Foreclosure Case

BALLINGER v. BAY GULF CREDIT UN., 2D09-4561 (Fla.App. 2 Dist. 12-15-2010) BALLINGER v. BAY GULF CREDIT UN., 2D09-4561 (Fla.App. 2 Dist. 12-15-2010) SAMUEL W. BALLINGER, Appellant, v. BAY GULF CREDIT UNION, Appellee. Case No. 2D09-4561. District Court of Appeal of Florida, Second District. Opinion filed December 15, 2010. Appeal from the Circuit Court for Hillsborough County; Martha J. Cook, Judge. Robert A. Carr of Resolute Law Group, LLC, Tampa (withdrew after briefing); Leon A. Williamson, Jr., of Leon A. Williamson, Jr., P.A., Tampa, (substituted as counsel of record), for Appellant. Keith D. Skorewicz and Jamie L. Weatherholt of Bush Ross, P.A., Tampa, for Appellee. MORRIS, Judge. Samuel W. Ballinger appeals a final summary judgment entered in favor of Bay Gulf Credit Union. While we find no error in two of the issues raised by Ballinger, we must reverse because the verified complaint was insufficiently pleaded and, therefore, final summary judgment was improvidently entered. This case involves Bay Gulf’s actions in seeking to repossess three luxury vehicles which Ballinger financed through Bay Gulf. In Bay Gulf’s verified complaint, a Bay Gulf employee, Sharmon Lenth, stated that Lenth read everything and that the facts stated were “true to the best of my knowledge and belief.” During the course of the proceedings, Bay Gulf sought summary judgment, and although Ballinger attempted to file an affidavit in opposition to Bay Gulf’s motion for summary judgment, the trial court refused to accept the affidavit because it had not yet been filed with the trial court at the time of the summary judgment hearing. The court then rejected Ballinger’s argument that the verified complaint — standing alone — was insufficient as a matter of law to support a final summary judgment. In doing so, the court noted that the complaint “says it is verified.” We acknowledge that “[a] verified complaint may serve the same purpose as an affidavit supporting or opposing a motion for summary judgment.” Boettcher v. IMC Mortg. Co., 871 So. 2d 1047, 1049 n. 2 (Fla. 2d DCA 2004). “However, in order to be so considered, the allegations of the verified complaint must meet the requirements of the rule governing supporting and opposing affidavits.” Id. (citing Fla.R.Civ.P. 1.510(e)). Rule 1.510(e), in turn, provides that affidavits must be based on personal knowledge and shall “show affirmatively that the affiant is competent to testify to the matters stated therein.” A verification which is improperly based on information and belief is insufficient to entitle the verifying party to relief because the verification is qualified in nature. See Muss v. Lennar Fla. Partners I, L.P., 673 So. 2d 84, 85 (Fla. 4th DCA 1996); Barton v. Circuit Court of the Nineteenth Judicial Circuit, 659 So. 2d 1262, 1263 (Fla. 4th DCA 1995); Thompson v. Citizens Nat’l Bank of Leesburg, Fla., 433 So. 2d 32, 33 (Fla. 5th DCA 1983). In this case, the verification reflects it was not based on Lenth’s personal knowledge. Bay Gulf asks this court to construe the verification as if it were based on Lenth’s personal knowledge because the verification does not say it was based on Lenth’s “information and belief” but, rather, states it was based on Lenth’s “knowledge and belief.” However, we decline to impose such a construction because the fact that the verification included the word “belief” indicates it was not based on Lenth’s personal knowledge. And, in fact, it is apparent from the record that Lenth could not state she had personal knowledge of the loan documents in question. The qualified verification here fails to meet the requirements of rule 1.510(e) and, therefore, should not have been considered by the trial court on a motion for summary judgment. See Thompson, 433 So. 2d at 33. Reversed and remanded. WALLACE and KHOUZAM, JJ., Concur. NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

Of Interest

http://mattweidnerlaw.com/blog/2011/02/secret-presentations-the-banks-dont-want-you-to-see/

Florida Supreme Court Briefs and Opinions

http://146.201.5.144/library/flsupct/sc09-1460/sc09-1460.html

Even Rolling Stones Has Something to Say on Wall St

http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?page=2

New York Foreclosure Legal Assistance

Mortgages (BNA 02/16/2011)


New York to Provide Legal Assistance In Foreclosure Cases, Chief Judge Says

ALBANY, N.Y.-New York state will create a program this year to ensure that homeowners who cannot afford a lawyer are provided with free legal assistance at their foreclosure settlement conferences, Judge Jonathan Lippman, the state's chief judge, announced Feb. 15 in his annual State of the Judiciary address.

Lippman said the program would begin in Queens, N.Y., in conjunction with the Legal Aid Society of Queens, and in Orange County, N.Y., with Hudson Valley Legal Services. The program will expand statewide by the end of the year, he said.

"A truly glaring problem ... is that the foreclosure process presents a need for legal counsel at precisely the moment when a lawyer is least affordable,'' Lippman said in his prepared State of the Judiciary report.

"Far too many homeowners enter our courts without legal help and with little understanding of the legal process. Many are so intimidated by the process and its consequences that they don't show up at all.''

The program is the second effort by Lippman and the state court system to address problems associated with foreclosures. In October, the New York State Unified Court System promulgated a rule requiring that attorneys for plaintiffs in residential foreclosure proceedings file an affirmation certifying that they have taken reasonable steps to verify the accuracy of documents related to the case.

The legal assistance program was applauded by the New York State Bar Association. "We are pleased with the chief judge's pilot program and his plans to later expand this innovative program statewide,'' Stephen P. Younger, president of the association, said in a statement.

"Nearly two-thirds of homeowners facing foreclosure are not represented by attorneys at their settlement conferences,'' Younger said.

Under a 2008 state law, courts must schedule a mandatory settlement conference with the parties in foreclosure proceedings involving certain subprime loans.

Lippman to Assign Attorneys

Lippman said, under the new program, he would assign legal services attorneys with foreclosure expertise to courts in the counties involved in the program. "After a screening process designed to make sure that the foreclosure settlement conferences are as meaningful as possible, these legal services attorneys will provide legal assistance or representation to unrepresented homeowners at the initial conference in as many cases as possible,'' he said.

"Thereafter, the attorney will either keep the case and continue with representation or refer the homeowner to a network of legal services, pro bono or law school clinic counsel who will be standing by to provide additional legal assistance in support of this project.''

By Gerald B. Silverman

http://www.nytimes.com/2011/02/16/business/16housing.html?_r=2

Foreclosed homes still selling at Palm Beach County auction without representation

http://blogs.palmbeachpost.com/realtime/2011/02/16/foreclosed-homes-still-selling-at-palm-beach-county-auction-illegally/?utm_source=twitterfeed&utm_medium=twitter

Foreclosed homes still selling at Palm Beach County auction without representation

http://blogs.palmbeachpost.com/realtime/2011/02/16/foreclosed-homes-still-selling-at-palm-beach-county-auction-illegally/?utm_source=twitterfeed&utm_medium=twitter

Interesting Articles

http://money.cnn.com/2010/10/28/real_estate/robosigner/index.htm





http://stopforeclosurefraud.com/2011/02/15/foreclosure-law-firm-lays-off-nearly-half-of-its-staff-after-losing-fannie-mae/




http://stopforeclosurefraud.com/2011/02/14/bloomberg-merscorp-lacks-right-to-transfer-mortgages-judge-says/




http://stopforeclosurefraud.com/2011/02/12/dailyfinance-when-banks-outsource-foreclosures-nothing-good-happens/

Accused MERS Robo Signer

Caryn A. Graham is an attorney employed by Marshall Watson P.A.

Read this from a former Robo Signer

http://money.cnn.com/2010/10/28/real_estate/robosigner/index.htm

More Accused Robo Signers

Lisa Markham signs for Deutsche Bank and for CitiMortgage and CR Title


Pite Duncan the California equal of David Stern in FL

STEVEN J. BAUM &
FEIN, SUCH & CRANE NY NJ David Stern

Treva Moreland

Pam January

Tishana S. Gibbs

G. Soberanis for Deutsch bank National Trust and Carrington Mortgage

Cecelia Knox Josh Lade Topako Love Reginald Lynch Greg Lyons Nathan Miller Bill …

http://www.scribd.com/doc/35783291/Other-Court-Sample-Doc-s-Topaka-MERS-Employee

eileen j gonzales where can i send them vp of first franklin vp of mers

Angelica Alanis and Gloria E Coleman-Benson. Alanis signed for Mers and Gloria was the notary. We have traced Alanis to a Household

Jeannette Love-Hadden, Anne Neely and just an FYI my assignment was signed by Kevin Prieshoff Assistant secretary for MERS. Please refer to the Shelli Hill deposition who confirms that he is an employee of the foreclosing law firm Lerner Sampson and Rothfuss. Also the notary was Karen James confirmed as an employee as well.

Pamela K Troxell

Chamagne Williams

cardless dixon – lisa gerard – jerrie moton – rashonda lynn turner – kimley godfrey – carolyn mcleod – van johnson – beverly clark

MARCIA MORGAN OR RICHARD E. PRICE

RACHEL WARMACK

 http://mylandrecords.appspot.com/pdf/ma017-22964-295/axbsdrW33HB/certificate.pdf?actual=1292689034

SYLWIA DRAPALSKI

Robo Signers

http://www.foreclosureself-defense.com/2010/11/robo-signer/

This Site has a list of Robo Signers with links and hints.

B of A Alledged Robo Signers

I don't guarantee spellingis correct  the list was hard to read.

Mark Acosta

Carrie Erbe

Catherine M Gorlewski

Jeanette Grodsky

Suzanne M Haumesser

Cynthia A Mech

Brandon Sciumbato

John S Smith

David P Sunlin

Christine Albert

Lisa Alliason

Micall Bachman

Lance Bell

Donald R Clark

Kimberly Dawson

Renee Hertzler

Lancia Herog

Mary Joos

Mary Kist

Michael Prindle

Rhoena Rice

Sheri Sohum

Melissa Viveros

Rhonda Weston

Jill Wosnak

Ted Cassell

Aaron Fozmby

Serena Harman

Gregory Higeons

Michael Holtz

Kaneisha Hunley

Holly M jarmusz

Deborah A jurek

Barbara Komisarof

Bridget Left

Cody mahon

Cheryl Mallory

Susan McCaughan

Timothy E Moran

Roxanne Nowicki

Frances Pecoraro

David M Perez

Laura m Pirritano

Tania Ramos

Robert Rybarczyk

Ken Setsky

Joyce Schithbato

Keri Selman

Teresa Skinner

TiaQuanda Turner

Sandra Williams

Ashley Barraza

Destiny Bentley

Tyria Garrison

Benjamin Hillis

Julia Myra

Gregory J Price

Donna Powell

Kathy Repka

Gail Stein

Vicki Lynn Vasquez

Lisa Wickser

Rachelle Wickware

Angelica B Williams

Diane Young

http://www.scribd.com/doc/40927249/Bank-Of-America-Robo-signer-List

Commit Bankruptcy Fraud go to Prison

As of early last year, criminal charges had been filed in just 24 of the 1,611 cases referred for prosecution nationwide in 2009.

http://www.tampabay.com/news/in-bankruptcy-debtors-hide-assets-and-pay-the-price/1151779


In 2006, authorities say, Richard Likane of Tampa got a mortgage after telling the lender he was making $12,324 a month as manager of an Italian restaurant.


But tax returns submitted in his 2008 bankruptcy case correctly stated that the only income he had in 2006 was $44.

After the FBI investigated those and other discrepancies between mortgage applications and Likane's bankruptcy filing, he was indicted last year on a charge of mail fraud affecting a financial institution — and faces up to 30 years in prison.


Are you listening South Florida?

Cal Sup Ct Says Recording ZIP Code Violates CA Song-Beverly Credit Card Act

The Supreme Court of California recently held that a business violates the California Song-Beverly Credit Card Act of 1971 (the "Credit Card Act"), which prohibits businesses from requesting that cardholders provide "personal identification information" during credit card transactions and then recording that information, when the business requests and records a customer's ZIP code during a credit card transaction.


A copy of the opinion is available online at:

http://www.courtinfo.ca.gov/opinions/documents/S178241.PDF

The language of Section 1747.08 of the Credit Card Act provides that no business "that accepts credit cards.shall.request, or require as a condition to accepting [a] credit card as payment., the cardholder to provide personal identification information, which the [business] accepting the credit card [records] upon the credit card transaction form or otherwise." Section 1747.08 further defines personal identification information as "information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder's address and telephone number."

Plaintiff credit card holder was asked for her ZIP code during a purchase at one of defendant retailer's stores. Plaintiff provided the requested information, which defendant recorded and then later cross-referenced with available databases to determine plaintiff's home address.

Plaintiff sued, asserting a violation of the Credit Card Act. The trial court ruled against the plaintiff, concluding that a ZIP code does not constitute "personal identification information" as that term is defined in Section 1747.08 of the Credit Card Act. The Court of Appeal affirmed, and the plaintiff appealed to the Supreme Court of California.

The Court considered the lower Court's conclusion that ZIP code information is not subject to Section 1747.08 because, although an address and telephone number are "specific in nature regarding an individual., a ZIP code pertains to the group of individuals who live within the ZIP code." Overruling and reversing the lower courts' decisions, the California Supreme Court noted that "a ZIP code is readily understood to be part of an address; when one addresses a letter to another person, a ZIP code is always included," and thus "the statute should be construed as encompassing not only a complete address, but also its components."

Further, even a complete address is unlikely to be specific to an individual, because multiple individuals often reside in the same household.

The Court also noted that all of the elements of Section 1747.08 "constitute information unnecessary to the sales transaction that, alone or together with other data such as a cardholder's name or credit card number, can be used for the retailer's business purposes." A broader interpretation of Section 1747.08 is preferred, ruled the Court, both because "courts should liberally construe remedial statutes in favor of their protective purpose" and because "[t]he Court of Appeal's interpretation.would permit retailers to obtain indirectly what they are clearly prohibited from obtaining directly, 'end-running' the statute's clear purpose." The Court also concluded that the terms chosen by the legislature "suggest. the Legislature did not want the category of information protected under the statute to be narrowly construed."

The Court then ruled that a broad interpretation is also consistent with subdivision D of Section 1747.08, which allows businesses to require a cardholder to provide reasonable forms of identification, such as a California state identification card, but specifically disallows the recording of that information. Because such identification would include information such as a ZIP code, the Court ruled, it would be inconsistent to otherwise allow the recording of information in a manner explicitly prohibited by subdivision D of the Section 1747.08.

The Court then examined the legislative history of Section 1747.08 and concluded that the legislature enacted its precursor "to address the misuse of personal identification information for, inter alia, marketing purposes" and concluded that the statute's "overriding purpose [is] to 'protect the personal privacy of consumers who pay for transactions with credit cards.'" The Court also observed that the Senate Committee on Judiciary analysis expressed the same motivating concerns.

The Court then examined subsequent amendments to Section 1747.08, which "permit.businesses to require cardholders provide identification so long as none of the information [is] recorded." Disregarding defendant's reliance on commentary by the State & Consumer Services Agency, which characterized these subsequent amendments as "a clarifying, nonsubstantive change," the Court ruled "that former subdivision (d) was considered merely clarifying and nonsubstantive suggests the Legislature understood former section 1747.08 to already prohibit the requesting and recording of any of the information, including ZIP codes, contained on driver's licenses and state identification cards."

Further, the Court noted, even "the 1990 version of former section 1747.08 forbade businesses from "requir[ing] the cardholder.to provide personal identification information." Given that the provision was later "broadened, forbidding businesses from "request[ing], or requir[ing] as a condition to accepting the credit card., the cardholder to provide personal identification information." the Court ruled, "[t]he obvious purpose of the 1991 amendment was to prevent retailers from requesting 'personal identification information and then matching it with the consumer's credit card number.'" Further, "[t]hat the Legislature so expanded the scope of former section 1747.08 is further evidence it intended a broad consumer protection statute."

Therefore, the Court concluded, "in light of the statutory language, as well as the legislative history and evident purpose of the statute, we hold that personal identification information, as that term is used in Section 1747.08, includes a cardholder's ZIP code."

The Court also rejected the business's contention that a broad interpretation of Section 1747.08 would "be unconstitutionally oppressive because it would result in penalties 'approach[ing] confiscation of [defendant's] entire business.'" The "statute does not mandate fixed penalties; rather it sets the maximum. at $250 for the first violation and $1,000 for subsequent violation[s]," the Court ruled, and thus "the amount of the penalties awarded rests within the sound discretion of the trial court."

Finally, the Court rejected the business's argument that the Court's ruling "should be prospectively applied only." Instead, the Court ruled, "[i]n our view, the statute provides constitutionally adequate notice of proscribed conduct." Further, because the filing of the plaintiff's complaint predated contrary precedent, "it therefore cannot be convincingly argued that the practice of asking customers for their ZIP codes was adopted in reliance on [contrary precedent]."

9th Circuit: Barrientos v. Wells Fargo Bank, N.A.

Ruling:

A party alleging contempt for violation of the discharge injunction must bring the contempt action by way of motion in the underlying bankruptcy case, not by adversary proceeding.

Facts:

Appellant Adolfo Barrientos ("Debtor") filed a Chapter 7 bankruptcy petition and received a discharge. After entry of the discharge, Debtor filed an adversary proceeding against Wells Fargo alleging Wells Fargo verified certain debts to credit reporting agencies in violation of the discharge injunction. The Adversary Complaint alleged a single cause of action for contempt for violation of Section 524 of the Bankruptcy Code and sought an injunction, declaratory relief, monetary penalties and attorney fees. Wells Fargo moved to dismiss under Rule 12(b)(6) alleging that such a contempt action must be dismissed under the reasoning set forth in Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 506-07 (9th Cir. 2002) because Section 105 does not support a private right of action for violation of Section 524. The bankruptcy court agreed and the district court affirmed, noting that the proper procedural avenue for such a contempt proceeding was through a motion in the underlying bankruptcy proceeding. The Ninth Circuit affirmed, reasoning that allowing an adversary proceeding would potentially permit a judge other than the judge in the underlying bankruptcy to enforce the discharge, which would undermine the bankruptcy court's supervision of the discharge. The Ninth Circuit also reasoned that Bankruptcy Rule 9020 requires "parties in interest" to bring contempt proceedings by way of a Rule 9014 contested matter and allowing an adversary proceeding would obliterate the distinction between contested matters and adversary proceedings. In support of its ruling, the Barrientos court cited In re Kalikow, 602 F.3d 82 (2d Dir. 2010), which held a proceeding under Section 524 seeks to enforce an injuction already entered and therefore does not need to be brought as an adversary proceeding under Bankrutpcy Rule 7001.

http://www.ca9.uscourts.gov/datastore/opinions/2011/02/10/09-55810.pdf

Comments:
The United States Court of Appeals for the Ninth Circuit recently affirmed a district court’s dismissal of an adversary complaint for alleged violation of a discharge of debt injunction under 11 U.S.C. § 524. The Court held that “[a]n action for contempt for violation of a discharge injunction under § 524 must be brought via motion in the bankruptcy case, not via an adversary proceeding.”


The debtor in this matter had filed for Chapter 7 bankruptcy, and been granted a discharge of debt under 11 U.S.C. § 524. Despite this discharge, some credit reporting agencies continued to report the debtor’s previous debt to Wells Fargo Bank, N.A. amounting to $80,831, which the creditor then confirmed in alleged violation of § 524.

The lower court dismissed the adversary proceeding, and the debtor appealed. The appellate court referenced that the “civil contempt power of bankruptcy judges” as based on 11 U.S.C. § 105. The Court then looked to its previous decisions, which held that “the availability of contempt proceedings under §105 for violation of a discharge injunction under § 524 does not create a private right of action for damages.” The Court stated that this precedent alone would be enough to “dispose of the present case,” and further noted that the proper procedure for “an action for contempt arising out of the violation of an order” from the bankruptcy case is to bring a motion in the bankruptcy case.

The Court next delineated the differences in procedure in bankruptcy court between “contested matters” and “adversary proceedings.” As the Court noted, Bankruptcy Rule 9020 “provides that Bankruptcy Rule 9014 governs contempt proceedings in bankruptcy.” Bankruptcy Rule 9014 “governs contested matters,” which are distinguished from adversarial proceedings governed by Part VII of the Bankruptcy Rules.

The Court disagreed with the debtor’s argument that “because Bankruptcy Rule 9014 invokes certain rules utilized for adversary proceedings” pursuant to Part VII, “any motion brought pursuant to Rule 9014 could also impliedly be brought as an adversary proceeding.” The Court noted that a “plain reading” of the language of Rule 9020 states that contempt proceedings “brought by the trustee or a party in interest” qualify as contested matters required to be brought by a motion in the bankruptcy case pursuant to Rule 9014. The Court further stated that Rule 9020 “exists solely for the purpose of mandating this” result.

In closing, the Court noted that even in the absence of Rule 9020, the debtor’s action does not qualify as an adversarial proceeding as described in Bankruptcy Rule 7001, as the debtor specifically requests punitive damages, and such damages are not a form of equitable relief.

In addition to seeking punitive damages, debtor also sought an injunction for the violation of the discharge which “already exists by operation of law.” The Court finally stated that “[a]n injunction against violating an existing injunction would be superfluous.” Thus, the Court ruled that the Appellant would suffer “no prejudice from the bankruptcy court’s requirement to proceed by motion rather than by adversary proceeding because he has failed to pursue the avenue of relief that no court has denied” him, that of bringing the proper motion in bankruptcy court.

The Court further denied the debtor’s arguments attempting to differentiate “motions” from “applications” as mere semantics, and stated there was no conflict in the Bankruptcy Rules when using one term rather than the other, as “in the Southern District of California . . . the words are generally considered synonymous.”

FDIC News

America Saves Week (February 20–27) is a chance for organizations and professionals to make a concerted effort to help individuals take positive steps to reach their savings goals. Visit http://www.americasavesweek.org/ to learn more, including ways to get involved. 


National Consumer Protection Week (March 6-12) brings together government and non-profit organizations to help consumers learn how to protect their privacy, manage their money, decipher advertising messages, and steer clear of fraud and scams.  Visit http://www.ncpw.gov/ for details and materials, including a toolkit and outreach ideas.

Obama's Fannie & Freddie Plan

Obama's Fannie, Freddie plan may boost mortgage rates

Washington Post
By Zachary A. Goldfarb
Friday, February 11, 2011; 8:59 AM

The Obama administration proposed raising fees for borrowers and requiring large down payments for home loans as part of a long-term effort to reduce the government's outsized footprint in the housing market, but warned that these moves could increase mortgage rates and potentially reduce the availability of the 30-year fixed rate mortgage, a mainstay of American housing for decades.

In a long-awaited white paper, the administration said that it intends to wind down Fannie Mae and Freddie Mac, which together with the Federal Housing Administration provide more than 90 percent of housing finance, but said the process could take five or more years.

It discussed three options for replacing them, including a new government agency that would insure mortgages all the time, a new agency that would only step in during times of market crisis, and then a third option that does not provide any government backing for home loans beyond the FHA.

The administration warned that this no-government option "has particularly acute costs in its potential impact on access to credit for many Americans." The white paper also warned that this option could have the greatest impact on boosting mortgage rates and would make it difficult for community banks to compete in the housing market.

But it said the other options continue to put at risk taxpayers for bailing out the mortgage market in big declines.

Regardless of this longer-term overhaul, the administration suggested a range of new measures to make taking a government-backed mortgage more expensive and thereby making it more competitive for private sector firms to compete in offering mortgages.

These include reducing the size of mortgages Fannie and Freddie can purchase, from $729,750 now to $625,500 by this fall. It also includes phasing a 10 percent down payment requirement for the companies. Finally, it includes raising fees the companies charge to insure loans.

The administration also suggested scaling back FHA, which caters to first-time homebuyers with low down-payment options. It said it wants to reduce the size of loans that FHA can provide, increase fees by a quarter percentage point, and potentially raise the down payment requirement from 3.5 percent now to 5 percent in the future.

The report also emphasized the importance of rental housing for low and moderate-income communities.

Senior administration officials said they would take gradual steps, to avoid harming the already struggling housing market. But they said this plan laid the groundwork for the future of housing in America.

"This is a plan for fundamental reform - to wind down the [Fannie and Freddie], strengthen consumer protection, and preserve access to affordable housing for people who need it," Treasury Secretary Timothy F. Geithner said. "We are going to start the process of reform now, but we are going to do it responsibility and carefully so that we support the recovery and the process of repair of the housing market."

In an interview with CNBC immediately following the release of the report, Geithner said that it is "important Congress legislates this over the next two years."

Mark Zandi, chief economist for Moodys.com, told CNBC that he felt the Obama administration had "laid out a prudent, appropriate plan."

"At the end of the day, though, the government is going to have to play some role in a catastrophic backstop," Zandi added.



Bipartisan support for scrapping Fannie, Freddie draws criticism
By Zachary A. Goldfarb
Washington Post Staff Writer
Wednesday, February 9, 2011; 10:55 PM

To many Republicans and the Obama administration, Fannie Mae and Freddie Mac, the government's mortgage giants, are ill. But rather than healing them, both sides agree that the companies should be left to die and that their support for the housing market should wither away.

Some influential interest groups are taking issue with that surprising bipartisan consensus.

They include small banks, real estate agents and consumer groups, who all say that Fannie and Freddie, or something similar, are crucial for sustaining the struggling housing market.

And ahead of the administration's scheduled release Friday of a white paper on overhauling the nation's mortgage system, some economists are also saying that shrinking the government's role too much will make housing far more costly for Americans.

"These groups have considerable political clout and will make it difficult to get Congress to act on housing finance reform," said Jaret Seiberg, an analyst with MF Global. "Legislation to cut back the government's role in housing finance will result in higher mortgage rates and downward pressure on home values. That is a tough vote for many lawmakers, regardless of their party affiliation."

Some business groups, such as small banks and credit unions, are worried that the demise of Fannie and Freddie would allow large financial firms to dominate the mortgage market. Realtors and home builders are reluctant to part with the federal subsidy for housing provided by Fannie and Freddie. Consumer groups are wary of eliminating the firms because of the role they play in helping lower- and moderate-income homebuyers get access to mortgages.

Seiberg said that this opposition could lead the administration to retain the two companies and reform them.

"We continue to believe the administration will restructure its investments in the enterprises to stabilize them to give Congress even more time to act," he said in a research report Wednesday. "A more stable Fannie and Freddie reduces the need for legislation, which makes it even harder to get lawmakers to act."

Divergent approaches

Although Republicans and the administration agree that Fannie and Freddie have got to go, that's where the agreement ends.

Congressional Republicans want to accelerate the mortgage giants' demise, reflecting their view that Fannie and Freddie are government-created monstrosities whose victims have been taxpayers. The seizure of the companies has cost the Treasury more than $130 billion. The Obama team wants to take a gradual approach.

And on the question of what should replace them, the GOP has outlined a clear, if controversial, vision: nothing. The administration's long-delayed white paper, by contrast, will not present a single vision for reform, but three different options.

This approach to overhauling Fannie and Freddie could make it even less likely that Congress will devise a new system for housing finance this year.

Federally backed Fannie and Freddie buy mortgage loans and guarantee them against default. This government guarantee has lent certainty and stability to the housing market, keeping funding available and interest rates low, at a time of severe stress. Fannie and Freddie, combined with the Federal Housing Administration, which supports low down-payment loans, have been behind more than 90 percent of new home loans in recent years.

Mark Zandi, an economist and adviser to both Republicans and Democrats, estimated this week that mortgage rates would be one percentage point higher and that home prices would be 10 percent lower if Fannie and Freddie were eliminated and nothing replaced them.

One of the options in the administration's white paper matches the Republican proposal that nothing replace the companies. The other two options involve a new government agency that would provide mortgage insurance for high-quality loans all the time - and one that would step in during times of crisis.

The administration will propose baby steps toward reducing government support, such as raising fees that Fannie and Freddie charge lenders and borrowers for the government guarantee as well reducing the size of mortgages they can insure, from $729,750 to $625,500.

The administration is also likely to champion steps that it has taken and regulators can take to overhaul the housing finance system.

GOP prodding

Meanwhile, Republicans, particularly in the House, say they will be pushing the administration to do more, faster.

"It's unfortunate that my colleagues across the aisle resisted any attempt last Congress to address the most expensive component of the federal government's intervention during the financial crisis," Rep. Scott Garrett (R-N.J.), chairman of the House panel overseeing housing finance, said Wednesday at hearing on their future.

But Rep. Barney Frank (D-Mass.), the top Democrat on the House Financial Services Committee, said that Republicans are likely to be more circumspect now that they are in charge and that any precipitous move to disrupt the housing market could cost homeowners in their districts.

The Republicans "seemed to know exactly what they wanted to do when they were in the minority," he said. "I think what they're finding is it's a little more complicated than they thought."

Hearing Set in Blockbuster Chap. 7 Motion

"A New York judge will hold a hearing on Feb. 24 to address a request by a Blockbuster Inc. creditor to move the Dallas movie and game rental chain's bankruptcy into Chapter 7 liquidation."

http://www.bizjournals.com/houston/news/2011/02/09/hearing-set-in-blockbuster-chap-7.html

10 Years for Bankruuptcy Fraud Debtor

http://www.bizjournals.com/twincities/news/2011/02/11/denny-hecker-sentenced-to-10-years.html

10 Years for Bankruuptcy Fraud Debtor

http://www.bizjournals.com/twincities/news/2011/02/11/denny-hecker-sentenced-to-10-years.html

8th Cir Affirms FCRA Furnisher Liability Ruling in Favor of Mortgage Servicer

The United States Court of Appeals for the Eighth Circuit recently affirmed the lower court’s grant of summary judgment in favor of defendant mortgage servicer as to the borrower’s claim under the federal Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 181o, 1601s-2(b).


Defendant EMC Mortgage Company (“EMC”) credited Plaintiff-borrower’s (“Plaintiff”) loan account with a payment received in December 2006, but presented a substitute check to Plaintiff’s bank in March 2007 due to the original check having been lost or destroyed. However, by March of 2007, Plaintiff had closed that bank account and the payment was dishonored by Plaintiff’s bank. EMC “un-credited” Plaintiff’s account for December and, although Plaintiff had otherwise kept current with his payments, EMC notified the credit reporting agencies (“CRAs”) that Plaintiff’s account was thirty days past due. Plaintiff then made an “extra payment” to bring his EMC account current, but by that time supposedly lost favorable financing for a real estate purchase because of the adverse credit reports.

Plaintiff brought suit against EMC alleging that EMC violated the federal Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681o, 1681s-2(b), by “furnish[ing] inaccurate information.” After the case was removed to federal court, the district court granted of summary judgment in favor of EMC as to the FCRA claim because the Plaintiff’s “account was more than thirty days past due as a matter of law when EMC reported that account status in April and May 2007.” The Eighth Circuit affirmed.

On appeal, Plaintiff argued “that summary judgment was inappropriate because the district court noted that an ‘Experian entry is inaccurate insofar as it states that Plaintiff’s account was delinquent in May and June (as opposed to April and May),’ and EMC failed to investigate and correct this inaccuracy.” The Plaintiff’s argument was based primarily upon a document entitled “Your Credit Report” dated June 25, 2009, which is a summary of credit reports from the CRAs.

The Eighth Circuit disagreed with the Plaintiff, holding that “the ‘Your Credit Report’ document failed to raise a genuine issue of material fact whether EMC violated 15 U.S.C. §§ 1681o and 1681s-2(b) by failing to investigate and correct an immaterial discrepancy as to which two months in 2007 Anderson’s account was thirty days past due.” The Court reasoned that “a furnisher’s obligation to conduct a reasonable investigation under § 1681s-2(b) arises when it receives a notice of dispute from a CRA, and it need investigate only ‘what it learned about the nature of the dispute from the description in the CRA’s notice of dispute.’”

In this case, dispute notifications from the “CRAs notified EMC that its reporting of the account as past-due for two months had been challenged. EMC investigated, correctly determined that the reported account status was accurate, and verified that information to the CRAs.” EMC’s “duties as a furnisher of information under the FCRA required no more.” Accordingly, the Court affirmed the judgment of the lower court.

The Court also noted that “the duties of EMC as a furnisher of credit information under 15 U.S.C. § 1681s-2(b) are triggered by notice that its information is being disputed from a CRA, not from the consumer. See § 1681i(a)(2).” The Plaintiff’s “complaint alleging that EMC reported inaccurate data failed to allege a triggering CRA notice and therefore failed to state a claim against EMC under the FCRA.” However, “rather than challenge the sufficiency of Plaintiff’s Complaint, EMC moved for summary judgment after the close of discovery.”

Ill App Ct Answers Certified Questions re: Assignments of Consumer Debts

The Illinois Appellate Court, First District, recently held that a collection agency has standing to sue, where the agency pleads and proves that it has legal title to accounts receivable assigned "for collection purposes only." The Court also held that an agency may establish such an assignment through multiple incorporated documents attached as exhibits to the complaint. However, the documents provided must include contracts of assignment or incorporate such contracts by reference; the agency may not rely merely on affidavits to establish an assignment. Further, the documents provided must also identify the accounts transferred, the consideration paid, and the effective date of the transfer of the accounts.


A copy of the opinion is available online at: http://www.state.il.us/court/Opinions/AppellateCourt/2011/1stDistrict/February/1100855.pdf


Defendant borrower defaulted on a Citibank credit card account. Citibank then sold the account to Unifund Portfolio A, L.L.C. On the same day, Portfolio A sold the account to Cliffs Portfolio Acquisition I. Cliffs Portfolio then assigned its legal interest in the account to Palisades Collection, L.L.C., to enable Palisades to collect on the account, but purported to retain an equitable interest in the debt itself. Finally, Palisades then assigned its interest in the account to the collection agency plaintiff.

In support of its complaint, the collection agency plaintiff provided an affidavit of an employee who had reviewed plaintiff’s internal records, as well as various contracts of sale and assignment for defendant's account, along with other incorporated agreements. The defendant debtor moved to dismiss, arguing that the purported assignments of his account were inadequate under section 8b of the Collection Agency Act because required information, such as the account information, the consideration paid, and the effective date of assignment were scattered among plaintiff’s exhibits, rather than contained in a single document.

The Appellate Court first considered whether an assignee of a debt has standing to sue where legal title was assigned “for collection purposes only.” The Court examined Section 2-403 of the Illinois Code of Civil Procedure, which states “[t]he assignee and owner of a non-negotiable chose in action may sue thereon in his or her own name.” Because a chose in action is a “proprietary right in personam, such as a debt owed by another person,” the Court ruled, “[c]hoses in action like plaintiff's debt in this case are assignable.”

The Court further noted that “[a]lthough Illinois cases have not explicitly addressed this issue, long-standing modern practice in other jurisdictions allows the owner of a debt to transfer the entire chose in action outright to a third party, retaining no ownership interest in it, or to transfer only the owner's legal interest in the action, retaining an equitable or beneficial interest.”

The Court also examined Section 8b of the Illinois Collection Agency Act, which states that “[a]n account may be assigned to a collection agency…to enable collection of the account in the agency's name as assignee for the creditor.” Thus, the Court ruled, “[w]hen the two statutes are read together, it is apparent that an assignee for collection has standing to bring suit in its own name in order to collect a debt” and that “section 2-403 encompasses not only assignees who take complete ownership of an account but also those who merely take legal title for the purpose of collecting the debt while the creditor retains the beneficial interest and equitable title.”

The Court then considered the requirements for pleading assignment of a debt under Section 8b of the Collection Agency Act. Observing that a collection agency can bring suit to collect on a debtor's account only when “[t]he assignment is manifested by a written agreement, separate from and in addition to any document intended for the purpose of listing a debt with a collection agency,” the Court considered whether an assignment must be manifested by only a single document or must consist of multiple incorporated documents.

In analyzing this question, the Court noted that “the key phrases in Section 8b are ‘assignment manifested by a written agreement’ and ‘document manifesting the assignment’” and thus that “assignment of the account must be manifested by a legal document in the formal sense, that is, by a written contract of assignment… that is completely separate from any contract to list the account with the collection agency.”

Further because “[i]t is a fundamental principal of contract law that ‘an instrument may incorporate all or part of another instrument by reference’,” then “it follows that the terms of the assignment may be found in either the contract of assignment itself or in any other document incorporated by reference.” Thus, the Court ruled, “assignment under Section 8b can be established through multiple documents that are incorporated by reference into the contract of assignment.”

Having concluded that an assignment can be manifested by multiple incorporated documents, the Court then considered the content required for those documents to satisfy Section 8b, which “requires that the contract of assignment ‘specifically state and include’ both the effective date of the assignment and the consideration given for the assignment.” Further, the Court ruled, “[i]mplicit in the statute is a third requirement that the contract of assignment specifically state the relevant identifying information for the account that is being assigned.”

Although the plaintiff collection agency provided “three broad categories” of documents in support of their complaint, including “affidavits, contracts of assignment, and incorporated documents,” the Court ruled that “[p]laintiff's use of the affidavit in support of its claim…is problematic,” because the “plain language of [Section 8b] provides only a single method of proving the existence of an assignment, and this method does not include affidavits.” The Court further noted that “[l]imiting the methods of proof of an assignment to only written contracts furthers…legislative policy because it requires collection agencies to clearly demonstrate that they and they alone are the proper parties for a debtor to be dealing with regarding their debt.”

Therefore, the Court ruled, bare “affidavits…cannot be used by a collection agency to prove the assignment and state a claim to a debtor's account.”

The Court then examined the contracts of assignment and incorporated documents provided in support of the plaintiff’s collection agency’s complaint. Although it declined to rule on their sufficiency, noting that “it is for the circuit court to determine whether all of the documents that plaintiff has attached to its complaint in this case satisfy the requirements of section 8b,“ the Court specifically noted that “Section 8b requires each contract of assignment in the chain of title for the account, beginning with the original creditor and ending with the plaintiff, to specifically state and include the effective date of assignment, the consideration paid, and the identifying information for the account transferred.”

Bankruptcy Vlo Case Update

7th Circuit: Busson-Sokolik v. Milwaukee School of Engineering (In re Busson-Sokolik)
Ruling:


The Seventh Circuit Court of Appeals affirmed the denial of debtor's discharge of his educational loans, holding that the determining factor of whether educational loans are educational or not is the purpose of the loan, not the use of the loan proceeds. The Court also affirmed the award of attorney fees for the creditor, as contractually provided for within the terms of the promissory note, and not in violation of the "American Rule" as argued by debtor. Finally, the Court affirmed the denial of sanctions under 9011(c)(1)(A) by the debtor as the debtor failed to provide the creditor with any opportunity to purge itself of sanctionable conduct under the 'safe harbor' rule, and affirmed the award of sanctions, for a lesser amount (by one half), imposed by the court against the Debtor through Fed R Bankr P 8020, such that he award would have deterrent effect, rather than result in financial ruin.

Facts:

Debtor was a student at the Milwaukee School of Engineering (MSOE) from September 1999 through May 2000. He borrowerd $3,000 on October 29, 1999. MSOE sued debtor in April 2005 on account of the note, and obtained a default judgment for $5,909.63. In June 2005, Debtor filed a Chapter 13 petition that was later converted to a Chapter 7 proceeding. MSOE was listed as a creditor, and Debtor filed an adversary to determine dischargeability of the debt. The bankruptcy court found the debt to be non-dischargeable and found that the Debtor owed MSOE $16,248.78, which included costs and attorney fees. Sanctions, on appeal to the District Court, were imposed by the court in an amount just exceeding $60,000.00. The Seventh Circuit reduced the sanction award by just over $30,000.00, finding same would deter future sanctionable conduct by the parties, without finanicially ruining the debtor and his counsel.

11th Circuit: Abrams v. Saint Felix (In re Miller)

Citation:
Case No. 10-12085 (11th Cir. Feb. 10, 2011)

Ruling:

The Eleventh Circuit reversed the district court's affirmance of the bankruptcy court's award of Rule 9011 sanctions because the motion for sanctions did not identify with specificty the conduct alleged to be sanctionable as required by Rule 9011(c)(1)(A).

Facts:

The trustee in bankruptcy sued Mr. Saint Felix to recover an alleged fraudulent transfer to him by the debtor of real property. In response, Mr. Sanit Felix served a Rule 11 motion. SImultaneously with service of the Rule 11 moion, Mr. Saint Felix filed a motion to dismiss; however, he subsequently withdrew the motion to dismiss and then filed a motion for summary judgment. Of note, the motion for sanctions did not refer to or incorporate the bases for the motion to dismiss. Contrary to the requirement of Rule 9011(c)(1)(A), the sanctions motion did not identify the alleged sanctionable conduct. Nevertheless, the bankruptcy court imposed sanctions which award was affirmed by the district court. On further appeal, the Eleventh Circuit held that the award of sanctions was an abuse of discretion because the sanctions motion did not identify the alleged sanctionable conduct. The Eleventh Circuit rejected Mr. Saint Felix's argument that notice was provided by the contemporaneously filed motion to didmiss, explaining that the rule required the sanctions motion to include that information and in any event the sanctions motion did not refer to or incorporate the motion to dismiss which, in fact, was subsequently withdrawn.

10th Cir Finds No Evidence of Willful Violation in FCRA Inaccurate Reporting Case

Birmingham v Experian
The United States Court of Appeals for the Tenth Circuit recently held that a credit reporting agency did not violate the federal Fair Credit Report Act in its response to a consumer’s complaints of errors in his record.

The plaintiff individual was the victim of identity theft, which led to two fraudulent accounts being opened with Verizon Wireless in his name, as well as disputed charges as to his legitimate Verizon accounts. All accounts were closed, but because the plaintiff had legitimate accounts with Verizon, and failed to pay money owed under the legitimate accounts, Verizon reported his failure to pay the charges to the three major credit-reporting agencies, including Experian Information Solutions, Inc. (Experian). After disputing the reports and being dissatisfied with the response, the plaintiff brought a lawsuit in federal court naming various Verizon entities and Experian, among others, alleging violations of the Fair Credit Reporting Act (FCRA) and Utah law. The district court granted summary judgment in favor of Experian finding no violation of FCRA and dismissed the claims against the Verizon entities because the proper Verizon entity was not named as a defendant. The plaintiff then appealed.

With respect to Experian, the appellate court noted that the sole issue before it was whether Experian intentionally or recklessly failed to adequately investigate the plaintiff’s dispute with Verizon. As you may recall, the FCRA provides that: “Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. § 1681e(b). A “willful” violation is “either an intentional violation or a violation committed by an agency in reckless disregard of its duties under the FCRA.” See Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57–58 (2007). A consumer need not prove actual damages if the violation is willful.

In upholding the district court's ruling, the appellate court noted that the plaintiff presented little evidence regarding what Experian knew and when it knew it, and that there was “a dispute of fact regarding when and how Plaintiff complained to Experian.” The court then went through the relevant facts in the course of its analysis:

The plaintiff stated that he disputed the charges online and that he did so approximately every six months, though he had no records of doing so. A letter from Experian produced in discovery indicated that it was not Plaintiff that first provided notice of a problem. Instead, it stated that Experian had “added an Initial Security Alert to [Plaintiff’s] credit file as requested on [his] behalf by one or more of the nationwide consumer credit reporting agencies," and further advised Plaintiff of what information he would need to provide (such as his social security number and a police report) to place an extended fraud alert on his credit file and to block information on his file that he believed resulted from identity theft. Nevertheless, the plaintiff never sent any credit reporting agency a copy of the police report.

A few months later, the plaintiff sent a letter to the three credit-reporting agencies. The letter provided his name, his current address, and a contact telephone number. It requested a free credit report and the removal from his credit file of derogatory information provided by Verizon. Experian responded a week later in a letter stating that it could not honor his request because it was “unable to access [his] report using the identification information [he] provided.” The letter explained that for a person to access his own credit report, Experian requires the person’s full name, current mailing address and two proofs of the address, social security number, date of birth, and complete addresses for the past two years. The letter provided an internet address and phone number to contact if Plaintiff already had a personal credit report, thought the information to be inaccurate, and wished to request an investigation. There was no evidence of a response.

The Court held that, on this record, Experian was entitled to summary judgment on the willful misconduct claim. The Court reasoned that the standards employed by Experian and the information it requested from Plaintiff were reasonable. Further, the court noted that it had “been pointed to no described practice that would be a reckless violation of the FCRA.” Therefore, the court held that a reasonable person reviewing the evidence before the district court could not find Experian to have committed a willful violation of the FCRA.

With respect to the Verizon entities, the Court noted that the issue was whether Plaintiff had named the right entity as a defendant. The Court held that the plaintiff had not, despite becoming aware of which Verizon entity was the correct entity months before the motions for summary judgment were heard. After finding that the delay was unexcused, the Court upheld the district court’s denial of the plaintiff’s motion for leave to amend his pleadings to name the proper entity.

RSBS Citizen v. RTGO

The Appellate Court of Illinois for the First District recently held that an interest provision in a loan agreement was not ambiguous and therefore the borrower was not entitled to claims under the Interest Act, good faith and fair dealing, and statutory and consumer fraud, based on alleged misrepresentations and ambiguity in the interest provision.

The borrower and lender entered into a loan agreement to finance the development of a residential condominium project. After the borrower defaulted on the loan, the parties executed a series of forbearance agreements. The loan remained unpaid and ultimately the lender filed a complaint for foreclosure.

The borrowers filed an answer, affirmative defenses and counterclaims based on alleged violations of the Illinois Interest Act (815 ILCS 205/1, et seq.), the duty of good faith and fair dealing, the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) (815 ILCS 505/1, et seq.), and common law fraud. The borrower’s allegations revolved around the general contention that the lender did not disclose its method of computing and charging interest, and unlawfully increased the amount of interest charged on the loan.

The lender moved to strike and dismiss all affirmative defenses and counterclaims. The circuit court granted the motion, dismissing the affirmative defenses and counterclaims with prejudice. The circuit court later denied a motion to reconsider its dismissal, and the borrowers appealed.

In upholding the circuit court, the appellate court first examined language in the forbearance agreement signed by the borrower that provided that the borrower had “no claims or defenses to the enforcement of the rights and remedies of Lender thereunder,” and that the agreements and relevant loan documents “constitute the legal, valid and binding obligations of Borrower, enforceable against it in accordance with their respective terms, and Borrower has no valid defense to the enforcement of such obligations.” The court noted that the forbearance agreements containing a waiver of defenses were executed in 2008, and the alleged offenses occurred upon the execution of the Note in 2005.

The appellate court held that Illinois law permits a party to contractually waive all defenses, though the duty of good faith and fair dealing is not waived absent an

“express disavowal,” which the appellate court found the above language did not do. However, the appellate court noted that a waiver of defenses was inapplicable to claims originating under the ICFA.

Nevertheless, the appellate court found the waiver of defenses was essentially part of the consideration that the lender received in exchange for a forbearance agreement. It noted that it “would be inclined to find that defendants also waived any affirmative defense or counterclaim based upon the Interest Act and common law fraud.” However, the Court “nevertheless address[ed] defendants’ contentions for the sake of completeness.”

The Court noted that each of the borrowers’ affirmative defenses and counterclaims revolved around the same basic theory – that the borrowers were mislead as to the amount of interest that would be paid under the loan. The court noted that there are generally three different methods lenders use to compute interest: the 365/365 method, 360/360 method, and 365/360 method.

The lender utilized the 365/360 method when charging interest under the loan, but the borrowers argued that the loan identified the rate as “per annum,” which they argued is defined as “by the year.” The relevant portion of the loan provided as follows with respect to interest charged: “Interest shall be computed on the principal balance outstanding from time to time, on the basis of a three hundred sixty (360) day year, but shall be charged for the actual number of days within the period for which interest is being charged.”

The Court noted that the phrase per annum does not appear in the interest provision. The Court therefore found that there was no ambiguity in the language and that the loan provided for the 365/360 method of interest calculation. Therefore, the appellate court held that the lender did not violate the Interest Act.

The Court next discussed the claims revolving around a duty of good faith and fair dealing. It noted that they occur “when one party is given broad discretion in performing its obligations under the contract.” The plaintiff borrowers alleged that the defendant lender breached this duty by (1) “deliberately creat[ing] ambiguity in the language of the loan documents” as to the calculation of interest; and (2) “exercise[ing] its discretion to calculate interest in a manner that charged *** more interest than Defendants reasonably expected.” The Court first noted that the duty of good faith and fair dealing, did “not arise out of precontractual actions and is only applicable to the conduct of parties to an existing contract.” Accordingly, it held that any allegations relating to the formation of the loan agreement did not implicate or violate the duty of good faith and fair dealing. The Court further found that since the agreement was not ambiguous, the lender did not exercise any discretion and therefore the second argument was also without merit.

With respect to the statutory and common law fraud claims, the Court noted that the borrowers’ fraud claims were predicated upon an assertion that the interest calculation method was deceptive and based upon misrepresentations and false statements. The Court held that there could be no statutory or common law fraud because there was no evidence of any impropriety or deception on the part of the lender and because it already determined that the loan agreement was unambiguous.

Finally, the appellate court found that the claims were properly dismissed with prejudice because the borrowers would not be able to cure the defect in the claims simply be repleading. However, the Court denied the lender’s request for sanctions against the borrowers for filing a frivolous appeal, noting that while it was unpersuaded by the borrowers’ arguments, it was not unreasonable that the borrowers would appeal the circuit court’s decision given that the primary issues on appeal were subject to de novo review and largely dependent upon an interpretation of a single contract provision.

Baud v. Carroll

Middle District of Tennessee.


Baud v. Carroll, 2011 WL 338001 (Sixth Cir. Feb. 4, 2011) (Cole) (Published at ConsiderChapter13.org 2/14/11)

The applicable commitment period of a Chapter 13 plan requires payments to be made over a time equal to the applicable commitment period; a debtor’s projected disposable income excludes benefits received under the Social Security Act; and there is no exception to the temporal requirement for debtors with a negative projected disposable income

Freddie & Fannie going Away?

http://www.treasury.gov/initiatives/Documents/Reforming%20America%27s%20Housing%20Finance%20Market.pdf

http://www.dsnews.com/articles/housing-finance-seven-years-down-road-2011-02-11

http://www.dsnews.com/articles/obama-administration-lays-out-plan-for-winding-down-fannie-and-freddie-2011-02-11


http://www.dsnews.com/articles/george-washington-university-study-says-fha-carrying-too-much-risk-2011-02-11

Housing Crash Is Hitting Cities Once Thought to Be Stable

The rolling real estate crash that ravaged Florida and the Southwest is delivering a new wave of distress to communities once thought to be immune - economically diversified cities where the boom was relatively restrained, the New York Times reported today. In the last year, home prices in Seattle had a bigger decline than in Las Vegas, while Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix. The bubble markets, where builders, buyers and banks ran wild, began falling first, economists say, so they are close to the end of the cycle and in some cases on their way back up. Though the overall economy seems to be mending, housing remains stubbornly weak. CoreLogic, a data firm, said last week that American home prices fell 5.5 percent in 2010, back to the recession low of March 2009