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One of the main talking points of health care reform and the Affordable Care Act, often referred to as “Obamacare,” was that increasing healthcare coverage would prevent people from falling into bankruptcy due to medical bills they could not afford to pay. Studies suggest that medical bills are the number one reason for filing bankruptcy, [...]The post Will Obamacare Reduce the Need for “Medical Bankruptcies” in Michigan? appeared first on Acclaim Legal Services, PLLC.
Many homeowners are aware bankruptcy can help you prevent foreclosure thanks to various advertisements that regularly promote this benefit. But, research suggests that in fact bankruptcy may help you avoid foreclosure and even provides evidence that filing is effective in preventing pending sales. Researchers at the University of North Carolina completed a study that included [...]
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for November 26, 2013 Judge promises quick decision on bankruptcy plan merger U.S. high court to chart fate of inherited IRAs in bankruptcy Judge approves initial motions in bankruptcy of electric carmaker Fisker Automotive
If you have student loan debt that is being pursued by the creditor when you file bankruptcy, collection efforts come to a halt due to the automatic stay. This also ceases collection attempts through bank and wage garnishments. This can give debtors time to figure out how to repay their loan obligations if they are [...]
Read about the bankruptcy filing of Backstreet Boy Aaron Carter in the Wall Street Journal Bankruptcy Beat: Aaron Carter Bankruptcy
Adam Brown is a bankruptcy attorney for Dexter & Dexter, a debt relief agency helping people file for bankruptcy.
It is inevitable. Every day I get a call that starts with “What do you charge for a Chapter 7?” It is a simple question and a question that most people believe is an indicator of what attorney they should hire. However, while most people are not aware, it is a very deceptive question. It is deceptive for three main reasons.
First any answer is dishonest. Chapter 7 is not like milk. When I buy milk I am buying the same product as the person in front of and behind me in line. I am buying a pre-packaged item that is always the same. This is not true for a Chapter 7. A Chapter 7 Bankruptcy is a fact based legal proceeding that is either more simple or more complicated based on the facts and actions surrounding the case. For this reason no attorney has a “price” set for a Chapter 7 bankruptcy. If you ask an attorney what they charge over the phone and they give you an answer they are simply guessing. If you get into their office and your case is more complicated they will charge you more. This bate an switch is dishonest and it is the reason I refuse to quote fees over the phone.
Second, the price that an attorney charges you is only a portion of the cost of a bankruptcy. If an attorney is not up on the current trends of the law because he is too busy handling a thousand cases at $500.00 a piece it could end up costing you far more that the attorney fees he charges you. Attorney error could lead to you losing property or tax refunds. It could lead to you losing a denial of your discharge. Finally, it could lead to your family or friends being sued for preferential transfers. While people in vulnerable financial positions may not be able to afford the most expensive attorney out there, they also may not be able to afford the cheapest attorney out there.
Finally most individuals are not well versed in bankruptcy laws and procedures. Many times individuals will come into my office believing that they would like to file a Chapter 7 bankruptcy just like their friend did. However in some cases the individuals may not qualify for a Chapter 7 and they may be forced into a Chapter 13. In other cases the individual may qualify for a Chapter 7, but a Chapter 13 may be more advantageous based on the facts of their case. If an individual bases which attorney they schedule their appointment with based on what charge is being quoted for a Chapter 7 they may end up with an attorney who files a Chapter 13 for them without the necessary experience to ensure the clients success.
Second Chance Legal Services is a bankruptcy law firm located in Madison Heights, MI. While we are located in Oakland County, we service Wayne, Oakland and Macomb County residents. As Detroit Bankruptcy Attorneys we specialize in helping individuals escape their burden of debt in order to get a fresh start on their bright future.
Because of our small size our clients get individual attention. You will have the same bankruptcy attorney throughout your case whether you are in a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy. Your attorney will help guide you through the bankruptcy process in order to help you get a successful discharge of your debt.
It is important to note that Macomb County Bankruptcy Attorneys, Oakland County Bankruptcy Attorneys and Wayne County Bankruptcy Attorneys all deal with the same judges and trustees. This is because all Michigan Bankruptcies are filed with the federal bankruptcy court in Detroit, MI. For this reason, it is important that you choose an attorney not by location but rather by how comfortable you feel with them when you meet. If you don’t feel comfortable with their knowledge, their experience or their demeanor you should seek out an attorney that you do feel comfortable with.
If you are interested in speaking with a Detroit bankruptcy attorney from Second Chance Legal Services, please contact our office at 248-629-6367 for a free initial consultation.
Aaron Carter, 25, also known as the younger brother of Backstreet Boy singer Nick Carter, filed for bankruptcy protection recently. According to his representative the filing is in relation to debt obligations from over a decade ago when he was a minor and not in control of his finances. The filing is being seen as [...]
Miami Chapter 13 and Chapter 7 Bankruptcy Attorney Jordan E. Bublick has over 25 ears of experience in filing personal bankruptcy cases. Attorney Jordan E. Bublick has filed over 8,000 bankruptcy cases.
The Home Affordable Modification Program (HAMP) was established by the U.S. Department of the Treasury pursuant to section 101 and 109 of the Emergency Economic Stabilization Act of 2008 (EESA)(section 109 of the EESA has been amended by section 7002 of the American Recovery and Reinvestment Act of 2009). HAMP includes loan modification and other foreclosure prevention measures.
Application of HAMP as to GSE Loans, Fannie Mae Announcment 09-05R
All Fannie Mae and Freddie Mac approved servicers are being directed through their servicing guides and bulletins to implement HAMP with respect to "mortgage loans owned, securitized, or guaranteed by Fannie Mae or Freddie Mac (the “GSE Loans”).
Fannie Mae provides Announcement. 09-05R (posted May 15, 2009) "Introduction of the Home Affordable Modification Program, HomeSaver Forbearance™ and Frequently Asked Questions thereunder, and New Workout Hierarchy."
Application of HAMP to Non-GSE Loans
Fannie Mae and Freddie Mac approved servicers as well as all other servicers may agree to participate in HAMP by agreement as to non-GSE Loans.
Role of Fannie Mae and Freddie Mac
Fannie Mae was designated by the Treasury as financial agent of the United States in connection with the implementation of HAMP to fulfill the roles of administrator, record keeper, paying agent, creation of certain standardized mortgage modification and foreclosure prevention practice consistent with EESA and in accordance with the directives of and guidance of Treasury. Freddie Mac was also designated as a financial agent to fulfill a compliance role for the program.
Key Information and Documents under HAMP
Fannie Mae as administrator of HAMP makes available on Hmpadmin.com key information and documents, including, a sample servicer participation agreement, supplemental directive 09-01 guidelines, the supplemental directive 09-02 dated April 21, 2009, the Servicer Reporting Requirements, data dictionary, net present value model overview, and borrower solicitation material. A self-guided training presentation is also provided.
Another Fannie Mae self-guided presentation is provided as to "Bankruptcy Filings on Loan Servicing", "Loss Mitigation in Today's Market", and "The New 2009 MBS Trust Agreement: An Introduction."
Net Present Value Model
Fannie Mae provides a "standardized guidance and a base net present value (NPV) model" for HAMP participating servicers. Such a servicer "must modify any loan "if the modification test for NPV is positive as "it is in the best interest of the lenders, servicers, investors, and borrowers." If the NPV is negative, modification is in the discretion of the servicer.
NPV refers to the "value today of a cash-generating investment." In the context of a distressed mortgage borrower, the choice is between modifying the mortgage or leaving as-is with each choice to generate expected cash flows with different net present values. If the NPV of the modified loan is higher than the NPV of the mortgage as-is, a modification is said to be "NPV positive." The Program is structured to "produce modifications that are more likely to test NPV positive... by lowering the probability that borrowers will default by making borrower payments more affordable and, second, by providing incentive payments that are added to cash flows received by lenders (or investors)."
NPV Assuming Non-Modification
The NPV calculation is to determine the net present value of the mortgage assuming it is not modified based on a. the probability that the mortgage defaults, b. the projection of the future cash flows of the mortgage if it defaults and the present value of these cash flows, c. the projection of the future expected cash flows of the mortgage if it does not default and the present value of these cash flows, and d. the probability weighed average of the two present values.
NPV Assuming Modification
The NPV calculation is to determine the net present value of the mortgage assuming it is modified based on the same manner with the incorporation of the effects on cash flows and performance of the modification terms and subsidies under the Program.
HAMP Modification
"The Making Home Affordable Program is structured to produce modifications that are more likely to test NPV positive, increasing the number of modifications that will be done and keeping more Americans in their homes." If eligibility criteria for HAMP are met, the servicer will adjust the terms of the mortgage to reduce the borrower's payment to HAMP's target front-end debt-to-income (DTI) ratio of 31 percent. Servicers are required to "reduce payment in the precise manner specified" by HAMP (the "Standard Waterfall") starting with reducing the interest rate on the mortgage. Once the modified loan terms are known, the NPV model calculation is run.
Principal Factors in the NPV Model
The NPV model was especially designed by an expert group for HAMP and takes into account the principal factors that can influence cash flows including the following:
1. Value of the home relative to the size of the mortgage.
2. Likelihood that the loan will be foreclosed on.
3. Trends in home prices.
4. Cost of foreclosure including:
a. legal expenses,
b. lost interest during the time required to complete the foreclosure action,
c. property maintenance costs, and
d. expenses involved in reselling the property.
5. Cost of conducting a modification including:
a. a lower monthly payment from the borrower,
b. likelihood a borrower will default even after the loan is modified,
c. financial incentives provided by the government, and
d. likelihood that a loan will be paid off before its term expires (prepayment probability).
Fannie Mae states that due to customization allowed within certain constraints and guidelines, servicer NPV results and resulting modification decisions may vary.
Discount Rate
In the base NPV model servicers are permitted "limited discretion to adjust the discount rate by up to 250 basis points because different investors may place different values on future payments versus payments received today." The discount rate may be as low as Freddie Mac's Primary Mortgage Market Survey rate ("PMMS") for 30-year fixed-rate conforming loans and as high as the PMMS rate plus 250 basis points. The PMMS are available on Freddie Mac's website. A rule is provided as to loans not owned or guaranteed by Fannie Mae or Freddie Mac. The servicer must apply the rate specified in Fannie Mae and Freddie Mac guidelines as to loans owned or guaranteed by Fannie Mae and Freddie Mac.
Default Rates
The probability of default if the loan is modified and if not modified depends on a number of variables particular to the loan and in general is assumed to vary based on the credit quality of the borrower, his debt burden, and the loan-to-value (LTV) of the home, and "whether the loan is modified early or later in the delinquency cycle."
The default rates are "generated by a model based on the performance of GSE and non-GSE loans" and the base model is to be updated as performance data under the Program becomes available to reflect actual program experience. Large servicers with a book exceeding $40 billion are allowed to customize the model to reflect their own portfolio experience, which customization must be empirically validated, commercially reasonable, and subject to review and oversight.
Home Prices
"Future increases or decreases in home prices impact a borrower’s willingness to stay in a house and potential financial loss in the event of foreclosure. A servicer must use the home price projection provided in the base NPV model. A servicer does not have discretion to substitute a different projection. The home price projection for the program has been made available by FHFA exclusively for this program, is based on data from a broad cross section of mortgage transactions, and will be updated quarterly. The projection is not based on the FHFA House Price Index and does not represent an official forecast of FHFA or any other government agency."
REO "Stigma"
"The REO stigma values used in the base NPV model are based on an analysis of sale prices of foreclosed homes sold by Fannie Mae and Freddie Mac. REO stigma values vary by state and home price. Servicers are not permitted to change the REO assumptions in the base NPV model."(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases. Bankruptcy Attorney Jordan E. Bublick has filed over 8,000 Chapter 13 and Chapter 7 cases.
According to Dealbook, NY Times, the Military Lending Act has some serious loopholes (11/22/13)
The Military Lending Act is supposed to protect our military from being preyed on by unscrupulous short-term lenders. Here is a summary of what the Act is designed to do. Lenders covered by the Act are prohibited from issuing rollover loans to pay off any prior loan, unless the new loan has more favorable terms than the prior loan.
In 2006 Congress the Military Lending Act which was intended to protect servicemen and women from the loans tied to a borrower’s next paycheck. These loans carry double-digit or triple-digit interest rates and force the borrower into a never ending debt cycle. Seven years later the government is finding that there are huge loopholes in the Act. Loopholes that do not cover some short-term loans, certain installment loans and rent-to-own, some auto title loans and pay day loans. Debts which the Act was designed to limit.
According to the New York Times’ article “Lenders who specialize in ripping off military personnel have official sounding names like Military Financial, Just Military Loans, and Patriot Loans. They like lending to the military because they get paid from the military allotment, which virtually assures payment. Moreover, soldiers have to stay in good financial shape in order to maintain their security clearance, which means lenders have maximum leverage over their borrowers. One lenders web site claims “We know the military because we are former military,” Lenders also lure customers by offering $25 Starbucks gift cards for referrals and throw parties with free food.”
There are serious repercussions to violations of the Act. Such as, the contract is void. Lenders who intentionally violate the Act can be charged with a criminal offense for which they may be fined and imprisoned for up to a year. Lenders may also be held liable for money damages caused by their misconduct, punitive damages, and court costs and attorney fees. the problem is that the lenders twist the law to serve their own greedy purposes. The contract states that the law of another state controls, usually choosing a state that has very weak enforcement policies.
Finally the Senate Commerce Committee has convened a hearing on abusive military lending. I wish that Congress cared as much for the non-military citizen, but we have to start somewhere. Now don’t get mad, I am married to a jarhead, who happens to be disabled. I have a great deal of respect for our military and am very aware of the sacrifices they make to protect us all. I make my earlier statement because I believe that wrong is wrong. That these unscrupulous lenders should not be allowed to prey on anyone, military, low income, elderly or otherwise.
What do you think?
The post Problems with Military Lending Act appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
(305) 891-4055 - Over 25 Years of Experience - Over 8,000 Cases Filed - Chapter 13 and Chapter 7 - Bankruptcy Attorney Jordan E. Bublick - 1221 Brickell Avenue, 9th Fl., Miami, Florida - www.bublicklaw.com 
The two different types of bankruptcy usually used by people to file bankruptcy are chapter 13 and chapter 7. Each provides for different requirements and relief. Bankruptcy law offers two chapter Chapter 13 bankruptcy is often used by people with higher incomes and substantial non-exempt property to formulate a chapter 13 plan to reorganize their debt while under the protection of the bankruptcy court. Under a chapter 13 plan, you are able to reorganize your secured debt (such as mortgages and car loans) as wells as unsecured debt (credit cards and personal loans). Often you are only required to back only 10% to 20% of you unsecured debt and discharge the rest. A typical chapter 13 plan is over a period of 3 to 5 years.
Chapter 13 bankruptcy is also used by people who are behind with their mortgages and to save their homes from foreclosure. Under a chapter 13 plan, you are able to take various approaches. You may reinstate your mortgage by catching up-to-date your past due payments over a period of up to 5 years. You may use the bankruptcy court's new loss mitigation mediation ("LMM") program to negotiate with your mortgage company to achieve a modification of your mortgage. Totally underwater second mortgages on residential property may be wholly avoided. Maintenance association liens may be avoided to the extent they are not secured by equity in the real estate.
Chapter 7 bankruptcy is usually used by people with lower income and little non-exempt property. Under chapter 7 unsecured debt, such as credit cards and loans, is discharged, unless it falls within the categories of non-dischargeable debts, such as student loans and some types of taxes.
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases. Bankruptcy Attorney Jordan E. Bublick has filed over 8,000 Chapter 13 and Chapter 7 cases.
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