When I come across something that I think might help readers answer this question, I be sure and post it here.
Read more at MSNBC.
Archive for October, 2007
“Be Debt Free in only 18 months!”
Monday, October 29th, 2007
There are ads on local radio stations that make this declaration. Earlier this month, the Federal Trade Commission filed a lawsuit in New York against a couple that operated a variety debt settlement companies: The Debt Settlement Company, The Debt Elimination Center, Pay Help, Inc., Money Helps and Edge Solutions. According to the FTC, unsuspecting consumers looking for help visited websites such as idebthelp.com and moneycares.com and lured into a “debt meltdown program.” According to the FTC,
The complaint alleges that, as a result of being in the defendants’ program, many consumers experience substantially increased debt because of late fees, finance charges, and overdraft charges, and suffer damage to their credit rating because of significant negative information such as late payments, charge-offs, collections, and garnishments, all of which may appear on their credit report for up to seven years.
Read more from the Arizona Republic.
Read more from the Federal Trade Commission.
Bad News On New Loans: Defaults are Up
Tuesday, October 16th, 2007
From today’s New York Times:
Borrowers who took out loans in the first six months of 2007 are falling behind on payments faster than homeowners who took out loans last year, according to a report by Friedman, Billings, Ramsey, an investment bank based in Arlington, Va. The data suggested that more Americans could lose their homes and that the housing market’s troubles might persist longer than many analysts have been predicting.
Treasury Secretary Calls for National License System for Mortgage Brokers
Tuesday, October 16th, 2007
The Washington Post reports that
At the [real estate] loan closing, [Treasury Secretary Henry M. Paulson Jr.] wrote, “the most critical facts, including potential future monthly payments, should be on a single page in clear, easy-to-understand language.”
In addition, he said the United States should consider replacing the disparate state rules that govern mortgage brokers with a national system.
Between predatory lending and complicated disclosure, “some of the conduct and practices I have learned about are shameful,” Paulson said. “The development of a uniform national licensing, education and monitoring system for all mortgage brokers is worth considering.”
The $70K Attorney’s Error and a Debtor’s Discharge
Tuesday, October 16th, 2007
In an interesting case involving an attorney’s mistake (and fortunately, it was not mine), a chapter 7 debtor will obtain a “clean” discharge. The case involved a debtor who in 1995 purchased her home under a state program which helped low and moderate income families to own their homes purchased at a market discount. Under this program, the local town or city would provide the housing subsidy. The local town or city would then retain certain rights, such as a right to a portion of net sale proceeds, first refusal and assent to refinancing. These rights were spelled out in a deed rider which was attached to the deed and recorded at the local registry.
In 2005, the debtor sold her home to a buyer. The buyer used the bank’s attorney, and did not retain one for herself. The debtor also did not hire an attorney. The closing attorney handled all aspects of the closing, including issuing a report that noted that the title to the condo was “clean.” The term “clean” however, meant free from any lien or encumbrance other than the first mortgage. The closing attorney missed the deed rider and the rights of the municipality.
Mass. Bankruptcy Judge Rules Trust Property Is Chapter 7 Estate Property
Tuesday, October 16th, 2007
When a bankruptcy petition is filed under Chapter 7, an estate is created. Unless the property is otherwise exempt, all of the debtor’s property belongs to the estate. The Chapter 7 Trustee is then required to sell the property to pay creditors. In a recent case, a debtor was a sole trustee of a real estate trust and the real estate was owned in the name of the realty trust. But in this case, Massachusetts Bankruptcy Judge Robert Somma held that the property belonged to the debtor’s Chapter 7 estate.
The case involved property in Malden. The trust was created by the debtor and the declaration of trust provided that: “This instrument [the declaration of trust] may be amended at any time by a written instrument signed by the trustees and acknowledged by one or more of them.” It also provided that the trustee could terminate the trust at any time. If he elected to terminate the trust, he was obligated to disburse the trust property to the beneficiaries (included other family members, but not the debtor).
