Bankruptcy and Foreclosure Defense: SLG

ABOUT THAT HUGE $25BIL AG/BANK SETTLEMENT....

2012-02-19T17:15:00.001-08:00

You may have heard that there was a recent settlement between numerous banks and attorneys general of 47 states, as "punishment" for the whole robo-signing/forged documents scandal that's plagued the foreclosure process for the previous few years. We've been getting a lot of questions about it, mostly because of the sizeable settlement amount--$25 billion--which is being hailed as a huge victory for homeowners, a savior of our economy, and a victory of righteousness over the evils of bank shanenigans. Oh...they're also saying it will be used to reduce homeowners' mortgage balances.

Before you start hailing victory, there are a number of things you should know about this great "victory."

The fist thing to know about the settlement is that foreclosures will increase. That's right. Increase. Many banks had been purposely delaying or slowing foreclosures while this settlement was being negotiated. Now that it's completed, you can expect to see many of these cases pressing forward much faster, or people who haven't been sued, being sued for foreclosure. The settlement did not prevent or bar anybody from foreclosing.

Second, the total settlement dollars are underwhelming, despite the seemingly large total amount. If you've already lost your home, the government and the banks wish to extend to you their most sincere apology, in the form of a whopping $2,000. Yes, more than 2 million owners have lost their homes to foreclosure during the last four years; this deal will provide 750,000 with a payment of $2,000 each.

What if you're still in your home? Well, if Fannie Mae or Freddie Mac have any interest in your property, you're not included in the settlement at all. That includes the majority of you, but if you're curious, you can go http://www.fanniemae.com/loanlookup/ or https://ww3.freddiemac.com/corporate/ to check if they own your loan. And, your property must be serviced by Bank of America, JPMorgan Chase, Wells Fargo, Ally Financial or Citigroup (that means, if you're in a foreclosure, don't look at your foreclosing Plaintiff, look at who sends you letters, bills, or correspondence).

Still in the game? Well if so, hang on. In Florida, 7.6 billion has been allocated to those of you with properties that are underwater (that's upside down in value), if you've already fallen behind. If you're current, you won't get a principle reduction but may qualify for a refinance.

So...you qualify for a principle reduction after all this....ready for the payoff? Ok. Florida has about 1.9 million homes currently underwater, and the average homeowner is underwater by $65,000, meaning Florida's negative equity total comes in at more than $123 billion. Except Florida's only getting 7.6 billion. The numbers aren't clear yet, but most estimates are that if you qualify, you'll get about $20,000 in principle reduction. So, you'll still be upside down, probably considerably so, although admittedly for some, it still may be enough to convince them their home is worth keeping.

(Incidentally, for those of you thinking of voting Republican anytime in the future, your Republican Attorney General, Pam Biondi, lobbied against inclusion of principal reduction as part of the settlement. Thank goodness, she lost.)

Anyway, the bottom line is that I'm sure that this settlement will finally put an end to the bank's days of fuzzy math and fudging numbers and falsifying information, now that they were forced to pay Florida 8.4 billion (http://myfloridalegal.com/pages.nsf/Main/94816CAD8E86B0778525799F00595D98), and California 18 billion (http://oag.ca.gov/news/press_release?id=2625), which together equals the sum total of 26.4 billion. On a settlement that was officially being announced as a total of 25 billion dollars. Oh...and that was for 47 states....

Wait a minute....

SHOULD YOU SEND "LEAVE ME ALONE" LETTERS TO COLLECTORS?

2011-12-16T08:46:00.001-08:00

You may or may not know that the FDCPA (Fair Debt Collection Practices Act) allows you to send a cease and desist letter to your creditors, telling them to stop contacting you about your debt. Assuming your creditors follow the law--a large assumption--your letter will stop creditors from writing you, or calling you. If your creditors violate or ignore your letter, they are liable under the FDCPA.

You will be left alone. No annoying phones. No annoying messages. Peace and serenity, at last. Sounds good. Right?

Well, there are pros and cons to sending such a letter to your creditors or collectors:

PROS

-You'll be left alone.

-If they violate your letter, they're violating the law, and you can sue them.

CONS

-If they can't call you or write to you, and they see you've cut off the lines of communication, they may just go straight to suing you.

-Most creditors violate the law through what they say or write to you, or when they contact you. So if you cut that off, you're limiting their opportunity to violate the law, and thus, your ability to sue them and try to get your debt erased or minimized.

-No communications means no settlement offers. So if you can pay a portion of the debt, you'll never know what their offers to settle may be.

So, think about whether you want to use the FDCPA's powerful "leave me alone" tool of a cease and desist letter. This is especially true if you are not a bankruptcy candidate, and thus, need to have some avenue to defend yourself on these debts, because you won't be able to discharge them.

Questions? Call us at 954 987-0515 or check us out at www.sunshinelawgroup.com

CAN I SUE THE BANK FOR DENYING MY MODIFICATION?

2011-12-07T06:25:00.001-08:00

In the mess of people wrongfully denied modifications under the government's HAMP (Home Affordable Modification Program), the question invariably presents itself...if you're wrongfully denied a HAMP modification, can you sue the bank?

First, what do we mean by "wrongfully denied a HAMP modification"? We're talking about situations where:

1) You send in your paperwork and the bank loses or ignore it or asks that it be sent over and over
2) The bank denies you when you should have qualified under the terms of the HAMP program
3) The bank puts you on a "trial modification," you make your trial modification payments on time, but the bank never converts the trial modification into a permanent modification.
(Of course, there are a million other scenarios--we've heard bizarre stories of what banks do when it comes to HAMP mods. These are just three major categories).

Can you sue? The answer is yes, and no.

You can't sue the bank for money damages. HAMP does not provide what's known as a "private right of action." That is, it doesn't provide an avenue for the Average Jane to hold the bank responsible in Court if it doesn't comply with HAMP.

What we here at Sunshine Law Group have done, is sue the bank under what's known as a Declaratory Judgment Action (a "dec action"). A dec action is an action that simply asks the Court to determine a party's rights under laws, contracts, ordinances, etc. It's an action that says "Court, we have a dispute over the meaning of this law/contract, we want you to tell us what our rights are under the law/contract and tell us which of us is right or wrong." So, we request that the Court determine whether our clients should rightfully have qualified for a loan modification and if so, what the modified payment should be. We're not actually suing the bank for any damages. We're just asking the Court to make a determination of rights--namely, the right to a modification.

This is an effective technique that avoids HAMP's lack of a private right of action. It forces the Court to look at the HAMP program and apply it properly--nothing more, nothing less. And for clients like you (maybe), it's an effective way to get the Court involved in seeing what kind of garbage the banks are pulling on people, and to get a judicial determination of your modification if the bank won't do it on their own.

Another avenue is suing under state unfair and deceptive practices statutes. HAMP may not have any private right of action for violating its terms. But if the bank's actions go beyond simple noncompliance, and become unfair or deceptive (which they all do), then it falls under the state's consumer protection statutes, which do provide a private right of action. Unlike the dec action however, the state consumer protection laws won't necessarily compel a modification.

Questions? Call us today at 954 987-0515.
-Jason Weaver, esq.

MOST BIZARRE FORECLOSURE STORIES OF 2011

2011-12-07T06:12:00.001-08:00

The Huffington Post has published an interesting list of the most bizarre foreclosure stories of 2011. Among the high--err...lowlights...are:

1. Bank of America foreclosing on homeowners who hadn't missed a payment

2. Bank of America foreclosing on commercial property...that had a Bank of America branch in it.

3. Homeowners getting foreclosed on for owing $0.00.

4. Homeowners being disqualified from their loan modification because they paid too early.

The full list is here: http://www.huffingtonpost.com/2011/12/02/foreclosure-fails_n_1125773.html?ref=tw.

Frankly, I probably have a few in my office that could rival some of these stories. And to me, the most bizarre thing is that foreclosures continue to occur even in the face of rampant fraud.

Actually, the most bizarre thing is that homeowners who could get extended time in their home or may qualify for a modification, still refuse to hire attorneys to help them, even though a good foreclosure defense attorney is affordable--much more affordable than your mortgage, in fact....

Are you a tenant? You have rights in foreclosure.

2011-11-18T08:49:00.001-08:00

So you're a tenant living in property that's being foreclosed on. The first question you may have is, do you pay your rent, or do you not pay your rent?

Well, we advise that you pay your rent. Why? Because as long as you are a valid tenant, you have rights to remain in the property, even after it's been foreclosed on.

As part of the Economic Stabilization Act of 2008 (that's the big act that passed all that money for banks--"the bailout," as it's so affectionately called), President Obama in 2009 passed the Protecting Tenants in Foreclosure Act. The act provides that if you are a tenant, you have:

1) The right to remain in the property for 90 days, or the duration of your written lease, whichever is longer, even if it's after the property has been foreclosed on

2) The right to remain in your property for 90 days, if you don't have a written lease (i.e., oral lease, or month-to-month).

The new owner must give you your 90-day notice. That's the new owner after foreclosure--not the current Plaintiff/foreclosing bank in the foreclosure action. You don't have to assert any defense in the foreclosure case to assert the rights, or show up to court, although we always recommend doing a notice of filing your written lease (if you have one) with the clerk of the court's office, in the foreclosure case.

You must have what's known as a "bona fide lease." That generally means a lease entered into before the foreclosure was filed, or without knowldge of the foreclosure, with an arms-length landlord (not your mom), and for real value. So forget about renting to your son for $1 so that you can get more time in the property. But for those of you who are real tenants--keep paying your rent, because your valid tenancy will get you more time at the end of the foreclosure.

Questions? Call us at (954) 987-0515 or www.sunshinelawgroup.com.

A Neat Modification Success Story

2011-11-16T12:59:00.001-08:00

Really, the point of this blog isn't to brag about our all-natural modification wonderfulness. But sometimes, we just have to do it.

If you wonder why you should pay a qualified firm to handle your modification, here's why.

Client--we'll call her "Beatrice," (just because that name sounds like a sweet, kind woman), has been trying to do her own modification. Problem is, her house is here in South Florida, but she spends a large part of the year in California, where her husband is employed. So, Beatrice's bank accounts, her husband's pay stubs, and tax returns, are all listed in California.

Bank says no modification for her--under HAMP, the borrower needs to be living in the property being modified.

Beatrice comes to us explaining her situation. The house here IS her primary residence, it's just that she spends so much time in California with her husband, she uses California bank accounts. But the bank wanted to hear nothing of it.

We get the case, and assist her in writing a letter to the bank, and we negotiate it, explaining the situation, specifically telling the bank that they can either modify the loan, or explain to the Court why it failed to take into account the client's unique situation. We also worked with Beatrice to get as much documentation as possible to support her claim.

Lo and behold...modification approved.

(A special thanks to our own Jared Fink, who worked hard negotiating this file. As a former Countrywide insider himself, Jared has some pretty in depth knowledge of what these banks are looking for, and has been very successful in getting modifications in difficult situations).

THE ATTORNEY GENERAL SELLS OUT

2011-03-25T15:27:00.000-07:00

After a series of successful fights and kinda-victories fighting our most notorious and unscrupulous foreclosure-mill bank firms, it looks like the AG has dropped the ball when it comes to, in my opinion, one of the hugest perpetrators of foreclosure fraud, Marshall Watson PA.

Yes, the Florida AG has settled with Marshall Watson, completely closing its investigation into the firm. Did the homeowners of Florida get anything? Was Marshall Watson crippled? Are there strict restrictions on how Marshall Watson PA can file foreclosures in the future?

Nope.

Among the highlights:

1. Marshall Watson settles for a whopping 2 million (in foreclosure mill law firm dollars, that's pennies). None of that goes to homeowners. Half goes to the AG's office, and the other half to the Florida Bar Foundation, which is a great cause, but doesn't directly do much for the tens of thousands displaced wrongfully by Marshall Watson.

2. In order to foreclosure in the future, Marshall Watson only has to have records in its file that it is a "nonholder" of promissory notes "with the right to enforce." In lay persons parlance, that means that even if they don't own your loan, that's OK, as long as they have permission from someone else to foreclose on you. In fact, that's contrary to what the law in Florida actually is. Marshall Watson in fact got a break here, with a lowered standard than they would have under Florida Law, where it is somewhat unsettled what a "nonholder with the right to enforce" actually is.

3. Marshall Watson only needs to verify its complaints filed from June 2010 forward, when the correct date should be February 2010 forward.

3. They have to review their own affidavits to make sure that they're accurate and correct, but there's no oversight. They do their own investigation. It's like asking your kid to make sure he hasn't eaten too many cookies, or asking your spouse to make sure she's letting you watch enough sports. This completely leaves the cat to watch the henhouse (or whatever the saying is). The AG is trusting a firm that has defrauded thousands, to audit themselves.

Word is that some Marshall Watson files have slowed down a bit; likely they will pick up or continue now that this is laid to rest. Ultimately, this is a slap on the wrist for Marshall Watson, and likely part of a broader "exit strategy" from the foreclosure fraud investigation by the AG's office.

I'm not sure how Marshall Watson got away with riding through this investigation without losing major clients, as is what happened with David Stern and Ben-Ezra and Katz. With both of those firms, Fannie Mae and other major lenders pulled their files in light of the investigation by the AG. I don't know how Marshall Watson managed to keep major lenders from pulling their files. I personally could produce loads of cases where fraud is just completely blatant with Marshall Watson, and I always considered them one of the worst offenders based on my files.

The agreement is here: http://myfloridalegal.com/webfiles.nsf/WF/SKNS-8FAHED/$file/WatsonAVC.pdf.

STERN STRIKES BACK

2011-03-22T13:27:00.001-07:00

It looks like foreclosure fraud king-thief David Stern is now suing the very banks he malpracticed--err, that is, represented. Excuse me.

It seems like certain banks stopped using Stern's services after his firm was investigated by the Attorney General's office, his shareholders sued his back-end processing company, national media reported on his lush lifestyle including his yacht named "mi casa es tu casa"), and numerous former employees testified that the firm was falsifying documents to obtain foreclosures, charging fees to homeowners that may have been illegitimate, failing to verify military service, and foreclosing on people who hadn't been served.

Can't imagine why anyone wouldn't want a firm like that on their side...

http://www.bizjournals.com/southflorida/news/2011/03/18/david-stern-strikes-back-sues-banks.html#ixzz1HLWvPfU9

SUNSHINE GETS SOME GOOD RESULTS

2011-03-21T15:45:00.001-07:00

Far be it for us to toot our own horn, but hey, we're here.

Sunshine recently obtained a dismissal of a foreclosure case filed against a homeowner in 2007. The homeowner had been a victim of a "foreclosure rescue" scam, whereby a company coerced her into signing over the deed to her property to them.

We were successful in forcing that company to transfer title of the property back to our client. Then, there was still the foreclosure case to deal with against the bank, which was set for trial in February of this year. The bank rarely knows how to try cases. Lucky for our clients, we do. By filing numerous motions to strike witnesses, and due to the bank's failure to provide requested information to us, we were able to force the bank to dismiss the entire case just days before it was scheduled to go to trial.

On another matter, a foreclosure case was dismissed on our client in a case filed in 2008. In that case, we pushed the bank to provide required information, including a pooling and servicing agreement, to document the bank's ownership of the loan. Naturally, they couldn't do that...and in fact, they were forced to drop their entire case, when we threatened to bring them to court for sanctions for their failure to provide the documents.

These are, of course, individual results, and not necessarily representative of all cases. But they're good results, and we thought we'd share them with you. Many people have the misconception that foreclosure cases can't be "won." While it's true that free houses are hard to come by, and in many instances, settlement is always a better option, with the right strategy and by staying on top of the bank, it is possible to get very good results for clients in trial, if necessary.

ANNUITIES CAN PROTECT YOUR ASSETS

2011-02-24T09:11:00.001-08:00

Remember....in Florida, money or assets placed in annuity are exempt from Bankruptcy. That means, they can't be taken from you if you declare Bankruptcy. An annuity is a great place to keep assets that you want protected from creditors, or bankruptcy.

Except that you must have real annuities, pursuant to an annuity contract. Many people think that any structured settlement, or installment payment, or other investment that's "like" an annuity, is an annuity. Not true. For bankruptcy protection, you must have an actual, real, bona-fide annuity contract, and live by the terms of that annuity contract. A financial professional can give you more information about your options.

And, if you're going to put assets in an annuity, it should be done as a planning strategy now, long before you declare bankruptcy. It could still be considered fraudulent, if you transfer assets into an annuity shortly before declaring bankruptcy just to protect those assets. It's the difference between "planning," which is acceptable, and "fraudulently evading," which clearly is not.

GUY FORECLOSES AGAINST HIS LENDER

2011-02-18T08:29:00.001-08:00

This is a great story about a guy who won a judgment against Wells Fargo, and when he was awarded a small judgment, proceeded to foreclose on Wells Fargo's office to collect...makes me want to try the same thing....

http://www.huffingtonpost.com/2011/02/17/patrick-rodgers-forecloses-on-wells-fargo_n_824765.html?fbwall

NEW FLORIDA MODIFICATION PROGRAM PROMISES TO HELP. SOME.

2011-02-07T15:03:00.001-08:00

The state of Florida has announced a new modification program, which will begin accepting applications in mere days. The money is from Uncle Sam, which is providing funds to states to try to assist homeowners.

The Good is that the program is geared to those who may be in the most need--the unemployed or underemployed, who are unable to pay their mortgage at all. The money you get from the state is tacked to the end of your loan, interest-free, and if you continue to make payments, the amount the state gave you gets wiped out bit by bit as the years go by.

The Bad is that the program is kind of limited. For example, to qualify, your household income (that means, including your spouse or adult kids who may live with you), must be 140% below median (that's low). You can't be more than 180 days late on your mortgage. It's limited to mortgages at $400,000 or less, which, if you'll recall about 5-6 years ago, was the going rate for 75% of properties in South Florida. You need to have regular check-ins about your job search progress. If you have cash in the bank, you need to apply some of that to your loan before getting assistance (i.e., they can ask you to wipe out the savings that you're currently living on to pay down your mortgage before the state pays). And, of course, the all-mighty banks and their servicers may have "different rules" regarding the use of the funds and application of the program.

So don't get overly excited about it, but check it out, or call us for help....

https://www.flhardesthithelp.org/

WHY IS THE BAR PAYING TO TEACH BANKS' ATTORNEYS?

2011-01-31T10:26:00.000-08:00

Would someone explain to me why MY BAR DUES (which are indirectly paid by your attorneys fees), are going to fund a FREE class for PLAINTIFFS (that's "banks' ") attorneys' legal education?

Where are the classes educating attorneys to DEFEND foreclosures, so that more people can get competent legal counsel defending them? Why do the banks' attorney get this free education from our Florida Bar?

For those of you who don't know, most legal education courses can cost between $150-$600, so it's no small gift that the Bar is giving away.

If you're interested, call the Bar and complaint. Nothing much more you or I can do about it. I'm just venting...

http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/Articles/2E96A4F33C299E0785257822004897E2

THE DANGERS OF NOT HAVING YOUR HOUSE SOLD

2011-01-27T13:27:00.001-08:00

The assumption that most make is that if the bank forecloses on you, they're selling your house at foreclosure auction. But it's important to remember that a judgment of foreclosure, and an actual sale, are different things. The judgment gives the bank the right to sell your home at auction...but it doesn't mean they will. And today, there's a growing trend of banks getting foreclosure judgments, but never putting the house for sale.

For many, this is good news--it allows them to continue to live in the home, without payment. And the bank benefits also, because they know there's someone presumably taking care of the property--mowing the lawn, running the water, repairing the toilets, etc.

But for those who don't actually live in the home being foreclosed on, or if they've moved out, this can be a very dangerous situation. Why? Because technically, until a sale happens, you are still the legal owner of that vacant property. This means you could be responsible for:

1. Trespassers or others who may be injured on the property

2. Code or city violations

3. Fires, or other disasters that may injure others (which could include criminal penalties as well!)

4. HOA or Condo dues or assessments.

This can be a scary situation. You're being on the hook to be responsible for, and take care of and maintain, property that you still legally own, but which has been foreclosed on, and in which you no longer even reside. And if the bank takes years to sell the property...well, you can imagine. Now you're in a situation where, to avoid the headache, you've got to expend money you don't have maintaining it--basically, preserving the bank's property for it until the time it decides it wants the house sold.

The answer? Well, nobody said the bank is the only one that can set a sale. If you're in this situation, you need to move the Court to set a sale date for the property. The Court should grant your motion, and set the property for public sale. Many people have no idea they can do this....but you certainly can, and should.

REALLY WANT TO SAVE YOUR HOME? TRY CHAPTER 13

2011-01-25T14:58:00.001-08:00

That's Chapter 13 bankruptcy....

Yes, Chapter 13, (sometimes known as Chapter 7's ugly cousin) is the one way that you are guaranteed to be able to save your home--if you qualify for a 13.

Unlike Chapter 7, where all your debts are discharged (wiped out), in a 13, you make payments on a portion of your debts over five years. Although it may seem preferable to just wipe out the debts in a 7 instead of making payments, that won't save your home. A 13 can. In a Chapter 13 bankruptcy, the arrears--that is, the amount of payments that you are behind--can be paid off in a period of five years. When you're done, you are current on your loan again, and the home is saved.

There are some considerations, though. Even after your plan, your mortgage will be current, but it won't be modified--that is, you're not changing the interest, principle, or payment amount owed on the property. So your upside down property is still upside down.

And, you need to have income to pay your normal mortgage payment while also making your Chapter 13 plan payments. You're essentially paying both your normal mortgage payment and the arrears through the payment plan, at the same time, and you need to be able to demonstrate sufficient income to do that.

On that note, if you don't have sufficient income, you won't qualify for a 13 at all.

And remember, the more you owe, the more your Chapter 13 payment is, and the less likely you are to qualify. For example, if you haven't paid your mortgage in two years, you'll owe more, and your Chapter 13 payments will need to be bigger, and thus it will be more difficult to quality for a payment plan than if you're only 6 months behind.

So the moral of the story, as it is in many things, is act fast and get a consultation, because you may be overlooking a fantastic and guaranteed way to save your home.

HERES WHAT YOU CAN LEGALLY DO WITH EXTRA MONEY BEFORE BANKRUPTCY

2011-01-04T09:21:00.001-08:00

One of the most common questions I get is from clients who have a little extra money that they don't want to lose in Bankruptcy. They know (or should know) that it is illegal to hide it and that the bankruptcy trustee can "claw back" or "undo" any transaction where they give the money to someone else to try to conceal it from the court.

So are they stuck losing the extra money in bankruptcy?

There are a limited number of ways that it is legal to spend the money before a bankruptcy. They include:

1. Funding an IRA

2. Prepaying home or auto insurance

3. Getting needed medical or dental treatment

4. Repairing the items that you already own, including a car--but be aware that if you improve the value of an item, you could improve it so much so that you lose that item to the bankruptcy court. For example, if you have a $1,500 beater car and you soup it up and modify it and make it into a car that's now worth $5,000, you risk losing that asset.

5. Fixing or improving your home.

6. Paying down student loans, child support, or back taxes, which generally aren't dischargeable in bankruptcy anyway.

Also remember that many expenses you are allowed to deduct from your monthly income when you do the means test. Normally, if your income is above the permissible limit to declare Chapter 7 bankruptcy, you can take certain deductions based on your expenses, to get your income below the allowable threshold. But if you pay down things, like medical debt, and you no longer have that payment, you can't deduct that payment from your income. You may then have a problem if your income ends up being right at the income limit, and you need deductions to reduce the amount.

This is why you should talk to a bankruptcy attorney before you do any of this of course...and much of it may change depending on if you're doing a Chapter 7 or 13 bankruptcy.

UNDERWATER PROPERTIES BY STATE

2010-12-28T20:38:00.001-08:00

Here is a list of the number of underwater properties/negative equity homes, by state. To summarize:

Florida is second in the nation to California, for the total number of properties with negative equity. When taking into account the total number of mortgaged properties--in other words, the percentage of upside down homes--Florida is third, behind Nevada and Arizona. The smallest percentage of upside down homes is in Oklahoma and New York, which are virtually tied.

Interestingly, New York isn't anywhere in the top of any category, despite its population.

The highest loan to value ratio--meaning, the state where the amounts on mortgages which are owed exceed the value of property by the most--is Nevada. Incredibly, the total amount owed by all homeowners in the state with mortgages, exceeds the value of all mortgaged property. What a sad, sad disaster.

Check it out: http://s.wsj.net/public/resources/documents/info-NEGATIVE_EQUITY_0911.html

COUNTRYWIDE/BANK OF AMERICA GO "OOPS!"

2010-11-23T14:39:00.001-08:00

Ever say something you really wish you could take back?

Apparently, Countrywide does too. Specifically, this quote, from a recent case, Kemp v. Countrywide, in a New Jersey Bankruptcy Court:

As to the location of the note, Ms. DeMartini testified that to her
knowledge, the original note never left the possession of Countrywide, and that
the original note appears to have been transferred to Countrywide's foreclosure
unit, as evidenced by internal FedEx tracking numbers. She also confirmed
that the new allonge had not been attached or otherwise affIxed to the note.
She testified further that it was customary for Countrywide to maintain possession of
the original note and related loan documents.

What does this mean?

Well, lets go back in our time machines all the way to 2005-2006, when mortgages were being packaged as securities and sold on Wall Street. Banks, including Countrywide, would originate loans and mortgages, with the idea of selling or transferring those loans, into a pool that contained thousands of loans--a "mortgage backed security."

Investors would invest in the pools of of loans, which were all managed by a trustee.

Well, as many of you who are in foreclosure now know, when someone doesn't pay their mortgage, the trustee forecloses. The trustee has authority because the homeowner's loan is included in that trustees pool of loans.

But here's the problem--if, as the testimony above says, the loans never left Countrywide's possession, they never made it into the pools. So now you have trustees foreclosing on loans that they say are included in their loan pools, when in fact, those loans couldn't be included, because they were never given to the trustees of those pools, because they never left Countrywide's office. It's kind of like starting a trust for your child, but you never actually put the money into the trust, you hide it under your bed.

Well, Countrywide--and now Bank of America, since BOA bought that jewel--has two problems. The first problem are its own investors. How would you feel if you purchased an investment that you thought had 2,000 loans and it only had 1,876? The second problem is obviously that if the loans were never given to the trustee, and never included in those pools, the trustee can't foreclose on them. The trustee now has no standing to enforce the loan.

Now, we defense attorneys have been saying this stuff forever. But this is the first time, in black and white, it's revealed that in fact, CW never gave the trustee the loans. And for CW and BOA, that's an admission that could have devastating consequences, and provide a wealth of defenses to foreclosure defense attorneys.

NEXT TIME, LET 'EM FAIL

2010-11-17T08:53:00.001-08:00

So we spent billions bailing out banks. And all indications are that it will be necessary to do again....this would be a bad, bad idea.

Let me begin by saying that I understand that the first time, we thought we had to save the banks. We believed that it was necessary, otherwise, bad things would happen, like financial collapse, economic depression, and the Sta-Puff Marshmallow Man trampling Wall Street.

But the banks took our money, and changed nothing. They did not lend money to people to help stimulate the economy. They didn't cease foreclosures. They did what companies do when they get money--hoarded it for themselves, built their financial portfolios and left the rest of us with the bill.

So next time...let them fail. It may actually help the economy. Firstly, foreclosures would be halted for a significant amount of time, and some may never happen at all. This means more money in the hands of the consumer, to spend and stimulate the economy. It means fewer vacant or bank-owned property on your street, lowering your property value.

And it would send a message to the remaining banks--manage your finances, or you'll fail. Modify loans to realize profit, instead of foreclosing on negative-equity property and losing money. Stop paying your CEO so much money. Banks do everything against their own financial best interests today, because they know they can; there are no repercussions. When they see the bank next door go under, maybe that attitude would change. And the remaining banks that would buy or take over the loans, seeing what happened to their predecessors, would also be more inclined to modify those loans, or at least make smart financial decisions to cut their losses.

It would open up the banking industry to competition. If Bank 1 refuses to loan money which in turn stimulates the economy, maybe Bank 2 will. Bank 2 would have the ability to do just that, having now seen an influx of new customers who used to be customers of the failed banks. You'd have a host of new banks ready to lend, with more common-sense financial policies.

And because the remaining banks would likely be (or at least start out as) smaller banks, the customer service would be much improved--no more call centers processing modification applications, or one arm of the bank having no idea what the other is doing, or paperwork needing to be faxed to them 25 times because nobody can find it.

Like little kids, the banks need to be taught the hard way. With bad decisions comes punishment. And punishing the big banks may be just what this economy and its consumers need right now.

FANNIE MAE--NO BETTER THAN DAVID J. STERN P.A.

2010-11-05T12:45:00.001-07:00

Well, David Stern (the foreclosure law firm, not the NBA Commissioner) has finally imploded. Largely based on on the continuing investigation by the Florida Attorney General, Stern has laid off hundreds of employees, and most major operations over there are in chaos. At one time Stern's office was handling something like sixteen billion foreclosure files (and that was just on the morning docket).

The death knell was essentially when Fannie Mae withdraw all of their files from the Stern firm. Yes, it seems like government backed Fannie Mae has found religion. See, before anybody cared that documents were being falsified, forgered, going unchecked, unverified, and loan mortgages and notes were being lost in the women's room at the Stern law offices, Fannie Mae didn't seem to care much about what was going on. In fact, according to Stern employee depositions, Fannie Mae was actually pressuring Stern's firm to move the cases faster.

Yet now, with the public eye on them, Fannie Mae pretends that they were duped, and in anger, they're pulling all their files away from Stern.

I don't have any sympathy for Stern--his firm faked documents and his employees committed forgery and perjury in a routine coordinated effort to defraud homeowners and judges. But seriously...it's a little disingenuous after all these years, for Fannie to lay the blame squarely on Stern.

Now Fannie Mae says that they will look for new counsel, to do their foreclosures the right way. Sure. See, the problem is that there is no right way--the loans are not owned by the securitized trusts that are bringing the suits, there are no assignments, and the companies that legitimately do own the loans, are long defunct or bankrupt (among about 100 other reasons why these foreclosures are not legitimate). Any firm doing things "the right way," would have to tell Fannie Mae that a large number of their loans are gone, unenforceable, void,and impossible to foreclose on. I seriously doubt Fannie will want to hear that. And I seriously doubt that law firms, desperate to become the next Stern, with millions of dollars in newly found revenue, will tell them that at the risk of losing their business.

So I don't see a whole lot changing. Regardless of what firm gets Fannie's business, we'll end up right back here again, because Fannie won't hire any law firm unless it tells them what they want to hear--and any firm that tells them that, and gives them the success rate in court that they will insist on, will end up exactly where David Stern is today.

BANKRUPTCY AND YOUR CREDIT SCORE

2010-10-28T11:22:00.001-07:00

The #1 Bankruptcy question I get asked is how Bankruptcy affects someone's credit.

Well, let's start with the obvious two points:

1) Your credit is probably pretty bad right now anyway

2) Bankruptcy is a negative on your credit score.

With that said, the news about your credit isn't all that bad--and in fact, many individuals report that their credit improves after Bankruptcy. Why? Well, firstly, your debts have been eliminated, and so your debt to income ratio is more favorable. Secondly, you have no recurring late payments anymore--that Amex bill isn't 650 days late, then 680 days late, etc etc. The marking of a Bankruptcy on your credit is a negative, but not as big as 25 unpaid credit cards with huge balances.

How can you improve your score after a Bankruptcy? Here's how:

1. Many credit card companies will actually extend credit to you after a Bankruptcy--thy now you have no other debts, and they know you can't declare Bankruptcy gain for another 7 years. So you're a good risk. The interest rate will be enormous--and lordy, I don't suggest racking up more debt after your bankruptcy--but taking out one of these cards and charging $50 a month and paying it on time will help you build a better credit score.

2. Many banks offer "secured" credit cards. With these, you make a deposit--say, $500-$1,000--as security, and that's your credit limit. If you default, they take the security. Again, charging a few dollars on this card every month just to build credit, is effective. Ask your bank about obtaining a secured card.

3. Piggybacking - There's some dispute about whether this is still an effective strategy, but there's some belief that being an "authorized user" on someone else's card can help you improve your credit. Your bankruptcy won't affect the cardholder's credit or interest rates in any way.

4. Credit Repair - Credit repair is relatively cheap and effective (so long as you go with a reputable company to do it with). The credit repair won't wipe the Bankruptcy off your credit, but it will wipe any other erroneous negative marks, or any debts that improperly remain on your credit after the Bankruptcy.

And remember -- even if after your bankrptcy you did nothing but sit on the couch eating bon bons (does anybody actually do this?), your credit still will improve faster than if you didn't declare bankruptcy, where paying off your debts could take 10-20 years.

HIRING DEBT SETTLEMENT LAWYERS--BE WARY

2010-10-20T20:09:00.001-07:00

There are a lot of attorneys making some good bucks off of so-called "debt settlement." And, a lot of desperate clients, willing to drop all their credit card or medical bills off to the lawyer, for the lawyer to negotiate or work out favorable settlements for them. Many are charged a flat fee, some a small monthly fee. The promise is that the attorney will magically lower the balances owed for the client, or work out some other favorable settlement

But here's the truth: In most cases, the lawyer has zero control over what your credit cards offer you, and they'll get you no better deal than you can get yourself.

See, when you owe on a credit card, they're not gonna cut you a deal. And why should they? If you owe $10,000 and they know a debt buyer will buy your debt for $5,000, why settle for you for $3,000? And credit cards are, after all, banks, with their own internal, unbendable, illogical, and often counter intuitive policies. If the company policy is lowering your bill 20%, that's what it is, no matter who is calling them.

You'll get a better deal when your debt is sent to a collection agency, and a better deal as it's bought over and over.

Many people hire lawyers just so they don't have to hear the creditors over and over again...and that may be worth whatever your paying. Problem is that once your debts are sold to collection agencies, each of those new agencies need to be contacted by the lawyer, otherwise they'll all start calling you again.

There's only one time when a lawyer really can help: When your debt is sent to an actual law firm, or even after a lawsuit has been filed, and there's an attorney on the or side. At that point, your attorney may be able to work with the company on he other side. But even then, there's no guarantee.

The bottom line is that most attorneys can't do anything more than what you can do yourself. And worse, if you have, say, $5,000 in credit cards, and you've paid your lawyer $2,000 to lower your balance $1,000, you've actually lost money.

I guess this would be a good time to remind you that if you really want to deal with your debt, the smarter, most effective, and most financially sound method to deal with the problem, is a bankruptcy. But you knew that already....

BLAME THE JUDGES

2010-10-16T15:34:00.001-07:00

So now that Mommy and Daddy (read: the Attorney General's office, and possibly the feds) are starting to come down hard on the kiddies (read: banks and their attorneys), one can only ask the question of how things were allowed to get this way.

And while there's plenty of blame to go around, from greedy (former) mortgage brokers, to investment banks, to congressmen, to foreclosure mill law firms, there's one party here that's gotten a free pass, but which deserves as much, if not more, blame than anyone:

The judiciary. That's the judges.

See, the shameful thing is that our laws were designed to prevent the fraud that has occurred. Our property laws are arcane, and old-school, for a reason: protection. To protect your ability to make sure the property you are buying is really yours, and that chain of title has passed properly, you need to jump through hoops. Also, our court system has evidentiary rules and procedural rules which are an absolute confuddled helter skelter of confusion...but that's also to make sure that fraud doesn't happen, and to protect the integrity of our court system and make sure justice is done.

So you can't blame the laws. The laws, if applied properly, wouldn't have allowed this to happen. And for years, foreclosure defense attorneys have argued before judges that there were problems. Every defense attorney worth his salt has argued, for example, that affidavits submitted to courts were faulty, that signors had no authority to sign, that signatures were falsified, that the note had been securitized, that the assignments were bogus...and yet, the judges ignored us. They entered foreclosures in spite of the law which was being argued to them over and over again. Judges who never would have allowed such shenanigans in a business litigation or family law cases, just looked the other way in a foreclosure case.

And now here we are...with revelations that everything we, the defense attorneys had been arguing, was true all along. Certainly, just because a judge rules against you, it doesn't mean the judge is wrong. Certainly, judges are limited by the evidence and arguments presented to them. And nobody says that a judge has to evenly decide the same number of cases for one side as he/she does the other to be fair. And yes, there have been a limited number of judges with the courage to actually apply the law properly.

But here, make no mistake about it--the judiciary dropped the ball. You'd think when hundreds and thousands of attorneys come to court arguing the same thing, that maybe the judiciary may think "gee, maybe there's something to this argument." Instead, they systematically entered judgments, at an overwhelming pace in favor of banks. The judiciary didn't get it wrong in just a few cases. Rather, they systematically ignored the rules and laws designed to safeguard us from fraud, perjury, and to ensure the proper transfer of property interests. They ruled in favor of the banks not just in a few, but in tens of thousands of cases (often under the rubric of "clearing dockets," code for "grant foreclosures no matter what so we can get rid of cases"), and they did so in the face of very strong evidence that individuals were falsifying affidavits, or pretending they worked for banks they didn't work for. The judiciary essentially made up their mind that these were not arguments they gave much credence to.

And now, as it's revealed that everything foreclosure defense attorneys have been arguing to judges has turned out to be true, it leaves us with nothing more than an empty feeling of "we told you so," and should, even if only secretly to themselves, leave judges asking themselves, "how did we let this happen in our courtrooms?"

MORE SMOKING GUN EVIDENCE

2010-10-12T18:45:00.001-07:00

As if more smoking gun evidence was needed demonstrating the rampant fraud that's going on in foreclosure cases, check this little nugget out.

This is apparently a report from a Citibank conference call with its own investors. You know--one of those meetings where the company tells its investors, "this is what we're doing right, and this is what may come back to bite us on the behind."

The report documents significant problems with securitized mortgages--that is, mortgages which have been pooled, or made a part of mortgage backed securities.

The report notes that even if the fraudulent assignments of mortgage which have been in the news as of late were actually legitimate, it wouldn't even make a difference because the problems in transferring mortgages into the pools began at the pools' inception. In other words, the documentation needed to demonstrate that the mortgages actually were transferred into the pools, were not executed properly, or else were not executed at all, way back when these pools started (usually between 2006-2008). The report balks at the notion that these problems can be fixed in just a few months.

Not only is the paperwork incomplete, but in many cases, the proper paperwork documenting the chain of ownership into the mortgage pool is simply...missing (not unlike how you lose your socks in the couch cushion, only your socks aren't worth $350,000).

The problem creates a catch-22 for lenders: If a particular mortgage wasn't transferred into the pool when it closed, that mortgage can't be included in the pool and the trustee can't foreclose on the mortgage. Well, the problem's easy to fix, right? Let's just execute some paperwork now, making the mortgage part of the pool! Errr...one problem...these pools don't pay taxes. They're known as REMIC trusts. But in order to have that exemption, they need to accept all their loans by the cutoff date, 90 days after the pool is "closed." Take an extra mortgage now, years after the pool has closed, and the entire trust may be subject to taxes--a devastating and costly burden which the investors will have to bear (and won't be very happy to do--can you say "investor lawsuits against the banks?")

The report is notable for its starkness, bluntness, and frank admissions as to the systemic problems in the foreclosure process.

Special thanks to attorney Michael Wrubel, a fantastic attorney who I respect and admire, for digging this report up. Mike also does foreclosure defense, and has an active criminal and appellate practice as well, and is one of the smartest attorneys you'll find.

https://docs.google.com/leaf?id=0B-vDedRvWHhoODg1MzI0MzctOGI2OS00NDQ3LThkY2QtNTNiZjc1YWZjNzFm&hl=en

LLC OWNERS BEWARE

2010-10-06T15:23:00.001-07:00

Many of our clients are small business owners. And while we're not asset protection attorneys, it's worth noting for any of our clients out there who are business owners, that Florida has recently made it much harder to protect your assets through an LLC.

Used to be that if you put property in the name of an LLC, your personal creditors couldn't touch it. No more, thanks to the Florida Supreme Court, which recently ruled that your personal creditors can, in fact, seize, levy, take, sell, and auction, your LLC's property, to pay your personal debts. So no more storing valuable stuff in the name of the company to protect it.

Remember also, small business owners, that Chapter 7 Bankruptcy can be declared by companies also. So if you have a struggling business--and maybe you've personally guaranteed those business debts, as is usually the case--A Chapter 7 for you and your company may be a good idea.

SOMEONE HAS TO PAY...RIGHT? RIGHT?

2010-10-05T21:12:00.001-07:00

I hear this all the time:

"OK, so maybe the bank that's foreclosing doesn't actually own the note or mortgage...but in the end, the homeowner has to pay someone. So in the end, what's the difference--the homeowner either owes this Plaintiff money, or someone else...nobody gets a free house."

It's a persuasive argument. That is, until you think about it logically.

Lets say that you own a business--any business. For now, let's pretend that you own an auto body shop. You have customers who owe you money. You go out of business. For whatever reason, you choose not to collect on the customers who owed your now defunct business money. Do your former customers have to pay "someone" if you don't collect? Could I, for example, bill your old customers and say "Look, I know you didn't actually owe me money, but you may as well pay me, because after all, you owe money to someone and you can't get free auto body work"? Of course not.

This happens all the time--businesses go under, just as banks do. And when they do, oftentimes the people who owed those businesses money, don't ever have to pay the money back. Yet, in no other industry other than housing do we just assume that the customer has to pay "someone." For some reason when it comes to mortgages, we feel that it's just a foregone conclusion that someone must be paid....but when thought of rationally and in the context of any other business, this logic fails. Nobody has yet to explain to me why any customer or debtor needs to just pay someone, where the company that the debtor owes money to, can't or won't collect the debt.

CHASE BITES THE DUST

2010-10-04T19:22:00.001-07:00

Well, now it seems that mega-bank JP Morgan Chase Bank is also halting at least some foreclosures, under revelation similar to that which happened with GMAC/Ally—that affidavits were fraudulently submitted and information in the affidavits and assignments may have been false or unknown to the person making the affidavit.

There are now tens of thousands and possibly more foreclosures that were incorrect, or fraudulent. Any judgment which has been entered in favor of these banks is now subject to attack—even if a homeowner has already lost the home, they could be entitled to damages, a waiver of a deficiency judgment, or both. For those who have only recently lost their home but the bank owns it, there is even the chance of getting the home back.

I am curious as to how many of our pro-bank senior judges whose only mission is to clear the foreclosure dockets will react to this revelation. Certainly, for pro-se (self-represented) folks, there may be minimal relief, but for those with attorneys, this would be a powerful defense.

http://blogs.trb.com/business/columnists/brackey/blog/2010/09/jp_morgan_chase_halts_foreclos.html

THE FRAUD DOMINOS BEGIN TO FALL

2010-10-04T19:12:00.002-07:00

This is big.

It was big news when it was revealed last week that GMAC falsely filled out affidavits and other documents which banks relied upon to foreclose on people. GMAC and Ally Financial, one and the same for most purposes, were exposed when an individual who signed thousands of affidavits was deposed in a court case. In the deposition, it was revealed that he actually had absolutely no knowledge of anything that he had testified about under oath via affidavit. This lead to a halt of all foreclosure actions by GMAC, fueled the Florida Attorney General investigation against many Plaintiff “mill” foreclosure firms, and even lead to Congressman Alan Grayson calling upon the Florida Supreme Court to halt all foreclosure actions in the state.

Now it gets bigger. Bloomberg is reporting (http://www.bloomberg.com/news/2010-09-27/jpmorgan-based-home-foreclosures-on-faulty-court-documents-lawyers-claim.html) that JP Morgan/Chase Bank may now be another culprit of fraud on the courts, after the deposition of a woman, Beth Cottrell, who signed tens of thousands of affidavits for Chase. Ms. Cottrell flatly stated in her deposition that she had no knowledge at all of anything that she signed in foreclosure cases.

JP Morgan/Chase is huge; one of the nation’s largest banks and one of its largest foreclosing Plaintiffs. Calling into question its foreclosures would send shockwaves through the Court system, as well as potentially disbarring the attorneys who perpetrate the frauds that the banks are pushing. Millions of judgments of foreclosure would now be subject to doubt, or reversal.

Stay tuned…

HERE’S WHY OUR HOUSING MARKET MAY NEVER RECOVER. EVER.

2010-10-04T19:12:00.000-07:00

Here’s a sobering thought: The housing crisis may last…forever?

How?

Well, we know that millions of homes are being foreclosed upon. Turns out now that many title insurers may refuse to insure title of foreclosed properties. As has been written about many times, banks often (nearly never) have evidence to show that they own the note or mortgage that they are foreclosing on. And while that may be good enough for a judge to enter the foreclosure, that won’t be good enough for title insurers after the foreclosure, many of whom, according to the article below, will refuse to insure the title of foreclosed property.

And if there’s no title insurance, there’s little chance of property selling to anyone, leaving houses vacant…conceivably forever.

See, when loans and mortgages are securitized and transferred, but banks take the “fast and loose” approach to getting the details right, even if the foreclosure is entered, title insurers won’t insure the title. The title insurer doesn’t care that the judge entered the foreclosure, or that the Plaintiff promised it owned the note and mortgage. The title insurance wants cold, hard, written, documented proof of the chain of ownership, and that doesn’t exist in 99% of foreclosures.

The banks could thus be killing our economy twice—first, when they chose to decimate our housing market by selling predatory loans at overvalued prices without concern to who was borrowing just so that they could pool the loan into a mortgage backed security (MBS) pool, and then again, when they foreclosed without documentation that they owned the loan or the mortgage, leaving a gaping hole in the chain of title, a hole which may not ever be curable.

http://www.nakedcapitalism.com/2010/09/latest-real-estate-time-bomb-title-of-foreclosed-properties-clouded-wells-fargo-dumping-risk-on-hapless-buyers.html

YOUR CAR AND BANKRUPTCY

2010-10-04T19:11:00.001-07:00

One of the things I hear most often from potential Bankruptcy clients is that they are concerned about being able to keep their car. Luckily, you have a number of options in Bankruptcy which will allow you to keep your car.

The initial option is if your car’s value minus any liens, leaves equity in the vehicle that falls below your exemption limit. For example, if you can exempt (that is, protect from being taken by the Bankruptcy Court to pay off creditors) $4,000 in personal property, and your car has $2,000 in equity, then there’s no problem. Even if your car is worth $100,000 but there’s $98,000 in loans on the car, the vehicle still only has an equity value of $2,000.

Your car’s value will be based on its resale value—you can do your own appraisal at Kelly Blue Book (kbb.com), or just by having places like CarMax review the value of the vehicle. Don’t forget to take into account issues that may lower your car’s value, such as scratches, prior accidents, or the throw up stains on the back seat when Fido ate too much grass at the dog park. Remember, for Bankruptcy—less is more…the lower the value of the car, the more likely it is to fit inside of your exemption limits.

You can also opt to pay the Bankruptcy trustee to keep your car. For example, if you have an exemption of $1000, but the car is worth $2,000, you may be able to pay the trustee $1,000 to keep the vehicle. Sometimes, when the car’s value is only slightly over the exemption, the trustee may just let you have it without asking for payment.

Lastly, there is the option of redemption, a process by which you are able to keep your vehicle and make payments based on the value of the car—not the amount of the loan. Many companies (722exemption.com) specialize in funding clients to keep their car. The benefit is that you get to keep the car, and make payments on just what it’s worth—although your interest may be quite high. But that may still be a decent option given the balance on the loan is lowered so significantly, and, of course, you get to keep your vehicle.

THE HIDDEN EVILS OF STUDENT LOANS

2010-10-04T19:10:00.001-07:00

The link below provides a sobering graphic for student loans, which are not dischargeable in Bankruptcy. Americans are racking up incredible student loan debt, while there are fewer and fewer jobs out there to help them pay it back. And if you thought getting a mortgage was easy “back in the day”, many college graduates simply signed a sheet of paper and Voila! –hundreds of thousands of dollars in loans were theirs.

http://abovethelaw.com/2010/09/the-student-loan-racket-now-in-one-easy-to-understand-graphic/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+abovethelaw+%28Above+the+Law%29

LADIES NIGHTS SURVIVE COURT SCRUTINY

2010-10-04T18:39:00.000-07:00

You may be glad to hear that your favorite ladies night at your local dive is in no danger…the Second Circuit District Federal Court has determined that it is not unconstitutional to charge more for men than women for admission on “ladies nights.”

The Plaintiff (who also happened to be an attorney) had argued that because the bars get their liquor license from the state, that they were “state actors,” and must abide by the constitution. Only state actors, not private businesses or persons, must comply with the constitution.

The Court didn’t buy the argument, saying that the fact that the liquor license is given by the state doesn’t turn the bars or clubs into “state actors” for constitutional purposes. As they are not “state actors,” the act of charging men more than women for admission was not a violation of the constitution.

Whew!

http://blogs.wsj.com/law/2010/09/01/second-circuit-rejects-constitutional-challenge-to-ladies-nights/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Flaw%2Ffeed+%28WSJ.com%3A+Law+Blog%29

THE LOTTERY MAY NOT PREVENT BANKRUPTCY

2010-10-04T18:34:00.000-07:00

Don’t get too excited by the lottery. A recent study shows that the Bankruptcy rate for lottery winners is about 5%. Of course, the majority of them were “modest” lottery winners, from about $5,000-$50,000. If you win Powerball you probably would be OK.

The study doesn’t tell us what percentage of the overall population will declare bankruptcy, nor does it tell us the economic status of the folks playing the lottery—i.e., whether they were having financial troubles before the played.

But why let facts get in the way of an interesting statistic….?

http://consumerist.com/2010/09/youre-more-likely-to-go-bankrupt-from-winning-a-lottery-than-to-win-one.html

STAY AWAY FROM DEBT CONSOLIDATION / SETTLEMENT COMPANIES

2010-10-04T18:22:00.001-07:00

Looks like those “Debt Settlement” companies will be gone soon, as they are now prevented from taking up front fees. These are companies that would promise to let you pay all your creditors in one consolidated reduced payment, or that would say they could reduce the balances that you owe on your debts.

The scam here is that there’s nothing they’re doing that you couldn’t do for yourself—most creditors will take payments, or even reduce balances if you can pay them all at once. You don’t need to pay a company to do that for you.

I’m sure we’ll hear about a lot of companies violating this rule…but generally, you should run from these “debt settlement” or “debt consolidation” companies.

http://www.dailyfinance.com/story/consumers-face-huge-losses-with-debt-settlement-firms/19613606/?icid=main%7Chtmlws-sb-w%7Cdl3%7Csec1_lnk3%7C167633

GOVERNMENT REVEALS TRUE MOTIVE OF HAMP IS TO HELP BANKS—NOT HOMEOWNERS

2010-10-04T18:20:00.000-07:00

Below is a fascinating article about the Government’s Making Home Affordable Modification program, affectionately known as HAMP.

Shockingly, the U.S. Treasury has admitted that HAMP has been a failure…for you. But not for banks. It appears that the U.S. Treasury has admitted that the goal of HAMP was not to allow people to keep their homes, but rather, to extend the time it takes to get foreclosed on, so as to allow banks to spread out their losses over time.

A foreclosure of underwater property is a net loss to the bank. Enough of those at once, and the bank goes under, (supposedly) bringing the economy down with it. But take those losses, and spread them out, and it’s not so bad. Kind of like how if you had to lose $50 a month for a year it would be better and easier for you to survive than paying $600 all at once.

So HAMP keeps people in their houses longer, as they apply for modifications, and in some cases, collect what’s known as “trial payments,” and the foreclosures take longer, and it ensures that the banks can keep a solid bottom line.

Kind of a shocker, considering that this administration was supposed to be pro-homeowner/consumer, not pro-bank. Many in legal circles have wondered why HAMP didn’t have more “teeth,” or provisions to make it more effective than it is. This is apparently the answer. The party line is probably that the failure of U.S. Banks drags the economy down with it, so keeping them afloat is best for all of us.

But is it? If your bank failed, its inventory—your mortgage—may be bought for pennies on the dollar by another bank. In turn, that bank can offer you a more aggressive modification. That puts more money in your pocket every month with a lower payment, and keeps neighborhoods vibrant and economically viable and stabilizes home values by preventing foreclosures. There’s some logic to saying that without banks to lend, there is no economy, but right now, banks aren’t lending anyway.

And of course, there’s pure economic Darwinism—the banks that offer modifications and cut their losses survive. The ones that don’t go under. I don’t see a huge problem with this.

http://www.alternet.org/module/printversion/147955?source=patrick.net_