Friday, April 22, 2011

Democratic Faction Unveils Plan to Retain 30-Year Mortgage Post-GSEs

http://ndc.crowley.house.gov/images/stories/Events/newdemhousingreformprinciples.pdf

The New Democratic Coalition has added the nation's housing finance system to its list of things to "modernize." They've outlined principles for following through with the wind-down of Fannie and Freddie while maintaining a limited government role to ensure access to the 30-year fixed-rate mortgage. But the debate is intense over whether the 30-year mortgage should stick around. With or without it, one research group says the numbers prove government guarantees aren't necessary to entice private investors.

Wednesday, April 20, 2011

Maurice, Louisiana Couple Convicted of Perjury Charges Related to Bankruptcy Assets

"Thad Corey Theall, 52, and Theresa Theall, 51, both of Maurice, La., have been convicted by a federal jury in Lafayette, La., of perjury charges relating to bankruptcy assets, United States Attorney Stephanie A. Finley announced.

Thad and Theresa Theall were indicted in July of 2009, in a two-count indictment: count 1, concealment of bankruptcy assets false statement under penalty of perjury; and count 2, concealment of bankruptcy assets false oaths. Testimony during trial revealed that The Theall’s filed for bankruptcy on June 16, 2005, and in relation to that Bankruptcy Petition, failed to disclose information under the bankruptcy filings which were verified under penalty of perjury. This resulted in the concealment of proceeds of approximately $100,000.00 from the sale of property located on Ambassador Caffery Parkway. It was further revealed that while under oath during a meeting of creditors before the U.S. Trustee in August of 2005, The Theall’s provided false information regarding the sale of the Ambassador Caffery Parkway property to conceal the $100,000.00 proceeds. Thad Corey Theall was found guilty on both counts, and Theresa Theall was found guilty on count 1."

http://criminal-justice-online.blogspot.com/2011/04/maurice-louisiana-couple-convicted-of.html

Mortgage Fraud

FRB 2019

The Federal Rules of Bankruptcy Procedure (“FRBP”) usually generate little interest or concern among practitioners. At best, FRBP changes receive a casual perusal about the time of implementation on Dec. 1 of each year. This year, however, practitioners need to be aware of the change that is coming and give thought before implementation as to how the amended disclosure requirements may affect their clients and strategy.

Specifically, FRBP 2019 deals with disclosure of the relationships of creditors acting in concert with each other. Historically, despite the existing FRBP 2019, the general attitude that courts took was that from L. Frank Baum’s The Wizard of Oz: “Don’t worry about the man behind the curtain.” In other words, courts were not inclined to require disclosure and attorneys were not inclined to disclose.

That changed, most notably, in 2007 in the Northwest Airlines case, which is discussed in greater detail below. Several subsequent cases on this issue followed. The relatively recent rise in sales of discounted debt to parties previously uninvolved with the debtor, added to a perception of unfair strategies being utilized in bankruptcy cases.

In response, the Federal Rules Committee has proposed an amendment to FRBP 2019. The U.S. Supreme Court has until May 1, 2011, to stop the proposed amendment. Congress then has through Nov. 30, 2011, to legislatively stop or change the proposed amendment. Absent those unlikely events, the proposed amendment will go into effect Dec. 1, 2011.

Current FRBP 2019

Paraphrased, FRBP 2019 provides that in Chapter 9 or Chapter 11 cases, each “entity or committee representing more than one creditor or equity security holder” (with the exception of Official Committees defined in the Bankruptcy Code) as well as “every indenture trustee,” must file a verified statement with its name and address, “the nature and amount of the claim or interest and when acquired” (unless it was acquired more than one year before the bankruptcy filing), how the claim or interest came into existence, and the identity of the organizing parties. These initial disclosures could be viewed as just a ministerial filing with essentially “directory” information.

The balance of FRBP 2019, however, is more intrusive and alarming to entities competing in debt purchase markets. It requires disclosure of the amount paid for the bankruptcy claim, the date of acquisition and a copy of any agreement authorizing collective action. Any party failing to make these disclosures risks the court prohibiting further involvement in the bankruptcy case and invalidation of plan votes or objections.

FRBP 2019 Springs to Life in Northwest Airlines

FRBP 2019 obtained new vitality in a decision generated by the Northwest Airlines bankruptcy: (In re Northwest Airlines Corporation, 363 B.R. 701 (Bankr. S.D.N.Y. 2007)). In that case, the debtor requested that the court require additional disclosures from the “Ad Hoc Committee of Equity Security Holders.” Specifically, the debtor asked the court to order the committee to supplement its initial disclosure to include the amounts owned by individual committee members, when the claims were acquired, as well as the specific amounts paid to acquire the claims.

In its initial disclosure, the committee simply listed the number of shares it collectively held, as well as its aggregate claim. It did not, however, specify which member had which equity interests or claims, nor did it identify when the interests were acquired, the purchase price, or any disposition of the interests. Judge Allan Gropper, applied a “plain language” reading of FRBP 2019, granted the debtor’s motion and ordered full supplemental disclosure within three days.

Since then, a number courts have dealt with the FRBP 2019’s application and requirements, reaching differing conclusions. These cases include Washington Mutual, 419 B.R. 271 (Bankr. D.Del. 2009); Philadelphia Newspapers, 422 B.R. 553 (Bankr. E.D. Penn. 2010); and Premier International Holdings, 423 B.R. 58 (Bankr. D.Del. 2010). Courts taking a contrary view to Judge Gropper’s Northwest Airlines decision find the ad hoc committees are representing only themselves, and not other creditors, suggesting that full disclosure under FRBP 2019 does not apply.

The issue continues to be contentious. For example, as recently as March 30, 2011, a motion to compel compliance with FRBP 2019 was filed by the debtors in the Lehman Bros. Holdings Inc., Case No. 08-13555 (JMP) (Bankr. S.D.N.Y.) seeking disclosure of “the nature and amount of the claims or interests held by the members of the Ad Hoc Group, the time of acquisition and a recital of the pertinent facts and circumstances in connection with [the Ad Hoc Group’s attorneys’] retention ... ; or a copy of the instrument whereby [the attorneys are] empowered to act on behalf of the Ad Hoc Group.”

Economic/Policy Issues

FRBP 2019 was originally developed under the Bankruptcy Act of 1898 to deal with committees providing representation for other creditors. Large creditors later used Depression-era committees as a means to assert control over smaller creditors. Generally, that issue died a natural death due to statutory changes, but the concern that similar abuses would arise again kept FRBP 2019 in existence even with the advent of the Bankruptcy Code in 1978.

FRBP 2019 has more recently been used in response to complex financial structures of larger debtors. With a more ready market for the sale and purchase of debt and equity of financially distressed companies, parties frequently acquire the interests and claims at a discounted value.

Accordingly, a purchaser’s economic incentives may be radically different from those of the original holders. Moreover, their economic incentives may be adverse to reorganization or other more typical and traditional creditor incentives. Courts enforcing FRBP 2019 disclosures apply a plain language interpretation and the policy that transparency and disclosure assist the bankruptcy process.

Purchasers, however, take a different view. They buy in extremely competitive markets where disclosing the terms of the purchases is akin to publically disclosing trade secrets. They maintain that the amount and timing of their purchases is irrelevant. A $1 million claim purchased from the original owner for $350,000.00 is still a $1 million claim against the debtor. As long as the purchasers otherwise act within the law and do not represent any other party’s interest in the bankruptcy, they maintain that their business and strategic decisions should not be publically disclosed.

Moreover, critics contend that Rule 2019 is invoked as a litigation tactic rather than for more benign reasons. They assert that motions to enforce FRBP 2019 are brought to gain negotiating leverage by placing the claim or interest holder in a dilemma — disclose what they consider to be trade secrets or risk being excluded from further participation in the bankruptcy.

The Rules Committee Steps In

With the courts split regarding FRBP 2019’s application, and the issue arising more frequently, the Federal Rules Committee decided to address the issue: Is FRBP 2019 only applicable when a party is representing another party’s interest, or is it applicable in any situation when a group of parties in interest coalesce to form a group to represent their interests? The committee also addressed the secondary issue of whether detailed economic disclosures are necessary or desirable such that these should be mandatory as a condition of participation in a bankruptcy.

While some critics initially suggested eliminating FRBP 2019, a consensus developed that it should continue to exist but be modified to deal with its current usage.

First, the proposed modified FRBP 2019’s title has changed the reference from “Representation” to “Disclosure,” and “Represent” now has a definition. “Represent” or “represents” means to take a position before the court or to solicit votes regarding the confirmation of a plan on behalf of another.

The addition of a definition of “Disclosable Economic Interest” broadens the FRBP 2019’s scope. “Disclosable economic interest” means any claim, interest, pledge, lien, option, participation, derivative instrument, or any other right or derivative right granting the holder an economic interest that is affected by the value, acquisition, or disposition of a claim or interest.

Official Committees will not be exempt from all provisions. FRBP 2019 makes it clear that indenture trustees, agents under credit agreements, class action representatives and governmental units are excluded. Notably for debt purchasers, FRBP 2019 no longer mandates disclosure of what they consider confidential information irrelevant to their claim amount. It does this by limiting disclosure to the quarter and year of purchase, if acquired within a year before the bankruptcy.

Practical Applications

The new FRBP 2019 should, at least initially, clarify FRBP 2019’s application and meaning over which the courts are now split. It makes clear that FRBP 2019 is really about disclosure and not simply applicable to certain kinds of representation. That disclosure, however, is now more limited and generalized.

To the extent FRBP 2019 was used as a tactic to force a creditor to disclose sensitive market information, it will no longer be useful for that purpose. It is still possible, however, to compel that disclosure, but it will have to be done through standard discovery rather than by invoking FRBP 2019.

Lawyers advising interest purchasers need only be concerned with disclosure that can be obtained through normal discovery rather than contending with a rule that some courts interpreted to mandate disclosure. On the other side, FRBP 2019 does require interest holders to specify the nature of the holdings and gives some added transparency to parties’ interest in a bankruptcy case.

The new definition of disclosable economic interest includes instruments not conceived when the original rule was promulgated. It also clears up an ambiguity: whether a lawyer advising in a case, but not appearing in court, must file a disclosure. The answer under the new FRBP 2019 is “no.”

Conclusion

FBP 2019’s modification should end or at least reduce FRBP 2019 litigation. While parties’ required disclosures will be broader in the sense of the information that must be disclosed, the sensitive market-based elements will now be protected from disclosure, except in unusual circumstances.

Hopefully FRBP 2019’s new scope, specificity and clarity, will permit lawyers and their clients to better assess their risk in a bankruptcy proceeding while, simultaneously, providing more transparency.



--By Timothy F. Nixon, Godfrey & Kahn SC

Wells Fargo In Federal Court

1:11-cv-00312-LY Yuen et al v. Wells Fargo Bank, N.A. et al ---txwd


6:11-cv-00639-JA-GJK Christy v. Wells Fargo Bank, N.A. et al – mdFL

2:11-cv-00509-DSC WELLS FARGO BANK, N.A. v. BORKOWSKI et al ---pawd

Articles for lawyers

http://www.lawjobs.com/newsandviews/LawArticle.jsp?hubtype=Tips&id=1202490666884&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110420&kw=The%20Attributes%20of%20Winning%20Lawyers&slreturn=1&hbxlogin=1



http://www.law.com/jsp/lawtechnologynews/PubArticleLTN.jsp?id=1202490637974


http://www.newsweek.com/2011/04/17/dead-suit-walking.html

South Florida Trustee To Plead Guilty To $16M Fraud

Longtime South Florida bankruptcy trustee Marika Tolz will plead guilty to federal charges that she misappropriated more than $16 million from cases she was overseeing and lost — or possibly pocketed — at least $2.4 million, her attorneys said Tuesday.


Tolz will cop to one count of conspiracy to commit wire fraud on May 5, admitting she wrote unauthorized checks from bankruptcy accounts to enrich herself and cover money misappropriated from other accounts, according to her attorneys.

Tolz expects to repay $2.4 million to parties involved in the cases she handled, according to co-counsel Benedict P. Kuehne.

U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer said in a statement. "Robbing from one client to pay another is no way to do business, and will surely end in criminal prosecution and incarceration."

Tolz is the second South Florida trustee charged with fraud in as many years. Lewis B. Freeman, formerly of Lewis B. Freeman & Partners Inc., was sentenced to an eight-year prison sentence in July for allegedly stealing more than $2.6 million.

The case is USA v. Tolz, case number 1:11-cr-20160, in the U.S. District Court for the Southern District of Florida.

The state case is the State of Florida v. Marika Tolz in the 17th Judicial Circuit of Florida. A case number was not immediately available.

IBM, Represented by Goodwin Procter, Wins Rights To Patents on Employee's Invention

This is just so wrong!  She worked there part time developed it on  her own time and patented when she had left IBM.   It was not like she was some over paid executive!


Can an employer claim the right to all inventions devised by its workers, even in their spare time? It sure can, according to a recent ruling by a Manhattan federal judge in a case that involved patents on methods to link electronic files to pictures.

http://www.law360.com/articles/239912/judge-dismisses-ip-suit-after-awarding-ibm-patents


http://agreements.realdealdocs.com/Employee-Retention-Agreement/IBM-SUPPLEMENTAL-EXECUTIVE-RETENTION-PLA-1006044/


http://www.webguild.org/presentations/ibmsocialmedia.pdf


http://www.jpo.go.jp/iken/pdf/shinshoku_keka/dantai_16-1.pdf


http://news.cnet.com/Telecommutings-patently-obvious-gains/2010-1030_3-6150394.html


http://news.cnet.com/Telecommutings-patently-obvious-gains/2010-1030_3-6150394.html

See the story:


A federal judge in New York on Friday tossed a lawsuit by the inventor of a graphical user interface that was developed while she worked at IBM Corp., ruling that Big Blue owned the patents under its employee agreement.

U.S. District Court Judge John G. Koeltl found that IBM's intellectual property agreement with the inventor, Michelle Baker, who worked part-time at a company lab, gives ownership of the patents to IBM instead of to her two companies that were assigned patent rights, Picture Patents LLC and Intellinet Inc.

The decision effectively dismantled Baker's patent infringement suit against nine companies, including the National Basketball Association and clothing retailer Aeropostale Inc., which she claims operated websites that allegedly infringe on her graphical user interface.

"The IP agreement clearly applies to the invention and the corresponding patents," Judge Koeltl wrote in his opinion. "Therefore, IBM owned the patents ... and Baker had no interest to assign to Intellinet or Picture Patents."

Baker was a Columbia University doctoral student when she started part-time work at IBM's T.J. Watson Lab in 1990. She devised the interface in 1991 as a solution to the problem of making computer systems accessible through pictures.

After leaving IBM in 1993, she continued to develop her technology and filed three patent applications between 1994 and 1999, eventually assigning them to Picture Patents.

Baker argued that the invention was not related to her work at IBM, putting it outside of the intellectual property agreement.

"The IP agreement, by its plain terms, applies to all such inventions, even if they do not relate to Baker's actual assigned work," Judge Koeltl ruled.

The judge's decision removes Picture Patents' standing to bring patent infringement claims against the companies named in Baker's suit including Dick's Sporting Goods Inc., Charlotte Russe Inc., GSI Commerce Solutions Inc. and subsidiaries of the NBA and Major League Baseball.

In 2007, Baker filed her first complaint against the companies, which argued that IBM was the true owner of the patents. Her fourth amended complaint added IBM to the suit and sought the court to declare Picture Patents the owner of the patents.

IBM, in response, brought seven counterclaims against Picture Patents and moved for summary judgment on Baker's declaratory judgment claims regarding the ownership of the patents.

An attorney representing Picture Patents was not available for comment Monday.

The patents-in-suit are U.S. Patent Numbers 6,278,455; 5,715,416; and 6,002,401.

Picture Patents is represented by Alston & Bird LLP.
IBM is represented by Goodwin Procter LLP.
Law firms representing the companies accused of patent infringement include Cooley LLP and Morgan Lewis & Bockius LLP.
The case is Picture Patents LLC v. Aeropostale Inc. et al., case number 1:07-cv-05567, in U.S. District Court for the Southern District of New York.

American Electric Power v. Connecticut.

http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202490642915


Seven of the eight justices participating in oral arguments in the case of American Electric Power v. Connecticut offered comments or questions that appeared critical of the scope or concept of a suit against major utilities that claims their output of greenhouse gases is a public nuisance under federal common law. The eighth justice, Clarence Thomas, asked no questions as usual. And the ninth, Justice Sonia Sotomayor, did not participate because she heard the case at an earlier stage as a circuit court judge. The overwhelming tenor of the justices' questions Tuesday was skepticism that courts should be deciding emissions standards and other possible remedies for climate change, instead of Congress and the Environmental Protection Agency. After staying out of the controversy during the Bush administration, the EPA under President Barack Obama has begun the rulemaking process for limits on greenhouse gases.

FRB Issues Proposed Rule on Dodd-Frank "Ability to Repay," "Qualified Mortgage," PPPs

The Federal Reserve Board issued a proposed rule to implement the Dodd-Frank Act amendments to TILA that would require creditors to determine a consumer's ability to repay closed-end mortgage loans generally, and would establish minimum mortgage underwriting standards.



The FRB is also soliciting comment on two alternative approaches for defining a "qualified mortgage."

The FRB's notice is available at:


http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110419b1.pdf

As you may recall, Regulation Z currently prohibits a creditor from making a "higher-priced" mortgage loan without regard to the consumer's ability to repay the loan. The Dodd-Frank Act expanded the scope of the ability-to-repay requirement to cover any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan). The Dodd-Frank Act also placed limits on prepayment penalties.

The proposal would apply to all consumer mortgages (except home equity lines of credit, timeshare plans, reverse mortgages, or temporary loans), and provides the following four options for complying with the ability-to-repay requirement:

(1) A creditor can meet the general ability-to-repay standard by considering and verifying certain specified underwriting factors, such as the consumer's income or assets, debt obligations, and credit history.
Underwriting the payment for an adjustable-rate mortgage loan is to be based on the fully indexed rate;

(2) A creditor can make a "qualified mortgage" (which provides the creditor with special protection from liability provided the loan does not have certain features such as negative amortization, the fees are within specified limits, and the creditor underwrites the mortgage payment using the maximum interest rate in the first five years). Importantly, the FRB is soliciting comment on two alternative approaches for defining a "qualified mortgage."

(3) A creditor operating predominantly in rural or underserved areas can make a balloon-payment qualified mortgage. This option is meant to preserve access to credit for consumers located in rural or underserved areas where banks originate balloon loans to hedge against interest rate risk for loans held in portfolio.

(4) A creditor can refinance a "non-standard mortgage" with risky features into a more stable "standard mortgage" with a lower monthly payment. This option is meant to preserve access to streamlined refinancings.

The proposal would also implement the Dodd-Frank Act's limits on prepayment penalties. In addition, the proposal would require creditors to retain evidence of compliance with this rule for three years after a loan is consummated.


http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110419b1.pdf

Under Dodd-Frank, the proposal would provide four options for complying with the ability-to-repay requirement.



http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110419a1.pdf

First, a creditor can meet the general ability-to-repay standard by considering and verifying specified underwriting factors, such as the consumer’s income or assets.



Second, a creditor can make a “qualified mortgage,” which gives the creditor special protection from liability provided the loan does not have certain features, such as negative amortization; the fees are within specified limits; and the creditor underwrites the mortgage payment using the maximum interest rate in the first five years.


Regulators are currently soliciting comment on alternative approaches for defining a “qualified mortgage.”


Third, a creditor operating predominantly in rural or underserved areas can make a balloon-payment qualified mortgage.


a creditor can refinance a “non-standard mortgage” with risky features into a more stable “standard mortgage” with a lower monthly payment.

The FRB reminds that general rulemaking authority for TILA is scheduled to transfer to the Consumer Financial Protection Bureau (or, "CFPB") on July 21, 2011. Accordingly, the FRB states that this rulemaking will become a proposal of the CFPB and will not be finalized by the FRB.







The comments deadline is July 22, 2011.

Criminal Justice Online: Maurice, Louisiana Couple Convicted of Perjury Charges Related to Bankruptcy Assets

Criminal Justice Online: Maurice, Louisiana Couple Convicted of Perjury Charges Related to Bankruptcy Assets

Tuesday, April 19, 2011

Lien Stripping

Bankruptcy -- Liens -- Avoidance -- Liens securing allowed claims -- A Chapter 13 debtor who is ineligible to receive a Chapter 13 discharge may not strip down or strip off the lien of wholly unsecured mortgage in a Chapter 13 plan -- Chapter 13 debtors were ineligible to receive Chapter 13 discharge, because debtors had obtained Chapter 7 discharges within four years of filing their Chapter 13 petitions -- On petition date, junior creditors had allowed secured claims against debtors' bankruptcy estates in form of mortgage liens encumbering debtors' property, even though debtors' personal obligations to creditors were discharged in prior Chapter 7 cases, because creditors' mortgage liens survived debtors' Chapter 7 discharges -- Junior liens could not be modified using 11 U.S.C. Section 506(d) of Bankruptcy Code, which provides that to extent that lien secures a claim against debtor that is not an allowed secured claim, such lien is void, because statute is not self-executing, and may not be used to strip down or strip off liens except in conjunction with another section of Code -- In Chapter 13 case at issue, Section 1325 provides the mechanism for lien stripping, but juniors liens may not be stripped off under that section because debtors are not eligible to receive a discharge

Reported at 22 Fla. L. Weekly Fed. B650a

Program for New Mommy Lawyers

http://www.lawjobs.com/newsandviews/LawArticle.jsp?hubtype=News&id=1202490232341&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110419&kw=O%27Melveny%20Program%20Helps%20New%20Parents%20Return%20to%20Firm&slreturn=1&hbxlogin=1

Wells Fargo Tax Shelter Scam

The Federal Circuit has upheld a ruling that Wells Fargo, with assistance from its lawyers at King & Spalding, engaged in an abusive tax shelter when it tried to claim $115 million in tax deductions using a "SILO" leasing transaction.

Facebook the Suit is still going!

http://65.17.245.43/webfiles/Winklevoss%20Petition%20For%20Rehearing%20En%20Banc.pdf
Winklevoss' Brothers are such assholes!  Mark Zuckerberg  looks like a nice guy by comparison and according to the movie he screwed over his best friend.

ConnectU founders claim Facebook, during mediation, led them to believe the company stock they would acquire was worth about $35.90 per share, and that they only learned later that Facebook had obtained an expert valuation of $8.88 per share. In rejecting the fraud claims, the panel noted the ConnectU founders entered mediation with a bevy of lawyers and a financial adviser at their sides. They made a deal that "appears quite favorable in light of recent market activity," Chief Judge Alex Kozinski wrote, pointing out that investors recently have valued Facebook at $50 billion — more than three times the value at the time the deal was struck.

Resilence Training

http://thecareerist.typepad.com/thecareerist/2011/04/stop-whining-youre-in-the-army-now.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+typepad%2Fpcnu+%28The+Careerist%29

http://hbr.org/2011/04/building-resilience/ar/1

http://www.ppc.sas.upenn.edu/prpsum.htm

http://csf.army.mil/

http://www.sas.upenn.edu/lps/graduate/mapp/

People may ask for your opinion, but that doesn't mean that they actually want to hear what you are saying

http://www.mortgageorb.com/e107_plugins/content/content.php?content.8379

For certain people who will remain nameless:

So true!!!  Please stop asking for my opinion- you don't want it, you do the exact opposite of what  I suggest.

Do not give me suggestions and comment forms  to fill out, I am not going to do it.  If you don't listen when you've cornered me and made me give you my opinion face to face- why would I every bother to write it down and wasting my time?

Ginnie Mae Update

The Government National Mortgage Association (Ginnie Mae), which provides a guaranty on mortgage-backed securities (MBS) consisting of loans insured by the Federal Housing Administration or backed by Veterans Affairs, has announced a new policy regarding the pooling of past-due loans.


http://www.ginniemae.gov/apm/apm_pdf/11-04.pdf

For single-family securities with an issue date of June 1, 2011, and after, servicers can no longer package loans into securities backed by Ginnie Mae that are delinquent by more than the monthly installment of principal and interest that is due on the issue date.


Prior to this new policy, servicers could pool delinquent loans – even mortgages more than 60 days late – into securities backed by the government agency. The agency says the new requirements will ensure loans within its bonds are of high quality and will continue to perform well over time.

In addition, effective September 1, Ginnie Mae will require issuers to provide additional information on loans submitted for collateralization.


http://www.ginniemae.gov/apm/apm_pdf/11-05.pdf
 
GinnieNET will collect the information on the import file layout or on the paper form of the schedule of pooled mortgages.


Issuers must supply up to eight new data elements on single-family forward mortgages, which include:

combined loan-to-value (LTV) ratio percent

total debt expense ratio percent

refinance type

last paid installment due date

pre-modification first installment due date

pre-modification original principal balance amount

pre-modification interest rate percent

pre-modification loan maturity date

The government agency says the new requirements will give the industry “more relevant information” while supporting its commitment to provide greater transparency on the underlying collateral of Ginnie Mae securities.

Ginnie Mae says its securities are the only MBS to carry the full faith and credit guaranty of the United States government, which means that even in difficult times an investment in Ginnie Mae MBS is one of the safest an investor can make.

S&P Cites Fannie and Freddie as Grounds for Negative Outlook on U.S.

http://www2.standardandpoors.com/spf/pdf/events/UnitedStatesofAmericaRatingAffirmedOutlookRevisedToNegative.pdf

Prevention and Sound Mortgage Servicing Act

Rep. Maxine Waters (D-California) has revised a bill she’s brought to the table several times before that would compel lenders to engage in what she says are “reasonable loss mitigation activities” for all delinquent homeowners.

“In light of the slap of the wrist our regulators are preparing to give 14 servicers who admitted to breaking the law, legislation to require loss mitigation prior to foreclosure is needed now more than ever before,” said Rep. Waters. “It’s the only way to protect homeowners and to prevent foreclosures.”


Waters has reintroduced an updated version of the Foreclosure Prevention and Sound Mortgage Servicing Act (H.R. 1567). It’s legislation she says could be a step in the right direction for ending the foreclosure crisis and holding servicers accountable.

The bill places one entity in charge of modifying primary and secondary liens and requires principal reduction for underwater mortgages.


A spokesperson from Waters’ office explained that this “one entity” refers to the servicers/mortgagee of the first lien. For example, if a borrower has two mortgages, with the second being a subordinate lien, under Waters’ legislation, the first lien holder would have primary responsibility for modifying both loans, with the second modified in proportion with the first.




According to Waters’ office, the current protocol is that when first liens are modified, generally nothing happens to seconds; or first-lien holders will refuse to modify unless subordinate lien holders modify as well, and seconds hardly ever modify.

A copy of Waters’ revised bill has not yet been logged in the congressional tracking system. Although her latest version has since been updated, a copy of the previously introduced legislation can be viewed:
http://www.govtrack.us/congress/billtext.xpd?bill=h111-3451

Dish to Assume Leases on More Than 500 Blockbuster Stores

Dish Network Corp. plans to assume the leases on more than 500 Blockbuster Inc. stores after it completes its acquisition of the video-rental company, Dow Jones Daily Bankruptcy Review reported today.Neither company provided a specific number as to how many stores will remain open, but the new round of closings would bring that number to near or below 1,000, according to court papers. As of earlier this month, Blockbuster had either closed or initiated closings on nearly half of its stores and now has just over 1,700 locations.

 
Hopefully Main St. in Dunedin FL stays open!

Monday, April 18, 2011

US Trustee BAnkruptcy Articles of Interest

http://www.justice.gov/ust/eo/public_affairs/articles/index.htm#2011

ME File

http://www.lawjobs.com/newsandviews/LawArticle.jsp?hubtype=Tips&id=1202490095833&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110418&kw=Working%20Smart%3A%20It%27s%20All%20About%20a%20%27Me%20File%27&slreturn=1&hbxlogin=1

Does Anyone actually have one?

NACTT Articles of Interest

http://www.sacbee.com/2011/04/11/3542974/combating-foreclosures-foreclosures.html#

http://finance.fortune.cnn.com/2011/04/13/fed-says-it-will-fine-banks-for-foreclosure-mess/

http://www.mortgageorb.com/e107_plugins/content/content.php?content.8335

http://www.businessweek.com/news/2011-04-14/u-s-foreclosure-settlement-muddies-outlook-for-mortgage-relief.html

In re Gerardin

In re Gerardin, 2011 WL 1118495 (Bankr. S.D. Fla. March 11, 2011) (Mark)


A debtor who is ineligible for a Chapter 13 discharge may not strip down or strip off a lien
http://thomas.loc.gov/

Rep. Elijah E. Cummings (D-Maryland) was joined by more than 20 original co-sponsors in introducing the Preserving Homes and Communities Act of 2011

(H.R.1477).

Sen. Jack Reed (D-Rhode Island), has authored a companion bill (S.489), which has nine cosponsors in the Senate.

The lawmakers say the bills would make “major changes” to the mortgage servicing and foreclosure process including:

Requiring lenders and servicers to evaluate homeowners for modifications prior to initiating foreclosure, and to offer approved modifications to qualified homeowners.

Eliminating the “dual tracking” scenario in which borrowers are evaluated for a loan modification while foreclosure proceedings are advanced.

Requiring servicers, if they deny a modification, to prove that they actually have the legal right to foreclose.

Placing limits on the manner in which foreclosure-related fees can be charged.

Creating an appeals process for those homeowners who are denied a loan modification.
Separately, Rep. Brad Miller (D-North Carolina) and Sen. Sherrod Brown (D-Ohio) introduced bills in their respective chambers – by the name of the Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 — that they say would overhaul the mortgage servicing industry by realigning servicer incentives so that they act in the best interests of investors and homeowners.

According to a statement from the lead sponsors, their bills would:

Protect homeowners from servicer errors, miscommunications, and abusive fees.

End the rush to foreclosure and require servicers to work with homeowners to find sustainable mortgages.

Improve standards for staffing and casework by mortgage servicers.

Protect the interests of investors who buy securities backed by residential mortgages.

Reform oversight of pools of securitized mortgages.

Foreclosure Probe Talks Said to Yield Some Agreements with Banks

,
Attorneys general negotiating a settlement of a 50-state investigation of foreclosure practices have reached agreements with lenders on some terms while failing so far to reach an accord on potential monetary payments by the banks, Bloomberg News reported today. The probe was triggered by claims of faulty foreclosure practices following the housing collapse which law enforcement officials said may violate state law. An accord remains out of reach because states want principal reductions for borrowers, which is more than banks agreed to in deals reached with U.S. regulators last week, said Allison Schoenthal, a lawyer at Hogan Lovells in New York. The 14 mortgage servicing companies who reached deals with U.S. regulators agreed to conduct a review of loans that went into foreclosure in 2009 and 2010, and improve their procedures for modifying loans and seizing homes. They also agreed to stop foreclosing on homes while negotiating lower mortgage payments for borrowers.
http://www.bloomberg.com/news/print/2011-04-18/foreclosure-probe-talks-said-to-yield-some-agreement-between-states-banks.html

Bank of America and JPMorgan, also taking part in the regulator agreements were Wells Fargo & Co. (WFC), Citigroup Inc. (C), the GMAC unit of Ally Financial Inc., Aurora Bank FSB, EverBank Financial Corp., HSBC Holdings Plc, OneWest, MetLife Inc., PNC Financial Services Group Inc. (PNC), Sovereign Bank, SunTrust Banks Inc., and US Bancorp.


Bank of America, JPMorgan, San Francisco-based Wells Fargo, New York-based Citigroup and Detroit-based Ally are the five companies involved in the talks with the 50 states.

Sunday, April 17, 2011

Guide for Smart Phone Usage

http://www.nytimes.com/2011/04/17/fashion/17TEXTSIDEBAR.html?_r=1

Prayer for Mommies

“First, Lord: No tattoos. May neither Chinese symbol for truth nor Winnie-the-Pooh holding the FSU logo stain her tender haunches.




May she be Beautiful but not Damaged, for it’s the Damage that draws the creepy soccer coach’s eye, not the Beauty.



When the Crystal Meth is offered, may she remember the parents who cut her grapes in half And stick with Beer.



Guide her, protect her when crossing the street, stepping onto boats, swimming in the ocean, swimming in pools, walking near pools, standing on the subway platform, crossing 86th Street, stepping off of boats, using mall restrooms, getting on and off escalators, driving on country roads while arguing, leaning on large windows, walking in parking lots, riding Ferris wheels, roller-coasters, log flumes, or anything called “Hell Drop,” “Tower of Torture,” or “The Death Spiral Rock ‘N Zero G Roll featuring Aerosmith,” and standing on any kind of balcony ever, anywhere, at any age.



Lead her away from Acting but not all the way to Finance. Something where she can make her own hours but still feel intellectually fulfilled and get outside sometimes And not have to wear high heels. What would that be, Lord? Architecture? Midwifery? Golf course design? I’m asking You, because if I knew, I’d be doing it, Youdammit.



May she play the Drums to the fiery rhythm of her Own Heart with the sinewy strength of her Own Arms, so she need Not Lie With Drummers.



Grant her a Rough Patch from twelve to seventeen.Let her draw horses and be interested in Barbies for much too long, For childhood is short – a Tiger Flower blooming Magenta for one day – And adulthood is long and dry-humping in cars will wait.



O Lord, break the Internet forever, that she may be spared the misspelled invective of her peers And the online marketing campaign for Rape Hostel V: Girls Just Wanna Get Stabbed.



And when she one day turns on me and calls me a Bitch in front of Hollister, Give me the strength, Lord, to yank her directly into a cab in front of her friends, For I will not have that Shit. I will not have it.



And should she choose to be a Mother one day, be my eyes, Lord, that I may see her, lying on a blanket on the floor at 4:50 A.M., all-at-once exhausted, bored, and in love with the little creature whose poop is leaking up its back. “My mother did this for me once,” she will realize as she cleans feces off her baby’s neck. “My mother did this for me.” And the delayed gratitude will wash over her as it does each generation and she will make a Mental Note to call me. And she will forget. But I’ll know, because I peeped it with Your God eyes.



Amen.”



-Tina Fey



(That my friends, is what you call good writing. Pick up Tina Fey’s book Bossypants for more.)

http://melodygodfred.com/2011/04/15/a-mothers-prayer-for-its-child-by-tina-fey/