Walking away from a mortgage comes with risks

Walking away from a mortgage you can afford won’t be the end of the story

By Buck Wargo (contact)

Friday, Sept. 3, 2010 | 2 a.m.

The news is bad enough that three homeowners out of four in the Las Vegas Valley owe more on their houses than they’re worth.  And there’s no comfort in the prediction that the local real estate market won’t recover for years.  For the full story click below.

http://www.lasvegassun.com/news/2010/sep/03/relief-now-price-later/

Related posts:

1. Prudential Americana features Tisha Black Chernine, Esq.
2. Black & LoBello featured in RJ’s Business Section
3. Real Estate Issues Addressed @ Town Hall Meeting

BATTLING THROUGH BANKRUPTCY: Chapter 7 not final chapter

Filing turns out to be ‘a relief’ for widow

Life as Renne Fortier knew it changed in January 2009.

Her husband, Mark, was diagnosed with CNS lymphoma, a brain tumor, while he was working in Hawaii. By March, he was gone and she was a 38-year-old widow with one income and two daughters, ages 16 and 11, to support.   Click below for the entire story.

http://www.lvrj.com/business/chapter-7-not-final-chapter-102326189.html

Related posts:

1. Tisha Black quoted in the LV Sun
2. Prudential Americana features Tisha Black Chernine, Esq.
3. Real Estate Issues Addressed @ Town Hall Meeting

Fannie Mae announced this week that it will begin monitoring all delinquent loans in its portfolios and backed-securities to guarantee that servicers comply with foreclosure time frames.   Fannie Mae currently monitors the progress of the foreclosure process by reviewing delinquent loans at the first of the month.   If Fannie Mae believes there is a delay in completing the foreclosure process, and the servicer is unable to provide a reasonable explanation for the delay, Fannie Mae may require the servicer to pay a compensatory fee.  This fee will not only reimburse Fannie Mae for damages but emphasizes the importance of foreclosing on delinquent loans in a timely manner.

Fannie Mae also announced an update to the allowable foreclosure time frames for Nevada to 150 days.  Foreclosure time frames account for the time starting from when the case is referred to the attorney or trustee for action to the completion of the trustee’s sale.  These allowable time frames represent the time typically required for routine, uncontested foreclosure proceedings where mediation is not required.

Joshua D. Carlson, Esq.

Related posts:

1. Fannie Mae: Friend or Foe?
2. Fannie Mae and Freddie Mac HAFA Guidelines Announced
3. Fannie Mae Shortens Wait Time to Get a New Mortgage

The phrase “Delinquent Mortgage,” once a foreign concept for many Americans, has now become part of our everyday vernacular. When nearly 4 million homeowners are currently 60 or more days behind on their mortgages, it is actually no surprise that citizens nationwide are buzzing about the housing crisis.  That crisis is worse here in Las Vegas than it is in many other areas of the country and Las Vegas citizens are certainly feeling the economic pinch.

More than 60 percent of homeowners nationwide who have seriously delinquent loans are still not involved in any form of loss mitigation with their lenders, probably due to the frustration with the processes available.  In fact, a recent performance report indicates that nearly half of the property owners approved for trial loan modifications have fallen out of the program.  By the end of July 2010, approximately 616,839 out of the total of 1,307,489 HAMP three-month trial plans have been cancelled since the program began.  This tremendous dropout rate may be due to the lengthy process of obtaining a permanent modification.  For instance, as a result of the backlog, only 36,695 HAMP restructurings were converted to permanent status during the month of July.

For those who are already involved in loan modifications or short sales, the process may soon become even more difficult and time consuming as Fannie Mae and Freddie Mac have become more aggressive in forcing originating lenders to buy back bad loans.  A report by Fitch Ratings illustrates that, in a worst-case scenario, the buybacks may result in a combined loss of between $17 billion and $42 billion for the nation’s four largest banks – Bank of America, JPMorgan Chase, Wells Fargo, and Citi.  Considering these numbers, it is safe to assume that the process will become even more tedious.

Despite homeowners’ understandable frustrations with the short sale and loan modification processes, these avenues may preserve some homeowners’ rights down the road.  For example, if a lender tries to pursue a deficiency judgment following a foreclosure, the homeowner has the ability to demonstrate efforts to work with the lender to mitigate losses.  It is hopeful that the courts will not turn a blind eye to these whole-hearted attempts.  As such, underwater homeowners should become informed, seek assistance from a legitimate source, and do their best to stay patient.

Kelle L. Kuebler, Attorney*

*Licensed only in New York and Connecticut

Related posts:

1. FHA Program for Underwater Homeowners
2. June HAMP Numbers Look Gloomy
3. New Report States the Obvious: Principal Reductions Lead to Lower Re-Default Rates

Don’t miss the upcoming Town Hall meeting in which Tisha Black, Esq., will address YOUR legal questions about the current Real Estate market. This meeting will be on September 25, 2010 at 10:00 AM located at the Green Valley Ranch. Please submit any questions you would like to have answered at this very important meeting through Twitter or Facebook.

Related posts:

1. Prudential Americana features Tisha Black Chernine, Esq.
2. Tisha Black quoted in the LV Sun
3. Black & LoBello featured in RJ’s Business Section

When facing the decision whether or not to file for bankruptcy you want to make sure you have an experienced attorney who will handle your case the way you want.  The following is a list of key issues you need to address and ask about when you are searching for a bankruptcy attorney:

Have you asked around?

The number one rule in choosing a lawyer is to ask others who have filed bankruptcy how their attorney treated them.  Some attorneys run a “mill” practice that focus on getting as many people in and out of their office doors as possible.  These attorneys charge typically charge lower fees but also give the least amount of service.  By asking friends and family, you can avoid falling into a “mill”.  Find an experienced attorney who will take the time to sit down and answer your questions.  Remember, no matter how much an attorney may be well-regarded, unless he or she is experienced in BANKRUPTCY law issues you don’t need them.

Does the attorney have the right experience?

Any attorney you consider using for your bankruptcy must have BANKRUPTCY experience. You don’t want to be some newbie lawyer’s guinea pig.  By “newbie” I just don’t mean a new lawyer but also a new bankruptcy lawyer.  As I mentioned before, no matter how much an attorney may be well-regarded, unless he or she is experienced in BANKRUPTCY law issues you don’t need them.

Are there communication issues?

Does the attorney explain the bankruptcy process in a way you can understand? Blogging and online publishing is more important now than ever before since professionals share information and educate the public about issues that concern them. Bankruptcy lawyers who maintain their own blogs prove they are knowledgeable enough to help others understand this field of law.

Who will be handling your case?

You must ask which lawyer will be handling your file. The attorney you interview may not necessarily be the one who will handle your bankruptcy issue.  Make sure to ask who WILL be doing the day-to-day work on your file.  In some firms, a paralegal might be handling the majority of your case so you should make sure you know this as well.

How much will it cost?

You have enough money trouble without worrying about what the fees will be for your bankruptcy.  Ask the lawyer for the most detailed estimate he can give as to how much your case will cost.

Don’t make a fee-based decision.

The cheapest lawyer is not always the best lawyer.  Hopefully, bankruptcy is a once-in-a-lifetime event. As such, you want to make sure you are getting a bankruptcy attorney who can do the best job for YOU.  You want an attorney who will take the time to answer your questions, concerns, and any other fears you may have.  An attorney who has his paralegal or assistant returning his phone calls might not be paying attention to your case. Always remember that you hired the attorney to work for you.  Don’t settle for anyone else but THAT lawyer to do the work.

Randy M. Creighton, Esq.

Related posts:

1. Four Questions To Ask A Bankruptcy Lawyer Before Signing
2. The Automatic Stay In Bankruptcy
3. 6 Mistakes to Avoid On The Eve Of Bankruptcy

According to a new report from the State Foreclosure Prevention Working Group, a group of state attorney generals and bank supervisors across the country, loan modifications made in 2009 are forty to fifty percent less likely to be delinquent six months after modification than loans modified at the same time in 2008.  Additionally, the report states that loan modifications which include a principal reduction have a lower rate of re-default.  While the report recommends principal reductions due to the improved long-term success of the loan modification, principal reductions have been rare to this point.  According to the report, only one in five modifications reduces principal.  Moreover, the report shows that seventy percent of loan modifications actually increase the amount of principal owed due to the addition of penalties, fees, and late payments.  The Home Affordable Modification Program (HAMP) provides for principal reductions as an alternative to its waterfall modification. However, due to the fact that government sponsored entity (GSE) loans are not eligible for principal reductions and reductions are optional, it is unlikely the principal reduction alternative to HAMP will have much impact.

Joshua D. Carlson, Esq.

Related posts:

1. REALITY CHECK: Loan Modifications Rarely Include A Principal Reduction
2. Chapter 13 Bankruptcy Or Loan Modification?
3. Nearly 4 Million Homeowners 60+ Days Late on Mortgages

The months and days leading up to a bankruptcy filing can make or break your financial future, and possibly stop you from being able to file for bankruptcy.  The following six (6) mistakes must be avoided if you are thinking of filing bankruptcy:

Retirement Accounts

Borrowing against or cashing in your retirement accounts to try to solve your debt problem is usually not a good idea. In Nevada, debtors are allowed to keep up to $500,000 per individual during a bankruptcy.  By cashing out these accounts you run the risk that these funds will be treated as a non-exempt asset. As such, these funds will not be protected in bankruptcy and you might be forced to turnover these funds to the Trustee. Therefore, before removing any funds from a retirement account, you should speak with a bankruptcy attorney. An attorney can help you determine if, in your circumstances, these funds may be used to avoid bankruptcy or if moving them would be a costly mistake.

Home Equity

Much like your retirement accounts, raiding the equity in your home to service your debts can be a costly mistake. Nevada allows debtors to retain $550,000 in equity in their home when they file a bankruptcy. Borrowing this equity can make it more difficult to stay in your home if you eventually need to file a bankruptcy. Speak with an attorney to determine if the equity in your house is sufficient to avoid bankruptcy or if it should remain in your home.

Incurring Additional Debt

Do not go into additional debt if you are seriously considering bankruptcy as an option. Racking up additional debt when you know you cannot repay and have no intention of ever repaying the debt is considered fraudulent. If you find yourself considering payday loans or high interest title loans to buy groceries, pay the energy bill, or put gas in your car, it is probably time to speak with a bankruptcy attorney about your options.

Ignoring Your Problems

When debts begin to pile up, there is a temptation to bury your head in the sand and hope the problem goes away. Waiting to deal with your problems can cause you irreversible financial harm. In addition, you are not helping yourself by dodging people trying to serve you with papers. Creditors only need to attempt to serve you. The only thing you have accomplished by not receiving service is that you will not know what court proceedings have been filed against you.

Paying Back Relatives or Business Partners

Do not repay a relative, friend, or business partner before filing bankruptcy. The bankruptcy court can make your relative or business partner repay to your bankruptcy estate anything you have paid them for up to a year. If you have any question on whether or not to pay a creditor, contact a bankruptcy lawyer.

Trying to Beat the System

Do not transfer any assets out of your name prior to filing bankruptcy without consulting an attorney. Unless the transfer is in the ordinary course of business and for fair market value, you run the risk of the transfer being found fraudulent. Do not keep any information from your attorney. Federal bankruptcy crimes are committed by people trying to keep the court from knowing about debts, assets, or transfers and can result in a loss of a discharge and, in some case, fines and prison time.

Randy M. Creighton, Esq.

Related posts:

1. The Automatic Stay In Bankruptcy
2. How To Choose The Right Bankruptcy Lawyer
3. Will Filing for Bankruptcy Protection Affect My Job?

The instant bankruptcy is filed, for either Chapter 7 or Chapter 13, a protective umbrella called the automatic stay is triggered which protects the debtor and the debtor’s property against the continuance of any action by any creditor.  For example, the automatic stay would protect and STOP a pending foreclosure. Additionally, when filing a Chapter 13 bankruptcy, that injunction extends to anyone else who is obligated to repay your debts.

However, the automatic stay is not absolute in that a creditor may restart collection proceedings by asking the court for permission.

Further, there are limits on how long the automatic stay lasts. For example:

• If you had a prior bankruptcy case pending in the last year which was dismissed then the automatic stay lasts for only the first thirty (30) days after your case is filed unless you or your lawyer gets a court order extending the automatic stay; or
• If you had two or more prior bankruptcy cases pending in the last year which were dismissed then the automatic stay does not take effect at all unless you or your lawyer gets a court order extending the automatic stay.

What The Automatic Stay Covers

As long as the automatic stay remains in place, the following actions are prohibited:

• Beginning or continuing law suits;
• Collection calls;
• Repossessions;
• Foreclosure sales;
• Income executions (“garnishees”); and
• Bank account restraints.

In other words, the automatic stay is a central and very powerful tool a debtor can take advantage of once the bankruptcy is filed.  The goal of any bankruptcy proceeding is to give the debtor a fresh start.  The automatic stay allows for the debtor to be protected from all creditor claims while he gets his finances back in order.

What The Automatic Stay Does Not Cover

Unfortunately, not all actions and debts are covered by the automatic stay.  The automatic stay does not stop:

• Criminal proceedings;
• Actions for a family support order or the modification of such order;
• Actions to collect support from property that is not property of the estate; and
• Tax audits or demands by a taxing authority to file tax returns or assessments of taxes due.

If you are thinking of filing for bankruptcy it is always best to talk with an experienced attorney to discuss your individual case.  The beauty of bankruptcy is that a debtor has many options to help resolve individual problems.  Only an experienced bankruptcy lawyer can help guide you through this difficult and confusing process.

Randy M. Creighton, Esq.

Related posts:

1. 6 Mistakes to Avoid On The Eve Of Bankruptcy
2. The Chapter 7 Discharge
3. Bankruptcy FAQ

Starting September 7, 2010, the Federal Housing Administration (FHA) will offer a new refinance program to qualifying underwater homeowners.  To be able to participate in the program you must be current on your home loan, your credit score must be 500 or above, and the home must constitute your primary residence.  Further, all lien holders related to the property must agree to the refinance and agree to write off at least ten percent (10%) of the unpaid principal balance.  As most borrowers know, lenders are loathed to write off any of the principal regardless of the possible incentives.  The program does, however, offer more incentives beyond new FHA-insured mortgages.  The program contemplates certain incentives for any second lien holders to provide a full or partial extinguishment of the lien.  HUD says interested homeowners should contact their lenders to determine if they are eligible and whether or not their lender agrees to write down a portion of the unpaid principal.  Keep in mind that the present loan must be a non-FHA loan.

Tisha Black Chernine, Esq.

Related posts:

1. Chapter 13 Bankruptcy Or Loan Modification?
2. FHA Program for Underwater Homeowners
3. Black & LoBello featured in RJ’s Business Section