Malik W. Ahmad

Archive for January, 2010|Monthly archive page

Debts Which Cannot Be Discharged in Bankruptcy?

In Loan Modification on 01/31/2010 at 5:20 pm

Debts You Still Have to Pay After Bankruptcy

- You still have to pay fine and penalties for violating the law and that includes your traffic tickets and criminal fines and criminal restitution.
- You still have to pay debts you have not included in your bankruptcy papers.
- Students loans are not dischargeable in bankruptcy court and filings unless it is a very hardship case and judge decides it separately.
- Again, child support and alimony cannot be discharged via bankruptcy.
- Your settlement from a divorce or separation cannot be subject to discharge in a bankruptcy proceeding.
- Fraudulent debts cannot be discharged.
- Debts for personal injuries or death caused by your intoxicated driving and
- Recent IRS collections and other tax dues.

Divorce and Bankruptcy?

In Uncategorized on 01/31/2010 at 5:17 pm

Filing of Bankruptcy During Divorce
Along with some narrow exceptions, the law of automatic stay does applies to divorce proceedings. It would prevent completion of divorce until the stay is lifted or expired or is terminated. A spouse can request the court asking for the motion to lift the stay to complete the divorce process. Failure to seek relief from stay can lead to swift contempt penalties from the court. It can be used as an abusive process as one spouse is abandoning its responsibilities toward the distribution of marital assets in community states like Nevada. The combination of both bankruptcy and divorce are done in different judicial forums as bankruptcy is filed in federal courts and divorce is filed in district courts on a state level and their interaction is dangerous to the interests of clients. It is complex and should be avoided

Tenant Eviction and Bankruptcy

In Uncategorized on 01/31/2010 at 5:14 pm

New Laws in Landlord Tenancy and Bankruptcy?
Let us say if you are behind on rent payments, can your landlord evict you while you file for bankruptcy?
This question has been asked many times from our clients. We had tried to answer it in simple ways here. The answer depends upon whether your residential landlord has only threatened to evict you or in fact got an eviction judgment against you. The new bankruptcy law has changed this equation for ever. Under this law, if your landlord has already begun eviction proceedings in state court and has obtained a judgment for possession of the residential premises before you file for bankruptcy, the landlord can evict you unless, the debtor do two things.
1. File a certification with the bankruptcy court, along with your bankruptcy petition, that there are circumstances under applicable non bankruptcy rules that would allow you reinstate the residential lease and cure the monetary default; and

(2) pay 30 days rent to the bankruptcy court clerk to be transmitted to the landlord. The landlord can still object, in which case the bankruptcy court must decided within ten days of the filing of the objection whether the landlord can proceed with the eviction in order to gain possession of the rental property. Then you must also file a second certification with the bankruptcy court, within thirty days of filing your bankruptcy petition, stating the pre-petition default that gave rise to the landlord’s judgment for possession in state court has been cured –in other words, that you have paid all back rent. Even after you file this second certification, however, the landlord may still object, in which case the court must determine within ten days of the objection whether the landlord can proceed with the eviction action.
The law also provides that, if the residential landlord has begun eviction proceedings before you file for bankruptcy on the grounds that you have endangered the rental property or have used or allowed others to use illegal substances on the property, all the landlord has to do is file a certification to this effect with the bankruptcy court clerk. The landlord can then proceed with the eviction process fifteen days later if the debtor does not object. Note that the law does allow you to object within fifteen days and, at a hearing, show the bankruptcy court that the situation has been remedies or never existed in the first place. At that point, it will be up to the bankruptcy court to decide whether your landlord can proceed or not. The deadlines in these kinds of situations are very short. It is good to contact an experienced and knowledgeable attorney in these matters.

What Are the Advantages of Filing Bankruptcy

In Uncategorized on 01/31/2010 at 5:12 pm

Advantages of Filing Bankruptcy?
Filing for bankruptcy allows most of the depressed folks a fresh financial start. Your debts are discharged and all the collection efforts are stopped immediately. Sooner you file for bankruptcy, an automatic stay is placed on the collection calls. If a creditors continues to collect, the creditor may be held in contempt of court and there are hefty penalties. There are also laws which stops and punishes all kinds of discrimination against people who declares bankruptcy.

What are problem debts and how to handle them in bankruptcy?

In Loan Modification on 01/31/2010 at 5:08 pm

What are Problem Debts?
Your debts far exceed your income. You are behind on your payments including your mortgage payments and other bills, and your creditors are constantly harassing you. You become sick few months ago, and could not pay the medical bills on time, and now your phone is ringing off the hook. Many Americans find themselves in this situation. The creditor’s keeps calling and the debt just keeps growing.
Bankruptcy is one of the alternatives available for relieving financial distress. It is a serious legal procedure and needs lots of both technical and legal help. Let us first explore about the alternatives to bankruptcy. Some people in this financial distress can improve their situations simply by contacting and directly negotiating with the creditors. Others may seek help with reputable consumer credit counseling services which have experienced negotiators with the creditors and formulating and establishing repayments plans. Bankruptcy should be taken as a last resort and not the first thing in this distressed decision making time.
Alternatives to Bankruptcy
A creditor might be willing to give you a break in giving more time for your payments. Also, a creditor might be willing to settle for cash a large onetime payment for the total debts. Again, it might be willing to settle its claims in exchange for partial cash payments, or it may be willing to extend the terms of the payments. These extensions and smaller payments over a considerably larger period of time may give you some relief.
Are you judgment Proof?
A judgment proof person is one who has not many tangible assets and most of his income is exempted already from garnishment. Again a judgment proof person has little or no money, no assets and no property that he would be unable to pay even if a judgment by a court of law is rendered against him. There are wide varieties of both state and federal laws which can make him/her exempt. When creditors would do their final analysis, they would consider it more convenient not to go after this judgment proof person because there is nothing they can take by way of judgment enforcement and execution. It is a futile exercise and waste of money seeking judgment against judgment proof folks. Your creditors would spent considerable amount of money in obtaining both judgment and then executing, and would be shocked and embarrassed when they don’t find any way to execute this against you. But your creditors may come back and keeps looking for avenue to satisfy your judgment sooner you get more property than what it originally made you a judgment proof individual.
Contacting your creditors
Again, it is a good idea to contact your creditors directly if you have more assets than a judgment proof may have. No need to hide them. It is good to pick up the phone and talk directly to your creditors. You can request a reduction in your monthly payments, as well as reduction in your interest rate. You also can obtain the help of some of the reputable credit counseling agencies. You can find the nearest CCCS by calling 800-388-22277 or by visiting http://www.nfcc.orga. Some do charge some money, but it is worth to pay this amount in exchange for very valuable help. Make sure you read all the finger prints and ask lots of questions. THE CCCS make repayment plans which are distributed among your creditors until your debts are fully paid. It can be lengthy time which can also repair some of your damaged credit and increase your FICO scores. Please be careful, however, with the for-profit agencies. Sometime there are sharks sitting in these turbulent waters. Keep in mind and look for predatory debt counselors. Be sure to check their references in the Better Business Bureau and ensures that it is approved by the US trustee for credit counseling in the bankruptcy operations.
What things to be considered in debt consolidation?A debt consolidation can ideally be too true, but it still is ideal for folks who do not like to declare bankruptcy and especially if their debts can be managed and they have the paying capacities. One should be careful in having a permanent interest rate when consolidating their debts. Again, watch out for a prepayment penalty? Are you surrendering something like a plastic card for permanent use? It is not a bad idea to do that. It is not worth any consolidation, if you keep on using your credit cards during this time. It is good to put them in a shredder once for all.
Can you Do Your Debt Consolidation at Your Own?
Of course, you can do it. You can at least do one habit right away. Start watching the financial news and read some good financial magazines. Pick up the phone and talk to your creditors and tell them your desire to consolidate debt. They would let you talk to some important and knowledgeable person. If you are eager to find a resolution, your creditors would also be eager to lend you a helping hand. You can always ask your creditors to forego the late fees, the penalties. Get everything in writing before making payments. Never give them the access to your checking account numbers

Bank of America Sued for Foreclosing on Wrong Home

In Uncategorized on 01/29/2010 at 11:09 pm

Banks in their zeal to foreclose are forgetting the basic principal of due diligence and foresight. Bank of America, by far is, the most despicable bank in its response to loan modification request. Its customer service is horrible, slow, lazy and would tell you quite often that they never received faxes, letters or financial statements despite you sending them many times. It has eaten up lots of bailout money, very slow in customer service and in doing loan modification, continuously lose all the papers sent to them, and mostly manned by rude customer and loss mitigation people. These folks have no basic milk of human kindness. Their stock is continuously going lower everyday but still they are not learning any lesson. This news came from Florida where the homeowners paid all cash for his home yet BOA still foreclosed their home.

http://www.law.com/jsp/article.jsp?id=1202439609936

Who Is MERS? Why They Hold Millions of Loans? Tracking Loans Through a Firm

In Uncategorized on 01/29/2010 at 5:01 pm

Almost every one of us has heard about MERS but do not exactly know who they are and what they do? Is MERS some kind of alien entity. In fact, yes, it is an electronic entity.

MERS is an entity which would foreclosure your home even though it has no physical presence anywhere. Under the rules of civil procedure only a real party in interest can sue or be sued, and MERS is an electronic entity and not a real party in interest. MERS never lent anyone a single penny, and never signed any disclosure papers, but still they like to foreclose your home. Why?
Here, is an interesting article about the role of MERS and what they do?

http://www.nytimes.com/2009/04/24/business/24mers.html?_r=1&pagewanted=print

Finally Ameriquest is Nailed As Predatory Lender

In Loan Modification on 01/28/2010 at 9:27 pm

Ronald Reagan used to include this phrase in his omnipresent speeches all the time: “You can run but you can’t hide”. This is true about Ameriquest. This was a predatory lender of the most henious kind along with Countrywide, and innumerable others who had already bitten the dust and no longer exists. Even their tombstones is vanished. Now, the good news is that the final settlement has been reached between the lenders and the homeowners who were cheated and victim of the predatory lending practices of this bank. It would be better if more predatory lenders are taken to task and forced to settle with the homeowners. Please read the following settlement story.

http://www.latimes.com/business/la-fi-ameriquest27-2010jan27,0,1961523.story

Are there any alternatives to chapter 7?

In Loan Modification on 01/27/2010 at 10:52 am

Before you like to decide and file for any of the chapter under the Bankruptcy Code, one must explore and find out that, in fact, there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Bankruptcy would destroy their credit ratings and dealings with established dealers and creditors. Why take such a risk? Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.
People with regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to “catch up” past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707(b).
Means Income of the Debtors?
If the debtor’s “current monthly income” is more than the state median, the Bankruptcy Code requires application of a “means test” to determine whether the chapter 7 filing is presumptively abusive. Abuse is presumed if the debtor’s aggregate current monthly income over 5 years, net of certain statutorily allowed expenses, is more than (i) $10,000, or (ii) 25% of the debtor’s nonpriority unsecured debt, as long as that amount is at least $6,000. (2) The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to chapter 13 (with the debtor’s consent) or will be dismissed. 11 U.S.C. § 707(b)(1).
Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.
Background
A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor’s property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property; but a trustee will liquidate the debtor’s remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property.
Chapter 7 Eligibility
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). Subject to the means test described above for individual debtors, relief is available under chapter 7 irrespective of the amount of the debtor’s debts or whether the debtor is solvent or insolvent. An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1). Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.
How Chapter 7 Works
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. (3) In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors. (The Official Forms may be purchased at legal stationery stores or downloaded from the internet at http://www.uscourts.gov/bkforms/index.html. They are not available from the court.)
The courts must charge a $245 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge. Normally, the fees must be paid to the clerk of the court upon filing. With the court’s permission, however, individual debtors may pay in installments. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Fed. R. Bankr. P. 1006. For cause shown, the court may extend the time of any installment, provided that the last installment is paid not later than 180 days after filing the petition. Id. The debtor may also pay the $39 administrative fee and the $15 trustee surcharge in installments. If a joint petition is filed, only one filing fee, one administrative fee, and one trustee surcharge are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 707(a).
If the debtor’s income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and the debtor is unable to pay the chapter 7 fees even in installments, the court may waive the requirement that the fees be paid. 28 U.S.C. § 1930(f).

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must provide the following information:

1. A list of all creditors and the amount and nature of their claims;2. The source, amount, and frequency of the debtor’s income;3. A list of all of the debtor’s property; and
4. A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household’s financial position.
Among the schedules that an individual debtor will file is a schedule of “exempt” property. The Bankruptcy Code allows an individual debtor (4) to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of the debtor’s home state. 11 U.S.C. § 522(b). Many states have taken advantage of a provision in the Bankruptcy Code that permits each state to adopt its own exemption law in place of the federal exemptions. In other jurisdictions, the individual debtor has the option of choosing between a federal package of exemptions or the exemptions available under state law. Thus, whether certain property is exempt and may be kept by the debtor is often a question of state law. The debtor should consult an attorney to determine the exemptions available in the state where the debtor lives.
Filing a petition under chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. 11 U.S.C. § 362. But filing the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Between 20 and 40 days after the petition is filed, the case trustee (described below) will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator (5) schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor’s financial affairs and property. 11 U.S.C. § 343. If a husband and wife have filed a joint petition, they both must attend the creditors’ meeting and answer questions. Within 10 days of the creditors’ meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b).
It is important for the debtor to cooperate with the trustee and to provide any financial records or documents that the trustee requests. The Bankruptcy Code requires the trustee to ask the debtor questions at the meeting of creditors to ensure that the debtor is aware of the potential consequences of seeking a discharge in bankruptcy such as the effect on credit history, the ability to file a petition under a different chapter, the effect of receiving a discharge, and the effect of reaffirming a debt. Some trustees provide written information on these topics at or before the meeting to ensure that the debtor is aware of this information. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the meeting of creditors. 11 U.S.C. § 341(c).
In order to accord the debtor complete relief, the Bankruptcy Code allows the debtor to convert a chapter 7 case to case under chapter 11, 12 or 13 (6) as long as the debtor is eligible to be a debtor under the new chapter. However, a condition of the debtor’s voluntary conversion is that the case has not previously been converted to chapter 7 from another chapter. 11 U.S.C. § 706(a). Thus, the debtor will not be permitted to convert the case repeatedly from one chapter to another.
Role of the Case Trustee
When a chapter 7 petition is filed, the U.S. trustee appoints an impartial case trustee to administer the case and liquidate the debtor’s nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor’s assets are exempt or subject to valid liens, the trustee will normally file a “no asset” report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an “asset” case at the outset, unsecured creditors (7) must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002(c). A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502(b)(9). In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor’s property should consult an attorney for advice.
Commencement of a bankruptcy case creates an “estate.” The estate technically becomes the temporary legal owner of all the debtor’s property. It consists of all legal or equitable interests of the debtor in property as of the commencement of the case, including property owned or held by another person if the debtor has an interest in the property. Generally speaking, the debtor’s creditors are paid from nonexempt property of the estate.
The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor’s nonexempt assets in a manner that maximizes the return to the debtor’s unsecured creditors. The trustee accomplishes this by selling the debtor’s property if it is free and clear of liens (as long as the property is not exempt) or if it is worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property. The trustee may also attempt to recover money or property under the trustee’s “avoiding powers.” The trustee’s avoiding powers include the power to: set aside preferential transfers made to creditors within 90 days before the petition; undo security interests and other prepetition transfers of property that were not properly perfected under nonbankruptcy law at the time of the petition; and pursue nonbankruptcy claims such as fraudulent conveyance and bulk transfer remedies available under state law. In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the estate. 11 U.S.C. § 721.
Section 726 of the Bankruptcy Code governs the distribution of the property of the estate. Under § 726, there are six classes of claims; and each class must be paid in full before the next lower class is paid anything. The debtor is only paid if all other classes of claims have been paid in full. Accordingly, the debtor is not particularly interested in the trustee’s disposition of the estate assets, except with respect to the payment of those debts which for some reason are not dischargeable in the bankruptcy case. The individual debtor’s primary concerns in a chapter 7 case are to retain exempt property and to receive a discharge that covers as many debts as possible.
The Chapter 7 Discharge
A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, though, debtors should consult competent legal counsel before filing to discuss the scope of the discharge. Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. In most cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case – generally, 60 to 90 days after the date first set for the meeting of creditors. Fed. R. Bankr. P. 4004(c).
The grounds for denying an individual debtor a discharge in a chapter 7 case are narrow and are construed against the moving party. Among other reasons, the court may deny the debtor a discharge if it finds that the debtor: failed to keep or produce adequate books or financial records; failed to explain satisfactorily any loss of assets; committed a bankruptcy crime such as perjury; failed to obey a lawful order of the bankruptcy court; fraudulently transferred, concealed, or destroyed property that would have become property of the estate; or failed to complete an approved instructional course concerning financial management. 11 U.S.C. § 727; Fed. R. Bankr. P. 4005.
Secured creditors may retain some rights to seize property securing an underlying debt even after a discharge is granted. Depending on individual circumstances, if a debtor wishes to keep certain secured property (such as an automobile), he or she may decide to “reaffirm” the debt. A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises that it will not repossess or take back the automobile or other property so long as the debtor continues to pay the debt.
If the debtor decides to reaffirm a debt, he or she must do so before the discharge is entered. The debtor must sign a written reaffirmation agreement and file it with the court. 11 U.S.C. § 524(c). The Bankruptcy Code requires that reaffirmation agreements contain an extensive set of disclosures described in 11 U.S.C. § 524(k). Among other things, the disclosures must advise the debtor of the amount of the debt being reaffirmed and how it is calculated and that reaffirmation means that the debtor’s personal liability for that debt will not be discharged in the bankruptcy. The disclosures also require the debtor to sign and file a statement of his or her current income and expenses which shows that the balance of income paying expenses is sufficient to pay the reaffirmed debt. If the balance is not enough to pay the debt to be reaffirmed, there is a presumption of undue hardship, and the court may decide not to approve the reaffirmation agreement. Unless the debtor is represented by an attorney, the bankruptcy judge must approve the reaffirmation agreement.
If the debtor was represented by an attorney in connection with the reaffirmation agreement, the attorney must certify in writing that he or she advised the debtor of the legal effect and consequences of the agreement, including a default under the agreement. The attorney must also certify that the debtor was fully informed and voluntarily made the agreement and that reaffirmation of the debt will not create an undue hardship for the debtor or the debtor’s dependants. 11 U.S.C. § 524(k). The Bankruptcy Code requires a reaffirmation hearing if the debtor has not been represented by an attorney during the negotiating of the agreement, or if the court disapproves the reaffirmation agreement.11 U.S.C. § 524(d) and (m). The debtor may repay any debt voluntarily, however, whether or not a reaffirmation agreement exists. 11 U.S.C. § 524(f).
An individual receives a discharge for most of his or her debts in a chapter 7 bankruptcy case. A creditor may no longer initiate or continue any legal or other action against the debtor to collect a discharged debt. But not all of an individual’s debts are discharged in chapter 7. Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal injury caused by the debtor’s operation of a motor vehicle while the debtor was intoxicated from alcohol or other substances, and debts for certain criminal restitution orders.11 U.S.C. § 523(a). The debtor will continue to be liable for these types of debts to the extent that they are not paid in the chapter 7 case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable. 11 U.S.C. § 523(c); Fed. R. Bankr. P. 4007(c).
The court may revoke a chapter 7 discharge on the request of the trustee, a creditor, or the U.S. trustee if the discharge was obtained through fraud by the debtor, if the debtor acquired property that is property of the estate and knowingly and fraudulently failed to report the acquisition of such property or to surrender the property to the trustee, or if the debtor (without a satisfactory explanation) makes a material misstatement or fails to provide documents or other information in connection with an audit of the debtor’s case. 11 U.S.C. § 727(d).

Even White House is Deep Under Water

In Loan Modification on 01/25/2010 at 10:03 pm

The flood had hit the home market and almost every home in USA is under water. The shocking thing is that the nation’s most recognized symbol i.e the White House is deep under water. Here, is the latest posting on the current market value of the White House. This link is taken from Zillow com, and all credit goes to them

http://www.zillow.com/blog/one-year-into-obama-presidency-what-is-the-white-house-worth-now/2010/01/20/#{scid=new-site-centerlink1}

New Version of Legislation Required to Help Homeowners

In Loan Modification on 01/23/2010 at 8:49 pm

We had said it many times that the current Obama Plan aka HAMP is inadequate to stop the increasing foreclosure and combat the rising foreclosure rate across USA. Basically, the HAMP has no teeth in any enforcement, and despite all the tought talk, the banks are free to deny the deserving homeowners the right to modify their loans. Banks had too many grounds to deny any deserving homeowners. We had suggested that only a very small legislation is required to fix the homeownership in USA. We had proposed earlier and we like to add again here.

-All homes are entitled to loan modification regardless of the income group and regardless of the interest rate.
-Every home is entitled for loan modification and that includes investors homes as well.
-only 2% interest rate should be charged by banks.
-Banks can increase after the initial 5 years to whatever the market rate justifies.
-No documentation should be required for any loan modification.
-Banks should be asked to do the loan modification with 15 days.
-Banks who comply the above requirements should be entitled to get $2000 from homeonwers and $1000 from administration.
-These steps would give more revenue to bank to hire more people, add phone lines and faxes.

Now, NY Times has also added their weight to whatever we had been asking previously. Here, is the article from NY Times.

http://www.nytimes.com/2010/01/23/opinion/23sat2.html?scp=2&sq=&st=nyt

How to Challenge Foreclosure in Nevada?

In Loan Modification on 01/23/2010 at 8:25 pm

How to Challenge Wrongful Foreclosure in Nevada
This is not a term paper or an extensive legal thesis but just some analytical and factual discussion for Nevada homeowners to know their capabilities how to challenge an imminent foreclosure. One must know here the rules of mediation in Nevada. If, however, the mediation is not granted and not applicable here, one can take all these steps or one of them, and not in any particular order. This is prepared for general awareness, and not meant as a legal situation. Each situation is different and this whole set of steps may not work for individual case. This is your home, please do not hesitate to fight and hire an attorney. This is one important part of your life where you should not shy away from spending money. Again, this is a brief guide for lay persons about how to challenge foreclosure successfully in Nevada. As usual, always consult a legal counsel licensed in your jurisdiction, and never someone who is barely familiar or paralegal because these are very complex issues even for the courts to decide. Enjoining foreclosure is difficult yet not impossible. Let us see what possible steps a Nevada homeowner, who is deep under water, can take.

It can be one or more step:
• Filing Bankruptcy before Foreclosure Occurs
• Suing to Enjoin Foreclosure before It Occurs
• Suing to Set Aside a Foreclosure that Has Already Taken Place
• Filing a Counterclaim in the Detainer Action after Foreclosure Has Occurred
• Filing Bankruptcy after Foreclosure
• Procedural Grounds for Challenging the Foreclosure • Substantive Grounds for Challenging the Foreclosure

Filing Bankruptcy before Foreclosure Occurs
This is often the shortest and simplest procedure. You can hire a bankruptcy attorney. Our firm is also great help in this matter. Law Office of Malik Ahmad (www.mymaliklaw.com)has extensively dealt with various foreclosure issues as well as loan modification and Law Office of Malik Ahmad has a very strong tract record in this regard. One thing you should avoid is not to do yourself or hire a paralegal. Because the courts (deep down in their heart) frown at your own representation and the paralegal. Because both of them slows the process and jam the wheels and court does not like it. It has the following advantages: a bankruptcy filing automatically prevents foreclosure temporarily and sometimes permanently. Again, you have the opportunity to cure a default in your payments by paying the delinquent amount in installments over a reasonable period; you may be able to reduce or eliminate the fees of the lender’s attorney; and you may be able to avoid interest on the amount you are delinquent (though not interest on the loan itself). You may file a counter motion if there is a motion to lift the stay requested by creditors’ attorney. There is no procrastination required, these are the steps you had to take. One additional advantage is that you can get rid of most of the unsecured debts. The obstacles again are if you can pass the means test, and otherwise qualified under the Nevada Median Income rules.
Suing to Enjoin Foreclosure before It Occurs
To obtain an injunction, you must file a complaint in a court. You will need a lawyer. You need to get a hearing date, and time from the court. Call the clerk and get a hearing date, and place it on the calendar. Make sure that there is still time left before the due date of your foreclosure. You need to serve the copy to the lender, creditor, or whoever has your mortgage papers. We are enclosing a sample Memorandum for Injunction here. Again, this is just a sample and purely for education purpose.
Temporary injunctions require a “clear” showing of “immediate and irreparable injury, loss or damage” or “that the acts or omissions of the adverse party will tend to render [the] final judgment ineffectual.” Judges take this requirement seriously.

The most difficult requirement of all may be the need to give a bond “in such sum as the court … deems proper” unless you successfully obtain permission to bring the action as an indigent person. A homeowner with only modest amounts of other assets and income may be unable to qualify as indigent and may also be unable to find anyone willing to provide a bond, especially one on short notice. However, Nevada courts may seeks small bonds and sometime it is less than $500.
Suing to Set Aside a Foreclosure that Has Already Taken Place
The grounds for setting aside a foreclosure are limited to “some evidence of irregularity, misconduct, fraud, or unfairness on the part of the trustee or the mortgagee that caused or contributed to an inadequate price.” Defenses like the absence of a delinquency or violations by the lender of federal or state commercial law may not be raised.
Again, you have the burden of proof in a lawsuit to set aside a foreclosure. It requires lots of proof of violations of both TILA and RESPA. For more accurate version, please see the loan modification blog of Attorney Malik Ahmad. Damages are the only remedy. There is nothing to prevent a third-party purchaser from keeping your house even if he knows of your claim against the lender and even if he believes that your claim is meritorious.
Filing a Counterclaim in the Detainer Action after Foreclosure Has Occurred
Foreclosure may be challenged by a counterclaim when the lender (or other new owner of the property) seeks possession by a “detainer” action. It is better to file the counterclaim in writing, and the grounds for doing so are discussed below. It is preferable that you use a lawyer to assist you, but most persons do not.
There is an initial problem. A statute says: “The estate, or merits of the title, shall not be inquired into” in a detainer action. Lenders may assert that a wrongful foreclosure may not be challenged even when the parties are before the court on the issue of possession, the right to possession is necessarily founded on ownership, and ownership depends on the lawfulness of the foreclosure. In our view, the statute disallows only attacks upon title based on transactions prior to the creation of the deed of trust. We also believe that the statute is inapplicable to counterclaims seeking to set aside a foreclosure, even if it bars defenses to the detainer action.
Who is a Real Party-In-Interest?
Not every new owner is successful in obtaining possession. It may overlook the proof that is necessary to show that it the foreclosure was conducted properly and that it was entitled to foreclose — things like affidavits or testimony showing that you did not make timely payments. You may and should contest every assertion made by the new owner, even if you do not have a lawyer. The new owner has the burden of proof. If it fails to meet that burden, the judge may conclude that you are entitled to remain in possession even though you no longer own the home.
On the other hand, if the new owner is successful in the detainer action, it is entitled not only to possession but also to the rental value of the property from the date of foreclosure until the date of removal. You have only ten days for an appeal. Just recently there have been major changes in landlord-tenancy relationship both in federal and state laws. Again, we continuously update on our blog and websites.

Filing Bankruptcy after Foreclosure

It is possible to set aside the foreclosure through the bankruptcy process. The grounds that may be asserted are discussed below.
There is some good news even if you lose the challenge; bankruptcy usually discharges all or part of a deficiency judgment against you for any amount still due after the foreclosure occurs.
Procedural Grounds for Challenging the Foreclosure
• Failure to Give Personal Notice. No personal notice to a borrower is required by statute. However, we believe that federal and state constitutions require personal notice to each borrower, either by summons or by certified mail that is actually received, and we are litigating cases so as to establish this principle. There are whole set of notice requirements provided under various Nevada notice statutes.
Insufficient Notice by Newspaper Publication or Posting in Public Places. Under Nevada statutes, advertisement of a foreclosure sale must be made three different times in “some” newspaper “published” in the “county where the sale is to be made.” Only 20 days’ notice is required, and the use of publications read almost exclusively by lenders and lawyers is permitted. Both the shortness of the time and the use of obscure newspapers seem vulnerable to constitutional objection. In addition, some counties have no eligible newspapers. In this case, written notice may then be posted in five “of the most public places in the county.” There is no guidance about what such places are or how they are to be determined. This is too vague a standard to pass constitutional muster.
Failure to Give Notice Required by the Deed of Trust. Many deeds of trust require notice of foreclosure by certified mail, or at least by mail, in addition to notice by newspaper publication. Many also require notice — before foreclosure is sought — that the entire sum has been declared to be due because of a late payment or other default.
• Nevada legislature just passed AB 149 which mandates mediation before foreclosure. Please see an attorney to find out the latest rules about mediation. Please do not in any case get the help of your loan officers. I have seen many loan officers, or some paralegals destroying a very good chance for loan modification for Nevada homeowners.
No Meaningful Opportunity to Dispute the Foreclosure. This too is a constitutional challenge to Nevada’s foreclosure process. It is based on the notion that making you find a lawyer and file a lawsuit in 15 days, assume a high burden of proof, and furnish a bond are unfair hurdles imposed on you.
Defects in the Foreclosure Sale. Nevada judges have said that the foreclosure must occur in the county in which the property is located; it must take place at an accessible location; and a lender may not use a purely technical default as a basis for foreclosure. However, when the lender demands the full amount of the debt, they have refused to let the borrower cure the delinquency by paying the disputed amount before the time the foreclosure occurs. They also have ruled that there is no minimum price that must be paid and have allowed the lender to recover a deficiency judgment if the amount received in the sale is less than the amount owed. They have yet to decide whether the combination of a shockingly low price and another procedural defect are sufficient to disallow the foreclosure.

Substantive Grounds for Challenging the Foreclosure
There are innumerable federal guidelines which must be observed by the lenders before foreclosure. The whole list is outside the scope of this article. However, the following claims and defenses are among those that may be raised so as to defeat a foreclosure altogether or reduce the amount of any deficiency:
Late Payments Were Accepted on Other Occasions. This suggests that the lender waived the right to refuse late payments and was estopped from foreclosing.
• The Lender Refused to Supply a Pay-Off Amount or Accept Full Payment so Foreclosure Could Be Avoided. Despite unfavorable precedent, this could be a viable ground.
• A Borrower was in Military Service at the Time of’ the Foreclosure. If the borrower was actively on duty in Afghanistan, or Iraq, he is fully protected under this clause.
• The Loan was Unconscionable. That is, the inequality of the bargain is so manifest as to shock the judgment of a person of common sense, and the terms are so oppressive that no reasonable person would make them on the one hand. No honest and fair person would accept them on the other.
• The Making of the Loan, or the Servicing of It, was Riddled with Unfair and Deceptive Practices that Violated the Nevada Consumer Protection Act.
• The Services Collected Unauthorized Fees for the Escrow Account, or as Late Charges, or as Attorney Fees during the Foreclosure Process.
• One Spouse Was Required to Sign the Mortgage Note even though the Credit of the Other Spouse was Sufficient.
• One or More Borrowers Lacked the Mental or Physical Capacity to Borrow.
• The Mortgage Broker Was Paid an Unlawful Sum by the Lender.
• The Lender Violated a Relationship of Trust with the Borrower that Developed in the Lending Process.
• There Was Fraud or Misrepresentation by the Lender in the Making of’ the Loan.
A trial loan modification was approved, the homeowners fulfilled all the terms of the trial loan modification and lender backed out from the affirmative contractual obligations.

Memorandum In Support of Motion to Stop Foreclosure against MERS

In Uncategorized on 01/21/2010 at 4:27 pm

[This memorandum is only for education purpose and only qualified attorney help should be sought in seeking legal help.]
Memorandum in Support of Motion to Dismiss
IN THE CIRCUIT COURT, FOURTH
JUDICIAL CIRCUIT, IN AND FOR
DUVAL COUNTY, FLORIDA.
CASE NO.:
DIVISION:
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.,
Plaintiff,
vs.
[DEFENDANT], DECEASED, ET AL
Defendants.

SEPARATE DEFENDANT, [SEPARATE DEFENDANT]’S MOTION TO CANCEL SUMMARY JUDGMENT HEARING, DISMISS PLAINTIFF’S COMPLAINT, OR IN THE ALTERNATIVE, MOTION FOR MORE DEFINITE STATEMENT

The Separate Defendant, [Separate Defendant],by and though her undersigned attorney, files this motion to cancel the summary judgment hearing, and dismiss the Plaintiff’s Complaint for failure to join an indispensable party, or in the alternative, for more definite statement, pursuant to Rules 1.460, 1.210(a), 1.130(a) and 1.140(b)(7) of the Florida Rules of Civil Procedure and states:

1. This defendant was not able to access legal representation prior to her contact with Attorney [Attorney for Defendant] of Jacksonville Area Legal Aid, Inc., on February 23,

2. This separate defendant was served with a summons and complaint in this foreclosure action on January 1, 2005 and she was noticed for the February 24, 2005 summary judgment hearing on January 24, 2005.

3. Counsel for Defendant has made known to Plaintiff’s attorney this request for continuance of the scheduled hearing so that this defendant is able to have the benefit of legal representation to defend and protect her interests in this residential foreclosure. However, counsel for plaintiff advises that he does not have authority without further contact with the plaintiff to consent to such continuance.

5. No prejudice will result to Plaintiff because of this Motion for Continuance.

WHEREFORE, for the above stated reasons, Defendants request that the Court grant a continuance of the hearing on the Plaintiff’s Motion for Summary Final Judgment.

MOTION TO DISMISS PLAINTIFF’S COMPLAINT, OR IN THE ALTERNATIVE, MOTION FOR MORE DEFINITE STATEMENT

1. This separate defendant is the owner of the property which is the subject of this mortgage foreclosure Complaint. She requests the Court dismiss this action pursuant to Rule 1.210(a) and 1.140(7), because it appears on the face of the Complaint that a person other than the Plaintiff is the true owner of the claim sued upon and that the Plaintiff is not the real party in interest and is not shown to be authorized to bring this action. In re: Shelter Development Group, Inc., 50 B.R. 588 (Bankr.S.D.Fla. 1985) [It is axiomatic that a suit cannot be prosecuted to foreclose a mortgage which secures the payment of a promissory note, unless the Plaintiff actually holds the original note, citing Downing v. First National Bank of Lake City, 81 So.2d 486 (Fla. 1955)], See also 37 Fla. Jur. Mortgages and Deeds of Trust §240 (One who does not have the ownership, possession, or the right to possession of the mortgage and the obligation secured by it, may not foreclose the mortgage)

2. Fla.R.Civ.P. Rule 1.130(a) requires a Plaintiff to attach copies of all “bonds, notes, bills of exchange, contracts, accounts, or documents upon which action may be brought” to its complaint. The plaintiff has failed to attach a copy of the Promissory Note upon which its claim is based and the assignment attached to plaintiff’s complaint is only an assignment of the mortgage and not the note. The assignment attached to the plaintiff’s complaint conflicts with the allegation in paragraph 3 of the plaintiff’s complaint which alleges that the assignment is of the mortgage and the promissory note.

3. Fla.R.Civ.P. Rule 1.310(b) provides that all exhibits attached to a pleading shall be considered a part of the pleading for all purposes. It appears on the face of MERS’ Complaint that it is not the proper party to bring this action

4. Further, although the plaintiff names itself in the complaint as “Mortgage Electronic Registration Systems, Inc., as Nominee For Homecomings Financial Network, Inc.” the documents attached to the plaintiff’s complaint conflict and therefore cancel out said allegations.

5. In this case, MERS’ allegations of material facts claiming it is the owner of the subject note are inconsistent with the documents attached to the Complaint. Further, MERS has alleged it does not have the original promissory note. When exhibits are inconsistent with the plaintiff’s allegations of material fact as to who the real party in interest is, such allegations cancel each other out. Fladell v. Palm Beach County Canvassing Board, 772 So.2d 1240 (Fla. 2000); Greenwald v. Triple D Properties, Inc., 424 So. 2d 185, 187 (Fla. 4th DCA 1983); Costa Bella Development Corp. v. Costa Development Corp., 441 So. 2d 1114 (Fla. 3rd DCA 1983).

6. Rule 1.210(a) of the Florida Rules of Civil Procedure provides, in pertinent part:

“Every action may be prosecuted in the name of the real party in interest, but a personal representative, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party expressly authorized by statute may sue in that person’s own name without joining the party for whose benefit the action is brought…”
The plaintiff in this action meets none of these criteria.

7. The plaintiff must allege that it is the owner and holder of the note and mortgage in question in order to be entitled to maintain an action on the note and mortgage which the plaintiff has not properly alleged in this case. Your Construction Center, Inc. v. Gross, 316 So. 2d 596 (Fl. 4th DCA 1975)

8. Plaintiff Mortgage Electronic Registration Systems, Inc. (“MERS”) does not have standing to pursue this action. Standing depends on whether a party has a sufficient stake in a justiciable controversy, whether a legally cognizable interest would be affected by the outcome of the litigation. Nedeau v Gallagher 851 So.2d 214, 2003 Fla. App. LEXIS 9762, 28 Fla. L. Weekly D 1537 (1st District, 2003).

9. Standing encompasses not only the “sufficient stake” definition, but at the at least equally important requirement that the claim be brought by or on behalf of one who is recognized by the law and a “real party in interest”, that is “the person in whom rests, by substantive law, the claim sought to be enforced. Kumar Corp. v Nopal Lines, Ltd, et al 462 So. 2d 1178, 1985 Fla.App. LEXIS 11940.41U.C.C. Rep. Serv. (Callaghan) 69; 10 Fla. L. Weekly 189 (3rd District1985).

10. It is axiomatic that a suit cannot be prosecuted to foreclose a mortgage which secures the payment of a promissory note, unless the Plaintiff actually holds the original note. A Plaintiff that does not hold the original notes sued has no standing and such action must be dismissed with prejudice Shelter Development Group v. MMA of Georgia, Inc 50 B.R. 588 (USBC, S.D. Florida 1985) Downing v. First National Bank of Lake City, , 81 So. 2d 486, (Fla., 1955) Tamiami Abstract and Title Company v. Berman, 324 So. 2d 137 (Fla 3rd DCA> 1975) Laing v. Gainey Builders, Inc. 184 So. 2d 897 (Fla. 1st DCA 1966). See also Davanzo v. Resolute Insurance Company, et al. 346 So.2d 1227, 1977 Fla.App. LEXIS 16014 (One who holds legal title to a mortgaged property is an indispensable party in suit to foreclose a mortgage).

WHEREFORE, this separate defendant requests the Court to dismiss the Plaintiff’s complaint with prejudice; or alternatively to order the Plaintiff to add the owner and holder of the subject note and mortgage as an indispensable party to this foreclosure action, and award this defendant attorney’s fees and all other relief to which she proves herself entitled.

Should You Walk Away From Your Underwater Home?

In Loan Modification on 01/20/2010 at 5:47 pm

I have dwelt on this topic in one of my previous column, but this topic keeps coming back as more and more people calling me and asking me this questions. However, my stand remains the same and again I am addressing this issue one more time. In fact, I had seen some unending debate on this topic, and even NY Times in its latest issues has dwelt on it. Basically, it depends on your standards of morality and accountability.

It is not my place to tell people to just leave their home and rent somewhere. It is akin to telling a soldier to surrender in the face of a tough fight. My suggestion is fight back, and it has always been that way. Why? Because this is your American dream? If you walk away, you are going to leave lots of body bags, and spoils of war for someone else to become rich. This home of yours has the pictures of your family, your loved one, and you had good memories. If you walk away, you are going to leave everything. When would you be able to buy another home? No one knows the answer.

You are sending a wrong message to your family and to your kids. Homeowners has responsibility to their family and to your neighbors as well. We see voluntary defaults and they are a new phenomenon. It was not too long ago, when Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. It is widespread that most of the homeowners are making a calculated decision to hang on their money and let their homes go. Is this irresponsible?

Our neighborhoods are going to be depressed, “for sale” sign everywhere mushrooming, and U-Haul truck roaming in our neighborhood. The government has done lackluster job. The new kid on the block, i.e, the much coveted Treasury Secretary is a bogus leader in this economy. He should be shown the door by Obama. He is an abysmal failure. Touted as a wiz kid, he does not know much about economy. At the most he is a backroom bureaucrat. Let someone better come. The home market is getting depressed everyday. The lenders has still the filthy and flimsy excuses of not doing enough, and their lists of excuses is getting longer and longer. NY Times, as usual my favorite papers has written and dealt extensively on this topic.

http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?ref=magazine

Higher Bankruptcy in Nevada

In Loan Modification on 01/17/2010 at 4:22 pm

Like higher status, as the number one foreclosure state in USA, was not enough, now more bad news coming to Nevada. Our bankruptcy rate is one of the highest in USA. It is not the most privileged and sought after status. It should be embarrassing for us. A bankruptcy is not a proud thing but it should be embarrassing as well as the protection is provided under the federal law. There are laws which stops discrimination against folks who have filed bankruptcy and were discharged through bankruptcy.

http://www.lvrj.com/business/bankrupt-in-nevada-many-are-81666032.html

Two More Banks Bites The Dust

In Uncategorized on 01/15/2010 at 4:38 pm

State Bank and Trust Company is taking over two failed and seized banks in Georgia, making this the #125 and #126 closed banks in America during the financial crisis. But this marks the 23rd bank failure in Georgia. The FDIC and the Georgia Department of Banking and Finance have just seized yet another bank in Georgia. The Buckhead Community Bank, based in Atlanta, Georgia, was just closed today. The FDIC has entered into a purchase and assumption agreement with State Bank and Trust Company, based in Macon, Georgia. First Security National Bank, based in Norcross, Georgia, was also closed today by the Office of the Comptroller of the Currency, and the four branches of First Security National Bank will reopen during normal business hours as branches of State Bank and Trust Company.

The Buckhead Community Bank clients of the six branches will now be banking clients of State Bank and Trust Company on Monday morning. As with all reposessions so far, the deposits will continue to be insured by the FDIC. As of November 6, 2009, The Buckhead Community Bank had total assets of about $874.0 million and total deposits of about $838.0 million. The FDIC and State Bank and Trust Company entered into a loss-share transaction on about $692 million of The Buckhead Community Bank’s assets. The FDIC estimates that the cost to the Deposit Insurance Fund will be $241.4 million.
First Security National Bank, based in Norcross, Georgia, was closed today by the Office of the Comptroller of the Currency, and the four branches of First Security National Bank will reopen during normal business hours as branches of State Bank and Trust Company.
As of September 30, 2009, First Security National Bank had total assets of about $128.0 million and total deposits of about $123.0 million. State Bank and Trust Company did not pay the FDIC a premium for the deposits of First Security National Bank. In addition to assuming all the deposits of the failed bank, State Bank and Trust Company agreed to purchase about $118.0 million of the failed bank’s assets. The FDIC retained the remaining assets for later disposition. The FDIC and State Bank and Trust Company entered into a loss-share transaction on about $82.4 million of First Security National Bank’s assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $30.1 million. State Bank and Trust Company’s acquisition of all the deposits was the “least costly” resolution for the DIF compared to alternatives. First Security National Bank is the 126th FDIC-insured institution to fail in the nation this year, and the 23rd in Georgia. The last FDIC-insured institution closed in the state was The Buckhead Community Bank, Atlanta, earlier today.

Bank of America is releasing more foreclosed home

In Loan Modification on 01/15/2010 at 1:02 am

First of all BOA is keeping secret about all the foreclosed homes, and releasing it slowly to avoid panic in the market and also to get the maximum value. It is good for the business, but bad for homeowners, as this is not helping the homeowners. It is like releasing slow pain killers. BOA should release all the home, and let these tremors hit the market. Once the lenders would face the dilemma, along with the Fed, they would come up with something more tangible plan to address the miseries of homeowners in Nevada.

http://www.lvrj.com/business/bank-of-america-to-release-homes-81453352.html

More Bankruptcy Filing for Nevada

In Loan Modification on 01/15/2010 at 12:52 am

Nevada is again high on the bankruptcy graph. More and more debtors are filing bankruptcy. It shows low depth in Nevada economy. As we stated many many times unless the plight of the homeownership is not improved, the current and passive state of economy would last. Here is the latest report.

http://www.printthis.clickability.com/pt/cpt?action=cpt&title=Nevada+bankruptcies+up+by+more+than+50+percent+-+Breaking+News+-+ReviewJournal.com&expire=&urlID=418552360&fb=Y&url=http%3A%2F%2Fwww.lvrj.com%2Fnews%2Fbreaking_news%2FNevada-bankruptcies-increase-by-more-than-50-percent-81550717.html&partnerID=386279&cid=81550717

A heart wrenching story of predatory lending

In Loan Modification on 01/14/2010 at 10:40 am

In my office, we hear lots of bad stories of predatory lending practices which triggered the present mortgage crisis, however, this one which I read in NY Times is most despicable in its kind and lasting in memory.

http://www.nytimes.com/2010/01/08/us/08sfmetro.html?scp=7&sq=&st=nyt

Should You Walk Away From Your Defaulting Home?

In Loan Modification on 01/14/2010 at 10:32 am

I have dealt with this topic before, and truthfully has done a reluctant job. It is not my place to tell people to just leave their home and rent somewhere. It is akin to telling a soldier to surrender in the face of a fight. My suggestion is to fight back, and it has always been that way. Why? Because this is your American dream? You have earned your home after a long struggle. You have pictures of your loved ones on the walls, and memories of happiness in every nook and corner. It is not only morter and bricks, it is your dream of love and affection and family and friends and dinners and quality time spent together. If you walk away, you are going to leave lots of body bags, and spoils of war for someone else to become rich. This home of yours has the pictures of your family, your loved one, and you had good memories. If you walk away, you are going to leave everything. When would you be able to buy another home? No one knows the answer.

You are sending a wrong message to your family and to your kids–homeowners has responsibility to their family and to your neighbors as well. We see voluntary defaults and they are a new phenomenon. It was not too long ago, when Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. It is widespread that most of the homeowners are making a calculated decision to hang on their money and let their homes go. Is this irresponsible?

Our neighborhood are going to be depressed, the for sale sign everywhere mushrooming, and U-Haul truck roaming in our neighborhood. The government has done lackluster job. The new kid on the block, i.e, the much coveted Treasury Secretary is a bogus leader in this economy. He should be let go by Obama. He is an abysmal failure. Let someone better come. The home market is getting depressed everyday. The lenders has still the filthy and flimsy excuses of not doing enough, and their lists of excuses is getting longer and longer. NY Times, as usual my favorite papers has written and dealt extensively on this topic.

http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?scp=5&sq=&st=nyt

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