WaMu Shareholders Want to Investigate JPMorganR
According to Reuters, WaMu's shareholders want to investigate whether J.P. Morgan Chase & Co. had any role in the bank's failure. Read More
Is it Impossible to Be a Success After Bankruptcy?
Interesting post by garrickhoeffner
Bankruptcy can not only prevent failure but it can also be a key to success. Can you imagine how much easier it could be to follow your dreams without the burden of debt looming over you?
As soon as you decide to get our from under your debt, you've gotten control over your life again. Asking a St. Louis bankruptcy attorney for credit card debt help, protection from foreclosure, and relief from the harassment of your creditors is a responsible move and can be seen as your first step toward success.
There are actually quite a few pioneers of industry who had to start over with bankruptcy before they could fully follow their dreams. Here are some of history's most famous examples of people who wiped the slate clean and became the massive successes we know them as today.
1. Milton Hershey had to file bankruptcy after his first attempt at opening a candy shop. However, getting rid of his debts allowed him to open up the Lancaster Caramel Company and become one of the biggest candy makers in the world.
2. Walt Disney had to file for bankruptcy protection after many filed attempts at making movies. After filing, he created Mickey Mouse and released "Steamboat Willie," launching him into success and allowing him to become a legend that children still revere.
3. Henry Ford filed for bankruptcy after his Model T prototype failed. Getting rid of his debts allowed him to reorganize his finances and start the Ford Motor Company.
Though these three people are all incredibly different, they share a common beginning. They all knew that in order to succeed, they must first get help with their debts. Simply asking for help and getting rid of their debts allowed them to become some of the biggest successes in American history.
These three aren't the only ones who've seen great success after bankruptcy. Many modern actors, athletes, and entrepreneurs have used bankruptcy protection to start over. Cyndi Lauper, George Foreman, Willie Nelson, and Donald Trump are just a few of these celebrities; but the list doesn't end there. People who've filed bankruptcy, celebrity or not, have some of the greatest success stories this country has seen.
These celebrity bankruptcy stories can really tell us something. You must do whatever you need to do to follow your dreams. If that means asking a St. Louis bankruptcy attorney for credit card debt help, protection from foreclosure, and relief from your creditors, then so be it. Your bankruptcy can be the inspiration for your future success too.
Posted by garrickhoeffner at 9:51 PM
Bankruptcy can not only prevent failure but it can also be a key to success. Can you imagine how much easier it could be to follow your dreams without the burden of debt looming over you?
As soon as you decide to get our from under your debt, you've gotten control over your life again. Asking a St. Louis bankruptcy attorney for credit card debt help, protection from foreclosure, and relief from the harassment of your creditors is a responsible move and can be seen as your first step toward success.
There are actually quite a few pioneers of industry who had to start over with bankruptcy before they could fully follow their dreams. Here are some of history's most famous examples of people who wiped the slate clean and became the massive successes we know them as today.
1. Milton Hershey had to file bankruptcy after his first attempt at opening a candy shop. However, getting rid of his debts allowed him to open up the Lancaster Caramel Company and become one of the biggest candy makers in the world.
2. Walt Disney had to file for bankruptcy protection after many filed attempts at making movies. After filing, he created Mickey Mouse and released "Steamboat Willie," launching him into success and allowing him to become a legend that children still revere.
3. Henry Ford filed for bankruptcy after his Model T prototype failed. Getting rid of his debts allowed him to reorganize his finances and start the Ford Motor Company.
Though these three people are all incredibly different, they share a common beginning. They all knew that in order to succeed, they must first get help with their debts. Simply asking for help and getting rid of their debts allowed them to become some of the biggest successes in American history.
These three aren't the only ones who've seen great success after bankruptcy. Many modern actors, athletes, and entrepreneurs have used bankruptcy protection to start over. Cyndi Lauper, George Foreman, Willie Nelson, and Donald Trump are just a few of these celebrities; but the list doesn't end there. People who've filed bankruptcy, celebrity or not, have some of the greatest success stories this country has seen.
These celebrity bankruptcy stories can really tell us something. You must do whatever you need to do to follow your dreams. If that means asking a St. Louis bankruptcy attorney for credit card debt help, protection from foreclosure, and relief from your creditors, then so be it. Your bankruptcy can be the inspiration for your future success too.
Posted by garrickhoeffner at 9:51 PM
Recent Review I received on AVVO--Glad when I can help clients
A recent review I received on AVVO:
Finally an Honest Lawyer! Posted by: Rick W., 2010-05-17 3 days ago. Flag as objectionable Overall rating Trustworthy Responsive Knowledgeable Kept me informed I recommend Daniela Romero.I used Daniela 1-6 months ago.Daniela handled my Bankruptcy / Chapter 13 matter.I have previously worked with 3-5 lawyers. Client Review: I went in to this at the last possible minute with no time to prepare, hours from losing my house and having no clue what Bankruptcy was all about it. I was so frustrated and angry I wanted to cut my wrists and pour vinegar on them. Ms. Romero was nothing but patient. Ms. Romero was nothing but patient, thorough, took my calls at any hour, acted as even a therapist to calm my craziness. She responded to emails super fast and put up with me the entire way. We have now got my plan to exactly where I need it and now I can make my way through this thing. I am making my payments, I don't feel like an inadequate loser which is what I thought anyone who went through bankruptcy was. I've also learned that Ch 13 is not that big of a big bad evil deal like many might think once you understand it's purpose and how it works. I highly recommend this attorney.
Finally an Honest Lawyer! Posted by: Rick W., 2010-05-17 3 days ago. Flag as objectionable Overall rating Trustworthy Responsive Knowledgeable Kept me informed I recommend Daniela Romero.I used Daniela 1-6 months ago.Daniela handled my Bankruptcy / Chapter 13 matter.I have previously worked with 3-5 lawyers. Client Review: I went in to this at the last possible minute with no time to prepare, hours from losing my house and having no clue what Bankruptcy was all about it. I was so frustrated and angry I wanted to cut my wrists and pour vinegar on them. Ms. Romero was nothing but patient. Ms. Romero was nothing but patient, thorough, took my calls at any hour, acted as even a therapist to calm my craziness. She responded to emails super fast and put up with me the entire way. We have now got my plan to exactly where I need it and now I can make my way through this thing. I am making my payments, I don't feel like an inadequate loser which is what I thought anyone who went through bankruptcy was. I've also learned that Ch 13 is not that big of a big bad evil deal like many might think once you understand it's purpose and how it works. I highly recommend this attorney.
The Pasadena Playhouse Files Chapter 11 Bankruptcy--Doners Will Fund Its Exit From Banruptcy
Below is a link from the Wall Street Journal about the Pasadena Playhouse's Chapter 11 Bankruptcy. It should be very interesting to follow this restructuring.
http://blogs.wsj.com/bankruptcy/2010/05/14/pasadena-playhouse-says-donors-will-fund-its-bankruptcy-exit/
Also, below is a reprint of an article from the Pasadena Star News about California's Official Theater's Chapter 11 bankruptcy filing.
The Pasadena Playhouse has filed for bankruptcy twice since its 1917 founding. In 1969 the historic building came close to being demolished but was rescued by the city, which now leases it to the playhouse for $1 a year.
The theater went dark in February when the Playhouse's director announced it could no longer afford to stay open. All staff, except for Eich, Artistic Director Sheldon Epps, an accountant and an assistant were laid off.
Eich has said that the goal is to find a way to work with the Playhouse's creditors to find a way to re-open.
Read more: http://www.pasadenastarnews.com/news/ci_15062173#ixzz0o41jNATa
http://blogs.wsj.com/bankruptcy/2010/05/14/pasadena-playhouse-says-donors-will-fund-its-bankruptcy-exit/
Also, below is a reprint of an article from the Pasadena Star News about California's Official Theater's Chapter 11 bankruptcy filing.
Pasadena Playhouse files for bankruptcy
Posted: 05/11/2010 11:24:26 AM PDT
PASADENA - The Pasadena Playhouse announced today that it has filed for bankruptcy. "This is a necessary step in our strategy to reorganize the Playhouse for the benefit of our creditors and the Pasadena Community at large," wrote Pasadena Playhouse Executive Director Stephen Eich in a prepared statement.
The Pasadena Playhouse has filed for bankruptcy twice since its 1917 founding. In 1969 the historic building came close to being demolished but was rescued by the city, which now leases it to the playhouse for $1 a year.
The theater went dark in February when the Playhouse's director announced it could no longer afford to stay open. All staff, except for Eich, Artistic Director Sheldon Epps, an accountant and an assistant were laid off.
Eich has said that the goal is to find a way to work with the Playhouse's creditors to find a way to re-open.
Read more: http://www.pasadenastarnews.com/news/ci_15062173#ixzz0o41jNATa
Predatory Loan Modifications
Such a great article that I'm posting it here from http://blog.ml-implode.com/2010/05/predatory-loan-modifications/
“Yes Virginia……………… there is a Predatory Loan Modification.”
For three years, the US has been subjected to all manner of communications from the government, the media, and lenders about loan modifications. For two years, I have, with increasing frequency, been reviewing actual loan modifications granted to borrowers, and loan modification offers. Over the past six months, I have been doing exams with paperwork included about loan modifications. And March 30, I wrote an article about the results of the HAMP loan modifications.
With what I have learned and know, it is time to finally put words to paper (or to the internet) about what is really going on. If attorneys and homeowners are going to fight to save homes, it is time to present to all the facts concerning the loan modifications efforts and offers. Many have seen portions or parts of the whole, but few have actually put it all together. Some have actually used the term Predatory Loan Modification, but they have applied it to companies that were trying to scam homeowners, by offering to negotiate loan modifications for homeowners, but with no real intent. It was those companies that resulted in SB-94 in California being enacted, with a lot of help from the banks, and that put loan modification companies out of business, and stopping large number of attorneys from engaging in loan modification efforts.
Predatory loan modifications come in many disguises and may include the actual offer, or just the negotiations of the loan modification. The purpose of the modification is to whether now or in the future, to cause the borrower to lose the home. It has no other purpose than that. I shall endeavor to explain many different ones, and then I shall offer an insight into where the next “Battle for California” and the rest of the US must take place.
The modification featured an interest rate which was the same as the current rate, but a higher monthly payment. The payment increased because arrearages were packed onto the back of the loan which resulted in the payment increasing. To add insult to injury, taxes were included as well.
The net effect of this “modification” was to induce the borrower to walk away from the home because they knew that the payments could never be made. Those that did accept the modification would end up losing the home anyway, since they could not make the payments.
The fact of the matter is that I have NEVER seen one of these plans result in a successful modification. Once the payments are made, the lender denies the modification and demands the arrearages. When the borrower can’t pay, the lender forecloses. With this program, the borrower has “proven” that he could make the payments, so there is no need to modify, in the minds of the lender.
America’s Servicing Company, aka Wells Fargo, is famous for this program.
First Federal contacts the borrower, offering to modify the loan. The modification will put the borrower into a 30 or 40 year fixed rate mortgage. The problem is that the interest rate will be 5.5%. In fact, they told a friend that 5.5% was the lowest that they could go by law. This was a portfolio loan that they owned.
Review of the loan revealed that at the time of the offer the borrower was in a loan with a 2.45 Margin. With the Index at 1%, this meant that he was paying a 3.45% interest rate. First Federal would modify his loan to 5.5%, over 2% higher than what he was currently paying. Of course, it resulted in the borrower declining the offer.
BTW, under the FDIC program, the borrower could have been offered down to 3%, and not 5.5%. Glad to see First Federal gone, but since OneWest took them over, it will be just as bad.
HAMP modifications offer to qualified borrowers a modification of the loan terms. The terms allow for an interest rate as low as 2%, for five years. After the fifth year, the rate will increase by 1% yearly, until it reaches the Freddie Mac rate at the time of the modification. This is usually about 5%. There it stays until the loan is paid off. Other terms are available with the modification, but to keep things simple, I shall not bother with those terms.
Sounds great with this modification, but here is the catch. I recently evaluated the HAMP program and found that the Mean Debt Ratio for all loans as of Feb 2010 was 59.8%. For March, this Debt Ratio was 61.3%. For the non-lending reader, this means the following:
• If a homeowner has a $10,000 per month Gross Income, and he has a great accountant and tax guy, he is in a 33% bracket for Federal and State Taxes, Social Security, Disability and other Deductions.
• After deductions, his income is $6,667 per month, take home pay.
• Subtract out the 61.3% Debt Ratio and he has $537 per month to live on.
• From the $687, he must cover food, fuel, utilities, medical insurance, clothing, phone, cable and other miscellaneous expenses. And, if he has several children, these expenses continue to mount.
Take into consideration now that the Mean Debt Ratio is the midpoint. 50% of all HAMP mods are over that Debt Ratio, and 50% are under. Subprime loans were for the most part a 50% Debt Ratio, and HAMP is approving them at 61.3% and above. Plus, how many are between 50% and 61.3%, we do not know.
The borrowers are going to face a decision relatively early in the payment process. Do they continue to make the loan payment, and end up having to stop making payments on all consumer debt? Or do they abandon the home, and pay consumer debt? Or do they just file bankruptcy and walk away from everything.
The end result is that most if not all of these modifications will likely fail.
“Yes Virginia……………… there is a Predatory Loan Modification.”
For three years, the US has been subjected to all manner of communications from the government, the media, and lenders about loan modifications. For two years, I have, with increasing frequency, been reviewing actual loan modifications granted to borrowers, and loan modification offers. Over the past six months, I have been doing exams with paperwork included about loan modifications. And March 30, I wrote an article about the results of the HAMP loan modifications.
With what I have learned and know, it is time to finally put words to paper (or to the internet) about what is really going on. If attorneys and homeowners are going to fight to save homes, it is time to present to all the facts concerning the loan modifications efforts and offers. Many have seen portions or parts of the whole, but few have actually put it all together. Some have actually used the term Predatory Loan Modification, but they have applied it to companies that were trying to scam homeowners, by offering to negotiate loan modifications for homeowners, but with no real intent. It was those companies that resulted in SB-94 in California being enacted, with a lot of help from the banks, and that put loan modification companies out of business, and stopping large number of attorneys from engaging in loan modification efforts.
Predatory loan modifications come in many disguises and may include the actual offer, or just the negotiations of the loan modification. The purpose of the modification is to whether now or in the future, to cause the borrower to lose the home. It has no other purpose than that. I shall endeavor to explain many different ones, and then I shall offer an insight into where the next “Battle for California” and the rest of the US must take place.
Same Rate – Higher Payment-Taxes Included
Throughout 2008, this was the most common Predatory Loan Modification. It was seen quite often with Sub-Prime loans, but other loans as well. It is still seen today.The modification featured an interest rate which was the same as the current rate, but a higher monthly payment. The payment increased because arrearages were packed onto the back of the loan which resulted in the payment increasing. To add insult to injury, taxes were included as well.
The net effect of this “modification” was to induce the borrower to walk away from the home because they knew that the payments could never be made. Those that did accept the modification would end up losing the home anyway, since they could not make the payments.
Forbearance Disguised as a Loan Modification
A common practice used in 2008 and also today is to present a borrower with a letter identifying a “loan modification” offer. The terms of the offer are for a period of time, usually from 4 months to a year, whereby the borrower will usually bring in a lump sum to pay a portion of the arrears, and then over a period of time, make higher monthly payments to “catch up” a portion of the arrears and at the end of the term, bring the loan up to date. The lure of this program is that it implies that successful completion would result in a loan modification.The fact of the matter is that I have NEVER seen one of these plans result in a successful modification. Once the payments are made, the lender denies the modification and demands the arrearages. When the borrower can’t pay, the lender forecloses. With this program, the borrower has “proven” that he could make the payments, so there is no need to modify, in the minds of the lender.
America’s Servicing Company, aka Wells Fargo, is famous for this program.
Option ARM Loan Modification
This is a different loan modification that I have seen offered numerous times, often by First Federal of Ca. The client is in an Option ARM mortgage.First Federal contacts the borrower, offering to modify the loan. The modification will put the borrower into a 30 or 40 year fixed rate mortgage. The problem is that the interest rate will be 5.5%. In fact, they told a friend that 5.5% was the lowest that they could go by law. This was a portfolio loan that they owned.
Review of the loan revealed that at the time of the offer the borrower was in a loan with a 2.45 Margin. With the Index at 1%, this meant that he was paying a 3.45% interest rate. First Federal would modify his loan to 5.5%, over 2% higher than what he was currently paying. Of course, it resulted in the borrower declining the offer.
BTW, under the FDIC program, the borrower could have been offered down to 3%, and not 5.5%. Glad to see First Federal gone, but since OneWest took them over, it will be just as bad.
Lower Rate – Two Year Term
This is a common offer. With it, the interest rate will be lowered for a two year term, and as low as 2%. However, after two years, the modification ceases and the loan program returns to its original terms. Of course, this only delays the inevitable.World Savings Modification
World Savings had a “wonderful” modification program. They would contact a borrower and offer a modification for $299. The offer generally dropped the interest rate by .5%. This lasted for one year. At the end of the year, World would contact the borrower with another modification offer. This offer would cost the borrower $499, and would last a year.HAMP
Surprised to see HAMP in this list? Why should you be? The lenders and Treasury administer the program.HAMP modifications offer to qualified borrowers a modification of the loan terms. The terms allow for an interest rate as low as 2%, for five years. After the fifth year, the rate will increase by 1% yearly, until it reaches the Freddie Mac rate at the time of the modification. This is usually about 5%. There it stays until the loan is paid off. Other terms are available with the modification, but to keep things simple, I shall not bother with those terms.
Sounds great with this modification, but here is the catch. I recently evaluated the HAMP program and found that the Mean Debt Ratio for all loans as of Feb 2010 was 59.8%. For March, this Debt Ratio was 61.3%. For the non-lending reader, this means the following:
• If a homeowner has a $10,000 per month Gross Income, and he has a great accountant and tax guy, he is in a 33% bracket for Federal and State Taxes, Social Security, Disability and other Deductions.
• After deductions, his income is $6,667 per month, take home pay.
• Subtract out the 61.3% Debt Ratio and he has $537 per month to live on.
• From the $687, he must cover food, fuel, utilities, medical insurance, clothing, phone, cable and other miscellaneous expenses. And, if he has several children, these expenses continue to mount.
Take into consideration now that the Mean Debt Ratio is the midpoint. 50% of all HAMP mods are over that Debt Ratio, and 50% are under. Subprime loans were for the most part a 50% Debt Ratio, and HAMP is approving them at 61.3% and above. Plus, how many are between 50% and 61.3%, we do not know.
The borrowers are going to face a decision relatively early in the payment process. Do they continue to make the loan payment, and end up having to stop making payments on all consumer debt? Or do they abandon the home, and pay consumer debt? Or do they just file bankruptcy and walk away from everything.
The end result is that most if not all of these modifications will likely fail.
NEWS: Bankruptcy Filings in the Central District of California are Still on the Rise
The Central District of California has had 43,626 bankruptcy petitions filed through April 2010.
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