The latest chapter of the mortgage crisis may actually help some homeowners facing foreclosure rather than hurt them. Recently, it has come to light that many of the nation’s biggest lenders, including Bank of America, JP Morgan Chase and GMAC, have been using questionable documentation to foreclose on homes all across the country.

In some cases, the lenders have been instructing employees to sign thousands of foreclosure documents a day without proper witnesses and notaries. These so-called “robo-signers” are signing affidavits that say they have reviewed the loan documents personally and that the banks have a legal right to foreclose on the delinquent mortgages. However, in many cases, the employees have not reviewed the documents and the lenders may not even have a legal right to foreclose on the properties.

In other cases, the underlying mortgage documents themselves have been forged. In one example, a former bank employee claimed that the bank’s attorney instructed employees to create mortgage documents after the fact in order to file the foreclosure because the bank had lost the original mortgage note.

These questionable documentation practices led Bank of America and other lenders to call a temporary freeze on foreclosures in most if not all states while they review their internal practices and assess how big the problem might be.

How is this Beneficial to Homeowners?

Lenders claim that the documentation errors are mere technicalities and are not grounds for stopping foreclosures. The lenders argue that despite the procedural errors, the fact remains that the homeowners have failed to pay their mortgages — and that this gives lenders a legal right to foreclose on the properties.

Not everyone agrees that the errors are mere technicalities, however. It could be that the banks are trying to circumvent the law. Currently, there is a joint investigation by all 50 State Attorneys General as well as a federal probe into the extent of the documentation fraud. Some bankruptcy judges have refused to allow foreclosures to continue, telling the banks that they have not been able to sufficiently prove ownership of the mortgage and, until they do, they are not entitled to repayment of the debt.

All of this may be good news for homeowners either facing foreclosure or already in foreclosure. In many cases the lenders will only have to refile new foreclosure documents to continue the process. In other cases, it will not be so simple. Some lenders will not have the proper documentation to prove ownership of the mortgage, leaving them in a serious bind.

Without the necessary proof of ownership, lenders risk losing most if not all of the money owed under the mortgage. For example, if the homeowner has filed for bankruptcy , lenders who cannot prove ownership of the mortgage will be demoted to the status of unsecured creditors. That means they would face a very real prospect of being able to recover little to nothing from the homeowner.

The other option lenders will have is to enter into time-consuming and costly litigation to try to prove their claim. This option also is not likely to be appealing to lenders, who already are losing thousands on bad mortgages and properties that are waiting for foreclosure.

Together, these conditions create a powerful incentive for lenders to consider renegotiating the terms of the mortgage so they can at least recoup some money on the loan – which is good news for homeowners who want to stay in their homes, but need a lower payment to do so.

The mortgage fraud crisis also has renewed calls for improved federal efforts to help homeowners in foreclosure. Previous attempts by the federal government to encourage banks to renegotiate the terms of mortgages have proven largely unsuccessful. Although some banks have offered to cut interest rates and give homeowners another opportunity to become current on their payments, so far they have been unwilling to reduce the principal balance owed on the mortgage. With thousands of homeowners owing more money on their houses than they are currently worth, cutting interest alone will not help them regain value in their investment.

Homeowners who have fallen behind on their mortgages but want to keep their homes out of foreclosure may be able to do so by filing for bankruptcy . Once a person has filed a bankruptcy petition, an automatic stay goes into effect, which prevents the individual’s creditors from continuing to pursue any collection activities against them. This includes mortgage debt.

Bankruptcy will not be able to stop a foreclosure that is already in progress, but it can give the homeowner additional time to try to work out an agreement with the lender. If the homeowner is simply behind on their mortgage payments but a foreclosure action has not yet been initiated, bankruptcy can give them an opportunity to catch up on the late payments and keep the house.

In my  years as a consumer and , I have represented over 5,000 clients. I can honestly say that not many of these clients have had a good financial plan. If they did, they wouldn’t be in my office speaking to a bankruptcy attorney. One common mistake is taking money out of 401k plans or IRA in order to pay off credit card debt. Retirement funds like 401ks and IRAs are 100% protected from both creditors and bankruptcy trustees. The only way that creditors can touch that money is if you voluntarily remove it from your account and give it to them. Many of my clients, prior to speaking with me, have taken money out of retirement and used it to make minimum payments. Now, they still owe more money than they can pay to creditors, and now they owe taxes, too.

Everyone should have a financial plan if they want to retire at some point. Even if your plan is as simple as saving a percentage of your salary, it is something. Anyone can open an IRA; it doesn’t need to be a company plan. Placing the bulk of your retirement funds into one of these accounts will be a good start to a protected future. There is no better time to start planning than now. Or, if you already have a plan, now is a good time to revamp your financial plan for the future.

I truly believe that bankruptcy is not financial failure. Instead, it is, very simply, financial planning for the future. Any client who has come see me was worried about their debts. I don’t want them to be worried about what they owe. I want them to protect what they have. The debts will always eventually get sorted out. Protecting assets is what they should really be focusing on. So, am I saying what you think I’m saying? Yes, I am. Protect your 401k and/or IRA and worry less about your debts. Why? Because if you know these assets are protected and your plan is to protect these assets at all costs, you will realize much sooner that it is in your best interest to file for bankruptcy protection. If something goes wrong, isn’t it better to know your options ahead of time? That’s what I call financial planning!

Queens has the highest retail vacancy rate in New York City — at 13.7 percent, it is nearly double the rate that Manhattan had in the second quarter of this year. But if there’s one spot where empty storefronts are a rare commodity, it is on Roosevelt Avenue, between roughly 72nd Street and 84th Street, a bustling commercial district on the edge of Jackson Heights.

On the travails of another bustling commercial district in Queens.

Bustling, except for two commercial spaces at the Roosevelt Avenue public transportation hub on 74th Street, which just happens to house the fifth-busiest subway station in the city. The spaces have never been occupied.

Miguel E. Silva, a real estate broker at Ocean Y. Realty, which overlooks the empty stores, called the spaces “the filet mignon of Roosevelt Avenue” because of the hundreds of thousands of potential customers who walk past them every week. Daniel Dromm, the local city councilman, described the spaces as “the biggest impediment to economic development in the community.”

To the area’s residents and merchants, the spaces are sort of a mystery. “I think it’s storage,” speculated Marta Velásquez, a Mexican immigrant who was selling churros outside one of them the other day. Juan Castillo, a street bookseller who is from Ecuador, shrugged his shoulders and said, “They seem abandoned to me.”

The spaces are among 14 stores built when the 74th Street station was renovated — an $18 million project that was completed in 2005. Eleven are leased, all of them in the station’s mezzanine. (A 12th spot on the mezzanine is also vacant.) But getting businesses to open in the street-level spaces has proven to be particularly challenging — for potential tenants and for the landlord, the Metropolitan Transportation Authority.

In one of the stores — a space measuring roughly 4,000 square feet and spreading across two floors along Roosevelt Avenue, between 74th and 75th Streets — bags of insulation are piled up near a roll of orange mesh fence the transportation authority uses to block access to parts of a station that are undergoing work. Outside, the paint on the wood boards that encase it is peeling and the sidewalk is covered in bird droppings.

Of the signs advertising that the space is available, one faces an access road used by buses and is hardly visible to pedestrians. The other is not hard to spot, but the phone number for the authority’s real estate office is obscured by a sticker publicizing legal services: divorces for $299, bankruptcy proceedings for $399.

The transportation authority first requested proposals for the space on Roosevelt Avenue in 2006 and got back a single response, from a Korean businessman who wanted to open a bakery, agency officials said. The businessman signed a 10-year lease in 2007, paid a $40,000 deposit and then an additional $75,000 in 2008, when he told the agency that he needed more time because of problems with the architect he had hired for the project.

The second space — a triangular store of about 200 square feet — cannot accommodate a ventilation system because of its odd configuration, making it impossible to house a pizza parlor that someone had intended to open there, the officials said.

No lease has ever been signed for the smaller space, and the lease for the larger one was not voided until September 2008, almost two years after it was signed. Though the Korean businessman forfeited his deposits, he never paid any rent on the space.

“That’s the ultimate absurdity of this whole deal,” Mr. Dromm said.

Mr. Dromm is particularly troubled by the impression that the shuttered stores might leave on visitors. The subway station is a gateway to the neighborhood and “it’s not a good thing if the first thing you see is boarded-up commercial space,” he said.

A spokesman for the authority, Kevin B. Ortiz, said that for the most part, the agency had been “pretty successful” in filling the retail spaces at the station, but would hire an outside broker to market the street-level spaces.

For now, the agency is working to do some of the finishing work that tenants are often required to complete, as retail spaces rented by the transportation authority are delivered raw. It is all in a bid to make them more attractive.

The first step you’ll want to take when choosing a personal bankruptcy attorney in Queens County New York is finding out practice areas of your lawyer. Some attorneys practice particularly in personal bankruptcy related matters. Other lawyers have a more general practice where they might cover a number of practice areas with bankruptcy being one of many.

The subsequent factor a potential debtor will want to know is which kind of bankruptcy law the attorney practices. Once more, there are some lawyers who concentrate Continue reading Find A Good Bankruptcy Attorney in Queens →

Personal bankruptcies continue to be out of control and will likely grow to 1.6 million by the end of the year according to the American Bankruptcy Institute report released this week.

That will make this year’s bankruptcies the worst in recorded history, except for a sharp increase in 2005 when Congress changed the bankruptcy laws and there was a rush to file before the new laws took effect.

Although consumers have generally done a good job the last two years tightening their belts and reducing the amount of debt that they carry, unemployed Americans still have expenses that can’t be met and many turn to bankruptcy.

Home foreclosures continue to be high. Some are filing bankruptcy in an effort to forestall foreclosure on their homes. Foreclosure proceedings are halted when bankruptcy filing Chapter 13 bankruptcy allows borrowers the opportunity to reformulate their debts into easier payment plans so the creditors may still be paid, albeit on a longer timeframe.

Most are still filing Chapter 7, which denies creditors any payments and may require the filer to liquidate or relinquish assets. Because Chapter 7 essentially frees consumers of their debt, it continues to be the more popular option.

When faced with overwhelming debt, many people don’t know where to turn: Should they file for bankruptcy, consolidate their debts into one loan or try to settle with creditors for less than they owe? Each approach can be fraught with difficulties and expense if you don’t know what you’re doing, but inaction is probably the worst course.

If you’re considering debt settlement, be aware that the Federal Trade Commission (FTC) recently changed several key rules governing how for-profit debt settlement (a.k.a. “debt relief”) companies may bill for their services and what information they are required to disclose.

Briefly, debt settlement is where you negotiate with creditors to accept less than the full amount you owe. You can conduct these negotiations yourself, but some people hire a debt settlement company to act on their behalf. There’s usually a hefty fee – 15 percent or more of the negotiated settlement is common.

In a typical contract, you might be asked to stop making payments on unsecured debts, such as credit cards or medical bills, and instead put the money into a dedicated savings account. Once you’ve accrued sufficient funds, the settlement company attempts to negotiate with your creditors to accept lump-sum payments for less than the amounts owed.

Although many legitimate debt settlement companies exist, the FTC found that a number of businesses were targeting consumers in financial distress by making unrealistic claims, such as promising to reduce debt by as much as 60 percent with no damage to their credit score – in exchange for a large up-front fee.

Unfortunately, the FTC estimates that approximately two-thirds of these consumers are unable to accumulate enough savings for a sufficient settlement offer and therefore not only forfeit the fee, but still owe their debt, plus accumulated interest and additional penalties.

Effective yesterday (October 27, 2010), certain for-profit debt settlement, debt negotiation and credit counseling companies can no longer collect fees for their services until they have renegotiated, reduced or settled at least one outstanding debt and the client has made at least one payment under the new agreement.

Other conditions of the new regulations include:

♦ They apply only to companies that market their services by telephone or take phone calls from customers responding to print, broadcast or other ads.

♦ They do not cover nonprofit firms, but do apply to companies that falsely claim nonprofit status.

♦ They don’t apply to in-person only or Internet-only sales.

Although settlement companies can still require you to set aside savings in a dedicated account to pay creditors (and their own fees), you retain control over the account, earn interest on its balance and may withdraw the funds at any time without penalty.

Companies must disclose how long it will take to see results, how much their services will cost, negative consequences of using debt relief services and key information about dedicated savings accounts, if they require one.

The rules do not limit the amount of fees, only when they may be charged.

By Ilan Moscovitz

Foreclosure fraud is heating up. While bankruptcy judges have chastised Wall Street’s lacksidaisical approach to recordkeeping and fabrication of court documents at least as far back as  1999, the foreclosure wave sweeping America has provided a new venue for lawbreaking.

Wall Street has characterized the fraud epidemic as a mere paperwork issue. Various journalists have echoed and expounded the party line, laying the blame thick on “deadbeat ” homeowners.

Here’s The Wall Street Journal editorial team:

Talk about a financial scandal. A consumer borrows money to buy a house, doesn’t make the mortgage payments, and then loses the house in foreclosure — only to learn that the wrong guy at the bank signed the foreclosure paperwork. Can you imagine …? Welcome to Washington’s financial crisis of the week …

We’re not aware of a single case so far of a substantive error. Out of tens of thousands of potentially affected borrowers, we’re still waiting for Continue reading Blaming “Deadbeat” Homeowners for Foreclosure Fraud →

So, you have failed as many advantages and disadvantages of applying for, and now you want to know what your options are. What are the advantages of filing Chapter 7 vs. Chapter 13 bankruptcy and how bankruptcy can help you decide the lawyer in Houston, which type is right for your financial situation? Fortunately, these two options are very different, and with a little ‘of style information for borrowers, you can easily Houston is chosen on what is right for you with the help of a receiver.

Chapter 7 bankruptcy

For borrowers, the debt to an extreme and can not see the end is in sight, in Chapter 7 is probably the best option. This type of bankruptcy for debtors who can not afford, and in time to pay the debt in a way I’m looking for a bankruptcy debt. The result of a Chapter 7 bankruptcy is a new beginning and possibility of returning to life, but there are some serious limitations in Chapter 7 bankruptcy. For example, student loans, food, child support, which currently is not, and the sums due, the government is not capable of this type included outstanding. Debtor loses what they themselves off, cars, homes, electronics and other products sold to pay creditors are paid. The choice of Chapter 7 vs. Chapter 13 bankruptcy is really a very dramatic way to approach insurmountable debt.

Chapter 13 bankruptcy

If, however, borrowers have a great debt, but she and her lawyers believe Houston bankruptcy to pay over a period of time with a little help in Chapter 13 bankruptcy would be a positive financial decision. This allows debtors all their belongings in a structured repayment plan to keep. During the work the recipient to pay the delinquent accounts for a period of three to five years of the creditors will forgive late fees and high interest rates to facilitate reimbursement. As parts of the plan are co-signatories of the rule and the protection of specific monthly debt service will be garnished by debtors and creditors, their merits. A bankruptcy lawyer in Houston that will offer customers who pay the cost of living in the situation, but have their difficulties, the payment of their payment pending file for Chapter 13 bankruptcy