Friday, October 1, 2010


The Census Bureau reported today that U.S. median household income fell 3 percent in 2009 to $50,221, Bloomberg News reported today. Maryland had the highest income for a fourth consecutive year, at $69,272, even as its median dropped from $70,545 in 2008, the bureau said in its 2009 American Community Survey. Mississippi had the lowest for at least the fifth straight year, at $36,646. The American Community Survey data is used to help determine the annual distribution of more than $400 billion in federal and state funds, the bureau said.

In related news, the Census Bureau also reported that the income gap between the richest and poorest Americans grew last year to its widest amount on record, the Associated Press reported today. The top-earning 20 percent of Americans — those making more than $100,000 each year — received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line, according to newly released Census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968. A different measure, the international Gini index, found current U.S. income inequality to be at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.



Moody's Investors Service reported  Monday  that U.S. credit card delinquencies fell in August as the six top issuers reported improved numbers, reported today. Delinquent accounts, the rates at which customers are making payments late by 30 days or more, dropped to 4.70 percent in August from 4.93 percent in July, Moody's said. Chargeoffs for the six top issuers overall climbed to 10.03 percent in August from 9.3 percent in July, reversing a trend of several months of decline.


The U.S. Supreme Court has given multinational companies a powerful new legal defense against fraud claims made by some of their investors, the Wall Street Journal reported today. The weapon for companies grows out of a June ruling that limits fraud claims in U.S. courts by private investors who bought shares on foreign stock exchanges. The Supreme Court decided that Australian shareholders who had purchased stock overseas in an Australian bank could not bring securities-fraud claims in a U.S. court. In order to avoid "incompatibility with the applicable laws of other countries," U.S. securities laws should govern only domestic stock purchases, the court concluded. The ruling means investors such as U.S. public pension funds could see limited recoveries in a number of pending securities actions. Judges have been interpreting the ruling in Morrison v. National Australia Bank Ltd. as preventing fraud claims in U.S. courts by any investor—either from the U.S. or abroad—who purchased shares on foreign exchanges.


The head of the Department of Justice's Criminal Division testified today before the Senate Judiciary Committee that a recent U.S. Supreme Court ruling is hampering the federal government's efforts to prosecute fraud and corruption in the public and private sectors, Dow Jones Newswires reported. The court's June decision in the appeal of former Enron Chief Executive Jeffrey Skilling to limit prosecutions for honest-services fraud has had an impact, Assistant Attorney General Lanny A. Breuer. "There is conduct that would have been prosecuted under the honest services fraud statute before Skilling that can no longer be prosecuted under the federal criminal law," Breuer said. In June, the Supreme Court ruled that it only applies to bribery and kickback schemes, and cannot be used in cases involving "undisclosed self-dealing" by a public official or private employee. Breuer urged lawmakers to move quickly to pass legislation to fill what Justice Department officials regard as a legal hole. Sen. Patrick Leahy (D-Vt.) criticized the Supreme Court decision, saying that federal circuit courts upheld the honest services statute for 21 years after Congress passed it in 1988.


Attorneys general in Connecticut and California ordered Ally Financial's GMAC mortgage unit to freeze all foreclosures within their borders, joining a growing list of states investigating whether the firm and other lenders improperly kicked people out of their homes, the Washington Post reported today. Connecticut Attorney General Richard Blumenthal yesterday accused Ally of using "defective foreclosure documents" in its filings and said he ordered the moratorium "to forestall horrendous, illegal harm against homeowners." California Attorney General Edmund G. Brown Jr. on Friday called Ally's document review process a "sham." In Illinois, Attorney General Lisa Madigan said that she "wants to see Ally stop the filing of foreclosures in Illinois as well until this situation can be remedied," a spokeswoman said. Iowa, North Carolina and Texas have also opened investigations into Ally's lending practices as well as those at other large mortgage companies, officials said. The announcement by California is especially significant because it had previously been thought to be unaffected. Last week, Ally announced it would halt evictions in 23 states where a court order is needed to evict a homeowner.


As many of you have requested, please see the following links for the purported deposition transcripts regarding the GMAC/Ally affidavit news media blitz issue:


RealtyTrac Inc. reported today that homes in the foreclosure process sold at an average 26 percent discount in the second quarter as almost one-fourth of all U.S. transactions involved properties in some stage of mortgage distress, Bloomberg news reported today. Foreclosures are adding to a swelling U.S. housing supply as an unemployment rate of 9.6 percent and the end of a federal homebuyer tax credit dampen purchases. A total of 248,534 homes that sold in the period had received a default or auction notice or been seized by banks, RealtyTrac said. The number was up 5 percent from the first quarter and down 20 percent from a year earlier, according to the Irvine, Calif.-based data seller. About 24 percent of all homes sold were in some stage of foreclosure, down from 31 percent in the first quarter. The average price of a distressed property was $174,198, up from $171,971, the company said.

Chart of Sales


The U.S. House of Representatives early today approved legislation to extend by one year increased loan limits on mortgages backed by the government, sending the bill to President Obama to sign into law, Reuters reported. The House voted 228-194 to approve a stopgap spending bill to keep the government running through mid-December. The bill, approved by the Senate earlier on Wednesday, contained language to keep the $729,750 limit for loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration through September of next year.

Email Discovery

Mortgage Rates Fall to New Lows...Again

How low can we go? When it comes to mortgage rates, the floor keeps dropping. Industry reports released Thursday show that interest rates for home loans - already at their lowest marks in more than a half-century - dropped again this week. Market analysis conducted by Freddie Mac puts the 30-year fixed rate at 4.32 percent and the 15-year rate at 3.75 percent. Bankrate says rates for the larger jumbo 30-year fixed mortgage also inched lower to 5.16 percent.

JPMorgan Halts Foreclosures, "Robo-Signers" Appear Commonplace

Following in the steps of GMAC, JPMorgan Chase has stopped foreclosures in 23 states. According to the bank, the cases may contain "defects" and "flawed paperwork." The sheer volume of foreclosure cases materializing out of the housing crisis seems to have given rise to what's being called the "robo-signers" – servicing execs that mechanically sign off on foreclosure actions without verifying their validity. One whistleblower says they are more prevalent than the industry would like to admit.

Ransom v. MBNA, American Bank, N.A.

On Monday, in Ransom v. MBNA, American Bank, N.A., the Court will hear oral argument in a case involving whether, in calculating a Chapter 13 debtor’s “projected disposable income” during the period of a bankruptcy plan, the debtor may deduct “ownership costs” for his car even though the car is already paid for. 

Credit Counseling

According to the American Bankruptcy Institute, bankruptcy filings by individuals or households with consumer debt surged 15% to 781,150 for the first six months of 2010 when compared to year ago levels. The Bankruptcy Institute predicts there will be more than 1.6 million new bankruptcy filings by the end of 2010.

The Justice Department also provides a list of approved counseling agencies at
Read all agreements carefully before signing anything. All verbal promises must be in writing.

Here are some questions to ask a credit counselor:

* What are your fees? Are there set-up and/or monthly fees? Get a specific price quote in writing. What happens if I can’t afford to pay?

* Will you help me fix my current problems and develop a plan for avoiding problems in the future?

* Are you licensed to offer your services in my state?

* What are the qualifications of your counselors? Are they accredited or certified by an outside organization? How are they trained?

* Do your employees make money if I pay a fee or make a contribution?

If your financial problems come from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in a debt management plan (DMP). A DMP may not be for everyone.   Many people are better of filing a Chapter 13.

In a DMP, your credit counselor develops a payment schedule with you and your creditors. You deposit money each month with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills, student loans, and medical bills. Your credit counselor may work out agreements with creditors to lower your interest rates or waive certain fees, but double check with all your creditors to be sure they offer the concessions that a credit counseling organization describes to you.

Before you send any payments to the credit counseling organization, make sure the creditor has accepted the proposed plan. Then, review statements from creditors to make sure they have received your payment.

Your DMP may prohibit you from applying for or using any additional credit while participating in the plan. This helps you get serious about paying down the debt you have, but it is also unlikely that creditors will give you credit anyway.

DMPs take time and discipline to be successful. You must make regular, timely payments, and the DMP could take 48 months or more to complete.  If your Credit Counselor sends the payments you sent timely to your  creditor you will get dinged on your credit report.

Make sure you understand how your DMP will work. Here are some questions to ask about DMPs:

* How will you know that all creditors will be paid by the due date? How will you get statements and updates about your account?

* How is the amount of my payment determined? What if the amount is more than I can afford? If you can’t afford the monthly payment, don’t sign up for a DMP.

* What debts will not be included in the DMP? You will still be responsible for paying these on your own.

* How will enrolling in a DMP affect my credit? Keep in mind that counselors cannot remove negative information from your credit report.

* What happens after I complete the DMP? Will you help me when it is time to apply for a loan?

Debt Consolidation

Before the credit crash, consolidating debt into a home equity line of credit was a popular and easy way to lower the cost of debt. The requirements for these have tightened dramatically. Even if you qualify,
these loans may not be worth the risk because they require you to put up your home as collateral. You could lose your home if you can’t make the payments or if your payments are late.  Consolidation loans are also costly. In addition to interest on the loans, you may have to pay “points,” with one point equal to one percent of the amount you borrow. However, these loans may provide certain tax advantages that are not available with other kinds of credit.  These are a bad idea!!! Credit cards are dischargable in Bankruptcy don't do it!!!!!!!!

Debt Negotiation Programs

Debt negotiation is not the same as credit counseling and DMPs. It can be very risky. If you don’t do it correctly, it will have a long-lasting impact on your credit report and hurt your ability to get credit. Many states now have laws regulating debt negotiation companies and the services they offer.

A debt negotiation company may describe itself as a “nonprofit” organization, but there’s no guarantee that the services they offer are legitimate. Your creditor may not even accept partial payment of a legitimate debt, and if you stop making payments on a credit card, late fees and interest usually are added to the debt each month. This can cause your original debt to double or triple and the fees add even more. Most debt negotiation companies charge a fee to establish the account with the debt negotiator, a monthly service fee, and a final fee of a percentage of the money you’ve supposedly saved.

Creditors aren’t obligated to negotiate a settlement, but they must provide accurate information to credit reporting agencies, including late payments and failure to pay monthly payments. This can hurt your credit report. Be aware that the Internal Revenue Service may consider any amount of forgiven debt to be taxable income.

You should also avoid credit repair clinics that claim to help clean up credit reports for a fee. You already have the right to have any inaccurate information removed from you credit report. No one holds a magic eraser to remove accurate information from your credit report. Only time and a conscientious effort to repay your debts will improve your credit report.  Bankruptcy will help in many cases improve ypour credit score.

In July, the FTC enacted new rules to protect consumers from predatory practices of debt settlement companies. Debt relief companies that sell products over the phone may not charge a fee before settling a debt for a consumer and they will be prohibited from making misrepresentations ( ) simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The Complete Credit Card Index ( ) is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for over 1000 credit cards offered in this country.  We do not endorse this company nor have we ever use it- this is  information only.

Whiney Attorney files Bar Complaint

I'm not a fan of David Stern, but an attorney who files a Bar Complaint  to try and gain a tatical advantage in litigation is not only a poor loser but scum.    Foreclosure Attorneys are "cockroaches" to quote Mr. Weidner- what is he besides a rat. And admit it jealous!   I know I am I wish I had the business sense David Stern had and then millions, don't you?

Thursday, September 30, 2010

For decades now, women lawyers have been trying to crack the male code and break into the exclusive boys' club at work. You know, the one where men always seem to get the plum assignments, the client credit, the power and the glory.

All this time we thought it was the testosterone, coupled with all that cultural stuff (football, golf, and stupid, action-packed movies) that made the male order so impenetrable. We were so wrong!!! They also get a big boost from boot camp--extreme boot camp. The kind where male lawyers get naked (literally).  At least in Californa- can't say I ever heard of a Florida law Firm doing this, but then being a girl they probably wouldn't tell me anyway.

Bummer that there's no female equivalent to that kind of intense bonding. Those women mentoring events, work/life balance discussion groups, and occasional shoe-shopping excursions are lame and tame compared to getting naked in front of your boss and colleagues. 

If you want to mentor me, how about a spa day or a shopping trip, after all I am a city girl.

Circuit Court of Appeals Cases

Third Circuit, 07/13/2010

In re Visteon Corp.
Debtor-employer may not terminate provision of retiree health and life insurance benefits without complying with section 1114.

Sixth Circuit, 07/22/2010

In re: Darrohn
Bankruptcy court's confirmation of chapter 13 plan reversed in light of the Supreme Court's recent decision in Hamilton v. Lanning where: 1) the bankruptcy court erred when it determined that it was required to use the income calculated on Form B22C, which was derived from the six-month look-back formula, rather than debtors' current monthly income; and 2) the bankruptcy court erred in failing to account for the debtors' intent to surrender properties securing the mortgages in considering reasonable necessary monthly expenses.

Ninth Circuit, 07/16/2010

In re Penrod
Creditor does not have a purchase money security interest in the "negative equity" arising from a vehicle traded in at the time of a new vehicle purchase. (Note: I filed an Amicus Brief in this case)

Tenth Circuit, 07/20/2010

In re Roser
Chapter 7 trustee cannot avoid a creditor's lien, where Colorado Certificate of Title Act (CCTA) did not supersede Colorado UCC section 4-9-317(e) because the provision did not govern the manner or timing of the perfection of liens, and governed only the priority of a lien and was not inconsistent with the CCTA.

Eleventh Circuit, 07/19/2010

In re Tennyson
Above median income debtor, with negative disposable income, may not confirm Chapter 13 bankruptcy plan to last for less than five years when the debtor's unsecured creditors have not been paid in full.

Thanks to

FHFA Reports Mortgage Interest Rates For August

The Federal Housing Finance Agency (FHFA) has reported that the national average contract mortgage rate for the purchase of previously occupied homes by combined lenders - which is used as an index in some adjustable-rate mortgage (ARM) contracts, was 4.65% based on loans closed in August. This is a decrease of 0.13% from the previous month.

The FHFA also reported that the average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 14 basis points (bps) to 4.7% in August, while the average interest rate on 15-year, fixed-rate loans of $417,000 decreased 20 bps to 4.46% in August.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.63% in August, down 14 bps from 4.77% in July. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.74% in August, down 16 bps from 4.9% in July. This report contains no data on ARM mortgages due to insufficient sample size.


Largest Servicers Get Low Scores in HAMP Audits

In Treasury’s latest report card on the Home Affordable Modification Program (HAMP), JPMorgan Chase, Wells Fargo, and Bank of America were called out by name as receiving sub-par grades in complying with the program’s guidelines for reaching out to delinquent borrowers and considering them for a HAMP modification.

“Non-compliance rates for both Wells Fargo and JPMorgan Chase were above the average and resulted in requiring the servicers to make changes to their solicitation and eligibility processes,” Treasury said in the report, adding that further evaluations have been conducted to ensure the companies are making the mandated changes.

S&P: $460B Shadow Inventory Will Take 41 Months to Clear

It's no secret that the volume of distressed residential properties is weighing heavy on U.S. housing markets and prolonging any meaningful recovery. Of even greater concern is the industry's growing backlog of homes that need to be liquidated and resold but have yet to make their way to the market. Standard & Poor's has just released a new report in which it estimates that the principal balance of this shadow inventory now stands at $460 billion and will take the industry about 41 months to clear.

FDIC in the News

The statement of Sheila C. Bair, Chairman, Federal Deposit Insurance Corporation on Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate; 538 Dirksen Senate Office Building, delivered this morning. September 30, 2010.  

.P. Morgan Chase to Freeze Foreclosures over Flawed Paperwork

JPMorgan Chase announced yesterday that it will freeze foreclosures in about half the country because of flawed paperwork, the Washington Post reported today. The bank's decision will affect 56,000 borrowers in 23 states where allegations of forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions. Officials at Fitch Ratings said that the "defects" found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said that it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation's largest lenders. The paperwork problems at J.P. Morgan mirror those uncovered last week at another large mortgage lender, Ally Financial. Both firms are investigating whether foreclosure files were improperly assembled, and whether their employees failed to review the documents even as they signed off on them