Posts Tagged ‘avoid bankruptcy’

Can Borrowers Stop Foreclosure by TRO in a Civil Action?

April 20, 2010

In April, 2010 Judge Gary A. Feess, U.S. District Court for the Central District of California, issued an opinion holding in substance that there is no injunctive relief against foreclosure based on lender RESPA violations. [see RESPA TRO Denial]  Presiding Judge Irma E. Gonzalez in the Southern District held to the contrary in November, 2009, [see Preliminary Injunction RESPA Preliminary Injunction] albeit in a case apparently involving different facts.  The gravamen is the same, lenders are running amok with foreclosures even though they cannot show the two basic things they need to show – (1) who owns the note and (2) how much is owed? Which opinion do you think best follows the law?

Attachments for this Discussion are on the Interactive Law Network at
http://interactivelawcenter.ning.com/forum/topics/are-borrowers-entitled-to/edit

Advertisements

FDIC Pares Loan Loss Aid for Bank Buyers

April 13, 2010

In February, 2010 I posted a Page entitled “Foreclosure Profits Beat Loan Mod” in which I reviewed the IndyMac Loan Purchase Agreement and Loss Sharing Agreement between the FDIC and OneWest Bank.  These are evidently templates that the FDIC devised during the Resolution Trust era of the 1990s.  The issue is whether these arrangements are fair or reasonable in practice.  OneWest Bank, which bought out IndyMac in March, 2009, was involved in a short sale case that was disseminated over the internet.  It was shown how, after reaching a threshold, OneWest gets a built in profit at the expense of the FDIC whenever there is a loss on a purchased loan.   Among the many implications is the effect such sweetheart deals will have over the long term on the general public.   Several major investors in OneWest already profited from the subprime mess, and now stand to reap obscene profits in this phase. 

The spotlight went off after about a week, the video is no longer readily accessible, and the FDIC simply published a statement that the bank needs to incur a minimum loss amout before it can start taking profits from losses.  In the March 27-28 weekend issue of the Wall Street Journal I found this article by Matthias Riekker with the above title indicating there are 94 of these loss sharing agreements outstanding that back $122 billion of assets.  There were 175 bank failures in 2009 and 41 in the first quarter of 2010.  The way these matters are handled continues to have an important impact on the average person and deserves careful scrutiny.

Why not Just Walk Away From an Underwater Mortgage?

March 19, 2010

The Los Angeles Times carried an article March 17 entitled “More Homeowners are Opting for ‘Strategic Defaults‘” documenting the increasing trend of borrowers who stop making mortgage payments, even if they can afford them.   It’s been a psychological issue with shame traditionally over-shadowing rational thought.  Brent T. White, a Law Professor at the University of Arizona, published a study that made quite a splash on the internet entitled “Law Professor to Homeowners, Walk Away From Your Mortgage“finding that most homeowners still are not walking away due exaggerated anxiety over foreclosure’s percieved consequences in addition to shame and guilt. Since the conduct of financial institutions and government is cold and calucalting, homeowners end up bearing a disproportionate share of the cost of the meltdown.

 Have you or anyone you know come up against this dilemma?  Certainly it makes no sense to struggle to pay if the bank is going to take the house away anyhow.

Early Planning Guides for Loan Modification and Bankruptcy

November 15, 2009

What you should know during loan modification and before you file for bankruptcy – follow these steps:

(1)  Collect your financial information.  What is your income and expense?  What are your assets and liabilities?

(2)  Consider the alternatives.  Get a free attorney consultation (widely available).  If you’re a homeowner, determine whether loan modification is feasible, or whether other measures are necessary.

(3)  If bankrtupcy is the only choice, familiarize yourself with the various types.  Chapter 7 to eliminate debts, Chapter 13 to pay all or part of your debts over time (often used to enable you to keep your home) and when Chapter 11 is required.

(4)  Develop a plan with an event timeline.

Avoid Bankruptcy – Prepare Ahead of Time

November 15, 2009

Are you struggling through financial problems and no comprehensive plan of action to deal with them?  With the recession dragging on and unemployment persistently growing, large numbers of people are reacting to financial predicaments as they arise, with short term solutions.  Loan modification proceedings can become a major diversion that ultimately fails to fully resolve a steadily deteriorating situation.  The most effective moves to avoid bankruptcy must often be made six months to a year before reaching a crisis, and/or during the loan modification period.  You are welcome to post a comment or go to the Interactive Law Center and receive an early consultation.  Also see our Pages entitled “Bankruptcy Checklist” and “Special Capabilities Required of Attorneys for Bankrtupcy Work”.