southfield, Mich.

Each year, thousands of debtors file for relief under chapter 13 between Jan. 1 and April 15. A certain number will then timely file tax returns for the prior year, and find that they have a tax liability. These “straddle” liabilities—liabilities for tax years preceding the year in which the chapter 13 is commenced but before the deadline for filing the tax return—pose serious problems for debtors who need and deserve the fresh start promised in chapter 13. How can a debtor deal with these tax liabilities in the chapter 13, if at all? Four recent decisions from Michigan illustrate the difficulties in analyzing and treating these straddle liabilities.

In In re Turner, [1] the debtor filed for chapter 13 relief on Jan. 13, 2009, and timely filed his State of Michigan tax return that indicated a liability of $2,396 for the tax year ending Dec. 31, 2008. The debtor filed a proof of claim on behalf of the state, which objected to the claim. The court focused on § 1305, which provides that only the taxing authority can file a claim for “taxes that become payable...while a case is pending.” The court stated that while the debtor could pay the taxes at any time after Jan. 1, the taxes are not payable until the final day on which a tax return can legally be filed. The taxes are not due to or legally enforceable by the taxing authority until that date, and until the return is filed, the taxing authority cannot know whether there is a liability. The court also noted that if the tax liability is found to be a pre-petition obligation, then the taxing authority may be denied the time required by Bankruptcy Rule 3002 for filing a proof of claim, and the taxing authority has 180 days from the petition date to file the claim. The debtor filed for relief on Jan. 13, and the bar date for a governmental proof of claim would run on July 28. If the tax liability is not fixed until April 15, then the governmental unit would have only 88 days between April 15 and July 28 to actually file the proof of claim. The fact that the taxes are not payable and the apparent adverse impact on the state’s ability to file a proof of claim compelled the conclusion that the straddle tax liability was a post-petition liability that could not be treated in the chapter 13 plan unless the state chose to file a proof of claim and receive payment through the Plan.

In In re Senczyszyn, [2]the court determined that § 1305 does not define “pre-petition” vs. “post-petition” claims, but applies only after a court makes the threshold determination that the claim is a post-petition claim. The court stated that whether an obligation is a claim is based on § 101(5)(A), which defines any right to payment—whether liquidated, unliquidated, contingent or otherwise—and is to be construed in the broadest terms possible. Under Sixth Circuit precedent, the obligation will be a claim if the obligation has its basis in a pre-petition relationship between the debtor and creditor. That relationship, standing alone, gives the creditor the required notice of an obligation to file a proof of claim. Applied to tax obligations, the liability by definition arises out of a pre-petition relationship between the debtor and taxing authority. Every fact that is necessary for the existence and extent of the claim occurred as of Dec. 31 of the prior year. The straddle tax liability is a claim as of Dec. 31 that, as a pre-petition priority claim, must be treated in debtor’s chapter 13 plan pursuant to § 1322, free from the restrictions of § 1305.

Two other cases [3] used a third approach to straddle tax claims and were the first to disagree with the Senczyszyn court regarding the status of the claim as a pre-petition claim. These courts agreed with the Turner court’s holding that the state’s “right to payment” did not arise until April 15 and, therefore, the claim did not arise until April 15, well after the commencement of the cases.

The courts then focused on §§ 1322 and 507(a)(8)(A)(i). Section 507(a)(8) gives priority status to any claim that is measured by income for a taxable year ending on or before the date of the filing of the petition for which a return, if required, is last due after three years before the date of the filling of the petition. Straddle tax liabilities are “measured by income” for a tax year ending prior to the commencement of the case—the debtor's income in 2009 certainly predates the filing of the case in 2010. The last date on which the debtor could timely file a return would have been April 15, 2010, a date is that is after a date that was three years prior to the commencement of the case. Thus, the debtor’s tax obligation for the year 2009 constituted a “priority” tax claim under § 507.

Section 502 provides that any claim that arises after commencement of the case for tax that is otherwise entitled to priority is determined and allowed as if the claim had arisen before the date of the Petition. Section 1322 requires that the debtor's plan provide for full payment of all allowed priority claims over the life of the plan. "[Sections] 502(i), 507(a)(8) and 1322(a)(2)…establish a Congressional intent to treat taxes on income for the taxable year preceding the bankruptcy cases as prepetition claims and to bring those claims into the bankruptcy plan." [4]

Regardless of the analysis used—whether the “straddle” tax claim is a pre-petition claim or is a post-petition claim that nonetheless can be treated in the Plan—allowing a debtor to treat these claims is more consistent with the “fresh start” policy of the Bankruptcy Code. Presumably, debtors are all committing all of their disposable income to the funding of the plan, raising the question of how the debtor would be able to pay this additional claim. Payment of the claim assures that the claim will be paid, as full payment of the priority claim is a condition to the debtor receiving a discharge. Payment through the chapter 13 plan also simplifies the collection by the taxing authority, which must do nothing more than file a proof of claim. The taxing authority may be denied the ability to charge interest and penalties. However, a taxing authority’s goal should be to collect taxes owed, not to seek unnecessarily punitive additional charges or fees. Payment of straddle tax claims through the chapter 13 plan furthers the goals of both the Code in providing the debtor with a fresh start and those of the taxing authority for collection of outstanding tax obligations.



1. 420 B.R. 711 (Bankr. E.D. Mich. 2009).
2. 426 B.R. 250 (Bankr. E.D. Mich. 2010).
3. In re Wilson, Case No. 10-45791 (Bankr. E.D. Mich. 2010), and In re Hight, 426 B.R. 258 (Bankr. W.D. Mich.), aff'd, 434 B.R. 505 (W.D. Mich. 2010).
4. In re Hight, 434 B.R. at 510.

Monday, December 27, 2010

SCAM Alert

Never agree to deposit a check from someone you don’t know and then wire money back. The check will bounce, and you’ll owe your bank the money you withdrew. By law, banks must make the funds from deposited checks available within a day or two, but it can take weeks to uncover a fake check. It may seem that the check has cleared and that the money is in your account. But you’re responsible for the checks you deposit, so if a check turns out to be a fake, you owe the bank the money you withdrew.

Wednesday, December 22, 2010

My Favorite Holiday Book


The Zombie Night Before Christmas

by Clement C. Moore, H. Parker Kelley, Dominic Mylroie (Illustrator)

Why worry about the Grinch when you’ve got ZOMBIES on the attack! Their prey? America’s best-loved Christmas poem. Get ready to have a holly jolly zombie holiday with this monstrously funny mash-up that subverts all that tiresomely good Christmas cheer. Clement C. Moore’s verses are tweaked and twisted, turning a once-cozy fireside read-aloud on its (now brainless) head. To complete the sacrilege: hilarious renderings of zombie stockings (undead legs!) hung by the chimney with care, and St. Nick attempting to repel a full-out, flesh-devouring zombie attack. One thing’s for sure—Santa and his eight tiny reindeer will never be the same!
Is Bankruptcy Right For You ?


Bankruptcy is a process designed to provide a financial “fresh start” to those with burdensome debts. Bankruptcy protects debtors against collections, garnishments, lawsuits, creditor harassment, and in certain cases avoids repossession of vehicles and foreclosure of homes. At the end of the process, bankruptcy results in a discharge, releasing the debtor from personal liability from specific debts, prohibiting creditors from collecting on those debts in the future, and ultimately gives the debtor peace of mind and a clean slate from which to start anew.

While nobody wants to file bankruptcy, it is important to understand that it is not the goal of the bankruptcy code to take away all of your assets, leaving you living in a cardboard box under a bridge. The code has certain exemptions, allowing you to keep assets such as home equity, vehicles, tools of the trade and the like - as well financial assets such as retirement funds.

There are two primary forms of consumer bankruptcy: Chapter 7 (liquidation) and Chapter 13 (reorganization). The decision of whether to file under Chapter 7 or Chapter 13 requires thorough analysis and may vary from case to case.



Call  (727) 410-2705 for an appointment today!

GSEs' Foreclosures Outnumber Modifications More than 2 to 1 in Q3

For every home loan held by Fannie Mae and Freddie Mac that was modified during the third quarter, 2.3 loans were foreclosed on during the same period. The GSEs initiated foreclosure on 339,000 home mortgages during the July to September timeframe. Loan modifications completed in the quarter totaled 146,500, with the majority of those completed through non-HAMP programs. The two companies approved 29,500 short sales during the third quarter.

http://www.fhfa.gov/

In a Sign of Foreclosure Flaws, Suits Claim Break-Ins by Banks

In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins keep surfacing, and in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation's biggest banks in recent months, critics say that these situations reinforce their claims that the foreclosure process is fundamentally flawed, the New York Times reported today. Identifying the number of homeowners who were locked out illegally is difficult, but banks and their representatives insist that these situations represent just a tiny percentage of foreclosures. Many of the incidents that have become public appear to have been caused by confusion over whether a house is abandoned, in which case a bank may have the right to break in and make sure the property is secure. Some of the cases appear to be mistakes involving homeowners who were up to date on their mortgages—or had paid off their homes—but who still became bank targets. More common are cases in which a homeowner was behind on payments, perhaps trying to work out a modification, when bank crews changed the locks. Banks and their contractors insist that the number of mistakes is minuscule given the hundreds of thousands of new foreclosure cases filed each month.

http://www.nytimes.com/2010/12/22/business/22lockout.html?_r=2&hp

Tuesday, December 21, 2010

Strategic Renting

The Sum Of All Eviction Fears

in From The Orb > Blog View
by John Clapp on Thursday 16 December 2010

BLOG VIEW: While scanning mortgage headlines the other morning, I was stopped in my tracks by one particularly eye-grabbing claim: "Families Exchange Homes to Stop Foreclosure."

Immediately, I recalled a story that made the rounds last summer. You might remember the one: While cleaning out their home, a family facing foreclosure found a highly valuable Superman comic book - Action Comics No. 1. That comic - apparently a collector's dream item - was later auctioned for $436,000, leading to a bevy of "Man Of Steel Saves The Day" headlines (but, sadly, no "Faster than an affidavit notarization, more powerful than a foreclosure locomotive on a dual track" ledes).

"But what's all this about swapping homes?" I asked myself as I dug into the press release.

As it turns out, the release was touting a new (and free) service being offered by an entity known as Home Lease Exchange LLC. In addition to boasting offices in Phoenix and San Jose, Calif., Home Lease Exchange appears to be the creative force behind the ForceYourLenderToModify.com - a domain name that doesn't exactly conjure up thoughts of compromise, good-faith negotiating, etc.

Here's how Home Lease Exchange's new service works: A borrower whose foreclosure is drawing near leases - under very generous terms - his or her home to another borrower who (a) lives nearby and (b) is also facing foreclosure. The long-term lease will deter buyers at trustee sales, leaving the servicer and/or bank to deal with the REO and its tenants, Home Lease Exchange explains.

According to the release, this plan "creates amazing leverage for homeowners with their lenders, because under President Obama's Helping Families Save Their Homes Act, tenants have the right to stay in their homes through the term of their lease, as long as the lease is entered into before complete title to the property is transferred."

The Helping Families Save Their Homes Act, which passed in May 2009, included the Protecting Tenants at Foreclosure Act (PTFA). Created in response to the rare but nonetheless unfair situation where a tenant is kicked out of his home on little notice because his landlord stopped paying the mortgage, the PTFA was designed to give tenants some breathing room between learning of his landlord's foreclosure and securing new living accommodations. Under the PTFA, servicers must abide by the terms of bona-fide leases or, where no such lease exists, provide a 90-day grace period for tenants.

The PTFA was immediately met by trepidation on the part of servicers and eviction specialists. Giving servicers cause for concern were the legislation's vague language, questionable cutoff points and definition of bona-fide leases.

For months following the PTFA's passage, eviction-themed webinars and industry panel sessions dealt with worst-case scenarios, such as the dreaded 10-year verbal lease entered into between a borrower and his brother. The PTFA, well-intentioned though it was, clearly put servicers in a precarious spot.

Making things more difficult was a PTFA amendment included in this year's financial reform legislation that essentially allows borrowers and tenants to enter into leases up until the point at which complete title to a property is transferred to a successor entity.

"Therefore, the Dodd-Frank Act opens the door wider than before to potential fraudulent leases or tenancies, under which straw-man tenants or others are used as a strategy to significantly delay the REO owner from recovering possession of the property," Larry R, Rothenberg, a partner at Weltman, Weinberg & Reis Co. LPA, wrote at the time. "'Strategic renting may now join 'strategic default' as a term in our lexicon."

Perhaps to the surprise of much of the industry, abuse of the PTFA has been limited to one-off events, eviction attorneys told me as recently as last week. Yes, suspicious leases come up now and then, they say, but by and large, the issue of fraudulent leases hasn't been nearly as bad as was originally feared.

Will Home Lease Exchange be the galvanizing force that turns eviction departments on their heads?
- John Clapp, editor, Servicing Management

Counseling Improves Mod Success, Nearly Doubles Payment Reductions

NeighborWorks America is the administrator of the National Foreclosure Mitigation Counseling (NFMC) Program, which was implemented by Congress in January 2008. Based on a new report that analyzed the NFMC program in its first two years, through December 2009, the nonprofit group found that the odds of curing a foreclosure is 1.7 times greater for a homeowner who works with an NFMC counselor than for a homeowner who doesn’t receive counseling.


The analysis also revealed that homeowners who obtain a mortgage modification through the NFMC program lower their mortgage payments by an average of $555 per

month, compared to savings of just $288 per month for homeowners who don’t work with an NFMC program counselor. NeighborWorks says the national counseling program has helped individual homeowners save more than $6,000 annually.

In addition, the re-default rate for homeowners counseled through the NFMC program was better than that for homeowners who didn’t receive counseling. The NFMC report estimates that 36 percent of counseled homeowners who received a default-curing mortgage modification became serious delinquent again after eight months, compared to 49 percent of homeowners who received no program counseling.


http://www.dsnews.com/articles/counseling-improves-mod-success-nearly-doubles-payment-reductions-2010-12-20

NJ Judge Stops Foreclosures

http://www.bloomberg.com/news/print/2010-12-20/bank-of-america-lenders-subject-to-new-jersey-court-order.html

Bank of America Corp., JPMorgan Chase & Co. and four other mortgage lenders and service providers face a possible suspension of foreclosures in New Jersey by Jan. 19 under a judge's order

Monday, December 20, 2010

Bankruptcy: Doomsday- NO - Salvation

The advantage of bankruptcy is that foreclosures, evictions, repossession, garnishment of wages or Social Security payments, utility shut-offs and collections calls stop. If a person waits too long to file, a legal judgment might eliminate options for saving an asset.


Do not wait until the car is on the verge of repossession or two days before the home is foreclosed.

Bankruptcy Court More Effective Than Loan Modification Efforts

Homeowners are finding that obtaining a loan modification even with an attorney’s assistance is costly, lengthy and only 50% successful. Filing for bankruptcy has become a viable option for consumers earning an income but facing foreclosure.




Helping a client file for Chapter 13 bankruptcy and putting together a plan allowing the homeowner to catch up on mortgage arrears beats the loan modification process which “has no teeth.”

http://www.post-gazette.com/pg/10354/1111554-499.stm

http://www.maxbankruptcybootcamp.com/why-hamp-should-be-of-interest-to-boot-campers

The Alphabet Problem

http://www.maxbankruptcybootcamp.com/alphabet-problem-pooling-servicing-agreement

Fraud Cases

http://www.foreclosurehamlet.org/profiles/blogs/half-dozen-florida-judges

Freddie Mac Extends Foreclosure Protection for Service Members Through 2011

For Immediate Release


December 17, 2010

Contact: corprel@freddiemac.com

or (703) 903-3933 (703) 903-3933

McLean, VA – Freddie Mac (OTC: FMCC) today instructed its servicers to delay initiating foreclosure for at least nine months for financially troubled service members who are released from active duty through the end of 2011 and have Freddie Mac-owned mortgages. Freddie Mac is one of the nation’s largest investors in conforming, conventional mortgages.

News Facts

Freddie Mac’s decision to extend the nine-month foreclosure stay will give lenders more time to work with service members that are having difficulty paying their mortgage.

Freddie Mac is making this protection a requirement for servicing our mortgages although its original authorization in the Housing and Economic Recovery Act of 2008 (HERA) expires on December 31, 2010.

The nine-month stay was originally authorized for service members under amendments to the Service members Civil Relief Act (SCRA) included in HERA.

News Quotes

“Our military make sacrifices every day to protect our homes and families,” said Anthony Renzi, Executive Vice President of Single Family Portfolio Management at Freddie Mac. “This small act will protect financially troubled service members when they return from active duty by giving them more time to work with their lender to stay in their home.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

http://www.bizjournals.com/washington/news/2010/12/17/freddie-mac-extends-foreclosure.html#ixzz18epkcylp

In Re Kemp

In re: Kemp

A claim filed by a mortgage servicer would be disallowed when that creditor did not have possession of the note and the note was not endorsed to the creditor at the time the claim was filed.
****************************

In the Matter of John T. Kemp, Debtor.


John T. Kemp, Plaintiff,
v.
Countrywide Home Loans, Inc., Defendant.
Case No. 08-18700-JHW, Adversary No. 08-2448.
United States Bankruptcy Court, D. New Jersey.
November 16, 2010.
Bruce H. Levitt, Esq. Levitt & Slafkes, PC, South Orange, New Jersey, Counsel for the Debtor.
Harold Kaplan, Esq. Dori L. Scovish, Esq. Frenkel, Lambert, Weiss, Weisman & Gordon, LLP, West Orange, New Jersey, Counsel for the Defendant.
 
391 B.R. 262 (2008)

In the matter of John T. KEMP, Debtor.
No. 08-18700/JHW.
United States Bankruptcy Court, D. New Jersey.
July 17, 2008.
263*263 Steven N. Taieb, Esq., Mt. Laurel, NJ, for the Debtor.

Bad Credit Car Loans

The following advice to consumers seeking a bad credit car loans before the end of the year:


• Know the information contained in each of your credit reports as well as the individual credit score for each one

• Plan on coming into a bad credit car loan with at least 10 percent down in cash or actual trade equity

• Keep the term of the loan as short as possible

• Buy a compact or midsize car and put off purchase what you really want until after you’ve reestablished your car credit.

Finances

http://www.stltoday.com/business/local/article_312e6705-f068-5119-a0e9-bb5fca99c529.html

New Rules for Gift Cards

New Federal Reserve rules provide important protections when you purchase or use gift cards. Here are some key changes that apply to gift cards sold on or after August 22, 2010:

Covered by the new rules

Store gift cards, which can be used only at a particular store or group of stores, such as a book store or clothing retailer.

Gift cards with a MasterCard, Visa, American Express, or Discover brand logo. These cards generally can be used wherever the brand is accepted. (Not all cards with a brand logo are covered; see "Other prepaid cards" below for exceptions.)
New protections

Limits on expiration dates. The money on your gift card will be good for at least five years from the date the card is purchased. Any money that might be added to the card at a later date must also be good for at least five years.

Replacement cards. If your gift card has an expiration date you still may be able to use unspent money that is left on the card after the card expires. For example, the card may expire in five years but the money may not expire for seven. If your card expires and there is unspent money, you can request a replacement card at no charge. Check your card to see if expiration dates apply.

Fees disclosed. All fees must be clearly disclosed on the gift card or its packaging.

Limits on fees. Gift card fees typically are subtracted from the money on the card. Under the new rules, many gift card fees are limited. Generally, fees can be charged if

you haven't used your card for at least one year, and

you are only charged one fee per month.

These restrictions apply to fees such as:

-dormancy or inactivity fees for not using your card,

-fees for using your card (sometimes called usage fees),

-fees for adding money to your card, and maintenance fees.

You can still be charged a fee to purchase the card and certain other fees, such as a fee to replace a lost or stolen card. Make sure you read the card disclosure carefully to know what fees your card may have.

Other prepaid cards

These new rules apply only to gift cards, which are just one type of prepaid card. The new rules do not cover other types of prepaid cards, such as:

Reloadable prepaid cards that are not intended for gift-giving purposes. For example, a reloadable prepaid card with a MasterCard, Visa, American Express, or Discover brand logo that is intended to be used like a checking account substitute is not covered.

Cards that are given as a reward or as part of a promotion. For example, a free $15 gift card given to you by a store if you purchase merchandise or services of $100 or more may have fees or an expiration date of one year rather than five years. Regardless, you must be clearly informed of any expiration dates or fees for these cards.

http://www.federalreserve.gov/consumerinfo/wyntk_giftcards.htm

SEC Subpoenas Big Banks' Mortgage Securitization Documents

http://www.dsnews.com/articles/sec-subpoenas-big-banks-mortgage-securitization-documents-2010-12-17

The Securities and Exchange Commission (SEC) is reportedly investigating lenders' procedures for packaging home mortgages into securities bonds for sale to investors. Reuters, citing two sources familiar with the probe, says the SEC sent subpoenas last week to Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, and Wells Fargo. The subpoenas focus on the earliest stage of the mortgage securitization process, in particular, the role of master servicers.

Wednesday, December 15, 2010

Credit Counseling or Bankruptcy?

When you have more debt than income and you're drowning in late payments, filing for bankruptcy can seem like a tempting way out.


But it may not be the fresh start you think it is. A new report shows nearly one in three people who filed for bankruptcy last month, still had to pay off their debt.


According to the American Bankruptcy Institute, more than 114,000 people filed for bankruptcy in November.
That's a 13-percent drop from the month before, but it's a more than 2 percent increase over consumer bankruptcies filed a year ago.


While bankruptcy can bring relief from creditors, credit counselors caution: consider every other option first.
The truth of the matter is, when you file bankruptcy, some of the effects linger for years and years and years.
Chapter 7 bankruptcy, which wipes out most of your debt, stays on your credit report for 10 years.  Chapter 13 stays on your credit report for up to seven years, and you still must repay many of your creditors on a payment plan.

The average debt management program through a credit counseling agency lasts, roughly about five years and affects your credit rating the same as a chapter 13 bankruptcy.   They may also pay your payments late causing additional marks on your credit report.  Payments through a Ch 13 plan can not be marked late.

By law, you must qualify for bankruptcy. Depending on your circumstances, you may be limited to chapter 13- the kind of bankruptcy that goes on your record, but still results in a court-ordered payment plan for your creditors. That's what happened to nearly a third of the consumers who filed for bankruptcy last in November.

FEDERAL RESERVE PROPOSES TO INCREASE CONSUMER CREDIT, LEASE-PROTECTION LIMITS TO $50,000

The U.S. Federal Reserve proposed two rules that would raise consumer protection coverage limits for credit transactions and leases, Bloomberg News reported yesterday. The rules would increase the limits to $50,000, according to the Federal Reserve, and amounts will be adjusted annually to reflect any increase in the consumer price index. Consumer loans of more than $25,000 are generally exempt from the protections of the Truth in Lending Act, and leases where the consumer’s total obligation exceeds $25,000 are also exempt from safeguards of the Consumer Leasing Act. The $50,000 limit for leases would apply to everything consumers are required to pay under the lease excluding taxes, the Fed said. The financial overhaul bill enacted July 21 included a provision to extend coverage to $50,000 effective July 21, 2011.

http://www.bloomberg.com/news/print/2010-12-13/fed-to-increase-consumer-lease-protection-limits-to-50-000.html

FDIC PROPOSES MINIMUM CAPITAL STANDARDS FOR BANKS

U.S. regulators today proposed new capital standards for all financial institutions, implementing a requirement of the Dodd-Frank financial overhaul, the Wall Street Journal reported today. The standards mandate that the nation's largest banks be subject to the same minimum standards for their capital cushions as smaller institutions, FDIC Chairman Sheila Bair said. The FDIC also voted to gradually boost the amount of reserves that insured banks must hold. The so-called designated reserve ratio would be targeted to rise to 2 percent over the next 17 years, FDIC officials said. The Dodd-Frank law sets a minimum of 1.35 percent by fall 2020. The Federal Reserve and Office of the Comptroller of the Currency are joining the FDIC's proposal

HAMP is A Failure

http://cop.senate.gov/documents/cop-121410-report.pdf

Today's monthly Congressional Oversight report concluded that for all intents and purposes, HAMP is a failure. Link to the report is here: http://cop.senate.gov/documents/cop-121410-report.pdf So, perhaps characterizing the program in last week's webinar as not longer having credibility in many policy circles was not too risky after all. It not only means the continued experimentation of alternative approaches - mediation etc - but a plaintiff's bar even more aggressive in its litigation strategies in the wake of the foreclosure document problem. Despite criticism of program implementation by Treasury, COP basically lays the failure of loan modification efforts at the feet of the mortgage servicers. Not at all surprising in today's environment:

A major reason [for HAMP's failure] is that mortgages are, in practice, far more complicated than a one-to-one relationship between borrower and lender. In particular, banks typically hire loan servicers to handle the day-to-day management of a mortgage loan, and the servicer's interests may at times sharply conflict with those of lenders and borrowers. For example, although lenders suffer significant losses in foreclosures, servicers can turn a substantial profit from foreclosure related fees. As such, it may be in the servicer's interest to move a delinquent loan to foreclosure as soon as possible. HAMP attempted to correct this market distortion by offering incentive payments to loan servicers, but the effort appears to have fallen short, in part because servicers were not required to participate. Another major obstacle is that many borrowers have second mortgages from lenders who may stand to profit by blocking the modification of a first mortgage. For these reasons, among many others, HAMP's straightforward plan to encourage modifications has proven ineffective in practice.

Fewer Homes "Underwater" as Foreclosures Increase

Trade-industry data released on Monday showed that the number of U.S. homeowners who owe more on their mortgages than their homes are worth fell in the third quarter, but the decline stemmed from banks getting more aggressive on foreclosures, not from home values going up, the Wall Street Journal reported today. The total of underwater mortgages fell to 10.8 million at the end of September, down from a peak of 11.3 million at the beginning of the year, according to CoreLogic, a real-estate data firm. The latest total accounts for nearly 22.5 percent of U.S. homeowners with a mortgage. Home prices, meanwhile, appear to be declining again after tax credits that spurred sales produced modest price gains during the first half of the year. Home values could drop by an estimated $1.7 trillion this year, a 40 percent increase from a year ago, according to Zillow.com, a real-estate website. Most of the decline is expected in the second half of the year.

 
 

Tuesday, December 14, 2010

Dress Code

It's winter -people wear clothes- so this should not even be an issue.  But no we have leggings!    If you are  built like a Kardasian or fat NO LEGGINGS with out a dress or sweater to mid thigh or below please! It is just gross!   While we are at it if your are over 25 you should follow the above even if you have the body for it- MLF is just gross.  If you are in an office you should also follow  number one.   Looking like a high price call girl instead of  a legal assistant will not gain  you respect- maybe a date with the  young male attorney or  start of your sexual harrasment case.

Weidner and Forrest attacked in Court by Robo- Signers

http://www.ritholtz.com/blog/2010/12/when-robosigners-attack/


Got copies of the videos removed from You Tube?  Send them to me- I'll post them  here too!

Oh and by the way the Robo-Signers can each  be prosecuted individual per signing under FS 117.105 of a third degree felony and under FS 117.107 they can be fined $5,000 per signature.

Anatomy of Mortgage Fraud, Part I: MERS's Smoking Gun

http://www.huffingtonpost.com/l-randall-wray/merss-smoking-gun-part-1-_b_794713.html

LPS

The reports and investigations will continue to roll in…but will there be any relief for the homeowner who was victimized by such practices? How many more families will be thrown into the streets while these investigations play out?


The first sign of legal problems for LPS emerged earlier this year, when the company disclosed that federal prosecutors in Florida had opened a criminal investigation into apparently forged signatures on foreclosure documents prepared by DocX, the shuttered subsidiary located in a small office park in Alpharetta, Georgia.

Fidelity National Financial, LPS’s former parent, had bought DocX in 2005. The unit soon became a high-speed mill, churning out mortgage assignments — many of which are now known to be of doubtful validity — on behalf of banks and investor trusts, helping them to foreclose on homeowners.

Few firms benefited more from the collapse of the U.S. housing boom than LPS. Spun off as an independent company in 2008, the company has seen its profits, with big help from its mortgage default services business, reach $232 million for the first nine months of 2010. That is a nearly 15 percent increase from the same period in 2009. Its revenue last year was $2.4 billion, up from $1.8 billion in 2008.


http://www.msnbc.msn.com/id/40533358/ns/business-us_business/

Funds for Uncleared Pre-Petition Checks Are Property of the Estate

Recently, in In re Brubaker, 426 B.R. 902 (Bankr. M.D. Fla. 2010), a Florida bankruptcy court held that funds related to checks that had not cleared were property of the estate under section 541(a)(1) of the Bankruptcy Code. In Brubaker, the debtors wrote several checks before filing for chapter 7 relief. As of the filing date, these checks had not cleared, and therefore the funds remained in the debtors’ bank account. The bankruptcy court rejected the debtors’ argument that these funds transferred on the dates that the checks were presented to the recipient, and thus were not property of the estate. Instead, the court noted that funds do not transfer until the checks are honored. Thus, the court held that funds remaining in the account were property of the estate since the debtors’ bank had not honored the checks.

Under section 542(a) all property in “possession, custody, or control” of the debtor at the start of the case must be delivered to the trustee. The court looked at the UCC for guidance in determining “control” under section 542(a). Under the UCC, a check is simply an order for the bank to pay the recipient a stated sum of money on demand. U.C.C. § 3-104(a)(2). Until the bank issues payment, the debtor has the ability to close the account or stop payment of the check. Since the checks in Brubaker had not been cashed at the time of filing, the funds were in debtors’ control and remained part of the estate. In Barnhill v. Johnson (In re Barnhill), 503 U.S. 393, 401 (1992), the Supreme Court held that transfer of funds occurred when the drawee bank honored the check. The court followed this decision and also considered the bankruptcy policy that the trustee must distribute funds among creditors fairly and equitably. The court decided that the best way to accomplish this goal was to determine that the transfer of funds did not occur until the bank honored the check. Holding otherwise would make it too easy for debtors and aggressive creditors to outsmart the system by selecting to pay certain creditors instead of others, knowing that those payments would be honored, thus defeating the goal of equitable distribution. As a result, courts have consistently held that outstanding funds remain property of the estate.

How should a debtor deal with these checks becoming property of the estate? Some options exist for the debtor. First, the debtor could notify his bank that he has filed for bankruptcy protection, his account is part of the estate, and any checks presented for payment should no longer be honored. Debtors should be careful writing checks on the eve of filing. It may be fraudulent if the debtor knows he intends to file for bankruptcy at the time the checks are written and therefore payment will be stopped. See Shake v. County of Buffalo, Neb., 154 B.R. 270, 276 (Bankr. D. Neb. 1993) (allowing criminal complaint against drawer of bad check to proceed as exception to automatic stay of section 362); Johnson v. Lindsey, 16 B.R. 211, 213 (Bankr. D. Fla. 1981) (permitting criminal prosecution for issuing worthless check, but not permitting repayment if found guilty). Second, the debtor can wait until all drawn checks have cleared from the account before filing a petition of relief. It should be noted that this option only relates to “when” a debtor should file bankruptcy. Although a debtor may want his checks to clear, there may be more imminent concerns. For example, the value of outstanding checks is probably not the biggest concern if a debtor’s home is being foreclosed.

Claims Of Discrimination Lead HUD To Investigate 22 Lenders

by MortgageOrb.com on Thursday 09 December 2010

Based on complaints filed by the National Community Reinvestment Coalition (NCRC), the U.S. Department of Housing and Urban Development (HUD) is launching multiple investigations to determine whether 22 banks and lenders discriminated against African American and Latino borrowers.

The NCRC alleges the mortgage originators denied Federal Housing Administration (FHA)-insured loans to African Americans and Latinos with credit scores as high as 640. FHA guidelines allow mortgages to borrowers with credit scores above 580, provided the borrowers have down payments equaling 3.5% of the loan amount, or above 500, provided the borrowers have down payments equaling 10% of the loan amount.

"The decision by some banks to not follow the FHA's policy is cutting qualified borrowers off from accessing credit, and in doing so, causing harm to their ability to prosper, build wealth and for our economy to grow," says John Taylor, president and CEO of the NCRC. "And this decision is arbitrary, because the loans are 100 percent guaranteed, whether the borrower's credit score is 580 or 780. That means the loans with lower credit scores don't pose additional risk to the company, so there's no legitimate business defense for this across-the-board practice."

The NCRC says it conducted "mystery shopping" tests on the nation's top FHA-approved lenders. Of all the lenders tested, 32, or 65%, refused to consider consumers with credit scores below 620. An additional 11, or 22%, refused to extend credit to consumers with credit scores below 640. Only five lenders, or 10%, had policies in place that served consumers with credit scores of 580 and higher.

The NCRC believes the policies of the 22 lenders violate the Fair Housing Act, the Equal Credit Opportunity Act and the Community Reinvestment Act. A complete list of the lenders against which the NCRC filed complaints can be found here.



SOURCES: HUD, NCRC

Fannie Mae Study- Americans more Likely to Rent

Overall, according to Fannie Mae, one-third of Americans (33 percent) would be more likely to rent their next home than buy, up from 30 percent in January 2010. Among renters, 59 percent said they would continue to rent compared to 54 percent in January 2010.


Shifting U.S. demographic and lifestyle trends, including shrinking numbers of married couples and fewer households with children, correlate to housing decisions that may have long-term implications for the housing market, according to Fannie Mae’s research analysis.

Negative Equity

CoreLogic’s market data shows that negative equity remains concentrated in five states. Nevada had the highest negative equity percentage with 67 percent of all of its mortgaged properties underwater, followed by Arizona (49 percent), Florida (46 percent), Michigan (38 percent), and California (32 percent).


Some of these same hard-hit states, however, also saw the largest declines in negative equity during the third quarter. Alaska experienced the biggest decrease, falling 1.8 percentage points, followed by Nevada (-1.6), Arizona (-1.4), California (-1.2), and Florida (-0.9).

Idaho and Alabama are the only states with noticeable increases in their negative equity ratios last quarter. CoreLogic says this comes as no surprise given they are currently the two top states for home price depreciation.

Thursday, December 9, 2010

Walking Away Isn't Limited To Borrowers

Although much has been made of borrowers' decisions to walk away from their mortgage obligations, a different form of abandonment - bank walkaways - has caught the attention of at least one federal entity.


According to a study published last month by the Government Accountability Office (GAO), bank walkaways, which occur when servicers abandon foreclosures, are extremely rare but nonetheless have a devastating effect on the communities where they are located. In total, the GAO estimates that walkaways made up less than 1% of all homes that became vacant between January 2008 and March 2010. Although they happen infrequently, bank walkaways are highly concentrated in a small number of areas. The areas of greatest concentration tend to be economically distressed communities, including Rust Belt cities like Chicago, Detroit and Cleveland.

Walkaways - or charge-offs, as they are sometimes called - are typically associated with low-value assets. The economic reasoning for why a servicer might choose to abandon a foreclosure action, or to not even initiate one at all, is that the servicer does not expect that the proceeds from the sale of a real estate owned property (REO) will cover foreclosure and property-preservation costs.


In other examples, servicers, with investors' blessings, will forgo foreclosure if the principal balance of a loan in default is below a certain threshold and all relevant loss mitigation options have been exhausted. Freddie Mac, for instance, requires reviews for charge-offs on mortgages with balances less than $5,000. Freddie's cross-town sibling-in-conservatorship, Fannie Mae, formally stopped charging off loans in April.

As part of its study, the GAO interviewed six servicers - four large national platforms and two shops that specialize in nonprime mortgages. According to at least some of those servicers, properties valued between about $10,000 and $30,000 are considered charge-off eligible.

"Based on our reviews of bank regulatory guidance and discussions with federal and state officials, no laws or regulations exist that require servicers to complete foreclosure once the process has been initiated," the GAO report states. "Therefore, servicers can abandon the foreclosure process at any point."

Analyzing loan-file data from the six servicers, the GAO found that most walkaways - about 60% - happen before the foreclosure process is initiated. And in those instances, properties are more than twice as likely to be occupied at the time the decision not to pursue foreclosure has been made. But in the remaining 40% of charge-offs reviewed by the GAO, nearly half of the properties - 48% - were vacant at the point of charge-off.

In other words, the later the decision to charge off a loan is made, the more likely it is that the property will be vacant. This trend does not sit well with officials in the cities and counties where bank walkaways are most prevalent. Vacant properties, as has been well documented, promote crime and blight, as well as wreak havoc on cities' tax rolls.

"Charge-offs are going to be the reality" in some cases, said Steve Bancroft, executive director at the Detroit office of Foreclosure Prevention and Response, at the National P&P Conference in Washington, D.C., last month. "The issue is, how is the process done."

Bancroft wants to see servicers improve their communication of charge-off decisions to local officials, as doing so could promote the transfer of low-value properties into local hands. His office has piloted several programs in the past year that aim to curb vacancy levels in the city.

Another approach taken by an increasing number of communities is to institute land banks - quasi-public entities that rehabilitate, repurpose or demolish REOs that they inherit or buy from investors and servicers at deep discounts. In its report, the GAO suggests that land banks deter servicers from abandoning foreclosure actions because they provide servicers an additional option for REO disposition.

The land-bank movement is perhaps best exemplified by the city of Cleveland, which also happens to be a bank-walkaway hub. The Cleveland-Elyria-Mentor metropolitan statistical area (MSA) recorded the third-highest level of abandoned foreclosures in the nation during the time period studied by the GAO. Only the Chicago and Detroit MSAs had higher volumes.

"We're really trying to get to the point where the major banks and servicers understand and recognize the fact that the vast majority of the properties they hold in the city of Cleveland are going to have to be charged off," Jim Rokakis, the land bank's chairman and Cuyahoga County treasurer, said at the National P&P Conference.

The objective for Bancroft, Rokakis and other similarly situated city officials is not to necessarily end the practice of charge-offs, but to end the practice of reckless charge-offs - the kind that, more often than not, result in vacant properties.

As part of its report, the GAO recommended that servicers be required to notify borrowers when foreclosure actions are stopped, as well as notify borrowers of their right to stay in their homes until a foreclosure has been completed. In response to this suggestion, the Federal Reserve said such notifications represent a "responsible and prudent business decision."

The GAO also recommended instituting a requirement for servicers to obtain updated property valuations before they initiate foreclosures.

Indiana App Ct Holds Noncompliance with HUD/FHA Regs is a Valid Defense to FHA Foreclosure Action

"It’s not getting any easier for lenders seeking foreclosure on delinquent FHA home loans in Indiana. In a case of first impression, the Indiana Court of Appeals held that a servicer’s noncompliance with HUD servicing regulations is a valid affirmative defense to the foreclosure of an FHA-insured mortgage. Lacy-McKinney v. Taylor, Bean & Whitaker Mortg. Corp., 2010 Ind. App. LEXIS 2161 (Ind. Ct. App. Nov. 19, 2010).

"The Federal Housing Administration operates a mortgage insurance program for the purpose of encouraging lenders to issue loans at favorable interest rates to otherwise ineligible borrowers. Participating lenders must comply with rules imposed by the Department of Housing and Urban Development (HUD), including the servicing regulations contained at 24 CFR § 203.500 – § 203.681. These regulations include requirements that in certain default circumstances servicers may not immediately accelerate and foreclose, but must first meet face-to-face with borrowers prior to filing a foreclosure claim, accept partial payments, and engage in other timely loss mitigation efforts.

"The Indiana appellate court rejected the loan servicer’s argument that the HUD regulations apply only to the relationships between mortgagees and the government and that Congress did not intend for the regulations to be used by mortgagors as a private right of action or defense. Instead, the court found that public policy, the language of the regulations and precedents from other state courts supported its decision that a mortgagee’s satisfaction of HUD-imposed regulations is a binding condition precedent to its right to foreclose on an FHA-insured property. Finding that the servicer improperly refused the borrower’s partial payments and failed to conduct a face-to-face meeting prior to foreclosure, the appellate court reversed the trial court’s summary judgment in favor of the mortgagee and remanded the case for further proceedings. An appeal has not yet been filed.

"Although the Lacy-McKinney decision only allows the HUD regulations to be used by borrowers as a shield and not a sword, it is certain to attract attention from the growing number of attorneys specializing in the representation of borrowers facing foreclosure."

Loan Modification Guidelines in the Northern District of California

Loan Modification Guidelines in the Northern District of California


December 7, 2010

NORTHERN DISTRICT OF CALIFORNIA INSTITUTES GUIDELINES REGARDING RESIDENTIAL LOAN MODIFICATIONS ON RELIEF FROM STAY MOTIONS AND IN CHAPTER 11 AND CHAPTER 13 PLANS

Dear Insolvency Law Committee constituency list members:

Please be advised that on December 1, 2010, Guidelines governing

(a) first lien mortgage holders who are seeking relief from stay in Chapter 7 cases in which the debtor has sought a loan modification, and (b) Chapter 11 and Chapter 13 debtors who seek consensual modification of the first mortgage loans on their principal residences went into effect in the San Francisco and San Jose divisions of the U.S. Bankruptcy Court for the Northern District of California. You can read the new Guidelines by clicking [HERE]

Disclosure Obligations Of Secured Creditors



Mortgage holders moving for relief must state on the cover sheet accompanying their motion (a) whether or not debtor has requested a loan modification prior to bankruptcy and/or the date any motion is filed, and (b) the status of the request.


Adequate Protection Options After Stay Relief Motion

As adequate protection, the court may set a deadline for the debtor to file a declaration describing (1) the date of such a modification request and to whom it was sent (attaching a copy of any transmittal letter, (2) the status of the request; and (3) the amount that is 31% of the debtor(s)' monthly gross income as shown on Schedule I.

The court may then set “an appropriate monthly payment amount, and in doing so may consider as adequate a monthly amount that is 31% of the debtor(s)' monthly gross income.” Such an adequate protection order will normally provide that, if the modification request is denied, the adequate protection payments will revert to the amount provided in the loan documents in the next calendar month and that the hearing may be restored to the calendar on ten days notice.

Modification In Connection With A Plan

A Chapter 11 or 13 plan premised upon a modification of a first mortgage loan secured by the debtor’s principal residence requires disclosure (by declaration in a Chapter 13 case or in the disclosure statement in a Chapter 11 case) of (1) the date of any modification request, (2) the status of such request, and (3) the present (unmodified) balances and total monthly payments on all claims secured by the debtor’s principal residence. Chapter 11 and 13 plans that propose to modify a first lien mortgage creditor's claim will not be confirmed until the modification has been approved by the first mortgage lender unless the plan provides that the secured creditor’s treatment reverts to the original contract terms if the modification request is denied. If a loan modification request remains pending when all other plan payments have been made, the case may be closed without a discharge.

Author’s Comment:

Guideline 10 makes it possible to confirm a plan while a modification request remains under consideration by a lender, but a potential trap for the unwary debtor exists in confirming a plan premised on approval of a modification. If the modification is denied, cash flow is not sufficient to make payments on the loan’s original terms, and the plan cannot be modified, then the debtor’s residence is likely to be lost after confirmation. Continuing to perform the plan may no longer make sense after such a loss. While a Chapter 13 debtor has an absolute right to dismiss under Bankruptcy Code section 1307(a), Chapter 11 debtors have no such right under Bankruptcy Code section 1112(b); a court must decide whether to convert even if dismissal is the debtor’s preference. In re Camden Ordnance Mfg. Co. of Arkansas, Inc., 245 B.R. 794, 803 (E.D. Pa. 2000). “. . . [T]he standard for evaluating a debtor’s motion to dismiss its own voluntary Chapter 11 is the ‘best interest of creditors and the estate,’ rather than ‘plain legal prejudice’ to the creditors.” Id. at 804. Absent a demonstrated ability to pay or otherwise accommodate creditor claims as a condition of dismissal, practitioners should endeavor to complete any loan modification before confirmation and ensure that the debtor is fully-advised of the risks of not doing so.



These materials were prepared by Robert G. Harris of Binder & Malter, LLP in Santa Clara



Thank you for your continued support of the Committee.



Best regards,



Insolvency Law Committee









The Insolvency Law Committee of the Business Law Section of the California State Bar provides a forum for interested bankruptcy practitioners to act for the benefit of all lawyers in the areas of legislation, education and promoting efficiency of practice.For more information about the Business Law Standing Committees, please see the standing committee's web page: http://businesslaw.calbar.ca.gov/StandingCommittees.aspx

Loan Modification Guidelines in the Northern District of California

NORTHERN DISTRICT OF CALIFORNIA INSTITUTES GUIDELINES REGARDING RESIDENTIAL LOAN MODIFICATIONS ON RELIEF FROM STAY MOTIONS AND IN CHAPTER 11 AND CHAPTER 13 PLANS

Dear Insolvency Law Committee constituency list members:

Please be advised that on December 1, 2010, Guidelines governing

(a) first lien mortgage holders who are seeking relief from stay in Chapter 7 cases in which the debtor has sought a loan modification, and (b) Chapter 11 and Chapter 13 debtors who seek consensual modification of the first mortgage loans on their principal residences went into effect in the San Francisco and San Jose divisions of the U.S. Bankruptcy Court for the Northern District of California.

Disclosure Obligations Of Secured Creditors

Mortgage holders moving for relief must state on the cover sheet accompanying their motion (a) whether or not debtor has requested a loan modification prior to bankruptcy and/or the date any motion is filed, and (b) the status of the request.

Adequate Protection Options After Stay Relief Motion

As adequate protection, the court may set a deadline for the debtor to file a declaration describing (1) the date of such a modification request and to whom it was sent (attaching a copy of any transmittal letter, (2) the status of the request; and (3) the amount that is 31% of the debtor(s)' monthly gross income as shown on Schedule I.

The court may then set “an appropriate monthly payment amount, and in doing so may consider as adequate a monthly amount that is 31% of the debtor(s)' monthly gross income.” Such an adequate protection order will normally provide that, if the modification request is denied, the adequate protection payments will revert to the amount provided in the loan documents in the next calendar month and that the hearing may be restored to the calendar on ten days notice.

Modification In Connection With A Plan

A Chapter 11 or 13 plan premised upon a modification of a first mortgage loan secured by the debtor’s principal residence requires disclosure (by declaration in a Chapter 13 case or in the disclosure statement in a Chapter 11 case) of (1) the date of any modification request, (2) the status of such request, and (3) the present (unmodified) balances and total monthly payments on all claims secured by the debtor’s principal residence. Chapter 11 and 13 plans that propose to modify a first lien mortgage creditor's claim will not be confirmed until the modification has been approved by the first mortgage lender unless the plan provides that the secured creditor’s treatment reverts to the original contract terms if the modification request is denied. If a loan modification request remains pending when all other plan payments have been made, the case may be closed without a discharge.

Author’s Comment:

Guideline 10 makes it possible to confirm a plan while a modification request remains under consideration by a lender, but a potential trap for the unwary debtor exists in confirming a plan premised on approval of a modification. If the modification is denied, cash flow is not sufficient to make payments on the loan’s original terms, and the plan cannot be modified, then the debtor’s residence is likely to be lost after confirmation. Continuing to perform the plan may no longer make sense after such a loss. While a Chapter 13 debtor has an absolute right to dismiss under Bankruptcy Code section 1307(a), Chapter 11 debtors have no such right under Bankruptcy Code section 1112(b); a court must decide whether to convert even if dismissal is the debtor’s preference. In re Camden Ordnance Mfg. Co. of Arkansas, Inc., 245 B.R. 794, 803 (E.D. Pa. 2000). “. . . [T]he standard for evaluating a debtor’s motion to dismiss its own voluntary Chapter 11 is the ‘best interest of creditors and the estate,’ rather than ‘plain legal prejudice’ to the creditors.” Id. at 804. Absent a demonstrated ability to pay or otherwise accommodate creditor claims as a condition of dismissal, practitioners should endeavor to complete any loan modification before confirmation and ensure that the debtor is fully-advised of the risks of not doing so.

These materials were prepared by Robert G. Harris of Binder & Malter, LLP in Santa Clara












The Insolvency Law Committee of the Business Law Section of the California State Bar provides a forum for interested bankruptcy practitioners to act for the benefit of all lawyers in the areas of legislation, education and promoting efficiency of practice.For more information about the Business Law Standing Committees, please see the standing committee's web page: http://businesslaw.calbar.ca.gov/StandingCommittees.aspx

Banks Suspend Foreclosure Evictions for Holidays

Leading the charge of big mortgage companies freezing foreclosures during the holiday season, Fannie Mae and Freddie Mac announced last week that they will not evict any homeowners for the rest of the year, MainStreet.com reported yesterday. The eviction freeze by both companies involves all single-family homes and two-to-four unit properties. "If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays," said Anthony Renzi, executive vice president of single family portfolio management at Freddie Mac. Suspending evictions in the holiday season is actually getting to be a regular occurrence for both Fannie and Freddie. Both companies did so in 2008 and 2009, despite a growing portfolio of delinquent mortgages. According to Fannie Mae's records, the government-sponsored enterprise now holds a 4.56 percent "serious delinquency rate" on its books, an amount totaling $798 billion as of Sept. 30, 2010.

http://www.mainstreet.com/article/real-estate/foreclosure/banks-suspend-foreclosure-evictions-holidays

Monday, December 6, 2010

The Bank of NY v Parnell -LA Sup Ct

The Supreme Court of Louisiana recently confirmed that a yield spread premium is not part of the “total points and fees payable by the consumer at or before closing” within the meaning of the Home Ownership and Equity Protection Act (HOEPA).

This case arises from an adjustable rate promissory note executed by Kathleen Johnson Parnell (Parnell), and secured by a mortgage on her home. The HUD-1 Settlement Statement prepared in connection with the loan closing noted that the lender paid the mortgage broker a YSP of $1,264. The HUD-1 stated that the YSP was “paid outside of closing.”

On June 19, 2003, Parnell demanded rescission under the federal Truth in Lending Act. Parnell claimed that her loan was subject to HOEPA, as the “points and fees charged in connection with her loan exceeded eight percent of the total loan amount.” She further claimed that she had not received certain disclosures required by HOEPA.

Following her demand, starting in September of 2003, Parnell stopped making the monthly payments due on her loan. The lender denied the demands made in Parnell’s June letter, as her points and fees totaled only 6.7 percent of the total loan amount by its calculation. The owner of the loan sought to seize and sell Parnell’s house in response to her failure to make payments on her promissory note. However, the note secured by the mortgage was later paid in full on June 26, 2006, from insurance proceeds following Hurricane Katrina.

In September of 2008, the loan owner filed a motion for summary judgment as to all claims asserted by Parnell in her June 2003 letter. The trial court held that the YSP paid by the lender to the mortgage broker “outside of closing” is “not included in HOEPA’s “point and fees” calculation” because “it was not paid or payable by Parnell at the time of closing.” Therefore, the trial court granted the Bank’s motion for summary judgment, and dismissed Parnell’s petition with prejudice. Parnell appealed this decision.

The court of appeals reversed the portion of the trial court’s decision granting summary judgment relating to Parnell’s HOEPA claim. The court of appeals “adopted a consumer-oriented view to HOEPA and a related regulation, Regulation Z.” Under this interpretation, the court found that “payable”, in relation to the YSP, meant “legally enforceable or obligated to pay rather than paid.” Therefore, “Parnell was legally obligated to pay the yield spread amount at or before closing” because of her obligation to pay a higher rate of interest during the life of the loan. This inclusion of the YSP in the points and fees calculation made the loan subject to HOEPA’s disclosure requirements.



The Louisiana Supreme Court reversed. The Court noted that “the phrase “points and fees” includes all compensation paid to mortgage brokers and excludes interest,” but “all “points and fees” must be “payable by the consumer at or before closing.”



Therefore, the Court held that while the statute itself and relevant case law sought to prevent “allowing lenders and financial institutions to manipulate the payment of points and fees . . . to avoid triggering the HOEPA protections”, the Board’s Official Staff Commentary clearly stated that “mortgage broker fees that are not paid by the consumer” are not included in calculating points and fees under HOEPA.



Thus, the Court held that, in cases where “the YSP is paid by the lender to the broker at the time of closing” and the borrower satisfies their obligation by paying a higher interest rate “over the course of the loan,” the YSP should not be included “in the calculation of the eight percent trigger.”

Foreclosure From Hell

http://online.wsj.com/article/SB10001424052748703865004575648900250047766.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsTop

FDIC TIP- Advance-Fee Loan Scams: ‘Easy’ Cash Offers Teach Hard Lessons

Advance-Fee Loan Scams: ‘Easy’ Cash Offers Teach Hard Lessons


Looking for a loan or credit card but don’t think you’ll qualify? Turned down by a bank because of your poor credit history?

You may be tempted by ads and websites that guarantee loans or credit cards, regardless of your credit history. The catch comes when you apply for the loan or credit card and find out you have to pay a fee in advance. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, that could be a tip-off to a rip-off. If you’re asked to pay a fee for the promise of a loan or credit card, you can count on the fact that you’re dealing with a scam artist. More than likely, you’ll get an application, or a stored value or debit card, instead of the loan or credit card.

The Signs of an Advance-Fee Loan Scam

The FTC says some red flags can tip you off to scam artists’ tricks. For example:

A lender who isn’t interested in your credit history. A lender may offer loans or credit cards for many purposes — for example, so a borrower can start a business or consolidate bill payments. But one who doesn’t care about your credit record should give you cause for concern. Ads that say “Bad credit? No problem” or “We don’t care about your past. You deserve a loan” or “Get money fast” or even “No hassle — guaranteed” often indicate a scam.

Banks and other legitimate lenders generally evaluate creditworthiness and confirm the information in an application before they guarantee firm offers of credit — even to creditworthy consumers.

Fees that are not disclosed clearly or prominently. Scam lenders may say you’ve been approved for a loan, then call or email demanding a fee before you can get the money. Any up-front fee that the lender wants to collect before granting the loan is a cue to walk away, especially if you’re told it’s for “insurance,” “processing,” or just “paperwork.”

Legitimate lenders often charge application, appraisal, or credit report fees. The differences? They disclose their fees clearly and prominently; they take their fees from the amount you borrow; and the fees usually are paid to the lender or broker after the loan is approved.

It’s also a warning sign if a lender says they won’t check your credit history, yet asks for your personal information, such as your Social Security number or bank account number. They may use your information to debit your bank account to pay a fee they’re hiding.

A loan that is offered by phone. It is illegal for companies doing business in the U.S. by phone to promise you a loan and ask you to pay for it before they deliver.

A lender who uses a copy-cat or wanna-be name. Crooks give their companies names that sound like well-known or respected organizations and create websites that look slick. Some scam artists have pretended to be the Better Business Bureau or another reputable organization, and some even produce forged paperwork or pay people to pretend to be references. Always get a company’s phone number from the phone book or directory assistance, and call to check they are who they say they are. Get a physical address, too: a company that advertises a PO Box as its address is one to check out with the appropriate authorities.

A lender who is not registered in your state. Lenders and loan brokers are required to register in the states where they do business. To check registration, call your state Attorney General’s office or your state’s Department of Banking or Financial Regulation. Checking registration does not guarantee that you will be happy with a lender, but it helps weed out the crooks.

A lender who asks you to wire money or pay an individual. Don’t make a payment for a loan or credit card directly to an individual; legitimate lenders don’t ask anyone to do that. In addition, don’t use a wire transfer service or send money orders for a loan. You have little recourse if there’s a problem with a wire transaction, and legitimate lenders don’t pressure their customers to wire funds.

Finally, just because you’ve received a slick promotion, seen an ad for a loan in a prominent place in your neighborhood or in your newspaper, on television or on the Internet, or heard one on the radio, don’t assume it’s a good deal — or even legitimate. Scam artists like to operate on the premise of legitimacy by association, so it’s really important to do your homework.

Finding Low-Cost Help for Credit Problems

If you have debt problems, try to solve them with your creditors as soon as you realize you won’t be able to make your payments. If you can’t resolve the problems yourself or need help to do it, you may want to contact a credit counseling service. Nonprofit organizations in every state counsel and educate people and families on debt problems, budgeting, and using credit wisely. Often, these services are low- or no-cost. Universities, military bases, credit unions, and housing authorities also may offer low- or no-cost credit counseling programs. To learn more about dealing with debt, including how to select a credit counseling service, visit ftc.gov/credit.

Where to Complain

If you think you’ve had an experience with an advance-fee loan scam, report it to the FTC.

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Three Cheers for Chelsea Handler

http://www.huffingtonpost.com/2010/12/06/chelsea-handler-angelina-_n_792423.html

You GO Girl!!!

Resume Tips for Oldies (That's You--Baby Boomers)

Recently, AOL Jobs offered some tips for older job seekers about how to make resumes fresh and alluring. Here's Vivia Chen's  adaptation of those tips for you baby-boomer lawyers:


1. Don't describe yourself as a lawyer with "X-number of years of experience" or use phrases like "seasoned" litigator. Both terms suggest that you really are an old fogey.

2. Don't use outdated phrases like "references available upon request" or "responsible for" or "duties included." And avoid calling yourself an "out-of-the-box thinker." All those terms suggest you are simply out of it.

3. Emphasize current expertise. Some lawyers can't help themselves but list every document they've ever gotten their hands on. But resist that urge and focus on one or two areas of expertise.

4. Briefly list a history of jobs and employers. "Account for early work experience to keep the chronology consistent and transparent, but abbreviate this experience when possible." Legal recruiter Dan Binstock also advocates giving a brief reason for leaving each job, because, he says, "it makes it easier for employers to understand the move." For instance, if you got laid off because of the economy, you should mention that you had received "top reviews and billed 2,200 hours" until the slowdown, says Binstock.

5. Disclose graduation dates, but keep the education section "subtle and brief." Lawyers, more than other professionals, love to sniff out gaps, so face the music. Dropping the class year, warns Binstock, "sends the message that the person is insecure" and "reduces the trust factor."

6. Make your extra curricular activities sound dynamic. "Hobbies that suggest a vibrant and healthy lifestyle may help counter any potential age bias. So if you are an avid runner, skier, triathlete, etc., go ahead and include this information on your resume." I'd add that Pilates and martial arts are probably fine too, though I'd eliminate any reference to aerobics (smacks of Jane Fonda workout tapes from the 1980s).

The sad truth, though, is that firms and companies do screen out candidates because of age. "No one wants to admit it, but there's a lot of discrimination on the age end," says Binstock.

But in the law firm market, at least, age doesn't matter as long as you've got clients. In that case, you could be on a respirator and still find a warm home. "It all comes down to portable business," sums up Binstock.

Bk Case Update

In re Stokes

Post-petition property taxes are administrative claims which must be paid in full when the plan provides that property does not vest in the debtor until discharge or closing.

Friday, December 3, 2010

Mortgage Rates Rise

The tracking firm reported that the benchmark conforming 30-year fixed mortgage rate rose to 4.71 percent (0.36 point) this week. That’s up pretty significantly from 4.58 percent reported by the company last week.


The average 15-year fixed mortgage increased from 3.97 percent to 4.07 percent (0.35 point) in Bankrate’s study. The larger jumbo 30-year fixed rate jumped as well, settling at 5.29 percent.

Bankrate also documented a rise in adjustable rate mortgages, with the average 5-year ARM climbing to 3.74 percent and the average 7-year ARM jumping to 4.08 percent.

Bankrate says the November unemployment report due out on Friday could be the catalyst for the next move in mortgage rates, with evidence of solid private-sector job growth fuel for higher rates.

Thursday, December 2, 2010

Cool BK Site for Research

http://bankr.law.uiuc.edu/index.asp

Thanks to Professor Robert Lawless of the University of Illinois College of Law, also of the Credit Slips blog, you can now save yourself from combing through dusty old books to find the language of Bankruptcy Code provisions going back as far as 1980. Need to find how Section 547 was worded prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA"), or interested in tracing the evolution of exceptions to the automatic stay of Section 362? Then navigate over to the BankrLaw Project site. Once there, select a date and the site will provide you with the Bankruptcy Code in effect at that time, free of charge. This promises to be a very useful research tool when the text of older Bankruptcy Code provisions is in issue.

Senior in Debt

More than half of those surveyed had saved less than $50,000 — and many of that group said they'd saved absolutely nothing — yet they retired anyway. Just 4% said they had delayed their retirement due to debt.


"They get to a certain age and they feel privileged," Ellington said. "They say, 'I'm going to go on that trip even though I have to put it on my credit card.'"

When you're young, you have time to pay off splurges like a trip to Hawaii, but for retirees, procrastination can lead to serious financial problems.

It's not just vacations and entertainment; one of the biggest sources of senior debt is medical expenses. More than 75% of the seniors surveyed said they went into debt for medical or funeral expenses.

Part of the reason they're not paying off their debts is they don't know where to start and they're too embarrassed to ask for help. But the financial crisis may have also played a role.

"Financial institutions haven't been perceived as the most friendly" and many people blame them for the recession, Ellington said. "They think, 'Hey, I'm not going to pay back these guys who ripped off America.'"

One of the biggest mistakes seniors make when it comes to credit cards is being late with a payment.

"That triggers a penalty APR that can exceed 30%, which can trap those seniors who can't pay their balances in full each month in a downward spiral of debt," said Ben Woolsey, the director of marketing and consumer research at CreditCards.com.

And while many retirees who are being quietly buried under a mound of debt may think they're protecting their kids by not burdening them with their financial problems, if they don't pay off their debts before they die, it will eventually become their children's burden.


Whatever that parent owes will be deducted from his or her estate before that estate is divided among the children and other beneficiaries.

Imagine a scenario where the kids are bickering over who gets mom's house and, in the end, no one gets it because it had to be sold to pay off mom's credit-card debt.

"That is a very realistic scenario," Ellington said. "A lot of kids don't find out how much their parents are struggling until they pass away."

Unfortunately, this debt denial isn't exclusive to seniors: Among those surveyed who had not yet retired, 25% said they were carrying debt of $5,000 or more — yet more than half said they didn't plan to delay retiring because of debt.

And more than one in four said they weren't worried about paying off their debt in their lifetime.

Another mistake they make is relying on debt-settlement companies when they get into trouble.

"It's much better to contact card companies directly to work out repayment plans or work with a non-profit debt-counseling service rather than a fee-based settlement company," Woolsey said.

Or declare BANKRUPTCY.

Screening Recruits the Goldman Way

http://www2.goldmansachs.com/careers/begin/interview-skills/index.html

Since the bank's vetting process is notorious for rigor, ambitious lawyers can only benefit by prepping (maybe over-prepping) the Goldman way. Here are some tidbits from the Goldman video:


First, the Dos:

1. Make a list of your qualificatons--academic and work experiences. Goldman's favorite buzz terms are "team orientation," "leadership potential," "problem-solving," and "creativity." Law firms like creative problem-solvers (translation: good legal researchers), but I'm not so sure about the leader stuff.

2. Create a narrative about why you are applying for a particular job or firm. Example: "I've had a fascination with hostile takeovers since childhood, and keep an active scrapbook of Marty Lipton.

3. Practice your talking points and memorize the names of the interviewers (assuming you know beforehand).

4. Develop a conversational, confident tone. This requires practice--if not an acting coach; it's not easy bragging about yourself in a nonbragging way.

And now for the Don'ts:

1. Don't come off being clueless as to why you are interviewing for the job.

2. Don't ask about mundane things like money and benefits. The mantra is to snag the offer, then ask about what you really care about later.

3. Don't get lost on the way to the interview. Studying the subway map ten minutes before your appointment is not advisable.

4. Don't send a thank-you letter by mail (too slow) or call (too awkward). But do send a thank-you e-mail.

What really makes a Goldman interview the gold standard are the "competency" questions that it throws at interviewees. The video says the idea behind a "behavioral" or "case studies" interview is to see how candidates solve problems. Take this question: "How many manhole covers are there in New York City?" The video says you could multiply 12 avenues by 150 streets to get 1,800 manhole covers. That answer "may or may not be correct," says the video, but it demonstrates "an approach."

As you might know, there's talk that law firms will eventually adopt some of these screening tools to weed out applicants. So perhaps it's a good time to practice explaining the rule against perpetuities.


Thanks Vivia Chen

Full Body Scanners.

http://www.youtube.com/watch?v=YQrsrAxul3w&feature=related

I'd rather be patted down and go through a metal dector!

Full Body Scanners.

http://www.youtube.com/watch?v=YQrsrAxul3w&feature=related

I'd rather be patted down and go through a metal dector!

Congress Considers Change to 'Red Flags Rule'

The American Bar Association has been battling for more than a year to exempt lawyers from new regulations designed to fight identity theft. Now, Congress has decided to step in.

With no fanfare and no recorded vote late Tuesday, the Senate approved legislation that could accomplish what the ABA was hoping to achieve. The bill would narrow the definition of “creditor” under the Fair and Accurate Credit Transition Act of 2003, likely ensuring that lawyers would not meet the new definition.

An ABA spokeswoman said the group is optimistic about House passage, possibly this week.

The regulations over identity theft were written by the Federal Trade Commission, and they’re popularly known as the “Red Flags Rule.” FTC regulators have interpreted the term “creditor” to include those who perform services and get paid at a later date, as many lawyers do. Other professional groups, including accountants and physicians, have protested their inclusion, too.

The bill, S. 3987, would define a creditor largely as someone who uses credit reports, furnishes information to credit reporting agencies or “advances funds…based on an obligation of the person to repay the funds or repayable from specific property pledges by or on behalf of the person.”

Sen. John Thune (R-S.D.) introduced the bill Tuesday with Sen. Mark Begich (D-Alaska) as a co-sponsor. In a prepared statement, they said the FTC was threatening small businesses.

“Small businesses in South Dakota and across our country are the engines of job growth for America,” Thune said. “Forcing them to comply with misdirected and costly federal regulations included in the FTC Red Flags Rule will hurt their ability to create jobs and continue growing our economy.”

ABA President Stephen Zack said in a prepared statement: “Last night’s Senate vote to clarify the rule so that lawyers are clearly not included was a critical step in ending a bureaucratic effort to solve a non-existent problem with paper-pushing regulations that would have increased legal costs.”

The fight over the Red Flags Rule has also played out in court after the ABA sued the FTC. In October 2009, U.S. District Judge Reggie Walton of the District of Columbia ruled in favor of the ABA. The U.S. Court of Appeals for the D.C. Circuit heard the FTC’s appeal last month.

In a recent interview with The National Law Journal, FTC Chairman Jon Leibowitz said the commission was trying to work with Congress to make the law clear. With the 2003 law, he said, “Congress didn’t give either side a lot to work with here.”

An FTC spokesman had no comment today.

 
Thanks Law.com

Wednesday, December 1, 2010

Attorney Defends Taking On Mortgages as Contingency Fee

http://www.dailybusinessreview.com/PubArticleDBR.jsp?id=1202475433460&hbxlogin=1

Defaulted Borrowers File Lawsuit Against Wells Fargo

The law firm of Harwood Feffer, LLP has filed a class action lawsuit against Wells Fargo Bank and its servicer, America's Servicing Company (ASC). The suit alleges that ASC induced borrowers to default on their mortgages by telling them they would not be eligible for a loan modification if they were current on payments. Harwood Feffer claims ASC was looking to boost its revenue by assessing additional penalties and fees and collecting interest on the nonperforming loans it services.

http://www.dsnews.com/articles/harwood-feffer-files-lawsuit-against-wells-fargo-2010-11-30

No Private Right of Action for Creditor’s Disclosure of Social Security Number

Recently, in Matthys v. Green Tree Servicing, LLC (In re Matthys), 2010 WL 2176086 (Bankr. S.D. Ind. 2010), a bankruptcy court held that a debtor does not have a private right of action against the creditor who listed the debtor’s full social security number on its proof of claim. This holding is consistent with what the majority of courts have held in similar cases. While the joint debtors in Matthys sought relief under various statutes, including Bankruptcy Code sections 105 and 107, the court found that no private right of action existed.

In Matthys, the debtors listed its lender as a secured creditor in their schedules. The lender’s servicing agent included the debtors’ full social security numbers when it filed an electronic proof of claim. The court granted the debtor’s Rule 9037 motion and removed the proof of claim from public access on PACER. Next, the debtors brought an adversary proceeding against the servicing agent seeking damages for violating several statutes, including Bankruptcy Code section 107, The Gramm-Leach-Bliley Financial Modernization Act, Federal Rule of Civil Procedure 5.2, Federal Rule of Bankruptcy Procedure 9037, and various tort claims such as invasion of privacy, negligent or intentional infliction of emotional distress, and negligence. The court, however, found no private right of action existed under the Bankruptcy Code or any other statute. However, the court did send the complaint for contempt to trial, since the court, but not the debtors, has the power to do so. Section 105(a) provides that bankruptcy courts “may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” The Matthys court concluded that it only had the power to hold the creditor in contempt, because the broad power under section 105 “is not limitless and . . . does not create a private right of action.” The court stressed that while a private right of action can be expressed or implied in a statute, courts are unwilling to go against congressional intent when searching for such a right.

Although several courts agree with the Matthys analysis, other courts do find that a private right of action exists under section 105(a). See In re Gregg, 428 B.R. 345 (Bankr. D.S.C. 2009); In re Killian, 2009 WL 2927950 (Bankr. D.S.C. July 23, 2009). For example, in McKenzie v. Biloxi Internal Medicine Clinic (In re McKenzie), 2010 WL 917262 (Bankr. S.D. Miss. March 10, 2010), the court held that it had the authority to compensate a debtor under section 105(a). McKenzie addressed similar facts to Matthys. The McKenzie court justified its decision by citing several rare cases where section 105 was used to compensate the complainant, typically for actual damages and attorney’s fees.

In re Matthys raises many concerns, both for debtors and creditors. Some courts do recognize a private right of action. Even if a debtor has no private right of action, the courts may still hold creditors in contempt under section 105. Thus, courts can and do hold creditors liable for violating Rule 9037.

Tuesday, November 30, 2010

Abandoned Foreclosures

http://www.gao.gov/new.items/d1193.pdf

GAO estimated that the number of abandoned foreclosures that occurred in the United States between January 2008 and March 2010 was between 14,500 and 34,600 — representing less than 1 percent of vacant homes.


The study revealed that 20 specific areas of the country accounted for 61 percent of the estimated “bank walkaway” cases, with certain cities in Michigan, Ohio, and Florida experiencing the most occurrences. Detroit topped the list.


GAO also found that abandoned foreclosures most frequently involved loans to borrowers with lower quality credit, or nonprime loans, and low-value properties in economically distressed areas.


The decision to forego foreclosure typically hinges on how much the lender expects to bring in from the subsequent sale of the repossessed property. However, GAO says it found that most of the servicers interviewed were not always obtaining updated property valuations before initiating foreclosure.
Vacant homes associated with abandoned foreclosures can contribute to increased crime and decreased neighborhood property values, the agency notes. Abandoned foreclosures also increase costs for local governments that must maintain or demolish the homes.


GAO learned that because servicers are not required to notify borrowers and communities when they decide to abandon a foreclosure, homeowners are sometimes unaware that they still own the home and are responsible for paying the debt and taxes and maintaining the property. Communities are also delayed in taking action to mitigate the effects of a vacant property.

REO

As of September 30, Fannie Mae’s inventory of single-family REO properties stood at 166,787. Freddie Mac’s REO inventory totaled 74,897 homes at the end of September. Together, the two GSEs hold about a quarter of all bank-owned residential properties in the United States.

Monday, November 29, 2010

Stern Sued by Former Employees

UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF FLORIDA


RENAE MOWAT, NIKKI MACK,

ARKLYNN RAHMING, and QUENNA HUMPHREY individually

and on behalf of all other similarly situated individuals,

Plaintiffs,
vs.
DJSP ENTERPRISES, INC., a Florida Corporation, DJSP
ENTERPRISES, INC., a British Virgin Islands Company,
and LAW OFFICES OF DAVID J. STERN, P.A.,
DAVID J. STERN, individually,

Defendants.

______________________________________/



EXCERPT:

CLASS ACTION COMPLAINT

Plaintiffs Renae Mowat, Nikki Mack, Arklynn Rahming, and Quenna Humphrey individually and on behalf of all others similarly situated, for their Complaint against Defendants, DJSP Enterprises, Inc., a Florida corporation, DJSP Enterprises, Inc., a British Virgin Islands Company, (collectively hereinafter referred to as “DJSP”), Law Offices of David J. Stern, P.A., (“Stern, P.A.”) and David J. Stern (“Stern”) state as follows:

NATURE OF CASE

1) Plaintiffs bring this action on behalf of themselves and other similarly situated former employees who worked for the Defendants in Plantation, Florida and who were terminated as a consequence of mass layoffs by the Defendants beginning on September 23, 2010 and who were not provided sixty (60) days advance written notice of the mass layoffs by Defendants as required by the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.

(“WARN Act”).

2) Plaintiffs and all similarly situated employees seek to recover back pay for each day of WARN Act violation and benefits under 29 U.S.C. § 2104.

3) This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1334 and 1367, as well as 29 U.S.C. §§ 2102, 2104(a)(5).

4) Venue over this matter is appropriate in this Court pursuant to 29 U.S.C. 2104(a)(5) because the acts constituting the violation of the WARN Act occurred, and the claims arose in this district. Venue is also proper under 28 U.S.C. §1391(a) and (b). The acts complained of occurred in the State of Florida and, at all relevant times, material hereto, the Defendants conducted business with and through the other named Defendants who also conducted business with and through the other Defendants and their subsidiaries and the named individual Defendant, David J. Stern, resides in this judicial district, and all of or a substantial part of the events or omissions giving rise to this action occurred in this judicial district.

http://stopforeclosurefraud.com/2010/11/29/fl-class-action-violation-of-warn-act-former-employees-mowat-v-djsp-enterprises/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ForeclosureFraudByDinsfla+%28FORECLOSURE+FRAUD+%7C+by+DinSFLA%29

Bankruptcy Judge Sanctions Lawyer for $110,000 , Warns About Being ‘Sequaciously

ABA Journal

A Nevada bankruptcy judge has sanctioned a lawyer $110,000 in legal fees for being too trusting. A lawyer for one of the owners of the Blue Pine Group told lawyer David Winterton that all of the corporate directors had passed a resolution authorizing a bankruptcy filing. Winterton believed the lawyer—and that was his mistake, according to U.S. Bankruptcy Judge Bruce Markell in his opinion. The Las Vegas Review-Journal has the story.

http://www.abajournal.com/news/article/bankruptcy_judge_sanctions_a_sequaciously_servile_lawyer


http://www.abajournal.com/files/BluePine.pdf