Northern California Bankruptcy Lawyer Blog

Homeowners throughout Northern California are continuing to struggle to keep their homes because of the reduction in values and inability to refinance their loans. Surprisingly, banks are getting headlines for donating homes or demolishing homes in neighborhoods that have been devastated by their foreclosures. The banks are taking these actions and getting positive reviews, but for the most part they continue to do nothing to help prevent foreclosure.

Beginning this month, banks can claim such activities qualify as part of their new commitment to help people stay in their homes pursuant to the 25 billion settlement with the government, although the actions have the opposite effect. The banks are taking advantage of their commitment under the $25 billion foreclosure abuse settlement between the government and five major banks announced last month. The settlement promises that of the $25 billion, the banks will give $17 billion "in assistance to borrowers who have the intent and ability to stay in their homes," according to a summary of the settlement. Unfortunately, more than half of that money can be used in ways that will not stop or affect foreclosures. According to the settlement, $2 billion of the settlement can go to donating or demolishing abandoned houses after foreclosure. Almost $1 billion can be used to help families that have defaulted on their loans move out. $1.7 billion can be used to waive "deficiency judgments," the amount a borrower still owes if a house in foreclosure is sold for less than the remaining mortgage debt. According to foreclosure experts, the banks virtually never go after homeowners for that type of debt and waiving deficiency judgments is not direct help for homeowners trying to prevent foreclosure. This means that $4.7 billion of the settlement is going toward expenses that the banks were incurring anyway before the settlement and which do not aid borrowers in foreclosure. There is also a concern that the banks will over estimate the value of this type of relief in getting credit towards the settlement.

According to the settlement, only $10.2 billion of the $25 billion must be used to reduce principal for borrowers who owe more on their mortgages than their homes are worth. According to the New York Times, Moodys.com, estimates that 700,000 borrowers, 250,000 for refinancing, and 450,000 for principal reduction would receive relief under the $10.2 billion debt reduction. The estimate is based on the fact that there are many homeowners who owe so much more than their homes are worth that the deal's average aid of $30,000 or so of principal reduction will not make them less likely to default. This is especially true in Northern California where loans tend to be higher than in most parts of the country. There may be a question as to whether or not there will be a significant number of homeowners where principal reduction works in a meaningful way in Northern California or other parts of the country.

The 25 billion settlement is between the government and Ally Financial, Bank of America, Chase, Citibank and Wells Fargo after allegations surfaced in 2010 that bank employees were fabricating or failing to review documents used in foreclosure proceedings and refusing to work with borrowers to modify loans. The settlement has attracted criticism that it is too easy on the banks. The state attorneys general, the Justice Department and HUD, have defended the settlement as appropriate. The criticism is that the settlement accomplishes remarkably little in the form of real relief for homeowners and that it gives the banks credit for far too much that they were doing before the settlement.

If you have a loan in Northern California and you have been unable to modify your loan or obtain other relief, Chapter 13 bankruptcy may be able to assist you. You may be able to pay back loan arrears over a 5 year period and catch up on your loan. You may also be able to strip any loans that do not have security because of the significant decrease in market value of homes in Northern California. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Homeowners throughout Northern California continue to suffer because of the decline of property values and loans that can not be refinanced due to the decline in property values. While some lenders have allowed borrowers to modify their loans, the modifications often do not solve the problems facing the borrower and the modifications often require the borrower to pay back arrears created by the modification process. Lenders generally will not consider a modification unless the borrower is behind in the loan. The lenders then often take months before they provide their decision on the loan. As a result, the loan cannot be modified because of the arrears that have to be paid back in the modification.

If you are having problems with a loan and the loan is not secured because the value of the property has declined, you may be able to obtain relief through bankruptcy. In some cases, a second loan that does not have security can be stripped in a Chapter 13 bankruptcy and the arrears can be paid back over five years. In the alternative, the loan arrears can be discharged if the property is surrendered in a Chapter 7 bankruptcy.

In Securities and Exchange Commission v. Wells Fargo & Co., 12-80087, U.S. District Court, Northern District of California (San Francisco) the Securities and Exchange Commission (SEC) is investigating Wells Fargo to evaluate whether or not its sale of almost $60 billion in residential mortgage-backed securities involved fraud. The SEC has been examining how many banks packaged and sold home loans to investors that resulted in the financial crisis. The SEC is looking for evidence that banks failed to disclose underlying credit weaknesses in mortgage pools and delinquencies. In other investigations, the SEC has told Goldman Sachs Group Inc. and JPMorgan Chase & Co. (JPM) that they may face civil claims.

The Securities and Exchange Commission recently asked a federal judge in San Francisco to compel Wells Fargo, the largest U.S. home lender, to deliver documents it agreed to produce under subpoenas dating from September 2011. The SEC in the Commission's San Francisco Regional Office issued several subpoenas to Wells Fargo since September 2011 seeking, among other things, materials related to due diligence and to the bank's underwriting guidelines. According to the SEC, Wells Fargo agreed to produce the documents, and set forth a timetable for doing so, but Wells Fargo has failed to produce many of the materials.

Pursuant to its Application, the Commission is seeking an order from the federal district court compelling Wells Fargo to comply with the SEC's administrative subpoenas and to produce all responsive materials to the staff. The SEC notes that it is continuing to conduct a fact-finding inquiry and has not concluded that anyone has broken the law. The SEC is examining whether Wells Fargo misrepresented or omitted facts in offerings from September 2006 to early 2008, according to the application. While the bank reviewed a sampling of loans and excluded those that failed to meet its standards, Wells Fargo may not have taken steps to address flaws in the remainder of the pool, the SEC claims
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The SEC's request, if granted, would give Wells Fargo 14 days to hand over 1,365 e-mails and attachments it has withheld from the SEC, according to the court filing. Wells Fargo said in a statement that the enforcement action is unwarranted and that it will defend itself in court.

Wells Fargo said in its annual report filed February 28, 2012 that it received a notice from the SEC warning the bank that it may face civil claims tied to the sale of mortgage- backed securities. SEC lawyers send the notices when they intend to recommend that the agency take action. Four days before, on February 24, 2012 the SEC told Wells Fargo that it was considering enforcement measures, the SEC said in its court filing. The bank has attempted to use that as an "excuse to avoid complying with the subpoenas," the SEC said in the filing. "There is no basis for Wells Fargo's refusal to comply with the subpoenas because a Wells notice, such as the staff provided, does not terminate the commission's investigative power," the SEC said in its filing. The scope of the SEC's probe "involves not just Wells Fargo's own potential violations of the securities laws, but the roles played by other persons associated with the bank's residential mortgage-backed securities offerings," according to the filing.

If you are having problems with your lender and facing foreclosure, you should seek advice from a bankruptcy attorney to determine what options are available to you. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Bank of America and other banks including Chase, Citigroup and Wells Fargo have been targeted by federal and state attorneys general investigators as the biggest violators of borrower's rights in the current mortgage crisis. Many borrowers in Northern California are suffering from a reduction in the value of their property, loans that far exceed their property value, spiraling loan costs and foreclosures. While borrowers have filed for assistance with Bank of America, Wells Fargo and Chase and other banks, the banks have often been unresponsive, requesting paperwork to be sent multiple times, delaying the process and then declining the modification and foreclosing on the loan based on the arrears created by the modification process. If you are having problems with your loan bankruptcy may help you. In a Chapter 7 bankruptcy you can discharge any recourse debt from a property you intend to surrender because you can no longer afford it. In a Chapter 13 bankruptcy you can strip unsecured loans from the property and obtain a payment plan to repay any arrears on the property. You can also get assistance in paying back taxes.

Bank of America's, Wells Fargo's and Chase's practices along with other banks have been the subject of negotiations with various state and federal agencies. Attorneys general from all 50 states began investigating the practices last year. State and federal officials investigating mortgage practices have worked on settlements including proposals for banks to fund principal writedowns for homeowners. The five largest banks have previously proposed paying $5 billion to settle the probe. Massachusetts Attorney General Martha Coakley has consistently indicated that her state will not sign on to any settlement of a nationwide foreclosure probe that includes liability releases for banks.

The banks in the settlement talks with state and federal officials have been seeking broad releases to protect them from legal claims. The banks want releases that go beyond servicing to include lending and securitization of loans. Massachusetts Attorney General Martha Coakley has said that she won't support an agreement that includes releases for securitization of mortgages and conduct related to a database of mortgages known as MERS.

Massachusetts Attorney General Martha Coakley filed a lawsuit on December 1, 2011 against JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and Ally Financial Inc., in state court in Boston. The case is Commonwealth of Massachusetts v. Bank of America N.A., 11-4363, Suffolk County Superior Court (Boston). She accused the banks of engaging in unfair and deceptive trade practices in violation of state law for allegedly conducting unlawful foreclosures and deceiving homeowners. Coakley blamed the banks for failure to reach a deal, saying they hadn't offered "meaningful and enforceable relief" to homeowners for harm they have caused. With a settlement still out of reach more than a year after all 50 states announced their investigation into bank practices, Coakley said, she decided to file her lawsuit. "They have had more than a year to show they've understood their role and the need to show their accountability for this economic mess, and they failed to do so," she said.

Coakley said at a press conference in Boston, "the stakes could not be higher at this stage of the game." "The foreclosure crisis continues to be at the root of the economic mess that we find ourselves in and our inability to turn it around." Coakley said the banks moved to seize Massachusetts homes when they had no legal authority do so because they didn't hold the mortgage on the properties. Failure to obtain valid mortgage assignments before foreclosure has affected titles to "hundreds, if not thousands, of properties" in the state, she said. The banks also deceived and misled homeowners about loan modifications, the attorney general said in a statement. The servicers "often strung along borrowers for months" in trial modifications before rejecting their attempts to modify loans, according to Coakley. Banks are also accused of engaging in "robosigning," in which foreclosure paperwork is signed without verification of the information in the documents. The practice was also used in the transfer of mortgages, Coakley said. "If we do not do this, we are stuck in this downward spiral of more foreclosures in a way that is totally counterproductive to the economy," she said at the press conference.

In September, California Attorney General Kamala Harris said she was withdrawing from the national talks, saying a proposed settlement was "inadequate" and would allow too few California homeowners to stay in their homes, but she has not taken any action since making the statement. The action taken by Massachusetts may provoke California to take similiar action.

If you are having problems with a loan, you should consult with an attorney. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Homeowners in Northern California have questioned the practices of Fannie Mae and Freddie Mac in foreclosure proceedings. If you are facing a foreclosure, you may be able to keep the property by filing for bankruptcy. You should consult with an attorney regarding your legal options.

After news reports in mid-2010 began to describe the dubious practices, like the routine filing of false pleadings in bankruptcy courts, Fannie Mae's overseer started to scrutinize the conduct of its attorneys. The inspector general of the Federal Housing Finance Agency severely criticized the FHFA's oversight of Fannie Mae and the practices of its foreclosure attorneys in a report issued Tuesday. "American homeowners have been struggling with the effects of the housing finance crisis for several years, and they shouldn't have to worry whether they will be victims of foreclosure abuse," Inspector General Steve Linick told the New York Times. "Increased oversight by F.H.F.A. could help to prevent these abuses."

According to the New York Times, the report is the second in two weeks in which the inspector general has outlined lapses at both the Federal Housing Finance Agency and the companies it oversees Federal National Mortgage Assn (Fannie Mae) and Federal Home Loan Mortgage Corp (Freddie Mac). The agency has acted as conservator for the companies since they were taken over by the government in 2008. Its duty is to ensure that their operations do not pose additional risk to the taxpayers who now own them. The companies have tapped the taxpayers to cover mortgage losses totaling about $160 billion. The new report from the inspector general tracks Fannie Mae's dealings with the law firms handling its foreclosures from 1997, when the company created its so-called retained attorney network. At the time, Fannie Mae was a highly profitable and powerful institution, and it devised the legal network to ensure that borrower defaults would be resolved with efficiency and speed.

The law firms in the network agreed to a flat-rate fee structure and pricing model based on the volume of foreclosures they completed. The companies that serviced the loans for Fannie Mae, were supposed to monitor the law firms' performance and practices, the report noted

After receiving information from a shareholder in 2003 about foreclosure abuses by its law firms, Fannie Mae assigned its outside counsel to investigate, according to the report. That law firm concluded in a 2006 analysis that "foreclosure attorneys in Florida are routinely filing false pleadings and affidavits," and that the practice could be occurring elsewhere. "It is axiomatic that the practice is improper and should be stopped," the law firm said.

The inspector general's report said that it could not be determined whether Fannie Mae had alerted its regulator, then the Office of Federal Housing Enterprise Oversight, to the legal improprieties identified by its internal investigation.

The inspector general said that both Fannie Mae and its regulator appear to have ignored other signs of problems in their foreclosure operations. For example, the Federal Housing Finance Agency did not respond to borrower complaints about improper actions taken by law firms in foreclosures received as early as August 2009, even though foreclosure abuse poses operational and financial risks to Fannie Mae.

The report cited a media report from early 2008 detailing foreclosure abuses by law firms doing work for Fannie Mae. Nevertheless, a few months later and just before its takeover by the government, Fannie Mae began requiring the banks that serviced its loans to use only those law firms that were in its network. By then, 140 law firms in 31 jurisdictions were in the group. Fannie Mae, the mortgage finance giant, learned as early as 2003 of extensive foreclosure abuses among the law firms it had hired to remove troubled borrowers from their homes. But the company did little to correct the firms' practices,.

Finally last fall, after an outcry over apparently forged foreclosure documents and other improprieties, the Federal Housing Finance Agency began investigating the company's process. In a report issued early this year, it determined that Fannie Mae's management of its network of lawyers did not meet safety and soundness standards. Among the reasons: the company's controls to prevent or detect foreclosure abuses were inadequate, as was the company's monitoring of the law firms. "If a law firm self-reported no issues as it processed cases," the inspector general said, "then Fannie Mae presumed the firm was doing a good job." The agency is still deciding how to handle the lawyer network, the inspector general said.

Officials at the housing agency have agreed with the recommendations in the inspector general's report. Corinne Russell, a spokeswoman for F.H.F.A. said the agency was concluding its supervisory work in this area and would direct Fannie Mae to take necessary action when the work was completed.

In a response, the agency said that by Sept. 29, 2012, it would review its existing supervisory practices and act to resolve "deficiencies in the management of risks associated with default-related legal services vendors."

If you are having problems with a loan or foreclosure, we provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Many people in Northern California are having problems with loans on properties that have lost value. Many of the loans contain unfavorable terms. The lending practices of the various lenders has come under increasing scrutiny by the 50 State Attorneys General and the Depatment of Housing and Urban Development (HUD) and other federal agencies. If you have a loan that you cannot afford, a Chapter 13 bankruptcy may help you keep the property. You should consult with a bankuptcy attorney regarding your options.

According to a news article in Bloomberg Businessweek , a Sept. 30 report from the Department of Housing and Urban Development's inspector general. Kelly Anderson, a HUD regional inspector general, recommended the agency pursue legal remedies against Charlotte, North Carolina-based Bank of America. Anderson wrote in the audit, "Countrywide did not properly verify, analyze, or support borrowers' employment and income, source of funds to close, liabilities and credit information. This noncompliance occurred because Countrywide's underwriters did not exercise due diligence in underwriting the loans."

According to the report, half of 14 loans reviewed had "material underwriting deficiencies" concerning borrowers that resulted in more than $720,000 in losses. The lender should perform a review of all mortgages that defaulted within the first six months of their creation, implement a quality-control program, and repay the government for the $720,000 in losses, according to the HUD report.

The Federal Housing Administration, run by HUD, insures mortgages on loans to borrowers who can't find traditional financing, such as those with low incomes. Lenders can ask the FHA to cover losses if borrowers default. The agency has stepped up scrutiny of those claims, and denials could be the next wave of expenses tied to faulty mortgages for lenders including Bank of America, FBR Capital Markets Corp. according to the FHA.

Bank of America Corp. should face fraud proceedings after its Countrywide unit submitted faulty data to back up claims for reimbursement on federally insured mortgages, according to an audit by a U.S. watchdog.

According to Paul Miller, FBR's banking analyst, "These loans were put together really sloppy. There were problems with the loans and the servicing. They can go after these banks as much as they want. The issue is, how deep do they want to go?"

Bank of America, which bought Countrywide Financial Corp. in 2008, may be among the biggest losers if its claims are rejected, according to Miller. HUD's inspector general identified 4,050 Countrywide loans originated between July 1, 2008, and May 26, 2009, that were at least 60 days overdue within their first six mortgage payments.
CitiMortgage, a unit of Citigroup Inc., was faulted in a separate inspector general's report. A review of 68 loans showed the firm, led by Chief Executive Officer Vikram Pandit, 54, improperly submitted claims of almost $5 million, which should be returned to HUD, according to the audit, which covered 2010.

That case stems from an FHA program that let borrowers in default sell their homes to satisfy mortgage debts to New York- based Citigroup, even if the proceeds were less than the total owed. The FHA compensated the bank for the difference between the sale price and the debt, according to the report.

"Citi did not have adequate policies and procedures in place to ensure that it properly determined borrower eligibility to participate in the program," according to the report.

If you are having problems with a loan and your bank is threatening foreclosure, you should consult with a bankruptcy attorney. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

If you live in Northern California and you are having a problem with your lender, Chapter 13 bankruptcy may help you keep the property. A Chapter 13 bankruptcy can create a payment plan to pay loan arrearages and to strip second and third loans that are unsecured. A number of homeowners have been challenging foreclosures nationally based on their bank's use of the Mortgage Electronic Registration System (MERS). MERS is a private electronic database, operated by MERS-CORP, Inc., that tracks the transfer of the "beneficial interest" in home loans, as well as any changes in loan servicers. After a borrower takes out a home loan, the original lender may sell all or a portion of its beneficial interest in the loan and change loan servicers. The owner of the beneficial interest is entitled to repayment of the loan.

The Ninth Circuit recently ruled on a case where the plaintiffs questioned the legal right to foreclose a loan that is transfered in the MERS system. The case is CERVANTES v. COUNTRYWIDE HOME LOANS 2011 DJDAR 13682. This is a putative class action case challenging origination and foreclosure procedures for home loans maintained within MERS. The plaintiffs appealed from the dismissal of their First Amended Complaint for failure to state a claim. In their complaint, the plaintiffs alleged conspiracies by their lenders and others to use MERS to commit fraud. They also alleged that their lenders violated the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and the Arizona Consumer Fraud Act, Ariz. Rev. Stat. § 44-1522, and committed the tort of intentional infliction of emotional distress by targeting the plaintiffs for loans they could not repay. The plaintiffs were denied leave to file their proposed Second Amended Complaint, and to add a new claim for wrongful foreclosure based upon the operation of the MERS system.

On appeal, the plaintiffs argued the sufficiency of some of their claims, but primarily contended that they could cure any pleading deficiencies with a newly amended complaint, which would include a claim for wrongful foreclosure. The Ninth Circuit was unpersuaded that the plaintiffs' allegations were sufficient to support their claims. Although the plaintiffs alleged that aspects of the MERS system were fraudulent, they could not establish that they were misinformed about the MERS system, relied on any misinformation in entering into their home loans, or were injured as a result of the misinformation. If anything, the allegations suggested that the plaintiffs were informed of the exact aspects of the MERS system that they complained about when they agreed to enter into their home loans. Further, although the plaintiffs contended that they could state a claim for wrongful foreclosure, Arizona state law does not currently recognize this cause of action, and their claim was, in any case, without a basis. The plaintiffs' claim depended upon the conclusion that any home loan within the MERS system is unenforceable through a foreclosure sale, but the Court determined that conclusion was unsupported by the facts and law on which they relied. Because the plaintiffs failed to establish a plausible basis for relief on these and their other claims raised on appeal, the Court affirmed the district court's dismissal of the complaint without leave to amend.

If you are having problems with your lender and you are facing a foreclosure in Northern California you should seek advice from legal counsel. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

In Northern California a number of homeowners are suffering from declining home values and loans that are not affordable. If you have a loan that is going into foreclosure, bankruptcy may help you keep your loan. You should consult with a bankruptcy attorney.

According to the Washington Post, a whistleblower lawsuit alleges some of the nation's biggest banks and mortgage companies have defrauded veterans and taxpayers out of hundreds of millions of dollars by disguising illegal fees in veterans' home refinancing loans.

The lawsuit was recently unsealed in federal court in Atlanta. The lawsuit accuses the companies, including Wells Fargo, Bank of America, J.P. Morgan Chase and GMAC Mortgage, of engaging in "a brazen scheme to defraud both our nation's veterans and the United States treasury" of millions of dollars in connection with home loans guaranteed by the Department of Veterans Affairs.

The lawsuit was filed under the False Claims Act by two mortgage brokers in Georgia, and has been under federal seal since it was filed in 2006 in U.S. District Court for the Northern District of Georgia. Cases brought under the act often remain under seal for years while they are investigated. Victor E. Bibby, one of the plaintiffs, is president and chief executive of U.S. Financial Services, a Georgia-based corporation that provides mortgage services in seven states. As brokers, Bibby and the company's vice president of operations, Brian J. Donnelly, helped veterans choose lenders and complete the application forms. Since 2001, their company has helped set up thousands of the veterans' refinancing loans, according to the suit.

In 2005, Donnelly said he read the rules in a VA handbook governing the fees that could be charged for the transactions, which are known as Interest Rate Reduction Refinancing Loans, or IRRRL loans. Donnelly, who served three years in the Army, did further research and said became convinced that the charges were fraudulent. "We knew it was wrong," he said."We started putting two and two together," They're hiding it intentionally. Bibby and Donnelly said they approached the lenders, who insisted they were doing nothing wrong. The brokers reported their allegations to the U.S. government, providing copies of hundreds of "fradulent transactions." Upon filing the whistleblower lawsuit, the court ordered the case sealed.

The whistleblower suit, which was unsealed Monday, seeks to recover damages and civil penalties on behalf of the U.S. government. "This is a massive fraud on the American taxpayers and American veterans," James E. Butler Jr., one of the lawyers bringing the suit, told the Washington Post on Tuesday. Tens of thousands of the VA loans have gone into default or resulted in foreclosures, resulting in "massive damages" to the U.S. government, the suit alleges. The faulty loans will cost taxpayers hundreds of millions of dollars, with the costs rising as more VA loans go into default, according to the suit.

Under VA rules, lenders can charge veterans for recording fees and taxes, credit reports and other customary fees, but they are not allowed to charge attorney's fees or settlement closing fees. "It was gut-wrenching to us, seeing the brazenness" of the lenders, broker Victor E. Bibby told the Washington Post.

The case involves refinanced loans that are available to retired or active-duty veterans on homes they already own. The program is aimed at giving veterans the opportunity to lower their interest rates or shorten the terms of existing home mortgages.
The Justice Department has notified the U.S. District Court that it is not taking over the case but is reserving the right to intervene at a later date, according to court papers.

Other companies named as defendants include CitiMortgage, Washington Mutual Bank, PNC Bank (which acquired National City Mortgage), Countrywide Home Loans, Mortgage Investors, First Tennessee Bank (which acquired First Horizon Home Loan), Irwin Mortgage and New Freedom Mortgage.

If you have concerns about your loan, are facing foreclosure and considering a bankruptcy, we provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Many homeowners in Northern California have suffered from the decline in housing values in the past several years. This decline has prevented homeowners from refinancing negative amortized loans or loans with high interest rates forcing them to attempt to modify their loans with lenders that have been reluctant to modify. According to the Standard & Poor's Case-Shiller Home Price Index released last week, the trend down in prices continued in March 2011. In 20 large cities, prices fell .8 percent in March from the previous month. This created a new recession low which is 33.1 percent under the July 2006 peak in real estate prices. The new Standard & Poor's Case-Shiller Home Price Index data did not provide any hope for optimism. The national housing index, which is reported quarterly, fell 4.2 percent in the first quarter after a drop of 3.6 percent in the fourth quarter of 2010. This also created a new recession low. "Home prices continue on their downward spiral with no relief in sight," David M. Blitzer, the S.& P. Index Committee chairman, said in a statement.

According to the Standard & Poor's Case-Shiller Home Price Index housing prices are now back to where they were in mid-2002 even before taking inflation into account. Such a decline was unimaginable to the boosters and many of the analysts in the middle of the boom, who were fond of saying that house prices never fell on a national basis. But as credit dried up and the easy refinances disappeared, the foreclosures began. Prices fell sharply in late 2006, 2007 and 2008.

For real estate, some economists say, an end to the seemingly endless decline in housing values might be in sight. But many economists think there are still relatively large drops to come. According to the New York Times, Dean Baker, co-director of the Center for Economic and Policy Research, expects a 6 to 8 percent fall during the rest of the year. "There are a lot of forces pushing prices downward," he said. One of the forces is the excess number of houses built by developers during the real estate boom. Developers built too much during the housing boom, and the desire for second and third homes has sharply diminished. New household formation will soak up the supply, but that will take years. Calculated Risk, the financial blog, estimated the excess housing supply last week using 2010 Census data, which it compared to 1990 and 2000. The blog concluded that the excess in April 2010 was about 1.8 million units.

The critical component in whether prices will continue to decline will based on consumer sentiment, otherwise known as confidence. The United States Conference Board reported last week that its consumer confidence index unexpectedly fell to 60.8 in May from a revised 66 in April. Analysts had forecast a one-point rise, but confidence actually decreased. The May 2011 level is the lowest since the fall. People with no confidence in the economy and their own success tend to put off major purchases.

If the price of your property has declined below the purchase cost or you took out a second or home equity loan and you are unable to refinance or modify the loans, bankruptcy may be a solution for you. If you have tried to modify the loan unsuccessfully and you are behind in the loan, Chapter 13 bankruptcy can stop a foreclosure, create a payment plan to repay the arrearage and strip or remove the second or equity loan. A Chapter 13 bankruptcy will also allow you to create a payment plan for your unsecured debts. In the alternative, if you cannot afford to keep the property because you have suffered a job loss, Chapter 7 bankruptcy will relieve you of the debt with no tax consequences. If would like a free legal consultation, contact us at one of our Northern California offices.

Northern California real estate prices have been significantly impacted by the economic recession. As a result, many borrowers that have defaulted on their loans have been forced to modify loans with their banks and mortgage servicers to try to reduce the loan payments and interest rates on their loans and in some cases to reduce the loan principal. In the alternative, the properties have gone through foreclosure. According to a recent report by LPS Applied Analytics, banks and mortgage servicers, who collect payments for lenders, are taking more time to complete foreclosures because of the huge volumes of defaulted mortgages, time-consuming reviews for loan modifications and additional delays caused by improperly filed foreclosure documents in tens of thousands of cases.

According to Applied Analytics, last year the number of days that the average borrower in foreclosure went without making a payment stretched from 410 in January to 507 in December. Before the foreclosure crisis, the norm was more like 250 days. About 2.2 million homes were in foreclosure at the end of January, according to LPS. LPS Applied Analytics tracks 37 million mortgages.

According to some experts, the delays by banks and mortgage servicers may translate into higher prices in some markets for foreclosed homes as inventories shrink. They will also push some foreclosures further into the future, meaning they'll weigh on housing markets longer.

Government initiatives that were begun in 2009 to increase loan modifications also slowed lenders' efforts to modify loans, experts say. The government programs are very complex and kept changing, which has added to the work required to do a modification and increased the time that seriously delinquent borrowers could live payment-free before losing their home, according to experts. According to LPS Applied Analytics, recent estimates reflect that delinquent borrowers now stay in their homes an average of 19 to 20 months without paying before they're forced to leave. By year end, the average may rise to 22 to 23 months, the longest on record. Some companies have assigned more workers to handle distressed loans, but they're still not likely to have enough to quickly process foreclosures.

If you are having problems with your loan or if you have received a notice of foreclosure, Chapter 13 bankruptcy may help you to keep the property. Filing a Chapter 13 bankruptcy will stop the foreclosure and allow you to strip an unsecured second or equity loan and create a payment plan for any arrears.

We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

In Northern California real estate values continue to remain depressed. Bank of America, Wells Fargo and Chase and the nation's biggest banks and mortgage lenders have steadily amassed real estate empires, acquiring a glut of foreclosed homes that threatens to deepen the housing slump and create a further drag on the economic recovery.

According to RealtyTrac, a real estate data provider, the banks own more than 872,000 homes nationwide as a result of foreclosures, almost twice as many as when the financial crisis began in 2007. In addition, they are in the process of foreclosing on an additional one million homes and plan to take possession of several million more in the years ahead.

Real estate prices have been declining across the country in recent months. Five years after the housing market started to decline, economists worry that the rise in lender-owned homes has further depressed home values and led to more distressed sales. Economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall by the end of 2011, and rise only modestly over the following year. Regions like Northern California that were hardest hit by the housing collapse and recession could take even longer to recover.

After drawing government scrutiny over improper foreclosures practices last fall, many big lenders slowed their operations in order to check their paperwork, and in two dozen or so states they halted them for months. The reasons for the backlog include inadequate staffs and delays imposed by the lenders because of investigations into foreclosure practices. The banks are being investigated nationally by the fifty state attorneys general and various federal agencies for alleged deceptive and illegal practices. The stockpile of houses could lead to additional losses for banks and other lenders as they sell houses at steep discounts.

Just as lenders were ill-prepared to handle the flood of foreclosures, they do not have the staff and infrastructure to manage and sell the properties they have taken in the foreclosures. Most of the major lenders outsourced almost every part of the process from sales to repairs. Real estate agents have complained that lender-owned home listings are routinely out of date, that properties are overpriced, and that lenders take too long to accept an offer.

If you are behind in your mortgage and your lender will not work with you to modify your loan, Chapter 13 bankruptcy may help you keep your home. Chapter 13 bankruptcy can create a payment plan to allow you to pay arrears and property tax and may allow you to strip away equity and second loans that are unsecured because of the decline in value. If you are having problems with your mortgage, you should contact an attorney to obtain advice as how to proceed.

We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Bank of America has been targeted by federal and state attorneys general investigators as the biggest violator of borrower's rights in the current mortgage crisis. Many borrowers in California are suffering from a reduction in the value of their property, loans that far exceed their property value, spiraling loan costs and foreclosures. While borrowers have filed for assistance with Bank of America, it has often been unresponsive, requesting paperwork to be sent multiple times, delaying the process and then declining the modification and foreclosing on the loan based on the arrears created by the modification process.

Bank of America's practices along with other banks have been the subject of negotiations this week with various state and federal agencies. State and federal officials investigating mortgage practices had offered revised terms during settlement talks in Washington, including a proposal for banks to fund principal writedowns for homeowners. The five largest banks proposed paying $5 billion to settle the probe, according to people familiar with the negotiations. An amount in that range would be viewed as favorable for the banks, since regulators had previously suggested a $20 billion penalty.

Bloomberg http://washpost.bloomberg.com/Story?docId=1376-LL1LWF0YHQ0X01-35SDRCD0D7SH4M5EPHTH48MK0U reports that Bank of America Corp., the largest U.S. mortgage servicer, may pay as much as $3.69 billion or as little as $890 million to settle with the state attorneys general and federal agencies over the investigation into its practices. The estimates are based on analysts at Nomura Securities International Inc. The upper estimate is based on the 14 biggest servicers agreeing to a $10 billion penalty in a deal tied to the number of loans in foreclosure. Bank of America may pay the lesser amount in a $3 billion group settlement based on the size of servicing portfolios. Bank of America would pay the most among the 14 largest servicers under both settlement scenarios.

If you live in Northern California and you are having problems with Bank of America and your loans, Chapter 13 bankruptcy may be an option for you to keep your home if it is heading into foreclosure. Chapter 13 may allow you to strip an unsecured second loan and create a payment schedule for your payments that are in arrears. It would also allow you to significantly reduce your payments on unsecured debts.

If you are having problems with your loan with Bank of America, you should seek the advice of an attorney. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

JP Morgan Chase and other banks including Bank of America and Wells Fargo have been targeted by federal and state attorneys general investigators as the biggest violators of borrower's rights in the current mortgage crisis. Many borrowers in Northern California are suffering from a reduction in the value of their property loans that far exceed their property value and spiraling loan costs. While borrowers have filed for assistance with their banks including JP Morgan Chase, the banks have often been unresponsive to loan modifications, requesting paperwork to be sent multiple times, delaying the process and then declining the loan modification and foreclosing on the loan based on the arrears created by the modification process.

JP Morgan Chase's practices along with other banks have been the subject of negotiations this week with various state and federal agencies. State and federal officials investigating mortgage practices had offered revised terms during settlement talks in Washington this week, including a proposal for banks to fund principal writedowns for homeowners. The five largest banks proposed paying $5 billion to settle the probe. An amount in that range would be viewed as a positive for the banks, since regulators had previously suggested a $20 billion penalty.

>Bloomberg reports that JP Morgan Chase may pay as much as $1.65 billion or $1.64 million to settle with the state attorneys general and federal agencies over the investigation into its practices depending on whether the funds are tied to portfolio size or foreclosed homes. The estimates are based on analysts at Nomura Securities International Inc.

If you live in Northern California and you are having problems with JP Morgan Chase and your loans, Chapter 13 bankruptcy may be an option for you to keep your home if it is in foreclosure. Chapter 13 may allow you to strip an unsecured second loan and create a payment schedule for your arrears. It would also allow you to significantly reduce your payments on unsecured debts.

If you are having problems with your loan with JP Morgan Chase and you think a Chapter 13 bankruptcy could help, you should seek the advice of an attorney. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Banks are running into trouble in Northern California and other parts of the country because they have failed to establish an assignment of the deed of trust or mortgage that would entitle them to proceed with foreclosure. The propriety of the banks action A recent California bankruptcy court decision may invalidate the Mortgage Electronic Registration Systems (MERS) process in nonjudicial states. The California bankruptcy court ruled that MERS cannot help a trustee establish legal standing to foreclose on a securitized mortgage, unless the trustee already possesses an actual assignment of interest in the loan.

U.S. Bank foreclosed on a property and the borrower filed for bankruptcy to stop the foreclosure and attempt to modify the loan. U.S. Bank, which is a unit of U.S. Bancorp foreclosed on the borrower as trustee for C-Bass Mortgage Loan Asset-Backed Certificates, Series 6000-CB. U.S. Bank responded to the bankruptcy by filing a motion for relief from stay to proceed with the foreclosure. The borrower argued U.S. Bank had no standing to seek relief from the court's grant of a stay on the foreclosure because U.S. Bank's foreclosure sale was defective because it never recorded "an assignment of interest" in the loan before the foreclosure as required under California Civil Code section 2932.5. U.S. Bank argued that the California statute does not apply to a deed of trust and alleged "MERS' status as the original beneficiary of the deed of trust obviated the recording of the assignment to U.S. Bank."

The bankruptcy court disagreed with this argument and essentially discredited MERS ability to establish foreclosing authority, saying even if MERS was the beneficiary at the time of foreclosure, the Virginia based firm had no authority apart from a nominal role based on the deed of trust.

The case, Salazar v. U.S. Bank, was filed in California's Southern District U.S. Bankruptcy Court. The opinion challenges the role MERS plays in the foreclosure process when dealing with securitized loans held by a trustee. California uses a nonjudicial foreclosure process. The court found that section 2932.5 applies to deeds of trust, not merely mortgages. U.S. Bank argued that section 2932.5 only applies to mortgages. The court found that the statute applies to deeds of trust, not merely mortgages The bankruptcy court's decision is only binding in its own jurisdiction and is tied to a very narrow issue filed in bankruptcy court,

The bankruptcy court's decision appears to contradict the Gomes v. Countrywide decision. In that case, the Court of Appeals of the 4th Appellate District said the language in a deed of trust gives MERS the authority to initiate a foreclosure. Legal counsel for Salazar argued that the Salazar case was different from Gomes in that in Gomes, the borrower, actually acknowledged that MERS could foreclose. In the Salazar case, MERS was the beneficiary at the time of inception, but by the time, the deed of trust was foreclosed, MERS was no longer the beneficiary. In the Gomes case, MERS was the beneficiary at the same time, and the appellate court did not want to interfere in a nonjudicial foreclosure.

If you are having difficulty with your lender and your bank has given you notice of foreclosure, you should seek advice from an experienced attorney. Chapter 13 Bankruptcy may help you stop the foreclosure and keep the property. You may be able to strip an unsecured loan and create a payment plan for any loans that are in arrears. If you decide you do not want to keep the property, you may be able to avoid any liability for recourse loans.

If you would like a free legal consultation regarding these issues, contact us. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Homeowners throughout Northern California continue to suffer with home values that are decreasing or stagnating and loans that far exceed the value of their properties. Homeowners have filed for loan modifications in record numbers and have received varying responses from their lenders. As a result, the fifty state attorney generals have filed a lawsuit against the lenders in order to force them to change their lending and modification practices.

This week, the state attorneys general and federal regulators including the Justice Department and the Department of Housing and Urban Development are meeting in Washington with the banks to discuss creating a multibillion dollar fund to help troubled borrowers. The purpose of the fund would be to help struggling borrowers stay in their home and to punish banks for their shoddy foreclosure practices. The current settlement talks grew out of widespread problems within the mortgage servicing industry including instances of forged foreclosure documents and flawed paperwork that surfaced in the fall and prompted federal officials and the state attorneys general to join forces against the industry.

According to the Washington Post, one option, would be to use a portion of the money to write down the principal balance for some beleaguered homeowners a controversial approach that, bank representatives argue, raises questions of fairness and poses logistical hurdles for the industry. This is an option that has been approached in a number of different ways including several attempts at passing legislation to allow the bankruptcy court to cram down a loan. So far, any attempts to reduce the balance on loans has been vigorously resisted by the lenders.

Another option would be to pay out part of the funds to state-run aid programs, mediation services, foreclosure hotlines and other efforts to help homeowners. But that approach also presents questions about how to allocate the money fairly and who would make that decision.

The state attorneys general, regulators and the banks are still negotiating over whether or not and how much in penalties each individual bank would have to pay and whether some of the money also will be set aside to compensate homeowners who suffered abuses such as wrongful foreclosures. The state attorneys general and federal regulators have submitted to the mortgage servicing firms a revised version of the original 27-page term sheet that they put together this year. The original proposal would require servicers to provide a single point of contact for borrowers looking to modify their loans and to do away with the "dual-track" problem in which homeowners sometimes receive foreclosure notices as they are negotiating modifications to their loans.

Last month, the Office of the Comptroller of the Currency and other federal banking regulators announced a separate deal with financial firms that requires them, in part, to hire consultants to determine whether any borrowers were harmed by sloppy foreclosure practices and reimburse them for any damage. The settlement did not address any of the problems, allowed the banks to self regulate which has not worked in the past and did not include any punishment or fines despite acknowledgement by the banks of widespread abuse. Critics called that settlement too lenient.

Unfortunately for the borrowers there is no consensus among the state attorneys general or the federal regulators. Politics continues to play a role in creating a solution. Oklahoma's attorney general, who opposes forcing servicers to reduce the principal on mortgages of borrowers who owe more than their properties are worth, has said he is prepared to break ranks. Other Republican attorneys general also have voiced concern about the original proposed terms, including Ken Cuccinelli II of Virginia.

This week's negotiations are expected to include the attorneys general, HUD and Justice officials and representatives of various banks, including Bank of America and Wells Fargo. Hopefully, the talks will result in some realistic changes to solve the continue problems suffered by borrowers.

If you are having problems with your loan and you have been given a notice of foreclosure by your bank, bankruptcy may be able to help you. In some cases a Chapter 13 bankruptcy can strip an unsecured loan and help you pay back arrears to allow you to keep your home. If you are unable to pay your loans and you have a recourse loan, Chapter 7 bankruptcy will allow you to surrender the property and walk away from the debt. If you do not discharge the debt, the bank may obtain a judgment against you and garnish your wages or accounts or take some other action against you.

You should seek the advice of an experienced bankruptcy attorney to evaluate your options. We provide free legal consultations for bankruptcy in San Francisco County, Sacramento County, Alameda County, Contra Costa County, San Mateo County, Santa Clara County, Stanislaus County, San Joaquin County, Marin County, Solano County and throughout Northern California. Contact us for a free legal consultation today.

Borrowers with loans in Northern California continue to suffer from unfair foreclosure procedures by banks that do not respond to requests for loan modifications, put borrowers through endless hurdles in the loan modification process and foreclose after declining modifications because loans are in arrears as a result of the modification process. The New York Times has reported that the nation's top lenders are expected to sign legal agreements by the end of this week compelling them to change their foreclosure procedures, according to regulatory officials.

The lenders and their servicers, who violated state and local laws and regulations governing foreclosures, are agreeing to improve their methods in numerous ways. Servicers will be required to hire an independent consultant to review foreclosures done over the last two years. If owners were improperly foreclosed on or paid excessive fees, they will be compensated. Going forward, under the new rules, homeowners in default will have a single point of contact with the servicer. The servicers will end their practice of foreclosing while borrowers are pursuing loan modifications that might allow them to stay in their homes. They will be required to have more layers of oversight and proper training of their foreclosure staff. The oversight will extend to third party groups, including the law firms that do much of the actual work of eviction. As a result of the changes being imposed, banks will have two options: either hire more employees to give the millions of households in default closer attention, or slow the pace of foreclosures.

While the banks have acknowledged violating the laws they maintain that very few if any people lost their house who were not in severe default. Bringing in a consultant to establish the amount of damages will give individuals who feel they were abused by their banks some means of redress. It is unclear how this will work if the bank is hiring the consultant to review the loans.

Many of the reforms that the banks are agreeing to were also being sought by the fifty state attorneys general, who filed lawsuits demanding similar reforms last fall. For several weeks in January, the regulators and the attorneys general attempted to work with officials from the Justice Department and the Department of Housing and Urban Development to produce a comprehensive settlement, but the negotiations were not successful. The attorneys general met with the banks again last week at the Justice Department. The attorneys general are seeking to make the banks cut the debt of delinquent owners. The banks are resisting these efforts.

Regulators expect to issue a report on foreclosure practices at the top 14 banks within the next few weeks. The report, is the result of an investigation this winter by the Office of Comptroller of the Currency, the Federal Reserve Board, the Office of Thrift Supervision and the Federal Deposit Insurance Corporation. It will not name individual banks but rather describe their aggregate behavior. The investigators reviewed the policies and procedures, structure and staffing of the top banks, as well as their use of law firms and other third parties. They examined 2,800 foreclosures in various stages. The banks examined were Bank of America, Citibank, GMAC, JPMorgan Chase, Wells Fargo and nine others. The examination found critical deficiencies and shortcomings in foreclosure preparation and oversight, resulting in violations of state and local foreclosure laws, regulations and rules. Based on the findings, the banks will probably be assessed fines at a later point.

Although the investigation by the regulators and the states attorney generals has shed some light on practices that the public has been aware of for several years and has revealed the problems and practices that have prevented homeowners from working out a solution to keep their home, there is no real solution that has been proposed that the banks have agreed upon that will allow homeowners to reduce their loans to the market value of the property or reduce their payments to an affordable level where the homeowner has lost their job or their income has been reduced. Most of the loans that are in trouble are the result of properties that were purchased before the recession that lost value and cannot be sold and combined with borrowers that have lost income because of the recession and can no longer afford their loans. Most of the borrowers are victims of the economic downturn and the banks are taking no responsibility for any role they played in creating the problem. Nor are they reaching out to their customers to work out individual solutions to their problems to keep them in their homes.

One of the only remedies to forcing lenders to work with borrowers remains Chapter 13 bankruptcy which allows a borrower to stop a foreclosure and forces the lender to abandon secondary unsecured loans and enter into a payment schedule for arrearages. Most lenders begin foreclosure proceedings during loan modifications on the grounds that the loan is in default, a condition that was created by their requirement that the loan be delinquent before they will consider a modification. After taking months to evaluate the modification, the banks demand the full payment of the arrears as a condition to continuing the loan. Most borrowers are not in a position to pay the arrears in a lump sum and must seek Chapter 13 bankruptcy assistance to obtain a payment plan for the arrears. A Chapter 13 bankruptcy will stop the foreclosure and spread the arrearages out over three to five years helping the homeowner to keep the home.

If you are encountering a problem with your lender in Northern California and you are being threatened with foreclosure, you should seek the advice of an attorney. We have offices throughout Northern California available to provide legal advice regarding these issues. Contact us for a free legal consultation.

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