Houston-based LTD Financial Services got slapped with $1.3 million in civil penalties to settle FDCPA violation charges.
Washington Mutual issued a press release in response to the action filed by the NY Attorney General. We reported on that action earlier this week.
An astute observation on the passage of BAPCPA: “Be careful what you wish for.”
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.
This morning’s Worcester Telegram is reporting that from January 1, 2006 through June 30, 2007 a total of 1,370 foreclosure notices were filed by lenders against Worcester homeowners. It also does not appear it will get better anytime soon:
Trouble could continue for the next two years, according to Mr. [Clark Ziegler, executive director of the Massachusetts Housing Partnership]. ARMs on about 200 more Worcester homes are scheduled to reset before the end of this year, he said. About 1,000 more ARMs reset in Worcester next year, followed by 1,000 more in 2009, he said.
Bank of America reports that “’unprecedented dislocations’ in credit markets will have a ‘meaningful impact’ on third-quarter results at its corporate and investment bank.” Unprecedented dislocation sounds painful. Perhaps that’s why they recently hiked up their ATM fees.
Today the The Wall Street Journal reports that the bankruptcy of American Home Mortgage Investment Corporation puts thousands of homeowners in “imminent risk” of losing their homes.
From the New York Post: Countrywide reportedly continues its struggle in this mortgage and housing meltdown.
And finally, USA Today reports that there should be no assumptions that the Federal Reserve will cut interest rates.
Dallas Federal Reserve Bank President Richard Fisher said the U.S. economy appears to be weathering troubles in housing and financial markets, but it is uncertain how things will play out.“Our economy appears to be weathering the storm thus far. The future path of that storm and the appropriate policy course, however, are still to be determined,” Fisher said in remarks prepared for delivery to a community forum in Laredo, Texas.
Last summer, I questioned whether we were heading into a Perfect Storm. If you read the news close enough, it would appear that we are. Are you prepared?
I am just getting back from a much needed respite. I had originally contemplated writing about my attending the Northeast Consumer Forum in Newport, Rhode Island. But after I wrote about it, I thought it was a pretty boring piece. So instead, I’ll simply mention that I happened across this article out of San Diego on the foreclosure crisis.
But before I do, I need to create the mood, and since I am still trying to get back into the swing of things, I cannot manage a more artful segue than to tell you that I am going to create mood and thus, I am going segue.
In the 2001 film Moulin Rouge, Satine, played by Nicole Kidman is a doomed temptress at the French Club which is run by Harold Zidler, played by Jim Broadbent. Satine needs to tempt the Duke to give money to the club to fund a show. But before she can finish singing her first number, she passes out to the horror of the “guests” of the club. As she is carried backstage, concerned people fawn all around. When she awakes, she is coughing up blood, a fact her attendants are all too careful to hide from Harold who desperately needs the Duke’s money, and presumably, the Duke’s happiness, and sees the only way of getting both is through Satine.
Being the trooper that she is, she gets up. She is clearly having difficulty breathing. She doesn’t look like she can stand, and she’s sweating profusely. She assures Harold she’s fine, and Harold who can see only what he wants to see, announces gleefully “e-very-thing’s go-ing so welllll!” It’s painfully funny and sad.
Segue back to this article. Here’s a tid bit:
Now that the dice have come up snake eyes on the housing market, other shoes will probably be dropping soon. Retail sales, which are plummeting at places like Home Depot and Sears, seem likely to decline further as defaulting home buyers cut down on their big-ticket purchases. In June, retail sales excluding gasoline fell 0.9 percent.
If retail sales continue to fall, adding to the declines in construction and real estate employment, unemployment could start to rise. The Norris Group’s latest real estate market report presents a feasible scenario in which unemployment in California rises above 8 percent, compared with its current level of 5.2 percent.
Since the Dow closed today just shy of 14,000 points, I felt the need to bring balance to the impression that everything is going so well.
Minimum payments on Bank of America credit cards: going up.
The Massachusetts foreclosure rate as measured by April filings: going down.
Gasoline prices: going up.
The cost of electricity as we head into the summer season: going down.
Number of people over the age of 45 seeking bankruptcy protection: going up.
You might want to read this from yesterday’s New York Times:
…it’s now clear that people who chose renting over buying in the last two years made the right move. In much of the country, including large parts of the Northeast, California, Florida and the Southwest, recent home buyers have faced higher monthly costs than renters and have lost money on their investment in the meantime. It’s almost as if they have thrown money away, an insult once reserved for renters.
Subscribers to our e-newsletter, Debt|Dollars|Sense might remember our recent recommendation of Calculated Risk as a blog worth taking a look at. This blog provides unique analysis and insight into what’s going on with our economy, the housing market and the sub-prime mortgage crisis (and what we might expect in the days, months and years ahead).
If you have not done so already, please check it out – and check back often.
For Everything, There is a Time
One of the most common client complaints I have heard throughout my career is how long the legal process can take. I can appreciate that. At the same time, what’s worth doing right, is worth doing well. Sometimes, it takes time to do something well. And lately, time is something that has been a luxury with some of the clients I see. Today, I was reminded how important time can be.
I received a call from some homeowners. They are in one of my least favorite mortgage products: 2/28, interest only. Translated: the first two years of their mortgage payments are “interest only.” Then, in 2 months, the principal will be added to their already high interest-only mortgage payment.
Fortunately, they are not behind. Yet. But they will be if time continues to march forward without some intervention. And even more fortunately, they are calling me early enough that we can take our time and explore all reasonable options available. There is no rushing to the Bankruptcy Court to stop an auction. We can take our time, explore the options, and move in the best direction for them.
Not everyone has that option, but the fact is, the only reason why they do not have the option is because they do not, or cannot look at the handwriting on the wall. Privately, colleagues have expressed their view that I tend to have a negative view of the economy. At the risk of continuing to sound like a ‘Negative Nancy’, today the stock market decided to deal with the summer heat by slipping into the deep end of the pool. Is the end nigh? No. But one cannot ignore that come October $50 billion worth of mortgages will be adjusted to reflect higher interest rates. For real. The handing writing is on the wall for more than the folks who were brave enough to pick up the phone today.
If you see the handwriting on the wall – and perhaps most importantly, if you can muster up the strength to look at what might not be so pleasant to look at on that yonder wall, call someone. Call someone now. It’s only July. There’s two full calendar months before October to plan, prioritize and strategize. That is time. And time is a precious commodity when it comes to saving your home.
October is a time for pumpkins, leaf raking and the World Series. If you are looking to October with a sense of dread, it’s time to do something about it. You can. There is time.
Tags: Bankruptcy, Chapter 13, Commentary - Legal, debt, debt relief, Economy, foreclosure, mortgage, Mortgage and Foreclosure, Mortgages and Foreclosures
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