Friday, June 4, 2010


Protect yourself !!

Make sure you act in your clients best interest and insist they seek legal counsel to explain their rights and options. Your client's lender is represented by an Attorney....make sure your client is represented.

If you are a Real Estate Agent we encourage you to contact us to find out how we can help you grow your business. We can help you for a flat fee we will:

- Evaluate all of your clients legal options to help them make a fully informed decision.

- Explain the loan modification process to the homeowner if they wish to remain in the home.

- Help you get your short sale listings approved.

As you are aware, short sale and loan modification negotiations require expertise, patience, and lots of time. Instead of marketing and taking new listings you spend most of your time navigating phone systems, and negotiating with overworked loss mitigators at banks. Unless you are in this business full time processing files, your efforts are better spent finding new listings or buyers.

We are a professional law firm staffed by highly trained professionals that are ready to handle your short sale, and to do everything they can to successfully close your file.
Contact our office for a free no-obligation consultation.

Ex-Oilers owner pleads to bankruptcy perjury

RIVERSIDE, Calif. (AP)—Former Edmonton Oilers owner Peter Pocklington pleaded guilty Thursday to perjury in a Southern California bankruptcy fraud case.

Pocklington, 68, entered the plea to a single perjury count in U.S. District Court under a deal that allowed him to avoid a possible 10-year prison term for making false statements and oaths in bankruptcy.

He was scheduled to be sentenced in August and was expected to receive probation, including six months of home detention that could force him to wear an electronic monitor.

A call to his attorney, Brent F. Romney, seeking comment was not immediately returned.

However, Pocklington told Global TV Edmonton on Wednesday that he was “not guilty of anything” and his indictment by a federal grand jury for allegedly concealing bank accounts was prompted by errors in his 2008 bankruptcy filing.

“Unfortunately, the lawyer I hired to do the original case is what caused all the problems,” he said. “‘He said, ‘Sign here,’ and I did, and unfortunately he left a multitude of things out.”’

Pocklington said he took the federal prosecutors’ plea offer to avoid trial.

“Unfortunately the jury pool is not a jury of your peers; it’s a jury of some of them unemployed, some of them that aren’t particularly bright,” he said. “And of course with press and so on, and in this country and Canada they seem to hate anyone that has been successful.”

The Oilers won five titles from the time that Pocklington acquired the team in the late 1970s until he sold it in 1998. He shocked fans when he traded star Wayne Gretzky to the Los Angeles Kings in 1988. Fans burned him in effigy.

Pocklington later moved to the United States. He filed for personal bankruptcy in 2008. He claimed to have debts of $19.6 million and assets of only about $2,900.

That includes nearly $13 million in loan money and interest that the Alberta provincial government claims it loaned to Pocklington’s meatpacking company in 1988.

Pocklington was arrested at his Palm Desert home in March 2009 on allegations he concealed assets during bankruptcy proceedings. Prosecutors said he failed to note that he controlled two bank accounts and two storage facilities.

FBI agents who raided his home in 2009 said they found $2,000 in cash, along with artwork and boxes of shoes, suits and Cuban cigars.

Under a plea agreement filed last week, Pocklington must cooperate with the Internal Revenue Service in determining his individual income tax liability for the years 2006 through 2008.

The agreement also stipulates that Pocklington make full restitution.

More Than 172,000 Loan Mods Completed in April: HOPE NOW

Home loan servicers are continuing to step up efforts to put distressed homeowners into more sustainable mortgages, according to data released this week by HOPE NOW, a congressionally-formed private sector alliance of mortgage servicers, investors, mortgage insurers, and non-profit counselors.

The number of loan modifications offered to homeowners during the month of April – more than 172,000 – represents a 46 percent increase compared to a year earlier, when the industry completed nearly 118,000 loan mods, HOPE NOW noted in its report.

In April of this year, servicers extended their own proprietary modifications to 104,265 borrowers. HOPE NOW says the year-to-date total for these types of loan modifications is now 409,783.

When added to the 68,000 permanent mods made through the Home Affordable Modification Program (HAMP) in April, that brings the industry’s monthly total to more than 172,000 and almost 642,000 so far in 2010, HOPE NOW says.

The industry group pointed out that the number of HAMP modifications continues to increase, but for homeowners who are not eligible, sustainable proprietary modifications continue to play an important role in helping homeowners in difficulty across the country.

Faith Schwartz, senior advisor for HOPE NOW, said, “Our data continues to show that the industry’s comprehensive loan modification efforts are making significant headway.”

According to Schwartz, the total number of modifications, including HAMP, show that more than three million homeowners have received modifications since 2007, but she adds, “Our work is far from over.”

Schwartz went on to say, “HOPE NOW and its members continue to demonstrate a commitment to keep as many homeowners as possible in their homes through loan modifications which include P&I [principal and interest] reductions, forbearance, and repayment plans. Additionally, when these options are not possible, servicers are working to find liquidation alternatives for borrowers seeking a graceful exit to homeownership.”

Thanks to DS News

Banks Have Recognized 60% of Expected Loan Charge-Offs: Moody’s

In its latest quarterly report on credit conditions of the U.S. banking system, Moody’s Investors Service says banks’ asset quality issues are “past the peak” but charge -offs and non-performers continue to eat away at profitability and sheer fundamentals.

Based on Moody’s market data, banks’ non-performing loans stood at 5.0 percent of total loan assets at March 31, 2010.

Moody’s says U.S. rated banks have already charged off or written-down $436 billion of loans in 2008, 2009, and the first quarter of 2010. That leaves another $307 billion to reach the rating agency’s full estimate of $744 billion of loan charge-offs from 2008 through 2011.

In aggregate, the banks have recognized 60 percent of Moody’s estimated total charge-offs and 65 percent of estimated residential mortgage losses, but only 45 percent of projected commercial real estate losses.

In the first quarter of this year, the banking industry’s collective annualized net charge-offs came to 3.3 percent of loans, versus 3.6 percent of loans in the fourth quarter of 2009, Moody’s said. Despite two consecutive quarters of improvement in charge-offs, the ratings agency notes that the figures still remain near historic highs, dating back to the Great Depression.

Thursday, June 3, 2010


U.S. Cities With The Most Underwater Mortgages

Topics:Real Estate

By: Paul Toscano , Producer,
10 May 2010
10:45 AM ET

For individual homeowners, being “underwater” on a mortgage – when a home is worth less than outstanding debt, or has “negative equity” – is one of the worst positions to be in, short of foreclosure., a firm that compiles US real estate and mortgage information, has put together a list of the 156 largest metro areas that includes statistics on median home values, market changes and the proportion of homes with negative equity.Included in the data is the “Zillow Home Values Index,” which represents the median measure of home valuations. According to Zillow’s newest report, the current median US home price is $204,900, down 6.82% year-over-year. More than one in five - 23.3% - of US homes are underwater, which is up slightly from 23% from Q2 2009, according to Zillow. So, which metro areas have the highest proportion of homes underwater? Click ahead for the results. By Paul ToscanoPosted 10 May 2010.­5?slide=2- Jax is no 15 with 49.1% underwater representing 127,807 homes and this is a low guess b/c it is Zillow/industry numbers.

In Re Reynolds

In re: BARRY REYNOLDS and DIANE REYNOLDS, Chapter 7, Debtors.
Case No. 08-10775-FJB.
United States Bankruptcy Court, D. Massachusetts, Eastern Division.
May 18, 2010.

FRANK J. BAILEY, Bankruptcy Judge

By this motion the Debtors seek to set aside and nullify a settlement agreement that they admit signing and that they admit was negotiated for them by counsel. The settlement agreement settled two adversary proceedings with the Chapter 7 Trustee, David Madoff. The Debtors argue that when they signed the settlement agreement they were not exercising their free will because they did so under duress. On May 10, 2010, I conducted an evidentiary hearing at which the Debtors had an opportunity to present evidence of duress to support their request that the settlement agreement be set aside. After hearing and for the reasons stated herein, I deny the motion to set aside the settlement agreement.


Based upon the evidence adduced at the hearing or in uncontested pleadings, I find the following facts:

On February 4, 2008, the Debtors commenced a proceeding under Chapter 13 of the Bankruptcy Code. On May 13, 2009, the case was converted to a case under Chapter 7 and David Madoff (the "Trustee") was appointed the chapter 7 trustee in the case by the United States Trustee. On July 17, 2009, the Trustee commenced an adversary proceeding against Leo-Louis, Jr. of The Family Dubois, Individually and as Trustee of the D'Amber Trust, A.P. No. 09-1226 (the "Transfer Litigation") alleging that Debtor Diane Reynolds transferred certain real estate in Lakeville, Massachusetts (the "Property") to Leo-Louis Dubois ("Dubois"), as Trustee of the D'Amber Trust, and that the transfer should be avoided under either federal or state law as actually or constructively fraudulent. On August 6, 2009, the Trustee commenced a second adversary proceeding, entitled David B. Madoff, Chapter 7 Trustee v. Barry and Diane Reynolds, A.P. No. 09-1247 (the "Discharge Litigation"), in which he objected to the Debtors' receipt of a discharge under sections 727(a)(2) and 727(a)(4) of the Bankruptcy Code.

Prior to the petition date, on February 23, 2006, the Debtors entered a loan agreement with the Bank of Canton. The Debtors executed a promissory note in the amount of $408,000 (the "Note") and a mortgage (the "Mortgage") on the Property. Bank of Canton recorded the Mortgage in the appropriate Registry of Deeds on February 26, 2006 and it later filed a proof of claim in the bankruptcy proceeding.

On November 16, 2009, Peter M. Daigle, acting as counsel to the Debtors in the adversary proceedings, contacted the Trustee to open settlement discussions. The Debtors retained Daigle for the purpose of settling the two adversary proceedings. Dubois retained another attorney, a Mr. Doherty, to represent him in connection with the settlement discussions. After a period of discussion, the Trustee prepared a proposed settlement agreement and sent it to Daigle and Doherty for review and comment. After some negotiation, the proposed settlement agreement came to include the following terms (which constitute the essential features of the agreement as it was eventually executed and approved). First, in the Transfer Litigation, judgment would enter for the Trustee on the constructive fraud count and the Property would be transferred to the estate; all other counts in the Transfer Litigation would be dismissed, including a dismissal of all counts pertaining to Dubois. Second, the Debtors (i) acknowledged the validity of the Mortgage, (ii) acknowledged that upon his recovery of the Property, the Trustee would attempt to market and sell it, (iii) agreed to provide the Trustee reasonable access to the property for inspection, marketing, and sale purposes and to refrain from interfering with the Trustee's efforts to sell the property, and (vi) agreed to vacate the Property within 180 days of the execution of the settlement agreement. Finally, the Trustee agreed to dismiss the Discharge Litigation with prejudice, to refrain from marketing the property for sixty after the execution of the Stipulation, and to permit the Debtors to occupy the property for 180 days from the execution of the Stipulation.

It appears that the Debtors met, either in person or via telephone conference, several times with their counsel, as well as with counsel to Dubois, to discuss the proposed settlement agreement. All negotiations concerning the settlement agreement between the parties, however, took place between either the Trustee or his counsel, on the one hand, and counsel to the Debtors and to Dubois, on the other. There is no evidence that the Debtors had any direct communications with the Trustee or his counsel. Nor is there any evidence that the Trustee or his counsel ever threatened or even intimated to the Debtors' counsel that the Debtors were facing any possible criminal liability or exposure as a result of the facts stated in either of the adversary proceedings, much less that the Trustee would seek to initiate criminal proceedings against the Debtors.

Diane Reynolds testified at the evidentiary hearing on the motion to vacate settlement agreement. Her husband and co-debtor, Barry Reynolds, did not. Mrs. Reynolds expressly waived the attorney-client privilege, and her husband did not object to the waiver. In fact, the parties stipulated to the entry into the record of a transcript of the deposition of Attorney Peter Daigle.[ 1 ] The Debtors also waived the privilege at the deposition.

Mrs. Reynolds testified about the meetings that she and her husband had with their counsel and with counsel to Dubois. She testified that counsel to Dubois was a criminal attorney and that he told the Debtors that they may be facing criminal charges if they did not settle the adversary proceedings. He, and perhaps their own counsel, told the Debtors that it would cost between $50,000 and $100,000 to defend the adversary proceedings and that if they did not settle, the Debtors would soon be deposed. There is no evidence that the Trustee or his counsel ever threatened to instigate criminal proceedings.[ 2 ]

The parties to the settlement agreement negotiated several points regarding the agreement. As a result of those negotiations, they made several changes in the proposed agreement. In connection with those negotiations, but never in the presence of the Trustee or his counsel, the Debtors plainly stated that they did not wish to sign the settlement agreement. Mrs. Reynolds even testified that when they met with their counsel at a bookstore in order to sign what was to be the final agreement, they told him that they felt they were signing "under duress." Mrs. Reynolds also testified that there were parts of the agreement that she did not understand at the time she signed it, but she did not elaborate on that theme.[ 3 ] In addition, the Debtors introduced into evidence a series of emails between themselves and their counsel, dated from mid-November through mid-December, 2009, in which Mrs. Reynolds articulated an unwillingness to forego in the settlement agreement her right to object to the claims of the Bank and of the Internal Revenue Service.[ 4 ]

Notwithstanding their reservations, the Debtors decided to sign the proposed agreement, and, on or about January 26, 2010, they did sign it, as did the Trustee and Dubois. On February 12, 2010, the Trustee then filed the signed agreement, entitled Settlement Stipulation, in the bankruptcy case with a motion for approval thereof; and he served the motion for approval on (among others) the Debtors themselves and their attorney, Mr. Daigle. No party objected or otherwise responded to the motion. Consequently, on March 9, 2010, the Court entered an order approving the stipulation; and no appeal was taken from that order. In accordance with the approved Settlement Stipulation, the Court, also on March 9, 2010, entered judgment in the Transfer Litigation, avoiding the transfer of the Property from Diane Reynolds to Dubois, and, on March 29, 2010, the Trustee and Debtors filed a stipulation of dismissal with prejudice in the Discharge Litigation. By virtue of the dismissal of the Discharge Litigation, the way was cleared for entry of the Debtors' discharge, and the court therefore entered a discharge order in their favor on March 31, 2010.

On February 17, 2010, just five days after the Trustee filed the Settlement Stipulation and motion to approve it and while that motion was still pending, the Trustee filed a second stipulation, this one between himself and Bank of Canton (the "Bank of Canton Stipulation"), and a motion to approve it. These, too, the Trustee served on (among others) the Debtors themselves and their counsel. The Bank of Canton Stipulation provides, in relevant part, (i) that the Bank shall have an allowed, valid, perfected, and enforceable first priority secured claim in a specified amount; (ii) that upon approval of the Bank of Canton Stipulation, the Trustee would seek to sell the property, first through a broker by private sale, but if no such sale is consummated and approved by June 30, 2010, then by public auction; and (iii) that proceeds of any sale would be distributed as specified, with the estate to recover $35,000 for certain administrative expenses before any payment to the Bank. On March 11, 2010, when neither the Debtors nor anyone else had objected to the motion to approve, the Court entered an order approving the Bank of Canton Stipulation, and no appeal was taken therefrom.

On April 6, 2010, and at the Debtors' request, Attorney Daigle moved to withdraw as their counsel in the bankruptcy case. The Court allowed the motion on April 16, 2010.

On April 23, 2010, the Debtors, now acting pro se (as they had through most of the chapter 13 phase of this case and some of the chapter 7 portion), filed the present motion, to which the trustee has objected. The court scheduled the matter for evidentiary hearing on an expedited basis, conducted the hearing on May 10, 2010, and took the matter under advisement.


The principal reason that the Debtors argue the settlement agreement should be voided is that they say they were coerced into signing the agreement. The sources of the coercion, according to the Debtors, are (a) threats that they were facing criminal prosecution and possible incarceration if they did not sign, (b) a concern that the defense of the adversary proceedings would be expensive, (c) a concern that they would be deposed immediately if the matters were not settled, and (d) statements of the Trustee to their counsel, at a point in the negotiations, that the settlement agreement was a "take it or leave it proposition."

The legal issue is whether the Debtors have established that the settlement agreement was procured by economic duress and therefore is invalid. In Massachusetts,

[t]o show economic duress (1) a party "must show that he has been the victim of a wrongful or unlawful act or threat, and (2) such act or threat must be one which deprives the victim of his unfettered will." Williston, Contracts § 1617, at 704 (3d ed. 1970). As a direct result of these elements, the party threatened must be compelled to make a disproportionate exchange of values. Ibid. The elements of economic duress have also been described as follows: "(1) that one side involuntarily accepted the terms of another; (2) that circumstances permitted no other alternative; and (3) that said circumstances were the result of coercive acts of the opposite party.

Ismert and Associates, Inc. v. New England Mutual Life Ins. Co., 801 F.2d 536, 543-44 (1st Cir. 1986) (Breyer, J.) (quoting International Underwater Contractors, Inc. v. New England Telephone & Telegraph Co., 8 Mass. App. Ct. 340, 393 (1979)). The Supreme Judicial Court of Massachusetts has defined "duress" in the settlement context to mean "such fear as precludes [the settling party] from exercising free will and judgment." Ismert at 548, quoting Coveney v. President & Trustees of the College of the Holy Cross, 388 Mass. 16, 22, 445 N.E.2d 136, 140 (1983).

The Debtors have failed to establish economic duress as a defense to the enforcement of the settlement agreement. Most fundamentally, they have not established that the Trustee engaged in any coercive act. There is no evidence that the Trustee ever threatened the Debtors, either directly or through their counsel, with criminal prosecution if they did not settle. The Debtors may well have heard from counsel to Dubois, or even from their own counsel, that they could be prosecuted for bankruptcy crimes, but no such statements were attributed to the Trustee or his counsel. The pressure the Debtors perceived with respect to the expense of mounting a defense to the adversary proceedings was not pressure from the Trustee, but the simple pressure that every litigant feels when having to chose between a compromise and the expense and uncertainty of continued litigation. Certainly that sort of pressure cannot constitute coercion on the part of the counterparty to the settlement, at least not of the sort that might support a defense of duress, or else no settlement agreement would ever stand. Nor can the Debtors' apparent fear of being deposed, which is simply a normal incident of litigation, constitute a wrongful act or statement of the Trustee. Inappropriate discovery demands are another thing, but the Debtors have neither adduced evidence nor even suggested that the Trustee intended or threatened to conduct discovery unnecessarily, to harass or intimidate. The Debtors have not even adduced evidence that the Trustee threatened to depose them. As to the "take it or leave it" ultimatum that the Debtors suggest was duress, I find nothing coercive about that statement. In fact, by its very nature, a "take it or leave it" ultimatum in a settlement negotiation expressly offers the party an alternative-the party can choose to forego the settlement and to litigate the matter.

In addition, the Debtors' contention that they felt overwhelming pressure is simply not credible. Were the Debtors to prevail on the present motion, the settlement and all its consequences would be undone, whereupon, as they surely appreciate, they would find themselves again right back in the situation they earlier experienced as coercively intolerable. Their discharge would be vacated; the Discharge Litigation and the Transfer Litigation would be reinstated; depositions and discovery would be renewed in both; and whatever possibility of criminal prosecution may have previously existed would be reinstated (if indeed it ever went away). But the Debtors have offered no explanation as to why they now suddenly find these tolerable. Nothing has changed. That these circumstances are tolerable now suggests that they were also tolerable then, when the Debtors entered into the Settlement Agreement. I therefore conclude not only that the Trustee is not responsible for any coercion, but also that the Debtors did not even feel themselves coerced. They were not precluded even by the circumstances from exercising their free will and judgment. They did exercise these as they saw fit. And they are now bound by the agreement they freely and deliberately entered. For all these reasons, the Debtors have not proven duress.

In addition to duress, the Debtors also mention "fraud upon the court" as cause to vacate the settlement agreement. However, after mentioning this phrase in the first paragraph of their motion, they do not return to it; the motion does not plead the alleged fraud with particularity. Nothing in the nature of fraud on the court was proven or argued at the evidentiary hearing.

For the above reasons, the Debtors have shown no duress or other cause to vacate, rescind, or otherwise grant them relief from the settlement agreement. Accordingly, the Court will enter a separate order denying the motion.

1. The deposition was taken on April 29, 2010, in conjunction with the present motion.

2. The Debtors have neither argued nor submitted evidence for the proposition that the Trustee's instigation of criminal proceedings against them would have been inappropriate in the circumstances. The Court need not address the issue.

3. The Court does not understand the Debtors to contend that, when they signed the settlement agreement, they did not understand the principal terms of the agreement, as outlined above in this memorandum of decision. Insofar as they may be so contending, they have adduced no credible evidence to support that contention. The Settlement Agreement is a model of clarity. The Debtors had discussed it thoroughly with their counsel. And they themselves concede that they were aware of the distasteful provisions by their testimony that, when they signed, they indicated that they were doing so under duress. They were well aware of the terms they found difficult to accept.

4. The Settlement Agreement, as eventually signed by the parties, includes an acknowledgement by the Debtors of the validity and perfection of Bank of Canton's mortgage on the Property but no waiver as to any claim of the Internal Revenue Service.

Thanks to:
April Carrie Charney , Esq.

Jacksonville Area Legal Aid, Inc.
126 W. Adams Street
Jacksonville, Florida 32202
phone 904 356-8371

Sout Florida Bankruptcy Filings

The number of businesses filing for bankruptcy in Miami-Dade, Broward and Palm Beach counties continued to eclipse last year’s numbers by a large margin in May – 60 percent higher, year-over-year – but dipped slightly compared to April, according to preliminary statistics from the U.S. Bankruptcy Court.

In the three-county area, personal bankruptcy filings were up 35 percent to 2,860 from 2,112 in May 2009, but down 2 percent compared to April.

The number of business bankruptcies for the three counties was up 60 percent in May, to 131 cases from 82 a year earlier.

Legal Update - Mabry Applellate Decision re California Civil Code 2923.5

The Court of Appeals decision in the Mabry case just came down today. It's a mixed bag for the servicing and trustee industries. On the positive side, the Court of Appeals adopted most of the arguments ALFN asserted in the Amicus Curiae brief we filed for the United Trustee Association and California Mortgage Association. Specifically, the Court of Appeals ruled, in a published decision, that: (1) the 2923.5 Declaration does not have to be signed under penalty of perjury; (2) that the compliance language in the 2923.5 Declaration can simply track the statute itself, i.e., the Dec does not have to identify the specific method by which the servicer complied with 2923.5; (3) the remedy for non-compliance with 2923.5 is postponement only; and (4) completed sales are not invalidated by alleged non-compliance with 2923.5.

As for the rest of the decision, the Court of Appeals held that: (1) there is a private right of action under 2923.5; (2) a tender is not required as a pre-requisite to stating a substantive 2923.5 claim; (3) 2923.5 is not preempted by HOLA; (4) the matter is remanded to the trial court to determine if Aurora complied with 2923.5; and (5) under the facts presented in the Mabry case, it is not appropriate for a class action.

Five potential implications of the decision on the industry?

1. 2923.5 causes of action on completed sales will be moot as the sale is final;

2. 2923.5 allegations in the eviction process will be moot, greatly helping eviction counsel;

3. Trustees should be able to file more Declarations of Non-Monetary Status on 2923.5 cases;

4. Borrowers will file more TROs alleging non-compliance of 2923.5 by the servicer; and

5. Without the private right of action, preemption or tender arguments, Demurrers and Motions to Dismiss will become more difficult to win, meaning more protracting litigation on those issues.

FHFA Proposes Rule On Underserved Markets

The Federal Housing Finance Agency (FHFA) has sent to the Federal Register a proposed rule implementing provisions of the Housing and Economic Recovery Act of 2008 (HERA) that establish a duty for Fannie Mae and Freddie Mac to serve very low-, low- and moderate-income families in three specified underserved markets - manufactured housing, affordable housing preservation and rural markets.

The proposed rule, implementing HERA's pre-conservatorship provisions, would require the government-sponsored enterprises (GSEs) to take actions to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets while adhering to the requirements of conservatorship.

As described in the proposed rule, while the GSEs remain in conservatorship, they are expected to continue to fulfill their core statutory purposes, which include their support for affordable housing. The FHFA says its approach to implementing the "duty to serve" provisions of HERA is to limit the proposed rule to existing core business activities at Fannie and Freddie and to require that they not engage in new lines of business as a result of the "duty to serve" proposed rule.

The proposed rule would also establish a method for evaluating and rating GSE performance in each underserved market this year and in subsequent years, and it describes the transactions and activities that would be considered for compliance.

The enterprises would be evaluated on the following four statutory assessment factors:

the development of loan products, more flexible underwriting guidelines, and other innovative approaches to providing financing; the extent of outreach to qualified loan sellers and other market participants; the volume of loans purchased relative to the market opportunities available, subject to the statutory condition that the FHFA not establish specific quantitative targets; and the amount of investments and grants in projects that assist in meeting the needs of the underserved markets.

Under the proposed rule, Fannie and Freddie would each be required to provide a plan for underserved markets against which the GSE would be evaluated and rated “satisfactory” or “unsatisfactory” for assessment factors in each underserved market on an annual basis.

Comments on the proposed rule are due 45 days from the date of publication in the Federal Register.

SOURCE: Federal Housing Finance Agency

Poll: 49% of Consumers Unable to Afford a Downpayment on a Home

Revealing a discouraging forecast for the U.S. housing market, a recent poll of more than 2,000 consumers found that 49 percent of respondents feel they will never be able to save enough money for a downpayment on a home.

The polll conducted by the National Foundation for Credit Counseling (NFCC), a national nonprofit credit counseling organization based in Silver Spring, Maryland, also found that just 12 percent of respondents feel they would have no trouble coming up with a 20 percent downpayment. An additional 20 percent said they would need a loan that allowed a much lower downpayment, and 18 percent said they would have to borrow the downpayment money regardless of how much is required.

According to the NFCC, finding the money for a downpayment for a home was historically only a problem for first-time homebuyers. But after purchasing their first home, buyers could normally satisfy the downpayment requirement on a new home from the proceeds of the sale of their former house.  However, this is no longer the case, the NFCC said.

Due to today’s turbulent housing market, the problem of being unable to afford a downpayment has now spread to those who currently own a home, the organization explained. With many mortgages underwater, even if the homeowner is able to sell his or her current house, there may be no profit available to satisfy the downpayment on the next home.

And further exacerbating the problem, the NFCC said, is that as home prices have decreased, many lenders have increased the downpayment amount required to obtain a mortgage loan.

“With the average home price in America just below $200,000, a 20 percent downpayment is near $40,000, a nice chunk of change by any standard,” said Gail Cunningham, spokesperson for the NFCC. “Some may still be able to obtain an FHA loan with a low downpayment requirement, but those with poor credit will likely have to put a larger amount down.”

Even with the economy improving, a staggering number of people are still out of work, and the retirement plans of many others have been decimated, Cunningham said. As a result, she said buying a home may no longer be a part of the American dream—at least not in the near future.


Unemployment rates fell in April for more than 90 percent of the nation's 372 largest metro areas as hiring picked up around the country.   The Labor Department says the jobless rate dropped in 346 areas last month. It rose in only 12 and remained flat in 14.

That's much better than March, when unemployment fell in 257 areas and rose in 89.

Much of the improvement was seen in Midwestern regions with significant manufacturing operations. Manufacturers, who added 44,000 jobs nationwide in April, are benefiting from increasing overseas sales and efforts by retailers and other U.S. companies to restock their warehouses.

For example, Monroe, Mich., near Detroit, saw its unemployment rate fall to 13.4 percent in April from 16 percent in March. Joblessness in Longview, Washington, which hosts several paper and packaging makers, dropped to 8.5 percent from 10.1 percent. And unemployment in Anderson, S.C., which is home to many auto parts companies, fell to 10.7 percent from 12.3 percent.


The 136,142 consumer bankruptcies filed in May represented a 9 percent increase nationwide over the 124,838 filings recorded in May 2009, according to ABI, relying on data from the National Bankruptcy Research Center.