According to the report, the number of foreclosure filings in January 2012 -- including bank seizures, default notices and scheduled auctions -- increased by 3 percent from December 2011. This means that approximately one out of every 624 U.S. homes -- or roughly 211,000 -- received some type of foreclosure filing.
While this may seem like only a minor increase, many experts believe it may be a sign that a surplus of foreclosed homes will soon be making its way onto the real estate market.
The reason?
]]> In 2011, many mortgage lenders were forced to re-file thousands of foreclosures in state court systems. This step was necessitated after accusations surfaced that mortgage lenders wrongly foreclosed upon hundreds of thousands of homes using flawed procedures and/or partial data.In addition, mortgage lenders were generally more careful about initiating new foreclosures in 2011, taking time to make sure that all paperwork was properly filled out.
Both of these actions served to create a sizeable foreclosure freeze, that may be on the verge of freeing up.
"The frozen-up foreclosure process is beginning to thaw," said RealtyTrac CEO Brandon Moore. "Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona and Massachusetts."
Interestingly, experts are also predicting that the recent $26 billion settlement between five of the largest U.S. banks (Wells Fargo, Ally Financial, Bank of America, Citigroup, and JPMorgan Chase) and the attorneys general of more than 40 states will also push more foreclosures forward in 2012.
Breaking the information down further, the RealtyTrac report ranked the four states with the highest foreclosure rates in the nation for January 2012:
Stay tuned for more from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about bankruptcy and foreclosure.
This post is for informational purposes only and is not to be construed as legal advice.
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Source:
CNN, "Foreclosures climbed in January" Feb. 16, 2012
]]>"We are working with legal counsel at this time on filing the bankruptcy," wrote board chair Jeanie Wyatt in a released email. "The SAO Board and its executive members have been working for months to explore all options for reorganization."
San Antonio residents may recall that the opera company was plagued with a litany of problems over the past few months, including the departure of founder and artistic director Mark Richter in November and the subsequent departure of his interim successor, Terrance Frazor, less than two months later when the company was unable to make payroll.
Furthermore, the opera company was forced to close its office in January, fire its office staff and cancel the production of "Don Giovanni."
]]> Even though it appears that the San Antonio Opera may soon be closing its doors, another group, the Opera Theater San Antonio, is slowly moving forward with plans to begin staging operatic events.However, while the emergence of a new opera group may be a relief to the city's theater-going crowd, San Antonio Opera founder Mark Richter indicated that it was one of three causes that may have helped contribute to his company's downfall.
"Obviously, the recession happened. That was the first swing," said Richter. "The second swing was this confusion about a phantom company coming in. Where corporations were already tight with their money, they would say, 'Hold on, what's this other company? And the third punch was we did not reach our expected goals for ticket sales for Plácido [Domingo]."
Indeed, the San Antonio Opera brought in opera superstar Plácido Domingo last summer in the hopes of raising funds. However, Richter indicated that the company lost "at least $200,000" on the performance.
It remains to be seen how the opera landscape will evolve here in San Antonio. In the meantime, Wyatt indicated that additional information on the bankruptcy filing will soon be available and encouraged ticketholders to visit the San Antonio Opera website for information about ticket exchanges.
Stay tuned for more from our San Antonio bankruptcy blog ...
This post is for informational purposes only and is not to be construed as legal advice.
Source:
The San Antonio Express-News, "San Antonio Opera headed for bankruptcy" Feb. 13, 2012
]]>Specifically, NACBA researchers asked 860 bankruptcy attorneys across the country to share their thoughts and experiences concerning student loan debt. Here's what they discovered:
"Take it from those on the frontline of economic distress in America," said NACBA President William Brewer Jr. "This could very well be the next debt bomb for the U.S. economy."
]]> While you might think the conclusions reached by the NACBA report are slightly overblown, consider the following:According to the authors of the report, the solution to the problem can be found in changing existing bankruptcy laws to make easier to discharge student loan debt.
The current United States Bankruptcy Code offers relatively little assistance. In fact, the only way someone can obtain any type of relief from student loan debt via bankruptcy is if they can demonstrate "undue hardship."
Unfortunately, a showing of "undue hardship" requires a separate trial involving attorneys, witnesses and legal experts. This can cost significant time and money that debtors just don't have.
"It's not fair and needs to be corrected," said Rep. Steve Cohen (D-Tennessee), who is sponsoring legislation calling for student loan amendments to the bankruptcy code.
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
Stay tuned for more from our San Antonio bankruptcy blog ...
This post is for informational purposes only and is not to be construed as legal advice.
Source:
USA Today, "Bankruptcy lawyers: Student debt is looming economic bomb" Feb. 9, 2012
]]>Specifically, the ABI -- using data supplied by the legal technology firm Epiq Systems, Inc. -- indicated in its report that there were exactly 87,946 bankruptcy filings in the U.S. in January 2012. This represented a 14 percent decrease from the same time last year and a 9 percent decrease from December 2011.
"The continued decline in bankruptcies reflects the effort of consumers and businesses to shore up their debt loads in order to navigate through an uncertain economy," said Samuel J. Gerdano, Executive Director of the ABI. "We expect overall bankruptcy levels in 2012 to continue to trend downward until consumers increase household spending."
]]> The ABI determined that the six states with the most bankruptcy filings in January 2012 were:Closer to home, statistics showed that bankruptcies also declined in south-central Texas, falling by 25 percent in January 2012 as compared with the same time last year.
In addition, these statistics show:
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
Stay tuned for more from our San Antonio bankruptcy blog ...
This post is for informational purposes only and is not to be construed as legal advice.
Sources:
The San Antonio News-Express, "South-central Texas bankruptcies fall 25%" Feb. 1, 2012
The Orange County Register, "1 in 6 bankruptcies is filed in California" Feb. 6, 2012
]]>For those unfamiliar with an underwater mortgage, it is a phenomenon whereby the actual value of the home is far less than the amount owed on their mortgage.
Curiously enough, many of these underwater homeowners are continuing to simply abandon their mortgages and their home -- a practice referred to as a "voluntary foreclosure" or "strategic default."
]]> In extremely challenging economic times, a voluntary foreclosure or strategic default may seem like a logical or even necessary move. However, it is imperative that homeowners considering this drastic step take the time to examine the potential ramifications of simply packing up and moving on.First and foremost, homeowners should know that a strategic default/voluntary foreclosure can make it difficult to secure a mortgage for several years. In addition, homeowners may find it difficult to secure other loans/financing and will likely see their credit score take a sizeable blow in the short-term.
Second, homeowners going down this path may also prove unable to escape responsibility for paying state taxes on their unpaid mortgage.
Finally, homeowners headed for greener pastures via strategic default/voluntary foreclosure should realize that in some states a bank/mortgage company might very well seek a deficiency judgment or hire a debt collection agency.
(However, in Texas we are considered a "non-recourse" state. To illustrate, if a Texas homeowner walks away from a home with a $200,000 mortgage and the bank sells it for $150,000, the bank cannot come after the homeowner for the $50,000 deficiency.)
Fortunately, homeowners do have viable alternatives.
Under Chapter 13 bankruptcy, a homeowner can create a repayment plan to pay off their mortgage arrears without paying interest.
The following post was for informational purposes only and is not to be construed as legal advice.
Consider speaking with an experienced legal professional to learn more about your options before undertaking a voluntary foreclosure/strategic default.
Stay tuned for updates from our San Antonio bankruptcy blog ...
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community
Source:
Reuters, "What happens when you walk away from your home?" Jan. 27, 2012
]]>The bankruptcy judge handling the case ordered Crane to reveal details of a private settlement he has entered into with J.P. Morgan Chase & Co. According to The Wall Street Journal, he bought $35 million in bonds from the investment firm four years ago before things went sour in the municipal bond market amid the U.S. financial crisis; a securities firm's valuation put Crane's losses from the investment at $24.5 million.
]]> Crane sued the investment bank, alleging that it failed to disclose things an investor such as himself would want to know. Now the county wants to get the dirt on the Crane-J.P. Morgan deal to help its own case against J.P. Morgan -- a situation that includes a municipal bankruptcy filing resulting from the county's own massive bad debt, as well as a bribery scheme involving county leaders and possibly the bank.The details of the case are murky for now, but more information as to any wrongdoing on the part of Crane or J.P. Morgan will certainly emerge once Crane hands over the settlement documents to the court. What is clear is that Crane and Jefferson County, Alabama will forever be linked as part of a sewer project that fell victim to corruption and, on top of that, the financial crisis.
While millions of Americans have felt the impact of the financial crisis and have experienced similar financial tragedies, it is hard to ignore the sheer magnitude of the case. The millions of dollars Crane lost on his investment in bonds for the sewer project and subsequent settlement also hint that there is more to the story.
Source: The Wall Street Journal, "Houston Astros Owner Mucked Up in JeffCo Bankruptcy," Katy Stech, January 20, 2012
]]>If you have found yourself in this situation, it is extremely important to remember that you have rights and options. Not only can you seek debt relief, but you are also protected under federal law from the actions of overly aggressive debt collectors.
Specifically, the Fair Debt Collection Practices Act (FDCPA) is a federal law that expressly prohibits creditor harassment, meaning debt collection agencies must refrain from using deceptive, unfair or abusive practices. Failure to abide by the FDCPA can result in serious consequences for debt collection agencies, including large fines.
To illustrate, consider the recent actions of the Federal Trade Commission (FTC) -- the enforcement agency of the FDCPA -- against Michigan-based Asset Acceptance, one of the largest debt collection agencies in the country.
]]> The FTC officially launched an investigation of Asset Acceptance after receiving volumes of consumer complaints. These complaints alleged that the Asset Acceptance debt collectors engaged in conduct that is strictly prohibited under federal law debt collection laws, including:Consequently, the FTC brought legal action against Asset Acceptance for its multiple violations and earlier this week got it to settle for a fine of $2.5 million, the second largest fine ever handed down.
In addition, the settlement requires Asset Acceptance to perform the following tasks:
In a released statement, Asset Acceptance indicated that it was "pleased to have this matter behind us, and to have clarity on the FTC's policies and expectations of the debt collection industry."
Don't be intimidated by threats of legal action or repossession. Contact an experienced legal professional to learn more about your debt relief options.
This post is for informational purposes only and is not to be construed as legal advice.
Stay tuned for more from our San Antonio bankruptcy blog ...
Source:
The New York Times, "FTC fines a collector of debt $2.5 million" Jan. 30, 2012
]]>One story in particular seemed to strike a chord with the American public on the gravity of the foreclosure crisis.
Last fall, 101-year-old Texana H. of Detroit, Michigan and her 65-year-old son were evicted from their family home after the son neglected to pay the required property taxes associated with a reverse mortgage.
Specifically, the U.S. Department of Housing and Urban Development (HUD) -- which assumed control of the reverse mortgage once the amount paid to Texana H.'s son exceeded the value of the home back in 2006 -- initiated foreclosure proceedings and evicted Texana H. from her home of 60 years on September 12, 2011.
]]> A mere two days later, HUD reversed its position and indicated that Texana H. would be allowed to return to her home.However, in yet another about face, HUD declared last week that Texana H. cannot return to her foreclosed home because it is both unsanitary and unsafe.
"We can't allow someone to live in that [environment] now that we are essentially the owners of the property," said Brian Sullivan, a HUD official. "The home isn't safe; it's not sanitary. It's certainly not suitable for anyone to live in, especially not a 101-year-old mother."
In the meantime, Texana H. has been living with a neighbor who lives just down the street, but is understandably anxious to get back to her family home.
Interestingly, HUD has indicated that while it does not wish to pay for the necessary repairs, it is actively working to try to find potential agencies or other parties that would assist with the necessary repairs to restore the home to a livable condition.
"We're not giving up," said Sullivan, "We talking with anybody and everybody about solutions to this situation, but the condition of the property is a challenge."
Stay tuned for updates from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about bankruptcy and foreclosure.
This post is for informational purposes only and is not to be construed as legal advice. Names have been withheld to protect the identity of the parties.
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Source:
The Boston Globe, "Evicted 101-year-old Detroit woman can't go home" Jan. 12, 2012
]]>The laws come in response to criticism of the payday lending industry in Texas, accusing businesses of predatory lending and taking advantage of people with bad credit. Lenders are apparently turning a decent profit, since a host of new competitors has entered the industry in recent years. The number of payday lenders in Texas nearly tripled from 2006 to 2010.
]]> Those who seek out the services of a payday lender often need cash immediately and are unable to secure a loan from a bank or other institution that could provide a lower interest rate. And while the laws of economics dictate that those with bad credit must endure higher interest rates because they are at a greater risk of default, critics suggest that the rates charged by payday lenders are outrageous and unreasonable.Borrowers should always be aware of the terms and conditions attached to any loan document they sign. Before entering into a loan agreement, a borrower should have some foundation of financial literacy, including an understanding of how interest factors into their loan. Lenders are in the business of making money, and borrowers should learn to protect themselves from risky loans. In addition, those with bad credit can undergo credit counseling to help improve their finances and secure more favorable loan terms in the future.
Source: The Texas Tribune, "Texas Payday Lenders Face New Rules, Scrutiny," Thanh Tan, Jan. 5, 2012.
]]>Specifically, the ABI -- using data supplied by the legal technology firm Epiq Systems, Inc. -- indicated in its report that there were exactly 96,264 consumer bankruptcy filings in December 2011. This represented a 16 percent decrease from the 114,738 consumer bankruptcy filings in December 2010.
"The decline in total filings reflects the retrenchment in consumer spending associated with a down U.S. economy," said Samuel J. Gerdano, an ABI executive. "As consumers continue to deleverage their debt and access to credit remains tight, bankruptcy filings will continue to decrease."
]]> Overall, calendar year 2011 saw a significant decline in the number of bankruptcies in the United States. To illustrate, there were approximately 1,379,113 bankruptcy filings in calendar year 2011, as compared with 1,561,008 bankruptcy filings in calendar year 2010 - a 12 percent decrease.In addition, the ABI report found the following:
Interestingly, experts have indicated that the drop in bankruptcies is not necessarily indicative of an improving economy. In fact, they indicated that it may be nothing more than a sign that more financially troubled Americans are choosing to use their credit cards to cover expenses.
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
Stay tuned for more from our San Antonio bankruptcy blog ...
This post is for informational purposes only and is not to be construed as legal advice.
Sources:
American Bankruptcy Institute, "Total bankruptcy filings decrease 12 percent in 2011, commercial filings fall 19 percent" Jan. 4, 2012
The New York Times, "Bankruptcy filings declined in 2011" Jan. 25, 2012
]]>The website Credit Karma recently conducted a survey of over 300,000 users, which revealed that from 2010 to 2011 the average credit card balance in America declined from $7,404 to $6,576. As previously stated, this continued a trend from 2009 to 2010, in which the average credit card balance decreased by as much as seven percent.
Here, Credit Karma researchers attribute two factors to the two-year reduction in credit card debt:
"I believe we are just about at the bottom of the debt trend," said Ken Lin, Credit Karma CEO.
Some of the other notable findings by Credit Karma include:
Statistics also showed that the average amount of auto loan debt here in the U.S. actually increased by two percent while mortgage debt remained relatively static.
Stay tuned for more from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about managing credit card debt/bad credit and fighting creditor harassment.
This post is for informational purposes only and is not to be construed as legal or financial advice.
Source:
CNN Money, "Credit card debt drops 11%" Jan. 3, 2012
]]>According to the report, the number of foreclosure filings in the United States -- including bank seizures, default notices and scheduled auctions -- fell by 34 percent from 2010 to 2011, with approximately 1,887,777 homes receiving some type of filing.
This constitutes the lowest foreclosure level since 2007.
What was behind this decline in foreclosure filings in 2011?
RealtyTrac experts believe that one of the primary reasons behind the decline in foreclosures filings in 2011 was the need for mortgage lenders to re-file thousands of foreclosures in state court systems. This step was necessitated after accusations surfaced that mortgage lenders wrongly foreclosed upon hundreds of thousands of homes using flawed procedures and/or partial data.
]]> "A big part that is inflating the size of the decrease is a continuing extended foreclosure process," said RealtyTrac marketing communications director Daren Blomquist. "Especially in some states, we have a dysfunctional foreclosure process that is bogging down foreclosures, but more importantly, it's bogging down and hampering the housing recovery."Blomquist indicated, however, that the decline in foreclosures is likely temporary and that the foreclosure rate will begin to steadily rise in 2012 as more foreclosures make their way through the courts.
Breaking the information down further, the RealtyTrac report ranked the 10 states with the highest foreclosure rates in the nation for 2011:
Closer to home, the RealtyTrac report also found that in December 2011, only one in every 1,133 homes in Texas received a foreclosure filing notice.
Stay tuned for more from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about bankruptcy and foreclosure.
This post is for informational purposes only and is not to be construed as legal advice.
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Sources:
Reuters, "Foreclosure filings hit four-year low" Jan. 12, 2012
The San Antonio Express-News, "Foreclosures: The beginning of the end?" Jan. 13, 2012
]]>According to news reports, Hostess Brands Inc. -- the food company behind such classics as Wonder Bread, Twinkies, DingDongs and HoHos -- filed for Chapter 11 bankruptcy last week.
For those unfamiliar with Chapter 11 bankruptcy, it typically entails a debtor proposing a plan of reorganization outlining how it will keep its business alive and pay off creditors over the course of time.
Here, Borders indicated in court documents that it plans to keep its business operations afloat with $75 million debtor-in-possession financing from a New York investment firm, and listed assets of $1 billion and debts/liabilities exceeding $1 billion.
Fortunately, the Texas-based company -- which employs roughly 19,000 people in bakeries, outlet stores and distribution centers throughout the United States -- is not planning any layoffs or closings.
]]> Interestingly, Hostess filed for Chapter 11 bankruptcy back in 2004 and completed its restructuring/reorganization in February 2009. However, the company indicated that this implemented only "incremental change" and that further change is now needed to address outstanding labor/pension problems."The company's current cost structure is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules," said a company spokesperson who indicated that negotiations with labor unions are ongoing.
Industry analysts cite a variety of factors -- outside of labor issues -- that have caused Hostess to suffer staggering losses, including the high cost of ingredients, the stocking of more expensive desert options by upscale grocery stores and the failure to adapt to health/obesity concerns.
"You can't pick up a paper without reading about obesity in America," said Adam Hanft, chief executive of a New York-based brand-strategy firm. "It seems like it's pretty bad management that they can't take advantage of a trend like obesity."
Stay tuned for future developments from our San Antonio bankruptcy blog ...
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This post is for informational purposes only and is not to be construed as legal advice.
Source:
The Los Angeles Times, "Hostess files for Chapter 11" Jan. 12, 2012
]]>According to a recent report in the Wall Street Journal, Kodak is actively preparing for a potential Chapter 11 filing, including hiring a renowned bankruptcy/restructuring firm, and entering into discussions with possible lenders for so-called "debtor in possession financing" (i.e., a $1 billion loan to help keep the company operational during the bankruptcy process).
(For the uninitiated, Chapter 11 bankruptcy involves a debtor proposing "a plan of reorganization to keep its business alive and pay creditors over time.")
Interestingly, the report also indicated that Kodak is waiting to see if it can sell its 1,100 digital-imaging patents -- estimated to be worth between $2 to $3 billion -- before filing for bankruptcy. However, the patents have been on the market since July, and thus far, no takers have emerged.
]]> "It feels like water torture," said Mark Zupan, dean of the University of Rochester's business school. "The game hinges on that [patent] sale, principally. And, at this point, they just have to create the insurance if they've got to go the other route. But the prospect of bankruptcy makes the sale more complicated too."Over the last decade, Kodak has seen its profits and stock prices tumble as it lost business to foreign competitors and failed to take part in the digital image revolution. (Indeed, some experts have accused the company of adhering to an outdated business model, valuing nostalgia over innovation.)
It is worth noting, however, that Kodak has invested significant resources into the development of new inkjet printers, software and packaging technology. In fact, the company is projecting that these three areas will more than double in size by 2013 and generate nearly 25 percent of company revenue.
Stay tuned for future developments from our San Antonio bankruptcy blog ...
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This post is for informational purposes only and is not to be construed as legal advice.
Source:
The Washington Post, "Wall Street Journal report says Kodak might file for bankruptcy in coming weeks" Jan. 4, 2012
]]>However, rather than battling to keep a home they simply can't afford or ultimately losing their home to the bank, an increasing number of people are now utilizing another option: donating their homes to charity.
By choosing to donate their homes to charity, homeowners -- especially those with low-value property -- can rid themselves of crippling payments on an underwater mortgage and take advantage of a charitable tax deduction.
"People see this as a way out if they can't sell," said Charles Konkus, president of the national charity Real Estate Donations.
In fact, homeowners aren't the only one getting in on the act, as more and more mortgage lenders are now donating or selling (at a significantly reduced price) foreclosed property to charities such as Real Estate Donations or Habit for Humanity.
]]> To illustrate, Bank of America donated 150 homes in 2011, and is currently planning to donate over 1,200 in 2012. Similarly, Wells Fargo donated 1,120 homes in 2011, and is planning similar figures for 2012."It's a win, win, win [for lenders, charities/investors and neighborhoods]," said Rebecca Mairone, the director of Bank of America's home donation program.
Indeed, experts indicate that the practice can help clean up drive up home values in neighborhoods, as donated/sold properties are typically refurbished, resold or even razed.
It's important to recognize, however, that the number of donated homes is only a small piece of the overall foreclosure problem. Over 6 million homeowners across the country are late on mortgage payments or already facing foreclosure.
Stay tuned for more from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about bankruptcy and foreclosure.
This post is for informational purposes only and is not to be construed as legal or financial advice.
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Source:
USA Today, "Charities get more in donated homes" Dec. 29, 2011
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