Thursday, May 13, 2010

Teenagers and Credit Cards

Teenagers that are given credit cards when they are in high school are more likely to have debts when they are seniors in college, before they have stable jobs. The American Bankruptcy Institute said that over 80% of college seniors have credit card debt. Add student loans and this can cause money issues for a lifetime. In 2007 the Institute also reported that 19% of those filing for bankruptcy were college students.

Even with these terrifying facts, parents give their teenagers credit cards for convenience. Most think it will teach them about finances and how to handle them. Yet this is not entirely true.

Credit cards don’t teach teenagers how to handle money, they teach them how not to handle money. When people are uneducated about money and budgeting they dig themselves a hole and it eventually gets deeper and deeper. This hole is debt and is sure to follow a teenager that is given a credit card, limiting their future.

The truth about credit cards is that they are marketed to teens and young adults most of the time. Credit card companies do not care about teaching young adults about money, no matter how much their catchy advertisements might say they do. What they do care about is getting paid.

Debt is the most aggressively marketed product in the U.S.A. today and by marketing debt to young generations it assures credit card companies that they will have money for years.

Legislative News

Wednesday morning, by a vote of 63 to 36, the Senate adopted an amendment to the financial regulatory reform legislation (S. 3217) by Senator Merkley (D-OR) that would ban mortgage brokers and loan originators from receiving payments that are based on the terms of the loans they sell. It also would bar lenders from making loans without first verifying that a borrower could repay the loan. It would retain the underlying legislation's risk-retention language. Senator Merkley amendment would not have any home borrower down-payment requirement, which the Senator said could hurt first-time homeowners who rely on programs such as FHA insurance to secure a mortgage. "That line is a line of great concern for those of us who have had experience with first-time homebuyers, those of us who have had experience with families who are at the bottom of the income spectrum," Merkley said.

The Senate subsequently rejected an amendment by Senator Corker (R-TN) by a vote of 57 to 42 that would have instructed federal regulators to write minimum mortgage underwriting rules that mandated a down payment of 5 percent by borrowers as well as private mortgage insurance for those with a loan-to-value ratio of more than 80 percent. The Corker Amendment would have also stripped the 5-percent risk retention requirement and call for a study on the issue.

Separately, senators Mary Landrieu (D-LA), Kay Hagan (D-NC), Robert Menendez (D-N.J.) and Mark Warner (D-VA) have proposed an amendment to the legislation that would not apply the 5% risk retention requirement to safer home mortgages, such as a 30-year fixed-rate loan with documented income and assets and a debt-to-mortgage rate of no more than 45 percent of monthly income.

Tuesday, the Senate rejected by a vote of 56 to 43 an amendment by Senator John McCain (R-AZ) that would have ended conservatorship of Fannie Mae and Freddie Mac and spin them off as private businesses. The Senate instead adopted an amendment by Senate Banking Committee Chairman Dodd (D-CT) that would require a Treasury Department study on options for ending the federal takeover, including liquidation of the two mortgage giants, privatizing them, or breaking them up into smaller companies.

New HAMP Directive Details Unemployment Program

The U.S. Treasury Department on Tuesday issued Supplemental Directive 10-04, which formally introduced the previously announced Home Affordable Unemployment Program (UP). The program offers eligible borrowers a forbearance plan to temporarily reduce or suspend their mortgage payments, and it takes effect July 1.

Under UP, unemployed borrowers must meet the Home Affordable Modification Program (HAMP) eligibility criteria, as well as be unemployed when a request for assistance is made; be entitled to receive unemployment benefits in the month of the forbearance plan effective date (servicers have discretion to require a borrower to have received unemployment benefits for up to three months before commencement of the forbearance plan); and request an UP forbearance plan before they become seriously delinquent (i.e., miss three monthly mortgage payments).

Unemployed borrowers who request assistance for HAMP must first be evaluated for an UP forbearance plan. If they qualify, they must be offered an UP forbearance plan before they can be considered for HAMP, according to the directive.

Borrowers currently in a HAMP trial-period plan who become unemployed may receive an UP forbearance plan if they have missed fewer than three monthly payments as of the first payment due date of the HAMP trial-period plan. If they do qualify, their existing HAMP trial-period plan must be canceled and the UP forbearance plan must immediately begin, without waiting until the borrower has received three months of unemployment benefits.


You Do Not Have A right to A Loan Mod.- See Industry Explanation

You've Got To Have (Good) Faith When Negotiating

in From The Orb
By Gerald B. Alt on Wednesday 12 May 2010

REQUIRED READING: So you have a customer who has fallen behind on his or her mortgage payments, and the normal customer-service collection efforts have not resulted in any arrangement to bring the loan current. Because of investor guidelines, the financial implications of losses from a foreclosure and your institutional sense of responsibility, you have created a dedicated department to evaluate and execute loan modifications, repayment agreements, forbearances or short sales to assist the customer.

Now, having used all of those resources to determine that your customer is ineligible for help, you get accused of acting in bad faith. What's a servicer to do under these circumstances?

The Treasury Department's Home Affordable Modification Program (HAMP) was announced a year ago, but most loan servicers have taken a proactive stance on workouts with their customers. Repayment agreements, negotiated Chapter 13 plans, forbearances for cause and cash-for-keys programs are nothing new. After all, with a few individual and isolated exceptions, there isn’t a loan servicer today who wants to hold, maintain and sell foreclosed property in this economic and housing cycle.

On the other hand, servicers have a responsibility to their investors and insurers to collect on the mortgage contract. That dynamic tension has always existed, but the general public awareness of loan modifications and other workout options has grown exponentially this past year because of HAMP and its almost daily inclusion in the vocabulary of government rhetoric and the popular press.

One challenge for the mortgage industry is consumers’ perception that there is a “right” to a loan mod. When customers hear on the radio and see on television that “they have the legal right not to pay their debts,” it becomes difficult for servicers to explain to them that their particular loan characteristics, investor guidelines or financial circumstances do not qualify them for the assistance they want - and, in some cases, need - to stay in their home. That misunderstanding is the basis for the recurring complaint that lenders are not acting in good faith.

Three factors commonly prevent borrowers from qualifying for a HAMP modification or any of the “waterfall” of alternatives. First, the value of the collateral - the home - has fallen substantially below the outstanding debt. Secondly, the borrower has experienced unemployment or underemployment (the latter being more prevalent). Third, the overall debt carried by the consumer, including credit cards and household expenses, exceeds her or his capacity to pay even a modified loan. None of these circumstances is the “fault” of the servicer, and yet it is the mortgage servicer and not the credit card issuer or the bad fiscal habits of the borrower that gets blamed for the low rate of successful modifications to date.

So long as jobs are scarce, employers are cutting back hours on existing workers and housing prices are deflated from the levels at which the loans were originated, there will be no quick fix for this problem. The challenge for the residential mortgage industry, and my thesis for this article, is to make sure that the blame is not unfairly placed on servicers’ and investors’ shoulders. There are some suggestions I would make to deflect, if not eliminate, this burden.

Set expectations:

Too often, borrowers have an unrealistic expectation that they will qualify for some relief if they only pony up all the financial data, income and expenses, supporting documentation and hardship affidavits they are asked to produce. It seems like everyone knows or has heard about a person who got a modification that reduced their payment by 75%, or who was able to surrender the keys to a seriously underwater home without liability for the balance of the note. In most cases, these stories are urban myths arising from vague government promises or the insights of pundits who themselves have not had to face a pending foreclosure.

To combat these misconceptions, servicers must work diligently to align the expectations of their borrowers with reality as soon in the process as possible. If a consumer’s financial circumstances or investor rules will not allow for a modification that falls within the borrower’s ability to pay, the borrower should be made aware of this up front, and a conversation about other foreclosure alternatives should begin.

Borrowers often interpret the absence of a denial or a request for more documentation as a vague promise of a future approval. When the approval doesn’t come, borrowers feel as though they have been misled by their servicer’s actions, if not their words.

Servicers should also look at their approaches to handling customers’ short-sale inquiries. At many financial institutions, short sales are handled by the real estate owned department or are otherwise separated from the silo of customer-service representatives handling modifications. A typical conversation with a borrower contemplating a short sale starts with a customer-service representative asking whether the borrower has an outstanding offer. If the borrower does not have an offer - which is most often the case - the customer service rep will tell the borrower that an offer is needed to process his or her request.

What happens is that when an offer does come in, with an impatient buyer in the wings, the wheels are set in motion to obtain a valuation, to review title, to ask for financial information and hardship affidavits, to run a net-present-value analysis, etc. By the time the offer can be approved, which often takes weeks or more, the buyer walks, and frustration sets in. When you later put the home in foreclosure, the borrower is now more likely to defend on the basis of bad-faith servicing.

Customers would be better served and servicers’ returns on investment would be increased, if consumers were given a heads-up on the requirements and expectations for a successful short sale. Borrowers should have access to the forms and information they will need, including details on any subordinate liens. That way, when the offer arrives, it includes a completed package that can be streamlined. The offer still might not be approved, but a rapid and certain process will instill more confidence in the customer that the servicer made a good-faith effort on his or her behalf.

The last bit of advice that I would offer - which may be harder for larger servicers to accomplish because of the sheer volume of calls they handle - is to strive for “single point resolution.” The reality of dealing with millions of delinquent customers is that despite servicers’ best (and continuing) efforts to personalize the experience, the industry is plagued by borrower frustration from long hold times, reaching a different person every time they call and the defeating sense of starting over every time they have a conversation.

A common borrower complaint is that servicers repeatedly ask for documents that have already been provided. As with the point above about setting a reasonable expectation, these borrowers feel they did what was asked and are now being intentionally ignored or that their servicer doesn’t care enough to have the processes in place to track and safeguard the documents for which they asked. A good deal of this aggravation can be avoided by establishing a person - or a discrete team, in the case of larger portfolios - that works with a fixed pool of borrowers and can be more attentive to the follow-up.

Some of the servicers with the best loan modification results also have the best feedback from their customers for having a personal connection through these dedicated teams. Even if the answer is ultimately “no,” the human side of making a connection and taking the time to discuss it with the borrower leads to a more positive outcome and shields against later allegations of bad faith.

Gerald B. Alt is president of LOGS Network, a network of attorneys that specialize in real estate-related title and legal services. He can be reached at (847) 205-3311 or

Give Me a Break!

Police in Pennsylvania routinely treat the use of profanity as a crime, according to two federal suits filed Wednesday by the American Civil Liberties Union of Pennsylvania on behalf of residents who say they were issued citations for disorderly conduct for yelling swear words in traffic disputes. The ACLU says more than 750 citations were issued in one year for the use of profanity or profane gestures. "It may not be polite to swear at someone, but it's certainly not a crime," said Marieke Tuthill, an ACLU legal fellow.

Do you know how many attorneys would be cited!

Interim Attorney Fees Awarded in Consumer Fraud Suit Over Mortgage

In a case of first impression, a New Jersey judge has awarded counsel fees during a pending consumer fraud suit brought by a couple who claim they were scammed by two foreclosure-rescue companies. The judge awarded fees incurred from the outset of the case to the entry of a preliminary injunction. The plaintiffs lawyer calls the fee award "groundbreaking" and says it means that "litigants -- who previously could not afford to initiate a lawsuit -- are now empowered to fight and expose mortgage fraudsters."

for article

Wednesday, May 12, 2010

Origins of Bankruptcy

Garnishments, Repossessions, Foreclosures, Lawsuits and Creditor Harassment.


Your Home, Your Car, Your Wages.

Now that I have your attention.   I would like to give a brief history of bankruptcy. The concept and laws of bankruptcy have been around for quite some time. How long, exactly?

Bankruptcy actually dates back to 1400 B.C. -- At the end of every seven years thou shalt make a release. And this is the manner of the release; every creditor shall release that which he hath lent unto his neighbor; he shall not exact it of his neighbor and brother; because the Lord's release hath been proclaimed. 

In the early 1300’s, bankruptcy was considered a crime and debtors could be imprisoned until their families paid the debts back. The first English bankruptcy law is believed to have been established in the early 1500's.  Bankruptcy was initially created to help creditors not debtors. In fact, in these early cases, debtors were subject to incarceration for failing to pay their debts. This came to be known as "debtor's prison."

In 1604, a law was passed in England allowing a debtor’s ear to be cut off for failing to pay his debts. In 1705, bankruptcy reform was enacted in England which provided debtors with two alternatives; participate and cooperate with a structured repayment plan in exchange for a discharge of debts or accept the death penalty.

In 1705, bankruptcy reform was enacted in England which provided debtors with two alternatives; participate and cooperate with a structured repayment plan in exchange for a discharge of debts or accept the death penalty.
The first bankruptcy act enacted by the United States congress was in 1800, though it was only for involuntary proceedings. The United States passed its first bankruptcy law which was roughly modeled after the British version but did not have any provision for the death penalty.

In 1898, Congress passed new legislation which is considered to be the foundation of modern bankruptcy law. The new laws provide for voluntary bankruptcies and the discharge of virtually all debts.

In 1938, Congress added the forerunner of today’s Chapter 13 which authorizes individuals to pay back just a portion of their debts in accordance with a formulated plan.

In 1984, the Bankruptcy Reform Act was amended to prevent discharge of many debts.

In October of 2005, sweeping changes were made to the bankruptcy code, designed to (at least in part) hamper the ability of consumers to get chapter 7 ("fresh start") bankruptcy relief. Consumers would be required to pass an income-eligibility test (commonly known as the "means test") and would have to comply with certain educational requirements, before being permitted to go bankrupt.  Modern bankruptcy laws (until very recently) provided that one could not obtain a bankruptcy discharge (under chapter 7) if a prior case had been filed within 7 years time.  Under present law, that restriction has been expanded to 8 years time.

So is bankruptcy immoral? Absolutely not. Realize that not only is bankruptcy sanctioned by the U.S. federal government (you are exercising your rights under federal law).
Call me today to set up a free consultation

Bankruptcy Filings Continue to Increase

Statistics thanks to the Bankruptcy Data Project:

                2008           2009           %                      2010          %
Jan           70,300       89,000       27%            102,600     15%
Feb          79,500      102,000        28%            117,800    15%

March      90,400      131,000       45%             159,200    22%

April         93,200     128,700       38%             146,200    14%

Florida Default Law Group

Case Law Update

§323(a) Solt v. Credit Prot. Ass'n, LP (In re Solt), 2010 Bankr. LEXIS 743 (W.D. Va., 3/23/2010)

§350(b) In re Cotnoir, 2010 Bankr. LEXIS 574 (E.D. Va., 2/23/2010)
reaffirmation agreement

§362(c)(3)(B)  In re Furlong, 2010 Bankr. LEXIS 749 (C.D. Ill., 3/19/2010)
bad faith presumption

§362(d) In re Vasquez, 2010 Bankr. LEXIS 610 (N.D. Tex., 3/3/2010)

§362(d)(1) In re Drocco, 2010 Bankr. LEXIS 593 (N.D. Cal., 2/25/2010)
Relief from stay granted ejectment action

§363 In re Blixseth, 2010 Bankr. LEXIS 585 (D. Mont., 2/23/2010)

§363(b) In re Miell, 2010 Bankr. LEXIS 603 (N.D. Iowa, 3/10/2010)
Trustee's motion to sell real estate free and clear granted

§363(b) In re Adams, 2010 Bankr. LEXIS 671 (N.D. Ill., 3/12/2010)

§502(b)(1) In re Curry, 2010 Bankr. LEXIS 726 (D. Kan., 3/16/2010)
Objections to proofs of claim overruled sufficient detail & documentation

§502(b)(9) In re Rushing, 2010 Bankr. LEXIS 613 (M.D. La., 3/3/2010)
Late-filed poc allowed as unsecured, nonpriority claims

§506 Murray v. US Bank (In re Murray), 2010 Bankr. LEXIS 735 (N.D. Ill., 3/11/2010)
Third mortgage lien on debtor's residence stripped

§522(b) In re Channon, 2010 Bankr. LEXIS 589 (D.N.M., 2/24/2010)

§522(d)(3) Moyer v. Hollinshead (In re Hollinshead), 2010 Bankr. LEXIS 566 (B.A.P. 6th Cir., 3/3/2010)

§523(a) Kashiske v. Frank (In re Frank), 2010 Bankr. LEXIS 615 (W.D. Mich., 3/5/2010)

§523(a)(6) Rodriguez v. Ramirez (In re Ramirez), 2010 Bankr. LEXIS 573 (S.D. Tex., 2/23/2010)
State court judgment against debtors for intentional shooting of creditor was nondischargeable

§523(a)(6)  Hall v. Desper (In re Desper), 2010 Bankr. LEXIS 588 (S.D. Miss., 2/19/2010)

§523(a)(8) Zygarewicz v. Educational Credit Mgmt. Corp. (In re Zygarewicz), 2010 Bankr. LEXIS 605 (E.D. Cal., 1/15/2010)
Motion for undue hardship discharge of student loan debt denied
§524 Burton v. Mouser (In re Burton), 2010 Bankr. LEXIS 675 (W.D. Ky., 3/16/2010)

§524(a)(4) Braden Trust v. Chavez (In re Chavez), 2010 Bankr. LEXIS 586 (D. Ariz., 2/23/2010)

§707(b) In re Hornung, 2010 Bankr. LEXIS 703 (M.D.N.C., 3/11/2010)
Case dismissed for bad faith where debtors purchased two vehicles on the eve of filing
§727 Wolff v. Foroutan (In re Foroutan), 2010 Bankr. LEXIS 758 (D. Md., 3/12/2010)

§727(a) Awad v. Sakalla (In re Sakalla), 2010 Bankr. LEXIS 580 (E.D. Tenn., 2/24/2010)

§727(d) In re Owens, 2010 Bankr. LEXIS 576 (E.D. Tenn., 2/25/2010)

§1129(b)(2)(B) In re Shat, 2010 Bankr. LEXIS 584 (D. Nev., 2/22/2010)
The absolute priority rule does not apply to individual chapter 11 debtors post-BAPCPA

§1307(c)(1) In re Jensen, 2010 Bankr. LEXIS 622 (S.D.N.Y., 3/17/2010)

§1325(b)(1) In re Rodger, 2010 Bankr. LEXIS 581 (D.N.H., 2/26/2010)
Below median chapter 13 debtors required to pay disposable income for full duration of plan


§524 Bryant v. Tidewater Fin. Co. (In re Bryant), 2010 Bankr. LEXIS 672 (C.D. Ill., 3/10/2010)

Tuesday, May 11, 2010

Foreclosure Defense and Options to Foreclosure

If your home is in financial distress or you are in danger of losing your home to foreclosure, you have several options that can help save your home. Carol A. Lawson  helps homeowners in Pinellas and Hillsborough County in dealing with lenders and their attorneys to help them through these difficult times.

What Should You Do?

We can assist you by defending you in a foreclosure lawsuit, or otherwise work with your lender to seek a workout solution by Equity Sale, Short Sale, Loan Modification, Foreclosure, Deed-in-Lieu of Foreclosure, Chapter 7, Chapter 13, or other alternatives that might be available for you if you qualify.

If you or your property is in distress or danger, the worst thing you can do is nothing. Failure to act will result in permanent loss of certain rights you may have. Please do not delay.

Your Rights Under the Law

Carol A. Lawson  will help you access the options provided to you by law. Our assistance to you in foreclosure defense or other distress relating to your mortgage will depend on your specific circumstances or hardship. We will work with the lender for you to tailor a workout solution based on your specific needs and abilities to the fullest extent possible.

Even if you do not retain Carol A. Lawson do not postpone seeking legal representation to help you with your mortgage or foreclosure.

If you will allow us to help you, please call our office TODAY to schedule a consultation in our Clearwater office at (7270 410-2705 you will speak directly to the attorney.  You can also set up an appoint by email at

Foreclosure Defense and Options to Foreclosure

If your home is in financial distress or you are in danger of losing your home to foreclosure, you have several options that can help save your home. Carol A. Lawson, helps homeowners in Pinellas and Hillsborough County in dealing with lenders and their attorneys to help them through these difficult times.

What Should You Do?

We can assist you by defending you in a foreclosure lawsuit, or otherwise work with your lender to seek a workout solution by Equity Sale, Short Sale, Loan Modification, Foreclosure, Deed-in-Lieu of Foreclosure, Chapter 7, Chapter 13, or other alternatives that might be available for you if you qualify.

If you or your property is in distress or danger, the worst thing you can do is nothing. Failure to act will result in permanent loss of certain rights you may have. Please do not delay.

Your Rights Under the Law

Carol A. Lawson will help you access the options provided to you by law. Our assistance to you in foreclosure defense or other distress relating to your mortgage will depend on your specific circumstances or hardship. We will work with the lender for you to tailor a workout solution based on your specific needs and abilities to the fullest extent possible.

Even if you do not retain Carol A. Lawson do not postpone seeking legal representation to help you with your mortgage or foreclosure.

If you will allow us to help you, please call our office TODAY to schedule a consultation in our Clearwater office.

Florida Default Law Group

Daily Business News
Law firm probed over 'false' documents filed in court cases
May 10, 2010 By: Paola Iuspa-Abbott

The Florida attorney general is investigating one of the nation's largest foreclosure law firms over allegations it falsified legal documents to expedite foreclosure cases filed by its lender clients.

Tampa-based Florida Default Law Group "appears to be fabricating and/or presenting false and misleading documents in foreclosure cases," according to the attorney general's Economic Crimes Division in Fort
Lauderdale, which is leading the investigation.

The office of Attorney General Bill McCollum is reviewing consumer complaints, taking depositions and researching the company's business practices to determine whether Florida Default has violated any state

The investigation is based on allegations that Florida Default lawyers submitted misleading documents to judges hearing foreclosure cases.

The documents included assignments of mortgage that "have later been shown to be legally inadequate and/or insufficient," according an April 28 statement by the attorney general's office when the investigation was opened.

The attorney general's office has received dozens of complaints from homeowners about questionable court documents filed by Florida Default's lawyers, according to a source familiar with the probe.

A call and e-mail to Florida Default president Michael Echevarria were not returned.

In announcing the Florida Default investigation, the attorney general's office pointed out that it is also investigating a Jacksonville-based provider of mortgage processing services for lenders that "appears" to
be doing business with Florida Default. The investigation, opened on the same day, also centers on questionable court documents in foreclosure cases.

The attorney general is also investigating the relationship between Florida Default and an AG staffer who also worked for the foreclosure firm.

Firms like Florida Default, which handles thousands of cases on behalf of lenders, are known in the industry as "foreclosure mills." Their job is to do all the legal work lenders need to foreclose on homes.

Foreclosures usually aren't contested, so companies like Florida Default are rarely challenged over the validity of their affidavits and court filings. But homeowners are increasingly hiring foreclosure defense
lawyers to scrutinize a lender's right to take their home.

Most lawyers request copies of notes and mortgages to verify that the lender actually owns the mortgage on a distressed property. These documents can be hard to find because loans are often bought and sold
many times. As a result, lenders often don't have those documents available when they file a lawsuit.

Months into the litigation, they produce documents, like assignments of mortgage, that were recorded long after the suit was filed. Often, they produce affidavits that wrongly name the lender as the loan owner,
according to defense lawyers.

Foreclosure defense lawyer Thomas Ice said the investigation into Florida Default is overdue. "It was a long time coming for a governmental agency to get involved in investigating what foreclosure defense lawyers are showing the courts every day," he said, adding that he often sees misleading affidavits and other court documents allegedly filed by foreclosure lawyers representing lenders.

Last year, Ice won dismissal of a foreclosure case after he showed that Florida Default had filed an affidavit that incorrectly named IndyMac Federal Bank, now OneWest Bank, as the owner of a West Palm Beach
couple's mortgage.

And Florida Default has paid for improper filings. In October 2008, U.S. Bankruptcy Judge John Olson fined Florida Default $95,130 for "repeated misrepresentations" to the court.

The firm had submitted documents claiming that Fort Lauderdale homeowner Fazlul Haque owed his lender, Wells Fargo, $2,114 in prepayment penalties even though the mortgage, while in arrears, was still on its books. Olson realized the fee was illegal since Haque had yet to pay off the delinquent loan.
"The notion that the debtor paid off his loan in full to the creditor is absurd," Olson wrote. "It is utterly perplexing to me how the creditor or its law firm could or did assert such claim."

In a recent interview with the Daily Business Review, Olson attributed the misrepresentations to "sloppiness" by the foreclosure firm rather than fraud.

In 2004, the Florida Bar reprimanded Florida Default president Echevarria for not properly supervising lawyers at his prior firm, Echevarria & Associates, according to the Florida Bar. Among the issues in the case, a lawyer at his firm notarized foreclosure-related documents without reviewing the foreclosure files despite signing affidavits affirming he had done so.

Until recently, an assistant attorney general with the Economic Crimes Division in Tampa worked part-time for Florida Default notarizing affidavits for the firm. Her work for Florida Default became an issue in
a pending foreclosure lawsuit filed in Volusia County.

"That is a potential conflict," said Ice, whose West Palm Beach law firm Ice Legal is involved in the Volusia suit. "They should address that issue first before they continue with the investigation."

Ice questions the veracity of the documents notarized by the AG employee on behalf of Florida Default and asked for the court's permission to depose her.

Erin Cullaro, who joined the attorney general's office in March 2008, received permission from her supervisors to moonlight three nights a week for 15 minutes each night notarizing documents. The request didn't disclose the name of the firm she would work for.

Several foreclosure suits filed across Florida contain Florida Default affidavits signed by Cullaro, including the lawsuit filed in Volusia.

Ice says he has nine affidavits from different foreclosure cases purportedly signed by Cullaro in 2009. Ice contends each signature is different.

"There is a possibility that [Cullaro] is not signing all of the thousands of Florida Default affidavits that she has filed around the state," Dustin Zacks, an Ice Legal attorney, said in a March deposition
on the pending Volusia foreclosure case. "Even the 20 or so that we have, have noticeably different signatures."

The attorney general's office is aware of Cullaro's side job, said spokewoman Ryan Wiggins. "Any suggestion that one of our attorneys might have been involved in improper activities while engaged as a notary outside her scope of employment with this office is troubling," she said. "The attorney general has asked his inspector general to thoroughly investigate this matter."

Wiggins declined to discuss details of the investigation into Cullaro and Florida Default.

Cullaro did not return several phone calls seeking comment.

It is unclear why the AG's office linked its investigation into Florida Default with another investigation of Docx, the Jacksonville mortgage processing service company.

Docx parent company Lender Processing Services said in a filing with the Securities and Exchange Commission that its subsidiary made an "error in the notarization of certain documents, some of which were used in foreclosure proceedings across the country."

Docx "seems to be creating and manufacturing 'bogus assignments' of mortgage in order that foreclosures may go through more quickly and efficiently," according to the attorney general's office. "These
documents are used in court cases as 'real' documents . ... when it actually appears that they are fabricated in order to meet the demands of the institution that does not, in fact, have the necessary document
to foreclose."

The attorney general's office said it appears that Florida Default was a "client" of Docx, which is also under investigation by the U.S. attorney for the Middle District of Florida.

LPS spokeswoman Michelle Kersch said that Florida Default is a "vendor" of her company, but she declined to comment further about the two company's relationship. Kersch said her company was cooperating in the investigations and had already dealt with its subsidiary's problem. "The services performed by this small subsidiary were offered to a limited number of customers," she said. "LPS immediately corrected the
business process and has completed the remedial actions necessary to minimize the impact of the error."

Paola Iuspa-Abbott can be reached at (305) 347-6657


Chase Plans Foreclosure-Prevention Events In Eight Markets

By on Thursday 06 May 2010

Chase says it will host multi-day homeowner assistance events for struggling Chase homeowners in eight major U.S. markets this year. The events complement 51 Chase Homeownership Centers that the company has opened throughout the country.

"We have increased borrower participation dramatically by concentrating our reach-out efforts and bringing together dozens of Chase loan counselors for several days," says Dave Lowman, head of home lending at Chase.

Over the next five months, up to 40 Chase counselors will work with homeowners for as long as 12 hours a day for four or five days in a central location, such as a civic center or community college.

Many of the counselors are based in the company’s homeownership centers, which Chase began opening in early 2009 to provide face-to-face counseling to homeowners who have fallen behind on their mortgages. The centers are open six days a week, including evening hours.

Chase began the multi-day events in Florida, where counselors met with 3,200 customers. Half of the homeowners spoke with counselors in less than 10 minutes, and a total of 85% waited no more than 30 minutes before speaking one-on-one with a counselor, the company says. Nearly three-quarters of the customers said their experience was excellent, while another 12% said it was very good.

"The centers have provided personalized help to more than 91,000 borrowers, and we expect these events will help thousands more in just a few days,” Lowman says.

Chase plans to host events in the Chicago; Atlanta; Washington, D.C.; New York; Northern and Southern California; Orlando, Fla.; and Phoenix markets.

Since 2009, Chase has hired 3,600 additional counselors, hosted and participated in nearly 475 outreach events, and mailed more than 1 million letters to invite customers to events and centers.

Freddie Mac Loss

Freddie Mac has reported a $6.7 billion net loss for the first quarter, prompting the company's conservator, the Federal Housing Finance Agency, to request a $10.6 billion draw from the U.S. Treasury Department.

After dividend payments of $1.3 billion on its senior preferred stock to the Treasury, Freddie Mac reports a net loss attributable to common stockholders of $8 billion for the first quarter of 2010, compared to a net loss attributable to common stockholders of $7.8 billion the fourth quarter of 2009.

Foreclosure Counseling

Fannie Mae has announced a new partnership that the company says will accelerate response time and provide financial counseling to distressed Florida homeowners whose mortgages are owned by Fannie Mae and serviced by SunTrust.

Under the agreement, the Orlando agency of Consumer Credit Counseling Service of Central Florida and The Florida Gulf Coast (CCCS) will initiate a grassroots mail and telephone campaign focusing on eligible homeowners who are delinquent on their mortgage payments.
Homeowners will be encouraged to schedule an appointment to meet with English- and Spanish-speaking housing advisors. The counselors will explain the qualification requirements for loan modification programs or other assistance available to them and help to facilitate an expedited resolution.

CCCS will assist each qualifying mortgage holder with organizing the documentation necessary to complete a loan modification through the Making Home Affordable program, or other programs, and submit the information directly to the servicer.

Hope Now Loan Modification Results

HOPE NOW completed 476,192 loan modifications during the first quarter of 2010 - a 29% increase from the same period last year. This brings HOPE NOW's loan modification total to more than 2.88 million since July 2007.

The alliance reports that it handled 1.36 million workout solutions in the first quarter of this year, a 92% increase from the 710,000 handled in the first quarter of 2009. The first quarter of 2010 also saw nearly 4 million 60 days-plus delinquencies and 291,380 completed foreclosure sales, compared to 2.85 million 60 days-plus delinquencies and 201,310 completed foreclosure sales in the first quarter of 2009.

Negative Equity

The number of mortgaged residential properties sinking under the weight of negative equity declined slightly during the first three months of this year, CoreLogic reported Monday.

According to the company’s market data, just over 11.2 million, or 24 percent, of all homes in the United States with a mortgage were worth less than the outstanding loan balance at the end of the first quarter of 2010. That figure is down from 11.3 million at the end of last year.

An additional 2.3 million borrowers had less than five percent equity in their home, CoreLogic found. Together, negative equity and near-negative equity mortgages accounted for over 28 percent of all residential properties with a mortgage nationwide.

“The two most important triggers of default, negative equity and unemployment, have stabilized over the last six months,” said Mark Fleming, chief economist with CoreLogic. “As house prices grow again and borrowers pay down their mortgage debt negative equity levels will begin to diminish.”

Fleming says the typical underwater borrower is likely to regain their lost equity over the next five to seven years.

Based on CoreLogic’s market analysis, negative equity continues to be concentrated in five states. Nevada sits at the top of that list, with 70 percent of all of its mortgaged properties underwater, followed by Arizona (51 percent), Florida (48 percent), Michigan (39 percent), and California (34 percent).

The share of borrowers nationwide whose mortgage debt exceeds the property value by 25 percent or more fell slightly in Q1 to 10.4 percent, or 4.9 million borrowers. That’s down from 10.6 percent, or 5 million borrowers, during the previous three-month period. The aggregate dollar value of negative equity for these deeply underwater borrowers was $656 billion dollars, according to CoreLogic’s data.

The company found that 38 percent of borrowers with second liens or home equity lines of credit were underwater in Q1, compared to 19 percent of borrowers without a junior lien. CoreLogic also noted the foreclosure rate for borrowers with secondary liens was 4 percent, compared to 2 percent for those withou

Mortgage giant Fannie Mae has reported a net loss of $11.5 billion for the first quarter of 2010. The deficit has prompted the GSE to ask the Treasury for another $8.4 billion in federal funding.

Last week, Freddie Mac requested $10.6 billion from the Treasury after it too posted another quarterly loss.

According to Fannie Mae’s earnings announcement, after adding in $1.5 billion of dividend payments to the Treasury, the Washington, D.C.-based company’s total Q1 loss attributable to common shareholders was $13.1 billion, or $2.29 per diluted share.
After steadily increasing for 12 consecutive quarters, the national mortgage loan delinquency rate—the ratio of borrowers 60 or more days past due on their mortgage—dipped down to 6.77 percent in the first quarter of this year, according to data released Monday by TransUnion.

This statistic, which is traditionally seen as a precursor to foreclosure, reflects a 1.74 percent decline from the previous quarter’s 6.89 percent average. However, on a year-over-year basis, mortgage borrower delinquency was still up approximately 30 percent from 5.22 percent in the first quarter of 2009.

This statistic, which is traditionally seen as a precursor to foreclosure, reflects a 1.74 percent decline from the previous quarter’s 6.89 percent average. However, on a year-over-year basis, mortgage borrower delinquency was still up approximately 30 percent from 5.22 percent in the first quarter of 2009.

TransUnion said delinquency rates in the first quarter continued to be the highest in Nevada (15.98 percent) and Florida (14.65 percent). And the lowest rates of delinquency were found once again in North Dakota (1.76 percent), South Dakota (2.44 percent), and Nebraska (2.68 percent.)

U.S. Bank Failures Hit 68 in 2010

The Federal Deposit Insurance Corp. said that state regulators closed banks in Florida, Minnesota, Arizona and California on Friday, bringing to 68 the number of banks that have failed so far this year.