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I recently received a phone call from a realtor. They were representing one of my clients whom had filed for Chapter 7 Bankruptcy. This client had contacted the realtor to list their home for short sale so that they could get it out of their name and get rid of their obligation to maintain the home. The realtor had signed an agreement with the client, listed the home and received several offers. After receiving the offers they contacted me to get a copy of the bankruptcy paperwork to provide as part of their hardship package. Much to their dismay they quickly learned upon contacting my office that the bankruptcy was not yet complete. Yes the bankruptcy had been filed over a year ago. Yes the discharge had been granted almost a year ago. No that does not mean the case is over and no that does not mean that the Debtor has the authority to sell the home.
When an individual files for bankruptcy all of their property is transferred into their bankruptcy estate by operation of law. This means that no deed is signed, not title is transferred, the property is just automatically transferred to the bankruptcy estate. While the bankruptcy remains open all property of the state is under the control of the Bankruptcy trustee who is charged with running and administering the bankruptcy estate. While the estate remains active only the bankruptcy trustee has the authority to sell the property. In Michigan many trustees are holding cases open for one or two years after the bankruptcy is discharged to determine if their is any possibility of recovering money through a below value bid at the Sheriff’s sale. In this case the Trustee had done just that. The active portion of the bankruptcy was over, but the case remained open.
Beyond this Debtor’s lack of authority to list the home, this realtor was potentially facing another more serious problem. When an individual is in an active bankruptcy they are not allowed to hire any professionals without bankruptcy court approval. If the sale were to go through this realtor would be facing both the risk that the trustee would invalidate the sale leaving the realtor open to lawsuits from the purchaser, but also would be facing the prospect that the trustee could allow the sale to go through but simply void the commission of the realtor and keep it as part of the estate’s property to distribute to other creditors.
The lesson this realtor learned is that anytime a client comes to her to list a home and discloses that a bankruptcy was filed within the last three years the realtor should first contact the individuals bankruptcy attorney to determine the status of the case. Additionally, the realtor should work closely with the bankruptcy attorney if the case does remain open to ensure that all proper authorizations are received
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.
When it come to bankruptcy fee quotes and prices for Oregon and Washington consumers, Northwest Debt Relief Law Firm has been offer a combination of two pricing elements that the other bankruptcy firms leave out. We have been doing this for years.
First, we offer certainty. Call me up and I will tell you exactly what you will pay. While our Portland, Seattle, Vancouver and Salem offices are all in pretty convenient locations, there is just no need to brave rush hour traffic or give up half your Saturday just to get the information that you need. My experience is that the bankruptcy firms that won’t immediately tell you what they charge probably have something to hide, namely high prices.
Second, we offer real bankruptcy payment plans. You will see many other firms offering them, but they are payment plans in name only. The usual arrangement is that you gradually pay all of your fees and then they file your case. Hard to believe that this kind of arrangement is some kind of favor to you. These bankruptcy installment payment plans are really more like the old lay-away plan where you keep dropping off money and six months to a year later once you have handed over well over a thousand dollars in cash they actually do something for you.
What we offer is a real payment plan where you pay part of your attorney fees prior to filing and then after your bankruptcy is filed, you pay the rest of your attorney fees as well as your filing fee for the court in seven monthly installments. Now that’s a payment plan. We take the lowest amount up front that the bankruptcy court will allow prior to filing. Moreover, we make it so that you don’t get needlessly garnished or harassed by getting you under the protection of the bankruptcy court as quickly as legally possible. We even offer a discount if you decide you don’t want to do a payment plan and would rather pay all the fees up front.
I will look forward to hearing from you and addressing all of your bankruptcy pricing questions immediately.
The original post is titled Oregon and Washington Bankruptcy Prices and Fee Quotes , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
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.
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