Learning Center » Bankruptcy

Police Union Taking Up Cudgels Against Management

Julie Parker — Fri, 13 Jan 2012 09:00:23 +0000

Photo by Digitalart

A drama is being played out in one of the foreclosed capitals of the country – Stockton City. The police union has taken up cudgels against the management. The city, starved of funds has targeted the police force with spending cuts. This has riled the group in an unprecedented way.

The first salvo against the administration has been protests through provocative banners. The second step was the purchasing of a house (the first property the union bought) right next to that of the city manager, Bob Deis. This targeting of the police by the city is happening at a time when crime has gone up in this inland port city. Stockton recorded the highest crime rate pertaining to violence in California in 2010.

The response of the city has been to sue the union regarding the purchase of the house and wants it to be sold. In documents submitted at court Deis stated, “I believe the SPOA purchased the property … for the sole purpose of coercing me in the exercises of my duties as city manager”. He said that one of the union members clipped trees during a party held in his house.

The police force that originally numbered 315 in 2008 has gone down by over 25%. The city compelled the force to accept reductions in wages and benefits while endeavouring to narrow a deficit of over $20 million.

The police union has brought legal charges against the city alleging that it has no right to use the fiscal emergency situation to break contracts. If the ruling goes in favour of the union then the city would have to pay arrear wages touching $10 million. The city is on the verge of bankruptcy and this verdict could well push it over the edge.

The city administrators did not make any comments on a pending legal suit. Meantime the union has rented out the house after indulging in loud noisy repairs to a retired person owning two dogs.

The angst is directed against the city spending on a sports arena, a hotel on the waterfront and other developments during sunny days. At night lights sparkle on a shopping plaza and movie complex. The theatre had sixteen screens but less number of customers hung around the neighbouring eateries.

Cops were often seen handcuffing offenders and for this the shop owner and residents were thankful. But with less numbers to patrol the streets they are apprehensive. Some want to move away.

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Congress Put Pressure on the Justice Department to go Ahead With Investigations About Foreclosure

Julie Parker — Tue, 10 Jan 2012 09:00:34 +0000

Photo by Brooks Elliott

One section of the Justice Department that monitors bankruptcy cases in courts is known as U.S. Trustees Program. In its annual report of 2010 noted that the mortgage servicing problems were all pervasive and long standing. These were not just technical but result in causing “real harm to homeowners in bankruptcy”.

The Trustee Program has accused the banks of falsifying affidavits by stating that the house owners owe them fees for some services that they never provided; the amount that the borrowers owed to the banks was inflated.

Professor Daniel Richman dealing with criminal law, of Columbia University Law School was formerly a federal prosecutor. He said the pivotal issue was who would be the targets of criminal investigation by the prosecutors.

Richman explained that a good number of workers who under the orders from supervisors churned out large number of affidavits could be sitting ducks. But that would not be worth the effort. Perhaps criminal investigations are necessary but it would be difficult to bring them against particular individuals who actually did the string pulling.

In 2010 October the Congress put pressure on the Justice Department to go ahead with investigations about foreclosure fraud. Eric Holder, the Attorney General said that it would be best to leave the matter to states with Justice Department’s help.

The OCC hastily came to a settlement with fourteen mega servicers to bring about operational changes and suggest compensation for those house owners who had been harmed.

The settlement leaves the banks to select their own agencies to determine who has been harmed and by how much. The arrangement has come in for harsh criticism from legislators and housing advocates for obvious reasons; the reviewing agencies would get their payments from the banks.

Since the eruption of the robo-signing scandal the Justice Department’s civil section has been working with a wobbly coalition comprising of all the fifty states seeking a settlement with the five mega banks that are also the biggest loan servicers. The settlement is leading towards a $20 billion (or maybe more) payment as penalties – a fraction of which would go towards paying the wronged house owners.

Law enforcement by the federal government has been practically non-existent even in those regions that have been decimated by the foreclosure crisis like Las Vegas.

The Federal Law Enforcers Seem Strangely Silent on Criminal Foreclosure Fraud

Julie Parker — Wed, 04 Jan 2012 09:00:22 +0000

Photo by Controlarms

The Federal law enforcers seem strangely silent on criminal foreclosure fraud. Is Washington afraid? Reuters have reviewed the records of bankruptcy court of New York (Southern District) to find that a minimum of twelve totally different documents claiming to be the genuine promissory note have popped up in foreclosure related cases; involved are six properties.

In one of the cases Wells Fargo was fighting to take over the house of a single mother, Tindala Mims in Bronx. She is employed as the driver of an ambulance.

In 2010 September Wells Fargo submitted one promissory note, signed and stamped showing the owner of the note was Washington Mutual Bank that has become defunct. Upon scrutiny physical alterations were noticed. Many marks were missing on original or appeared to have been clearly altered in the second.

The second one contained an endorsement that was stamped – something that was not there on first; the impression given was that Wells Fargo had foreclosing rights. The judge turned down the second attempt also but not to be deterred, Wells Fargo is trying for the third time. The bank refused to make any comments.

The lawyer of Mims, Linda Tirelli has brought a legal suit against Wells Fargo for “fabrication of documents”. Tirelli said, “It seems to me that Washington is deathly afraid of the banking industry. If you’re talking about filing false documents and filing false notarizations, do you really think that the U.S. Attorney would find it too difficult to prosecute”?

Preet Bharara U.S. Attorney has a matter of routine pressed charges relating to forgery and submission of false documents against the small fry. Last April, seven employees of USA Beauty School located in Manhattan were arrested by FBI. The allegation is that they forged various documents – diplomas of high school, records of attendance and applications relating to financial aid for those students attending classes in cosmetology.

Last August the office of Bharara brought against the CEO of a company dealing with sports memorabilia felony charges. He was accused of selling in auction, jerseys that have been wrongly advertised to have been used in game by renowned players of Major League Baseball.

Considering these and other activities of the office aggressively chasing maxi and mini violations of the law, of U.S. Attorney across America, it seems strange that cases relating to foreclosure fiasco are noticeably absent. Why?

Visiting Professor Raymond Brescia (Yale University) said, “Why there hasn’t been more robust prosecution is a mystery”.

Bankruptcy is Another Alternative for Stopping Foreclosure

Julie Parker — Tue, 03 Jan 2012 09:00:55 +0000

Photo by Renjith Krishnan

A couple from Robeson Townshipin Pennsylvania unable to contact their lender, facing foreclosure somehow saved their home by filing for bankruptcy (Chapter 13). Naomi and Joseph Nepple aged fifty two and fifty nine respectively were saddled with a debt of $14,000 on their mortgage dues.

They missed out on taking part in Berks County Mortgage Foreclosure programme scheduled to kick off from 1st January. Judge Jeffrey Schmehl sympathized with the position of the Nepples. As per the programme the representatives of the lender would have to be present at settlement meetings.

Lawyer Brenna H. Mendelsohn, representing the couple deals with personal bankruptcy. Mendelsohn opined that the new programme would help those troubled house owners who were being ignored by their lenders. She said, “If there are cases where the new programme works that would be great. It’s too late for Naomi and her husband because they have already filed for bankruptcy”.

The bankruptcy case will enable the Nepples to continue to stay in the house, pay off the accrued debt and make fresh payments. The bankruptcy process would clear their dues on credit card dues also. Mendelsohn remarked that the bankruptcy is another alternative for stopping foreclosure. Those that apply for it pay their dues to the court and continue with their mortgages.

Nepple expressed her gratitude to the lawyer for help in straightening out their finances.

Naomi Nepple was a computer operator with a sportswear firm of Reading. She was retrenched in 2007. She took training covering two years in a programme dealing with criminal justice but even after graduating she could not find a job in this stream. From 2009 her financial troubles started.

Price of fuel was shooting up and her husband badly needed money to operate his business. He began to use his credit cards to fill the tanks of his dump trucks. He hauled in his trucks stone as well as sand. Together the couple ran into debt amounting to over $30,000 on their credit cards.

Soon a time came when they began to default on their house mortgage amounting to $1,500 per month. Nepple tried but failed to meet any representative of the lender. All she could do was to make phone calls; the whole thing was frustrating.

Mendelsohn referring to the filing of bankruptcy said, “She’s on the right track. The new programme may have helped her too. It does make the bank talk to you. Bankruptcy is a great opportunity to save your home”. Meanwhile Nepple has got a job and is now earning per month 41,200 to $1,500.

Occupy Movement Targets Banks to Stop Foreclosures and Evictions

Julie Parker — Thu, 15 Dec 2011 10:55:56 +0000

Photo by Scottchan

The idea of occupying foreclosed houses has caught on. In Redwood City the protestors have been able to postpone the imminent auction of the house of septuagenarian Gloria Takla. On 6th December Takla together with thirty protestors forcibly entered a branch of Chase shouting slogans and waving placards.

For nearly two years Takla has been trying in vain to get her house loan modified. The original granter of the loan was Washington Mutual. Later Bank of America bought it off. Her monthly payment shot up to unmanageable levels from $1,450 to $2,650. She had bought it with her life’s savings of $1,450. Takla is not conversant with English and bemoans she has been victimized by predatory lending.

On 6th December, Takla demanded to talk to somebody “human” in the bank and not just a recorded voice. The employees linked her with agents in the customer service cell while the police of Redwood City tried to keep the situation calm outside the bank.

Ten protestors squatted in the lobby while the police remained silent spectators. Meanwhile, Takla helped by her daughter, spoke to the bank authorities. None was arrested. When the protestors had stormed the bank only minor scuffles had broken out.

Takla talked to Ramel Nalus of Santa Clara Home Ownership Center of Chase. He has probably given her till 14th February to have her loan modified or be foreclosed upon. None of the officials of Chase, including Nalus, responded to calls made by Daily Journal seeking comments.

Takla and the protestors came out of the bank after about an hour, claiming ‘victory’. Takla said, “We were able to postpone the sale date only because the people joining me in the action”. Among those who had teamed up with Takla were Pastor Sandy Perry, Lili Liu, Christy Wong, Louis Vaughn and Aaron Castle.

Liu had recently been able to get her loan modified with the help of Alliance of Californians for Community Empowerment. She had come from Freemont to join the march. The group had organized the march and the protest before the bank in Redwood City. After ACORN filed bankruptcy, ACCE came into existence.

Vaughn said that the minorities have been targeted by predatory lending; the renters too have suffered. The tenants have been thrown out because the landlords were foreclosed upon. It was a trap for the people – they got sandwiched.

Foreclosed JCC May Come Up for Auction Soon

Julie Parker — Tue, 29 Nov 2011 09:00:02 +0000

Photo by Bloomsberries

The US real estate industry is yet to recover. Foreclosures are happening thick and fast. The number of homes with negative equity has also increased. Now it is time for Ruth Hyman Jewish Community Center (JCC) of Monmouth County to be auctioned. JCC is located in Ocean Township.

A foreclosure notice had been filed with the lender — TD Bank. But the suit has not been settled. It seems possible that the center may come up for auction. The auction will be conducted in the Hall of Records at Freehold.

The auction of JCC was scheduled for October 24. However, the spokeswoman of Monmouth County Sheriff’s Department, Cynthia Scott, said a defendant can appeal for postponement of auction on two occasions. The JCC did it first on October 24 and then again on November 7.

The president of the board of directors for the JCC, Stephen Levy, said there are still options. There are still ways that the recent one could be avoided. Levy said, “We are still in negotiations with the bank and several stockholders.

I’m optimistic, but not certain, that the sale won’t occur.” Levy has been in the midst of conference calls to find out the latest status. Another option for JCC is to come up with bankruptcy filing. Raising funds from stockholders is the other option.

It may be pointed out that JCC does not have to shell out property taxes of the land as it is a non-profit organization. The land is 12 acres approximately. The taxes would also work out to $180,000 in a year.

The plaintiff is the bank. The firm — Buchannan Ingersoll and Rooney – is representing JCC. However, JCC has retained services of Neumann, Fisher and Shaver LLC and Timothy Neumann of Broege, to represent the company. The sale’s approximate amount is $6,502,717.18.

The organization was located in Second Avenue. However, it relocated in 1977. In a major expansion move in 1999, a 520-seat theater auditorium was added. This was known as Axelrod Performing Arts Theater. The area is 110,000 square feet in area. Wellness and fitness programs are on offer. There are programs for the senior and the youth as well. Currently there are 700 memberships.

Levy said that the center was badly hurt when the economy was in a poor shape. That’s why the present foreclosure suit is threatening them. The numbers of members too have declined. In December 26th the JCC roof had collapsed.

350,000 Pending Foreclosure Cases in Florida

Kevin Simpson — Wed, 09 Nov 2011 11:03:49 +0000

Photo by Khrawlings

In the last week, lenders from different courts all over of the nation, which are all overrun with foreclosure cases, gathered at a discussion session where they brought up matters of bank honesty and attorney civility in foreclosure issues. They also foresaw estimated a huge number of pending foreclosure cases in Florida. The officials at the meeting believed that there could be around 350,000 cases still to be heard.

Bankruptcy and Foreclosure, a View from the Bench is the forum which invited the judges and attorneys from Broward, Palm Beach and Miami-Dade counties to discuss matters pertaining to foreclosures. Both attorneys and judges got the chance to inform each other about foreclosure matters that were occurring outside the courthouse environment.

The attorneys asked a number of things to the judges, and even the judges also described the nature and behavior of property owners and lenders. In the question-answer session, some replies were met with uncomfortable silence from federa, judges when questions of non-judicial foreclosure cases and dubious mortgage documents holding fake signs arose.

The Circuit Judge of Miami-Dade, Ronald Dresnick, slashed out at the lenders and borrowers for such a slow pace in the foreclosure process, stating that this only making courthouse matters slow. Another foreclosure judge of Broward, Marina Gracia-Wood, said that nearly 7,000 pending foreclosure cases are waiting to be brought to court in her system.

Dresnick said, “The thing nobody gives a fig about is moving these cases. Defendants don’t want the cases moved and I’m scratching my head about why the plaintiffs don’t want to move the cases. It’s pathetic”. He is referring to all the pending foreclosure cases that have been brought to court in the state of Florida.

Former Chief Judge of Broward, Victor Tobin, controlled a panel which dealt with the state of the foreclosure cases in different courts. However, in May, he submitted his resignation to the bench and joined the Law Offices of Marshall C. Watson. “My job is to oversee the operation as best I can. That was my job in the courthouse also,” he said.

There was only another judge from Palm Beach County who joined the forum for the discussion; his name was Robert Carney. In the forum, this senior judge described how the spike in the foreclosure cases (which came to a head in the courthouses between the years of 2009 and 2010). Foreclosures really slowed down during the end of 2010 due to fraudulent foreclosure cases and the robo-signing scandal.

Gracia-Wood mentioned that 250 cases are handled on a regular basis in her court. She also commented about the sincere way attorneys handled court cases nowadays. She said, “If you’re not happy about the court’s ruling, instead of rolling your eyes or murmuring under your breath, show me why I should rule in your favor. I’m trying to do the best I can.”

Speaker John Boehner has Consistently Opposed Foreclosure Relief Programmes

Julie Parker — Fri, 10 Jun 2011 09:00:28 +0000

Stephanie Moes of Legal Aid Society (Southwest Ohio) said that in some parts of Butler County predatory lending had been rampant. But recently the families are battling the downturn in the economy. These people tried their best to manage their mortgages; they never bought anything that was to them unaffordable but now they are facing unemployment that is persisting and refusing to go away.

Since the previous three years the legislators across the state have been pushing for foreclosure mitigation – frequently disregarding party lines for this purpose. But speaker Republican John Boehner was never part of this.

In 2008 Rep. Steve Chabot (Republican) the borders of whose districts borders that of Boehner, gave his support to a bill that would give relief to house owners in the bankruptcy courts; but Boehner declined to ink it When the Democrats passed another prevention bill for foreclosure later in 2008 Boehner came down heavily on it as “a bailout for scam artists and speculators”.

During the middle of the robo-signing mayhem last fall the banks for a short time halted their foreclosure operations. Last November President Obama used his veto against a bill that would have made it easy for the banks to go ahead with wrong foreclosures and more difficult for the house owners to prove that they had been victimized.

But Boehner together with his Republican colleagues and 16 from the Democrat camp tried but failed to override this veto. It happened at a time when the attorneys general had already started bringing lawsuits against the banks for fraudulent practices.

Boehner has always been reluctant to talk about housing issues but recently speaking to Harry Smith of CBS he said, “Over the last couple years, Congress has really set up four programmes to help with those mortgage problems.

And unfortunately, none of those have worked. And all they’ve really done is dragged out the length of time for the market to clear the problems”. Thus Boehner has been persistently opposing foreclosure relief programmes on the ground that these have been delaying the curing of the market. This argument might apply to the failure of the HAMP plan but in the district Boehner represents in the market there is nothing left to clear.

Do you Know the Consequences of Foreclosure?

Kevin Simpson — Tue, 09 Mar 2010 14:14:28 +0000

If you have ever been threatened by foreclosure, chances are high that you were unable to pay off your mortgage to the lender for a considerable length of time. However, if the mortgage lender decided to take your home away due to term violations, namely payment, it may have lead you to think that the situation was futile. But there are actually many ways to avoid the terrible consequences of foreclosure. People threatened by foreclosure have the option to file for bankruptcy, refinance, short sale, negotiate temporary arrangements with their lender or utilize the deed in lieu procedure.

Although it is beneficial to learn about the ways to avoid foreclosure, you must be prepared for the worst as well. There are several tax, credit and legal consequences of foreclosure.

One of the major consequences of foreclosure is damage to your overall credit. If someone fails to pay off his or her mortgage over the stated 30-day period, it will remain as a black mark on his or her credit report. Failing to pay off bad credit scores automatically results in denial of any future applications for loans, mortgages and credit cards. It could take a person up to three years to stabilize their credit score. Damage to your credit score is caused by either the consequences of foreclosure or real estate being lost from a deed in lieu.

Although there are many consequences, there are also several positive things that can result from foreclosure. One of these positive things are if you bought your real estate with a mortgage more than 2 years ago then, according to a 2007 law called the Mortgage Forgiveness Debt Relief Act, it can be sold either by short sale or auction for less than your actual debt. Furthermore, you are not obligated to pay taxes on the difference in rates and the lender will never ask it of you, if you bought your real estate more than 2 years ago. However, if you bought your real estate with a mortgage less than 2 years ago, or have applied tax-deferred capital gains, the national tax office has the right to make you pay further taxes on your property.

Two of the many key terms that describe the consequences or causes of foreclosure are short sales and missed mortgage payments. Both of these key terms are widely used and have a strong connection with the foreclosure process.

Missed mortgage payments are when borrowers fail to pay their mortgages over the deadline acceptable by their lenders, which is normally within 30 days.

Short sales occur when someone sells their real estate under mortgage and foreclose their property for a lower price than what the actual debt is. Due to the aforementioned Act of 2007, lenders nowadays cannot sue short sellers for the payment difference.

Seek advice from a legal expert!

Foreclosures Transform a Symbol of Prosperity into Emblem of Recession

Julie Parker — Fri, 09 Oct 2009 13:15:15 +0000

Foreclosures have transformed Lake Las Vegas resort from a symbol of prosperity into an emblem of recession. Beyond the suburban spread there lay an artificial lake in the desert flanked by a village with an Italian touch – representing everything that taste and money could buy. But the overflowing milk of prosperity has suddenly curdled.

In 2008 Transcontinental Corporation that was developing the property lost it to foreclosure after failing to repay loans amounting to $540 millions. The new owners filed Chapter 11 bankruptcy in the summer of 2008. One of its main hotels – Ritz Carlton LLC too filed bankruptcy to ward off foreclosure and since then has been sold. One of the prime golf courses has been left abandoned.
There are practically now new constructions of residential houses although the project is far from being completed. Like an epidemic, foreclosures have spread causing value of houses to tumble. The glittering aquamarine lake that was thought of as the jewel in this region suddenly developed an ominous leak causing engineers to hastily repair it to prevent sudden draining of it.
The residents are all trying to sell their units one after another. In May this year about 10% of the houses in the region were in the foreclosure category – either bank repossessed or in short sales. It meant that the values of the houses were so low that the loan amount was far greater according to the findings of Applied Analysis that deals in real estate research. About 80% of the houses that were listed lay vacant and unoccupied.

Ed Santacruz – formerly a mortgage broker and fortune hunter said, “I thought it was a no-lose situation. It ruined me.” His hotel-condo lapsed into foreclosure. He had plans of renting out the unit to tourists but there were not enough candidates so as to meet the mortgage expenses. He added, “That’s where I messed up, I believed enough in the product and in Las Vegas.”
It is not difficult to find the reasons for the problems of Lake Las Vegas. The community was planned to be a resort as well as a residential centre. It leaned heavily on buyers of second home and tourists for its success. But when the economy began to falter it too began to choke and stumble. Brian Gordon of Applied Analysis said, “There was a point and time when the higher end of the market had been less impacted. But as the recession has run longer and deeper than initially expected …”