Friday, November 25, 2011

Refinance Program for Underwater Borrowers

Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.

Refinance applications and appraisal complications are holding up home sale closings, according to a HousingPulse survey released Monday. The report states that the normal timeline for a closing is about 30 days. That timeline has been extended to between 45 and 60 days. However, the delay is even more exacerbated among short sales and sales of foreclosed homes - which according to the survey made up 44.4 percent of the market in September.

Share Enjoy ends 11/30
California Restricts Use Of Consumer Credit Reports For Employment Purposes


DECISION BELOW: 619 F.3d 823

The Fair Housing Act makes it unlawful "[t]o refuse to sell or rent after the making of a bona fide offer ... or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin." 42 U.S.C. § 3604(a). Respondents are owners of rental properties who argue that Petitioners violated the Fair Housing Act by "aggressively" enforcing the City of Saint Paul's housing code. According to Respondents, because a disproportionate number of renters are African--American, and Respondents rent to many African--Americans, requiring them to meet the housing code will increase their costs and decrease the number of units they make available to rent to African-American tenants. Reversing the district court's grant of summary judgment for Petitioners, the Eighth Circuit held that Respondents should be allowed to proceed to trial because they presented sufficient evidence of a "disparate impact" on African-Americans.

The following are the questions presented:

1. Are disparate impact claims cognizable under the Fair Housing Act?

2. If such claims are cognizable, should they be analyzed under the burden shifting approach used by three circuits, under the balancing test used by four circuits, under a hybrid approach used by two circuits, or by some other test?

CERT. GRANTED 11/7/2011

From Forbes:
The U.S. Supreme Court has agreed to decide whether aggressive housing-code enforcement in the City of Saint Paul amounts to racial discrimination.

A couple of articles on HUD's view:

In a victory for creditor rights, the Michigan Supreme Court overturned a Court of Appeals decision which had previously held that MERS had no statutory authority to foreclose a mortgage by advertisement. In reversing the court of appeals, the justices held that the lower court ruling was inconsistent with well established legal principals and case law in Michigan. Specifically, the Court stated that, although MERS did not own an interest in the underlying Note, "MERS' contractual obligations as a mortgagee were dependent upon whether the mortgagor met the obligation to pay the indebtedness which the mortgage secured." Furthermore, the Court held that the Legislature's use of the phrase "interest in the indebtedness" to denote a category of parties entitled to foreclose indicated the intent to include mortgagees of record.

Articles of Interest

occupy foreclosures--I donot support this!!!

Atty Gen Foreclosure gate

CA Prop 8 Sup Ct Decision

What’s Involved in Filing for Bankruptcy?

If you owe more money today than, you did yesterday and you cannot pay your bills on time, you need to realize you are going in the wrong direction with your finances.

If you do not have enough money to pay that debt you have to find another way to deal with it. 

If your income is insufficient to cover your debts you either need more income or less debt, or both. Bankruptcy won’t help you make more money but it can discharge some types of debt.

You should make a list of the items you can live without, and remove them from your budget. Take a hard look at your expenses -determine where your money goes and you can eliminate  money that you spend on impulse or frivolous items.

 Life without debt is a goal you can achieve through Chapter 7 bankruptcy.

Come  see me today for a free consultation!  Weekend and Evening Appointments no need to miss work!
Call 727-410-2705 now.

Past Due Mortgages = 6,298,000

There were 6,298,000 mortgages going unpaid in the United States as of the end of October, according to Lender Processing Services (LPS). It's a daunting number, but the data show that it's actually been on a fairly steady decline for nearly two years now. At the start of 2011, the total number of non-current mortgages in the U.S. stood at 6,870,000. In January 2010, it was 8,118,000. LPS' report indicates mortgage delinquencies are declining while the nation's foreclosure inventory is growing.

Distressed Homeowner Program Mainly Benefited Three States

Almost half the homeowners aided by the Emergency Homeowners' Loan Program are in Pennsylvania, Maryland and Connecticut, based on preliminary figures from the Department of Housing and Urban Development.

Fewer than 12,000 applicants were approved before the program expired, short of the 30,000 target.
Funds were allotted for 32 states and Puerto Rico based on population and unemployment

HUD new rule

The U.S. Department of Housing and Urban Development recently issued aproposed rule to establish a uniform standard of liability for facially neutral housing practices that have a discriminatory effect in supposed violation of the Fair Housing Act.

Under the proposed rule, liability for "discriminatory effects" or "disparate impact discrimination" under the FHA would be determined by a burden-shifting approach. That is:

(1) the plaintiff or complainant first must bear the burden of proving its prima facie case of either disparate impact or perpetuation of segregation;

(2) the burden then shifts to the defendant or respondent to prove that the challenged practice or policy has a necessary and manifest relationship to one or more of the defendant's or respondent's legitimate, nondiscriminatory interests; and

(3) if the defendant or respondent satisfies its burden, the plaintiff or complainant may still establish liability by demonstrating that these legitimate nondiscriminatory interests could be served by a policy or decision that produces a less discriminatory effect.

According to HUD, neither HUD nor any federal court has ever determined that liability under the Fair Housing Act requires a finding of discriminatory intent, and "[i]t is thus well established that liability under the Fair Housing Act can arise where a housing practice is intentionally discriminatory or where it has a discriminatory effect."

However, there has been some variation in the application of the discriminatory effects standard. HUD uses the three-step burden-shifting approach described above, as do many federal courts of appeals. On the other hand, some courts apply a multi-factor balancing test, other courts apply a hybrid between the two, and one court applies a different test for public and private defendants. The proposed rule would standardize the three-step burden-shifting approach.

Another source of variation is in the application of the burden-shifting test. If the defendant or respondent satisfies its burden to justify its challenged practice as having a necessary and manifest relationship with a legitimate nondiscriminatory interest, courts and HUD administrative law judges have differed as to which party bears the burden of proving whether a less discriminatory alternative to the challenged practice exists.

The majority of federal courts of appeals that use a burden-shifting approach place this burden on the plaintiff, analogizing to Title VII's burden-shifting framework. However, other federal courts have kept the burden with the defendant. HUD has, at times, placed this burden of proving a less discriminatory alternative on the respondent and, at other times, on the complainant. The proposed rule would place the burden of rebuttal on the plaintiff or complainant.

The purpose of HUD's proposed rule is to establish uniform standards for determining when a housing practice with a discriminatory effect violates the Fair Housing Act.

Comments are due 60 days from the date of publication of the proposed rule in the Federal Register, which is expected shortly.

of Interest

of Interest

Living Paycheck to Paycheck?

The problem is that when you are already living paycheck to paycheck, it’s difficult, if not impossible to find the extra income to pay the loan back, forcing you to re-borrow over and over again.    Break the Cycle and come see me today for a free consultation.


Bk Court slows down Foreclosures

Appeals court decision allows stripping of second mortgages

Foreclosed Houses =Pot Houses,0,574959.story

Banks Offer Payday style loans

Bankruptcy Case Update

In re Reed, 2011 WL 3801859 (Bank. D.Or., Aug. 9, 2011) (Perris)

In the Ninth Circuit, when an above-median income Chapter 13 debtor has no (or negative) projected disposable income as calculated using the mechanical approach, there is no applicable commitment period for a debtor’s Chapter 13 plan, so the plan need not last five years.

MERS- Michigan

The Michigan Supreme Court recently held that MERS, as an "undisputed record holder of a mortgage," has statutory authority to foreclose. (Our prior update regarding the appellate court's opinion in this matter, which the Michigan Supreme Court now reversed, is below.)

A borrower obtained a mortgage loan that provided for rights of foreclosure by the designated Mortgagee, MERS. MERS foreclosed on the property by advertisement, and quitclaimed it to successor lender ("Plaintiff"). The borrower challenged the foreclosure, on the grounds that MERS did not have statutory authority to foreclose under Michigan law.

As you may recall, Michigan law allows a party to foreclose a mortgage by advertisement if, among other things, that party owns an interest in the indebtedness secured by the mortgage. See MCL 600.3204(d)(1).

The lower court rejected the borrower's argument, and borrower appealed.

A Michigan Court of Appeals overruled the lower court's decision, holding that MERS "only held an interest in the property as security for the note, not an interest in the note itself." Accordingly, the Court of Appeals held that MERS did not have authority to foreclose.

The Michigan Supreme Court reversed the Court of Appeals, holding that MERS held an interest in the indebtedness, and therefore had the authority to foreclose.

In so doing, the Court noted that the interest in the indebtedness held by MERS "does not equate to an ownership in the interest in the Note."

Instead, the Court found that "MERS owned a security lien on the properties, the continued existence of which was contingent upon the satisfaction of the indebtedness." Because MERS had an interest in the indebtedness, the Court held that MERS was authorized to foreclose under Michigan law.

The Court further explained that it found no indication that the Michigan Legislature intended to "establish a new legal framework in which an undisputed record holder of a Mortgage, such as MERS, no longer possesses the statutory authority to foreclose." Instead, the Court held that the Legislature's use of the phrase "interest in the indebtedness" includes mortgagees of record, as well as owners and servicers of the debt.

Glarum Revised Decision

The revised Glarum decision that addressed the issue of how an AOI can be authenticated and admitted into evidence when the AOI is based upon business records from a prior servicer. The original decision implied that the affiant must have personal knowledge of how the payment information is entered into the servicer’s system in order to execute the affidavit. This new decision was just release last week. Look specifically at the footnotes for clarification on the issue.

The Illinois Appellate Court for the First District recently confirmed that an attempt to rescind a mortgage loan made more than three years after the borrowers received the mortgage was untimely, and held that the borrower's earlier alleged attempt at rescission within the three-year period was inadequate, as it was not a written communication that clearly stated that the borrower was rescinding the loan.

A copy of the opinion is available at:

The borrowers defaulted on their mortgage loan, and the investor instituted a foreclosure action. In the course of settlement negotiations, the borrowers frequently alleged TILA violations, and threatened to rescind the subject Note and Mortgage. In one letter, the borrowers included an unfiled counterclaim, which stated that "[t]he borrowers, by the filing of this action, elect to rescind the subject transaction." The borrowers provided the investor's counsel with this unfiled counterclaim within three years of receiving their mortgage.

The borrowers filed their counterclaim "exactly three years and one day" after they entered into the loan agreement. In addition to attempting to rescind the loan, the borrowers' counterclaim sought damages under TILA.

The lower court dismissed the counterclaim on the basis that it was untimely.

The borrowers appealed, contending among other things that (1) that their election to rescind was timely; and (2) even if it was not, the election should survive under a "right of rescission in recoupment under state Law."

As you may recall, TILA provides that "[a]n obligor's right of rescission shall expire three years after the date of the consummation of the transaction." 15 U.S.C. Sec. 1635(f) (2006). TILA's implementing regulation provides that "[t]o exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram, or other means of written communications." 12 C.F.R. Sec. 226.23(a)(2) (2006).

The Court began its analysis by noting that the Supreme Court held that TILA "completely extinguish[es] the right of rescission at the end of the three year period." Beach v. Ocwen Federal Bank, 523 U.S. 410, 412-14 (1998).

Finding that holding unambiguous, the Court turned its attention to the manner in which a borrower must provide notice to the creditor under TILA, which it found to be an issue of first impression in Illinois. Based on the plain language of TILA and its implementing regulation, the Court held that TILA "requires that the written communication clearly state that the borrower is rescinding the mortgage in the present; it nowhere speaks of merely notifying the creditor of an intention to rescind at some unspecified point in the future."

Under the facts at issue here, the Court observed that none of the borrowers' communications contained an unqualified statement of the borrowers' intention to rescind the loan. In particular, the borrowers' counterclaim stated that the borrowers' intended to rescind the loan "by the filing of this counterclaim."

However, the counterclaim was not timely filed. Therefore, the Court held that the borrowers "failed to rescind their loan within the three-year statute of repose" imposed by TILA.

The Court next examined the borrowers' contention that they should be allowed to proceed under a "defense in recoupment" per Illinois law. The Court found that a recent decision held that "Illinois law.does not authorize an action in recoupment in defense of foreclosure actions brought outside of the three-year requisite period." Wells Fargo Bank, N.A. v. Terry, 401 Ill App 3d 18 (2010) ("Terry").

In Terry, the court held that under Illinois law, the right of rescission would only survive the expiration of the three-year period if the relevant portion of TILA were a statute of limitations. Id. at 21.

However, the U.S. Supreme Court in Beach v. Ocwen held that TILA is a statute of repose. See Beach v. Ocwen, 523 U.S. at 417. Therefore, the Court held that the borrowers' argument failed, and their rescission claim was properly dismissed.

Check Your Child's Driver's License Record

Lay Off Rights

For a business with 50 to 99 employees, the federal Worker Adjustment and Retraining Notifications Act mandates notification of layoffs constituting at least 33 percent of the staff. The act provides a 90-day notice period.

Consumer WARNING

Some fraudsters attempted to disguise themselves as government agencies by displaying government seals or adopting names similar to a government agency. They promise to help borrowers modify their loans through the Home Affordable Modification Program (HAMP).

SIGTARP warns homeowners to seek modifications through their servicers or contact a HUD-approved housing counselor at 1-888-995-HOPE (4673).

Consumer Warning

Some fraudsters attempted to disguise themselves as government agencies by displaying government seals or adopting names similar to a government agency. They promise to help borrowers modify their loans through the Home Affordable Modification Program (HAMP).

SIGTARP warns homeowners to seek modifications through their servicers or contact a HUD-approved housing counselor at 1-888-995-HOPE (4673).

Reaffirmation Agreements

A reaffirmation agreement is a brand new legal contract that revives your personal liability on the mortgage note – a liability that will otherwise be wiped out when you receive your discharge in your bankruptcy case.

What this means is  if sometime down the road, say, 2 or 5 or 10 years from now, you can no longer afford to make your mortgage payments, your lender would not only be able to foreclose and take your home, but the mortgage company can also file a lawsuit against you for the deficiency from the foreclosure sale (ie, the difference between what you owe on the mortgage loan and the amount the property sold for at the foreclosure sale).  For example, if you owe $200,000 on your mortgage loan, and your home is worth only $150,000 at the time of the foreclosure sale, then if you sign a reaffirmation agreement now, you could legally owe your lender $50,000 even though you no longer own your home.

Your lender will give you reasos to try to get you to sign the reaffirmation agreement which will certainly sound enticing: start receiving monthly billing statements again, reestablish automatic debit payments, and  have your positive payment history reported to the credit reporting agencies.

But you have to ask yourself whether those are nearly good enough reasons to put yourself back on the hook for a liability of hundreds of thousands of dollars in the future?   Just keep making your mortgage payments and comply with all the other terms in your mortgage loan documents (property taxes, insurance, etc), and if you have any problems with your lender, then come talk to us.

Now, if your lender is willing to re-negotiate the loan, lower the interest or the principal owed, or somehow entice you into an offer you cannot refuse, then we may be willing to talk about it.

Note: This does not apply to car loans.  You must reaffirm car loans to keep the vehicle.  Ride through  provisions no longer apply to vehicles.

Bankruptcy Case Law

In re Dumont, 383 B.R. 481, 489 (9th Cir. BAP 2008)

“Ride through” option under pre-BAPCPA law was eliminated in 2005. However, “if a debtor is in compliance with sections 521(a)(6) or 362(h)(1) and (2), then section 521(d) has no effect, and enforcing an ipso facto default clause is still barred by the Code.”

In re Bennett, 298 F.3d 1059 (9th Cir. 2002)

Absent a valid reaffirmation agreement, an agreement to repay a discharged debt is unenforceable under section 524(a)(2), regardless of California law to the contrary

Southern District Flordia Effective 12/1/11

Single Point of Contact and Reviews

The Federal Reserve says all servicers have instituted policies to end dual-tracking and provide borrowers with a single point of contact. Mortgage servicers under the OCC’s jurisdiction include: Aurora Bank, Bank of America, Citibank, EverBank, HSBC, JPMorgan Chase, MetLife Bank, OneWest Bank, PNC, Sovereign Bank, U.S. Bank, and Wells Fargo.
The Federal Reserve has supervisory responsibility over the two other servicers subject to the April regulatory consent orders – Ally Financial and SunTrust.

The independent consultants for each servicer are:

• AllonHill for Aurora Bank

• Clayton Services for EverBank

• Deloitte & Touche for JPMorgan Chase

• Ernst & Young for HSBC and MetLife

• Navigant Consulting for OneWest PricewaterhouseCoopers for Citibank and US Bank

• Promontory Financial Group for BofA, PNC, and Wells Fargo

• Treliant Risk Advisors for Sovereign Bank

• The engagement letters describe how the independent consultants will conduct their file reviews and claims processes to identify borrowers who suffered financial injury as a result of procedural deficiencies.

• The letters include language stipulating that consultants will take direction from the OCC and specifically prohibiting servicers from overseeing, directing, or supervising the reviews. The OCC says it is working to ensure a consistent process for all servicers.

Principal Write Downs Coming?

Bank representatives and government officials are working on a broad settlement of most state and federal foreclosure-practices investigations that could move forward without the participation of California, long considered a key to any deal, the Wall Street Journal reported. The dollar value of the settlement would include the value of principal write-downs, interest-rate reductions and other benefits to homeowners as well as cash penalties.
Bank representatives and government officials are working on a broad settlement of most state and federal foreclosure-practices investigations that could move forward without the participation of California, long considered a key to any deal, the Wall Street Journal reported. The dollar value of the settlement would include the value of principal write-downs, interest-rate reductions and other benefits to homeowners as well as cash penalties.

Debt Card Increases Under Justice Dept Review

The U.S. Justice Department is conducting an antitrust review of statements and actions by banks and their trade associations about imposing fees on customers who use debit cards. The Federal Reserve, acting on a provision of the 2010 Dodd-Frank Act, imposed rules on Oct. 1 limiting fees card networks charge merchants to 21 cents per transaction, about half what retailers had been paying. In response, lenders including Bank of America and Wells Fargo considered new charges for debit customers to make up some of the $8 billion the largest banks may lose under the rules. House Democrats who last month asked Attorney General Eric Holder to investigate whether U.S. banks and their trade groups colluded on whether to impose fees in response to caps on what they can charge for using debit cards.

Happy Thanksgiving