Homes at Risk, and No Help From Lawyers
By DAVID STREITFELD
In California, where foreclosures are more abundant than in any other state, homeowners trying to win a loan modification have always had a tough time.
Now they face yet another obstacle: hiring a lawyer.
Sharon Bell, a retiree who lives in Laguna Niguel, southeast of Los Angeles, needs a modification to keep her home. She says she is scared of her bank and its plentiful resources, so much so that she cannot even open its certified letters inquiring where her mortgage payments may be. Yet the half-dozen lawyers she has called have refused to represent her.
“They said they couldn’t help,” said Ms. Bell, 63. “But I’ve got to find help, because I’m dying every day.”
Lawyers throughout California say they have no choice but to reject clients like Ms. Bell because of a new state law that sharply restricts how they can be paid. Under the measure, passed overwhelmingly by the State Legislature and backed by the state bar association, lawyers who work on loan modifications cannot receive any money until the work is complete. The bar association says that under the law, clients cannot put retainers in trust accounts.
The law, which has few parallels in other states, was devised to eliminate swindles in which modification firms made promises about what their lawyers could do, charged hefty fees and then disappeared. But foreclosure specialists say there has been an unintended consequence: the honest lawyers can no longer afford to assist Ms. Bell and all the others who feel helpless before lenders that they see as elusive, unyielding and skilled at losing paperwork.
The revelations three months ago that large banks were sloppy and negligent in preparing foreclosure documents underscore just how important it is for distressed homeowners to have representation, lawyers and consumer advocates say. Homeowners whose cases were handled improperly have little way of knowing it. Even if they found out, they would be hard-pressed to challenge a lender without a lawyer.
“Consumers just don’t know what is going on,” said Walter Hackett, a former banker who is now a lawyer for a nonprofit service in Riverside. “They get a piece of paper saying they are going to lose their homes and they freak out.”
The problem for lawyers is that even a simple modification, in which the loan is restructured so the borrower can afford the monthly payments, is a marathon, putting off their payday for months if not years. If the bank refuses to come to terms, the client may file for bankruptcy. Then the lawyer will never be paid.
Alice M. Graham, a lawyer in Marina del Rey, said a homeowner in default recently tried to hire her. When Ms. Graham declined, the despairing owner begged her in vain to accept payments under the table.
“The banks have all the lawyers they want, and the consumers are helpless,” Ms. Graham said.
In some states, including New York and Florida, foreclosure proceedings are overseen by courts. In California, the process is more of a private matter between the bank and the homeowner. Through Sept. 30, lenders filed notices of default on 229,843 homes in California this year, according to the research firm MDA DataQuick.
The length of time California households spend in foreclosure, which was rising as owners pursued modifications, fell in the third quarter to 8.7 months, from 9.1 months in the second quarter. That could indicate that the absence of defense lawyers is beginning to accelerate the process.
While lawyers for nonprofits like Mr. Hackett continue to represent clients, they are too overwhelmed to help everyone. “A homeowner in California is going to have an extraordinarily difficult time finding an attorney,” he said.
That group includes Ms. Bell, who owned two properties free and clear and then gave in to a friend’s urging to “put your money to work.” That friend was an agent, and soon Ms. Bell owned two more properties and was making unsecured loans.
The loans went bad, the investments went bust, and Ms. Bell is trying to salvage her home. She wants an advocate but is reluctant to respond to any of the solicitations that fill her mailbox. “I know better,” she said.
Many people did not. Defaulting owners saw television commercials or heard radio ads where a lawyer promised relief. They handed over a few thousand dollars and heard no more.
Two years ago, the state bar association had seven complaints of misconduct in loan modifications. By March 2009, there were more than 100 complaints, and a task force was formed to deal with the problem. Soon, there were thousands of complaints.
It was a public relations disaster. The president of the bar association wrote in a column last year that “hundreds, and perhaps thousands, of California lawyers” were victimizing people “at the most vulnerable point in their lives.”
Politicians heard complaints, too. Ron Calderon, a state senator who represents several communities east of Los Angeles, sponsored a bill that prohibits advance payments for modifications and required lawyers to warn clients that they could do the job themselves without professional assistance. Lenders were supportive of the bill, Senator Calderon said.
It passed 36 to 4 in September 2009. The maximum punishment is a $10,000 fine and a year in jail.
The law is working well, Senator Calderon said. “You do not need a lawyer,” he said.
Mark Stone, a 56-year-old general contractor in Sierra Madre, feels differently. A few years ago, he got sick with hepatitis C. Unable to work full time, he began to miss mortgage payments. The drugs he was taking left him “a little confused,” he said.
Mr. Stone knew that his condition put him at a disadvantage in negotiations with his bank. So he hired Gregory Royston, a real estate lawyer in Redondo Beach. It took Mr. Royston nearly a year, but he restructured the loan.
Without the lawyer, Mr. Stone said, “I’d be living under a bridge.”
The legal bill, paid in advance, was $3,500. “Worth every penny,” said Mr. Stone, who is now back at work.
Mr. Royston said winning modifications was never easy and often impossible. “The banks stymie the borrower, and they really stymie any third party who works on behalf of the borrower,” he said.
A spokesman for the Mortgage Bankers Association said it simply wanted to protect homeowners from fraud. “Be very careful about anyone who wants you to pay them to help you get a loan modification,” said the spokesman, John Mechem.
That advice has never been more true. If any honest lawyers still do modifications, they are lost in a sea of swindles. “This law,” Mr. Royston said, “took the wrong people out of the game.”
Suzan Anderson, supervising trial counsel of the California bar’s special team on loan modification, defended the law, saying that in other types of cases, including personal injury and medical malpractice, the lawyers do not get paid until the end. She acknowledged, however, it was “a very problematical situation.”
As for the swindlers singled out by the law, they appear unfazed. The state bar is investigating 2,000 complaints of modification fraud.
“I wish the law had worked,” Ms. Anderson said.
Wells Fargo to Modify Mortgages
LOS ANGELES (AP) — Wells Fargo agreed to modify about 14,900 adjustable-rate loans made by banks it acquired, according to filings released on Monday.
The agreement with the state attorney general will result in more than $2 billion in principal write-downs, interest-rate reductions and other concessions through June 2013, said Franklin Codel, chief financial officer of Wells Fargo Home Mortgage.
The deal applies to mortgages marketed as “pick-a-payment” loans by Wachovia and World Savings Bank, a subsidiary of the Golden West Financial Corporation.
Wachovia bought World Savings in 2006, and Wells Fargo bought Wachovia in 2008.
The mortgages were so named because their terms allowed borrowers to make payments at various levels each month, including a payment option that increased the loan’s principal by covering less than the monthly interest owed.
In California, Homeowners at Risk Struggle to Find Lawyers - NYTimes.com
California Mortgage Foreclosure Case May Become Class Action Lawsuit: Hearing January 25, 2011 Los Angeles Superior Court
FOR IMMEDIATE RELEASE
Media Contact:
The Wroan Law Firm, Inc.
Telephone: 310-973-4291
LOS ANGELES, CA (January 5, 2011)
One of the longest running cases involving the lending crises in California has just become more interesting and potentially even more complex.
The case is little known and has not been reported on but is unusual because it was initially filed nearly three years ago in March of 2008 but until recently had been stayed by the court. Now, on January 25th the Los Angeles Superior Court will hear a motion by the Plaintiffs to amend their complaint in order to pursue their case as a class action.
Case No. BC 386920 has all the familiar facts and allegations of other similar cases around the country including forged loan documents, misrepresentations and fraud but is noteworthy because it also includes a dispute over the interpretation of a Master Repurchase Agreement (“MRA”) between two of the defendants Accredited Home Lenders, Inc. and Wachovia Bank, N.A. These so called ‘repurchase agreements’ have recently come under scrutiny with the revelation last month by the New York State Attorney General’s office that it has filed a complaint against the accounting firm Ernst & Young for failing to properly characterize such transactions as loans rather than as ‘purchases or sales’.
In addition, the case is also significant because it calls into question the validity of a foreclosure services agreement (“FSA”) in which legal services were performed and provided by non licensed entities and individuals conducting foreclosures in the states of Washington, Nevada, Virginia and California. The claims of unauthorized practice of law, unfair competition and trade practices are the first of its kind in California but have been raised in other cases most notably In re Thorne v. Prommis Solutions Holding Corporation, Lender Processing Services, Inc., LPS Default Solutions, LLC et al. in the United States Bankruptcy Court for the Northern District of Mississippi Case No. 09-11763-DWH.. In that case the U.S. Department of Justice recently joined in as a plaintiff in November 2010.
For a copy of the proposed complaint see:
http://www.wroanlawfirm.com/CLASS_ACTION_COMPLAINT.pdf
For a copy of the Exhibits including the MRA and ‘Foreclosure Services Agreement’ see:
http://www.wroanlawfirm.com/Ex_1-2_%20of_3rd_Amended_Comp.pdf
Media Contact:
The Wroan Law Firm, Inc.
Telephone: 310-973-4291
LOS ANGELES, CA (January 5, 2011)
One of the longest running cases involving the lending crises in California has just become more interesting and potentially even more complex.
The case is little known and has not been reported on but is unusual because it was initially filed nearly three years ago in March of 2008 but until recently had been stayed by the court. Now, on January 25th the Los Angeles Superior Court will hear a motion by the Plaintiffs to amend their complaint in order to pursue their case as a class action.
Case No. BC 386920 has all the familiar facts and allegations of other similar cases around the country including forged loan documents, misrepresentations and fraud but is noteworthy because it also includes a dispute over the interpretation of a Master Repurchase Agreement (“MRA”) between two of the defendants Accredited Home Lenders, Inc. and Wachovia Bank, N.A. These so called ‘repurchase agreements’ have recently come under scrutiny with the revelation last month by the New York State Attorney General’s office that it has filed a complaint against the accounting firm Ernst & Young for failing to properly characterize such transactions as loans rather than as ‘purchases or sales’.
In addition, the case is also significant because it calls into question the validity of a foreclosure services agreement (“FSA”) in which legal services were performed and provided by non licensed entities and individuals conducting foreclosures in the states of Washington, Nevada, Virginia and California. The claims of unauthorized practice of law, unfair competition and trade practices are the first of its kind in California but have been raised in other cases most notably In re Thorne v. Prommis Solutions Holding Corporation, Lender Processing Services, Inc., LPS Default Solutions, LLC et al. in the United States Bankruptcy Court for the Northern District of Mississippi Case No. 09-11763-DWH.. In that case the U.S. Department of Justice recently joined in as a plaintiff in November 2010.
For a copy of the proposed complaint see:
http://www.wroanlawfirm.com/CLASS_ACTION_COMPLAINT.pdf
For a copy of the Exhibits including the MRA and ‘Foreclosure Services Agreement’ see:
http://www.wroanlawfirm.com/Ex_1-2_%20of_3rd_Amended_Comp.pdf
Scandal-hit Calif. city near bankruptcy - UPI.com
BELL, Calif., Jan. 7 (UPI) -- The small city of Bell, Calif., notorious for its officials' extravagant pay, is going broke, an audit warns.
A review by Los Angeles County, released Thursday, estimates if the city keeps spending at current rates, it will run a $2.2 million deficit by the end of the fiscal year, the Los Angeles Times reported.
The audit called for laying off employees, cutting city salaries, benefits, supplies and services, offering only "core services" and possibly disbanding the police force.
Pedro Carrillo, Bell's interim chief administrative officer, said Thursday he will present the city council with ways to balance the budget.
"All options are on the table," he responded when asked if bankruptcy was a possibility.
The city, one of the county's poorest, was engulfed in scandal last year when the Times revealed its leaders' astronomical salaries.
In September, former city manager Robert Rizzo, Mayor Oscar Hernandez, a former assistant city manager and five council members were arrested and charged with misappropriation of public funds.
Read more: http://www.upi.com/Top_News/US/2011/01/07/Scandal-hit-Calif-city-near-bankruptcy/UPI-11641294419013/#ixzz1AOAkWjcu
Scandal-hit Calif. city near bankruptcy - UPI.com
A review by Los Angeles County, released Thursday, estimates if the city keeps spending at current rates, it will run a $2.2 million deficit by the end of the fiscal year, the Los Angeles Times reported.
The audit called for laying off employees, cutting city salaries, benefits, supplies and services, offering only "core services" and possibly disbanding the police force.
Pedro Carrillo, Bell's interim chief administrative officer, said Thursday he will present the city council with ways to balance the budget.
"All options are on the table," he responded when asked if bankruptcy was a possibility.
The city, one of the county's poorest, was engulfed in scandal last year when the Times revealed its leaders' astronomical salaries.
In September, former city manager Robert Rizzo, Mayor Oscar Hernandez, a former assistant city manager and five council members were arrested and charged with misappropriation of public funds.
Read more: http://www.upi.com/Top_News/US/2011/01/07/Scandal-hit-Calif-city-near-bankruptcy/UPI-11641294419013/#ixzz1AOAkWjcu
Scandal-hit Calif. city near bankruptcy - UPI.com
S.E.C. Said to Be Investigating Calpers on Disclosures - NYTimes.com
Federal regulators are investigating whether California violated securities laws and failed to provide adequate disclosure about its giant public pension fund, according to a person with knowledge of the investigation.
The Securities and Exchange Commission normally polices companies, but last year it brought its first enforcement action ever against a state, accusing New Jersey of securities fraud for misleading bond investors about the condition of its pension fund. The commission signaled, in its settlement with New Jersey, that it was going to look more broadly at the pension disclosures of states and cities.
The fund, the California Public Employees’ Retirement System, known as Calpers, lost about a quarter of its total investment portfolio during the financial crisis, leaving the state responsible for replacing billions of dollars each year and contributing to its huge deficit. The question is whether California adequately disclosed in the preceding years how risky the pension investments were and how much money it might need to cover any shortfall.
But it is unclear whether investigators are focusing on those risks or on possible conflicts of interest in steering investments to related parties, the subject of a separate investigation by the attorney general of California.
S.E.C. officials declined to confirm an investigation, citing agency rules. But the person with knowledge of the investigation said it was among the agency’s top priorities. A spokeswoman for Calpers, which is America’s largest pension fund with assets of about $220 billion, said it had not been contacted by the S.E.C. about its accounting or about financial disclosures.
“The SEC has an ongoing look at pension funds in California” because of revelations about the use of placement agents who recommended investment managers, said Patricia Macht, a spokeswoman for Calpers.
Along with concerns about the use of placement agents, regulators have grown increasingly concerned about whether states may have hidden financial weaknesses, particularly in their pension portfolios, and whether investors who buy municipal bonds can fully appreciate the risks.
A spokesman for the California state treasurer’s office, which is responsible for disclosures to bondholders, said “we provided all material information about pension fund issues at all times.”
California has not defaulted on any debts and says its bonds are safe. But the state has been grappling with big, structural budget deficits every year, and cannot easily increase revenue because of voter-approved tax caps. The state’s credit has been downgraded as these financial problems have intensified, and the downgrades have in turn lowered its bonds’ value. Had investors been able to clearly see the pension risks, they might have steered clear of California’s debt or demanded a higher yield.
If federal investigators are able to make a case that California misled investors about the risk in its pension fund, it would send a powerful signal to other public funds, which almost without exception base their financial reporting on average annual investment returns of about 8 percent a year, something hard to defend in today’s markets, no matter what the investment mix.
The S.E.C.’s goal is to force public pension funds to be more open, not just about their investments but about how their risk may affect the finances of the state. It is unlikely that the S.E.C. would impose any penalty because that would force taxpayers to pay for wrongs they knew nothing about. In the New Jersey case, the S.E.C. imposed no penalty but publicized the case in hopes it would be a deterrent.
Any accusation of securities fraud could take years because public finance is a new area for the S.E.C. and any case would rely on novel legal theories. It would be a blow to Calpers, which has used its institutional clout for years to promote good corporate governance and truth in accounting. Calpers has recently pushed for boardroom reforms at JPMorgan Chase, Goldman Sachs, Apple, and BP, among others. And it has sued Moody’s, Fitch and Standard & Poor’s, accusing them of giving “untrue, inaccurate and unjustifiably high” ratings to structured investment vehicles that failed in the mortgage collapse.
Its activism has served as a role model for smaller public pension funds that have also had losses, but might not have been able to challenge corporate governance practices on their own. But now the tables have turned, because S.E.C. investigators hope to use Calpers as an example in a case about of how misleading pension disclosures can amount to securities fraud, according to the person with knowledge of the investigation. Like most public plans, Calpers has maintained that its accounting methods are appropriate and that it is in full compliance.
Calpers has lately been under fire for a big benefit increase in 1999. At that time the fund ran various assumptions on how its investments might do. It discussed them in a public meeting but the state did not put them into its bond prospectus, which was the responsibility of the state treasurer, then Phil Angelides, who also sat on the board of Calpers.
In the years after that, Calpers stepped up its investments in real estate, riding the market up and then crashing when the housing bubble burst. The worst case, created by Calpers’ staff, turned out to be oddly prescient. It said the state might have to come up with $3.95 billion a year in fresh money for the pension fund by the end of 2010. In fact, the state has to contribute $3.88 billion.
Mr. Angelides, now chairman of the Financial Crisis Inquiry Commission, was not available to comment Thursday because the commission was finishing its report.
David Crane, an aide to then Gov. Arnold Schwarzenegger, said last year in legislative testimony that he found it “nothing short of astonishing” that Calpers had “promoted the largest nonvoter-approved debt issuance in California history” without revealing the risks or conflicts of interest involved.
“Frankly, I’ve never seen anything like the Calpers sales document, which makes even Goldman Sachs’s alleged nondisclosure look like child’s play,” said Mr. Crane, who testified at a time when the S.E.C. was suing Goldman Sachs over alleged disclosure violations in connection with mortgage-backed securities.
S.E.C. Said to Be Investigating Calpers on Disclosures - NYTimes.com
The Securities and Exchange Commission normally polices companies, but last year it brought its first enforcement action ever against a state, accusing New Jersey of securities fraud for misleading bond investors about the condition of its pension fund. The commission signaled, in its settlement with New Jersey, that it was going to look more broadly at the pension disclosures of states and cities.
The fund, the California Public Employees’ Retirement System, known as Calpers, lost about a quarter of its total investment portfolio during the financial crisis, leaving the state responsible for replacing billions of dollars each year and contributing to its huge deficit. The question is whether California adequately disclosed in the preceding years how risky the pension investments were and how much money it might need to cover any shortfall.
But it is unclear whether investigators are focusing on those risks or on possible conflicts of interest in steering investments to related parties, the subject of a separate investigation by the attorney general of California.
S.E.C. officials declined to confirm an investigation, citing agency rules. But the person with knowledge of the investigation said it was among the agency’s top priorities. A spokeswoman for Calpers, which is America’s largest pension fund with assets of about $220 billion, said it had not been contacted by the S.E.C. about its accounting or about financial disclosures.
“The SEC has an ongoing look at pension funds in California” because of revelations about the use of placement agents who recommended investment managers, said Patricia Macht, a spokeswoman for Calpers.
Along with concerns about the use of placement agents, regulators have grown increasingly concerned about whether states may have hidden financial weaknesses, particularly in their pension portfolios, and whether investors who buy municipal bonds can fully appreciate the risks.
A spokesman for the California state treasurer’s office, which is responsible for disclosures to bondholders, said “we provided all material information about pension fund issues at all times.”
California has not defaulted on any debts and says its bonds are safe. But the state has been grappling with big, structural budget deficits every year, and cannot easily increase revenue because of voter-approved tax caps. The state’s credit has been downgraded as these financial problems have intensified, and the downgrades have in turn lowered its bonds’ value. Had investors been able to clearly see the pension risks, they might have steered clear of California’s debt or demanded a higher yield.
If federal investigators are able to make a case that California misled investors about the risk in its pension fund, it would send a powerful signal to other public funds, which almost without exception base their financial reporting on average annual investment returns of about 8 percent a year, something hard to defend in today’s markets, no matter what the investment mix.
The S.E.C.’s goal is to force public pension funds to be more open, not just about their investments but about how their risk may affect the finances of the state. It is unlikely that the S.E.C. would impose any penalty because that would force taxpayers to pay for wrongs they knew nothing about. In the New Jersey case, the S.E.C. imposed no penalty but publicized the case in hopes it would be a deterrent.
Any accusation of securities fraud could take years because public finance is a new area for the S.E.C. and any case would rely on novel legal theories. It would be a blow to Calpers, which has used its institutional clout for years to promote good corporate governance and truth in accounting. Calpers has recently pushed for boardroom reforms at JPMorgan Chase, Goldman Sachs, Apple, and BP, among others. And it has sued Moody’s, Fitch and Standard & Poor’s, accusing them of giving “untrue, inaccurate and unjustifiably high” ratings to structured investment vehicles that failed in the mortgage collapse.
Its activism has served as a role model for smaller public pension funds that have also had losses, but might not have been able to challenge corporate governance practices on their own. But now the tables have turned, because S.E.C. investigators hope to use Calpers as an example in a case about of how misleading pension disclosures can amount to securities fraud, according to the person with knowledge of the investigation. Like most public plans, Calpers has maintained that its accounting methods are appropriate and that it is in full compliance.
Calpers has lately been under fire for a big benefit increase in 1999. At that time the fund ran various assumptions on how its investments might do. It discussed them in a public meeting but the state did not put them into its bond prospectus, which was the responsibility of the state treasurer, then Phil Angelides, who also sat on the board of Calpers.
In the years after that, Calpers stepped up its investments in real estate, riding the market up and then crashing when the housing bubble burst. The worst case, created by Calpers’ staff, turned out to be oddly prescient. It said the state might have to come up with $3.95 billion a year in fresh money for the pension fund by the end of 2010. In fact, the state has to contribute $3.88 billion.
Mr. Angelides, now chairman of the Financial Crisis Inquiry Commission, was not available to comment Thursday because the commission was finishing its report.
David Crane, an aide to then Gov. Arnold Schwarzenegger, said last year in legislative testimony that he found it “nothing short of astonishing” that Calpers had “promoted the largest nonvoter-approved debt issuance in California history” without revealing the risks or conflicts of interest involved.
“Frankly, I’ve never seen anything like the Calpers sales document, which makes even Goldman Sachs’s alleged nondisclosure look like child’s play,” said Mr. Crane, who testified at a time when the S.E.C. was suing Goldman Sachs over alleged disclosure violations in connection with mortgage-backed securities.
S.E.C. Said to Be Investigating Calpers on Disclosures - NYTimes.com
Now That It's Out of Bankruptcy, Pasadena Playhouse to produce musical 'Twist,' directed by Debbie Allen | Culture Monster | Los Angeles Times
As the Pasadena Playhouse continues to work toward full financial recovery, leaders have been gradually announcing new main-stage productions, short of committing to a full season. On Tuesday, the company added another show to its roster -- the new musical, "Twist," based on the Charles Dickens classic, "Oliver Twist." It is set to open June 25.
"Twist" had its world premiere in 2010 at the Alliance Theatre in Atlanta. The musical transposes Dickens' story of an orphan boy who falls in with a gang of pickpockets to New Orleans on the eve of the Great Depression. The score is by songwriters Tena Clark and Gary Prim, and the book is by Tony Award nominee William F. Brown.
Debbie Allen directed and choreographed the Atlanta production and will return for the Pasadena version. The cast for the musical will be announced at a later date.
The musical will begin preview performances on June 14 and is scheduled to run through July 24.
"Twist" has been kicking around regional theaters in various workshop forms since the 1990s, but the musical was reportedly revised for the Atlanta production. A reviewer for the Atlanta Journal-Constitution praised the cast and Allen's direction, but wrote that the musical overall "feels overly politicized and unoriginal."
The Pasadena Playhouse shut down its main stage in February due to crushing debt and other financial pressures. The company emerged from bankruptcy in July and said that it has successfully raised $2 million thanks to a matching grant. Since reopening its main stage, the company has mounted productions of the solo show "FDR," starring Ed Asner, and "Uptown Downtown," starring Leslie Uggams.
In February, the Pasadena Playhouse will start performances of the new musical "Dangerous Beauty," which is based on the 1998 movie of the same name.
-- David Ng Pasadena Playhouse to produce musical 'Twist,' directed by Debbie Allen | Culture Monster | Los Angeles Times
"Twist" had its world premiere in 2010 at the Alliance Theatre in Atlanta. The musical transposes Dickens' story of an orphan boy who falls in with a gang of pickpockets to New Orleans on the eve of the Great Depression. The score is by songwriters Tena Clark and Gary Prim, and the book is by Tony Award nominee William F. Brown.
Debbie Allen directed and choreographed the Atlanta production and will return for the Pasadena version. The cast for the musical will be announced at a later date.
The musical will begin preview performances on June 14 and is scheduled to run through July 24.
"Twist" has been kicking around regional theaters in various workshop forms since the 1990s, but the musical was reportedly revised for the Atlanta production. A reviewer for the Atlanta Journal-Constitution praised the cast and Allen's direction, but wrote that the musical overall "feels overly politicized and unoriginal."
The Pasadena Playhouse shut down its main stage in February due to crushing debt and other financial pressures. The company emerged from bankruptcy in July and said that it has successfully raised $2 million thanks to a matching grant. Since reopening its main stage, the company has mounted productions of the solo show "FDR," starring Ed Asner, and "Uptown Downtown," starring Leslie Uggams.
In February, the Pasadena Playhouse will start performances of the new musical "Dangerous Beauty," which is based on the 1998 movie of the same name.
-- David Ng Pasadena Playhouse to produce musical 'Twist,' directed by Debbie Allen | Culture Monster | Los Angeles Times
Buying or Selling Gold in Pasadena, California? Know the Law!
Buying or Selling Gold? Know the law!
The Pasadena Police Department would like to inform the public that buying gold is against the law unless you are licensed through the California Department of Justice. Gold buyers are required by law to ask for identification from whoever they buy from and maintain a description of the items they are buying. This information is then reported to local law enforcement.
“Given the current economic constraints, selling excess jewelry has become a viable option for some people,” says Chief of Police Phillip Sanchez. “But we want to caution people that care should be taken to buy from and sell to only licensed second hand dealers. This helps to prevent crime and will prevent people from buying stolen property unknowingly.” Businesses that do not possess a second hand dealer’s license and engage in buying and selling gold and other items are breaking the law, are subject to arrest, a $1500.00 fine and accusations of dealing in stolen property.
Several businesses in the City of Pasadena advertise “We Buy Gold” and these businesses must be licensed as a “Second Hand Dealer”. They are regulated by the Pasadena Police Department. Some businesses may knowingly or unknowingly take in stolen property that belongs to a victim of a crime.
This license also applies to those who are buying other used items that bear a serial number or identifying marks such as laptop computers, iPods, cell phones and gaming devices. These goods have been found to constitute a “significant class of stolen goods” and must be reported to law enforcement.
“By using reputable, licensed businesses, the average citizen can curb the buying and selling of stolen goods,” continues Chief Sanchez. “When we make it harder for thieves to sell their ill gotten gains, there is more of a chance to stem property crimes related to burglary.
For more information or to become licensed by the Department of Justice, please call Detective Sergeant Marie Sell at 626-744-3816.
The Pasadena Police Department would like to inform the public that buying gold is against the law unless you are licensed through the California Department of Justice. Gold buyers are required by law to ask for identification from whoever they buy from and maintain a description of the items they are buying. This information is then reported to local law enforcement.
“Given the current economic constraints, selling excess jewelry has become a viable option for some people,” says Chief of Police Phillip Sanchez. “But we want to caution people that care should be taken to buy from and sell to only licensed second hand dealers. This helps to prevent crime and will prevent people from buying stolen property unknowingly.” Businesses that do not possess a second hand dealer’s license and engage in buying and selling gold and other items are breaking the law, are subject to arrest, a $1500.00 fine and accusations of dealing in stolen property.
Several businesses in the City of Pasadena advertise “We Buy Gold” and these businesses must be licensed as a “Second Hand Dealer”. They are regulated by the Pasadena Police Department. Some businesses may knowingly or unknowingly take in stolen property that belongs to a victim of a crime.
This license also applies to those who are buying other used items that bear a serial number or identifying marks such as laptop computers, iPods, cell phones and gaming devices. These goods have been found to constitute a “significant class of stolen goods” and must be reported to law enforcement.
“By using reputable, licensed businesses, the average citizen can curb the buying and selling of stolen goods,” continues Chief Sanchez. “When we make it harder for thieves to sell their ill gotten gains, there is more of a chance to stem property crimes related to burglary.
For more information or to become licensed by the Department of Justice, please call Detective Sergeant Marie Sell at 626-744-3816.
Student loans leave crushing debt burden - Business - CNBC TV - msnbc.com
The cost of a college education is rising faster than the cost of medical care and as much as three times as fast as consumer prices in general. But that's just the beginning of the price of admission.
This is the story of a debt crisis few are talking about.
Americans now owe more on their student loans than they do on their credit cards — a debt fast approaching $1 trillion with no end in sight.
Students borrow because they see little choice. A college education, after all, is a key to success. That, it seems, is an article of faith.
For Rick and Tami Tuipers, of the Chicago suburb of Tinley Park, Ill., the world revolves around their kids.
"We've committed to our children's education from day one," said Tami. "That's the commitment we made when they were born."
Zach is a high school sophomore and, at 15, the youngest in the family. Shelby, 18, is a senior and interested in science.
To read more click here:
Student loans leave crushing debt burden - Business - CNBC TV - msnbc.com
This is the story of a debt crisis few are talking about.
Americans now owe more on their student loans than they do on their credit cards — a debt fast approaching $1 trillion with no end in sight.
Students borrow because they see little choice. A college education, after all, is a key to success. That, it seems, is an article of faith.
For Rick and Tami Tuipers, of the Chicago suburb of Tinley Park, Ill., the world revolves around their kids.
"We've committed to our children's education from day one," said Tami. "That's the commitment we made when they were born."
Zach is a high school sophomore and, at 15, the youngest in the family. Shelby, 18, is a senior and interested in science.
To read more click here:
Student loans leave crushing debt burden - Business - CNBC TV - msnbc.com
WaMu Bankruptcy Judge Keeps Documents Secret - ABC News
to read the article, click here WaMu Bankruptcy Judge Keeps Documents Secret - ABC News
Loehmann's strikes deal for quick bankruptcy exit
By Tom Hals
WILMINGTON, Del., Dec 15 (Reuters) - Retailer Loehmann's [ARCABL.UL] said on Wednesday it reached an agreement with unsecured creditors that will allow the department store chain to exit bankruptcy by Feb. 18.
Loehmann Capital Corp's current owner, Istithmar, a unit of Dubai World [DBWLD.UL], and Whippoorwill Associates Inc will backstop a rights offering that will invest $25 million in the company when it exits Chapter 11.
The pair will likely end up owning 71 to 85 percent of the company when it exits Chapter 11, depending on the outcome of the rights offering.
Loehmann's, which opened in Brooklyn in 1921, sells designer brands at steep discounts through its stores. It has been unable to meet its debt load even as competitors such as TJX Cos Inc (TJX.N) and Ross Stores Inc (ROST.O) have reported robust sales.
Loehmann's began the year with around 60 stores, but has been closing its weaker locations and currently has about 46.
The company has been trying to restructure its debt for months, but failed to reach an agreement with enough bondholders to prevent a bankruptcy.
The unsecured creditors had opposed the company's original bankruptcy plan, which offered them a recovery of about 4.2 percent.
Under the revised deal reached on Tuesday, the unsecured creditors will get a recovery of about 7.6 percent.
The deal allows Loehmann's to restructure, rather than seek a quick sale, as happens with most bankrupt retailers. The operator Trade Secret beauty salon chain and Urban Brands Inc, which owns the Ashley Stewart clothing chain, both sought quick sales in bankruptcy in recent months.
The Loehmann's agreement is subject to court approval.
The company will also have a $33 million revolving credit facility with Crystal Financial LLC to fund its operations once it exits bankruptcy as well as a $7 million junior facility provided by Whippoorwill. (Reporting by Tom Hals; Editing by Richard Chang)UPDATE 2-Loehmann's strikes deal for quick bankruptcy exit | Reuters
WILMINGTON, Del., Dec 15 (Reuters) - Retailer Loehmann's [ARCABL.UL] said on Wednesday it reached an agreement with unsecured creditors that will allow the department store chain to exit bankruptcy by Feb. 18.
Loehmann Capital Corp's current owner, Istithmar, a unit of Dubai World [DBWLD.UL], and Whippoorwill Associates Inc will backstop a rights offering that will invest $25 million in the company when it exits Chapter 11.
The pair will likely end up owning 71 to 85 percent of the company when it exits Chapter 11, depending on the outcome of the rights offering.
Loehmann's, which opened in Brooklyn in 1921, sells designer brands at steep discounts through its stores. It has been unable to meet its debt load even as competitors such as TJX Cos Inc (TJX.N) and Ross Stores Inc (ROST.O) have reported robust sales.
Loehmann's began the year with around 60 stores, but has been closing its weaker locations and currently has about 46.
The company has been trying to restructure its debt for months, but failed to reach an agreement with enough bondholders to prevent a bankruptcy.
The unsecured creditors had opposed the company's original bankruptcy plan, which offered them a recovery of about 4.2 percent.
Under the revised deal reached on Tuesday, the unsecured creditors will get a recovery of about 7.6 percent.
The deal allows Loehmann's to restructure, rather than seek a quick sale, as happens with most bankrupt retailers. The operator Trade Secret beauty salon chain and Urban Brands Inc, which owns the Ashley Stewart clothing chain, both sought quick sales in bankruptcy in recent months.
The Loehmann's agreement is subject to court approval.
The company will also have a $33 million revolving credit facility with Crystal Financial LLC to fund its operations once it exits bankruptcy as well as a $7 million junior facility provided by Whippoorwill. (Reporting by Tom Hals; Editing by Richard Chang)UPDATE 2-Loehmann's strikes deal for quick bankruptcy exit | Reuters
FBI — Holiday Shopping Tips and Warnings
Holiday Shopping Tips
11/15/2010—This holiday season, the FBI reminds shoppers that cyber criminals aggressively create new ways to steal money and personal information. Scammers use many techniques to fool potential victims, including conducting fraudulent auction sales, reshipping merchandise purchased with stolen credit cards, and selling fraudulent or stolen gift cards through auction sites at discounted prices.
Fraudulent Classified Ads and Auction Sales
Internet criminals post classified ads and auctions for products they do not have and make the scam work by using stolen credit cards. Fraudsters receive an order from a victim, charge the victim’s credit card for the amount of the order, then use a separate, stolen credit card for the actual purchase. They pocket the purchase price obtained from the victim’s credit card and have the merchant ship the item directly to the victim. Consequently, an item purchased from an online auction but received directly from the merchant is a strong indication of fraud. Victims of such a scam not only lose the money paid to the fraudster, but may be liable for receiving stolen goods.
Shoppers may help avoid these scams by using caution and not providing financial information directly to the seller, as fraudulent sellers will use this information to purchase items for their schemes. Always use a legitimate payment service to ensure a safe, legitimate purchase.
As for product delivery, fraudsters posing as legitimate delivery services offer reduced or free shipping to customers through auction sites. They perpetuate this scam by providing fake shipping labels to the victim. The fraudsters do not pay for delivery of the packages; therefore, delivery service providers intercept the packages for nonpayment and the victim loses the money paid for the purchase of the product.
Diligently check each seller’s rating and feedback along with their number of sales and the dates on which feedback was posted. Be wary of a seller with 100 percent positive feedback, with a low total number of feedback postings, or with all feedback posted around the same date and time.
Gift Card Scam
Be careful when purchasing gift cards through auction sites or classified ads. It is safest to purchase gift cards directly from the merchant or retail store. If the gift card merchant discovers that your card is fraudulent, the merchant will deactivate the gift card and refuse to honor it for purchases. Victims of this scam lose the money paid for the gift card purchase.
Phishing and Smishing Schemes
In phishing schemes, a fraudster poses as a legitimate entity and uses e-mail and scam websites to obtain victims’ personal information, such as account numbers, user names, passwords, etc. Smishing is the act of sending fraudulent text messages to bait a victim into revealing personal information.
Be leery of e-mails or text messages that indicate a problem or question regarding your financial accounts. In this scam, fraudsters direct victims to follow a link or call a number to update an account or correct a purported problem. The link directs the victim to a fraudulent website or message that appears legitimate. Instead, the site allows the fraudster to steal any personal information the victim provides.
Current smishing schemes involve fraudsters calling victims’ cell phones offering to lower the interest rates for credit cards the victims do not even possess. If a victim asserts that they do not own the credit card, the caller hangs up. These fraudsters call from TRAC cell phones that do not have voicemail, or the phone provides a constant busy signal when called, rendering these calls virtually untraceable.
Another scam involves fraudsters directing victims, via e-mail, to a spoofed website. A spoofed website is a fake site that misleads the victim into providing personal information, which is routed to the scammer’s computer.
Phishing schemes related to deliveries are also rampant. Legitimate delivery service providers neither e-mail shippers regarding scheduled deliveries nor state when a package is intercepted or being temporarily held. Consequently, e-mails informing of such delivery issues are phishing scams that can lead to personal information breaches and financial losses.
Tips
Here are some tips you can use to avoid becoming a victim of cyber fraud:
Do not respond to unsolicited (spam) e-mail.
Do not click on links contained within an unsolicited e-mail.
Be cautious of e-mail claiming to contain pictures in attached files, as the files may contain viruses. Only open attachments from known senders. Scan the attachments for viruses if possible.
Avoid filling out forms contained in e-mail messages that ask for personal information.
Always compare the link in the e-mail with the link to which you are directed and determine if they match and will lead you to a legitimate site.
Log directly onto the official website for the business identified in the e-mail, instead of “linking” to it from an unsolicited e-mail. If the e-mail appears to be from your bank, credit card issuer, or other company you deal with frequently, your statements or official correspondence from the business will provide the proper contact information.
Contact the actual business that supposedly sent the e-mail to verify if the e-mail is genuine.
If you are asked to act quickly, or there is an emergency, it may be a scam. Fraudsters create a sense of urgency to get you to act quickly.
Verify any requests for personal information from any business or financial institution by contacting them using the main contact information.
Remember if it looks too good to be true, it probably is.
To receive the latest information about cyber scams, sign up for e-mail alerts on this website. If you have received a scam e-mail, please notify the IC3 by filing a complaint at www.ic3.gov.
FBI — New E-Scams & Warnings
11/15/2010—This holiday season, the FBI reminds shoppers that cyber criminals aggressively create new ways to steal money and personal information. Scammers use many techniques to fool potential victims, including conducting fraudulent auction sales, reshipping merchandise purchased with stolen credit cards, and selling fraudulent or stolen gift cards through auction sites at discounted prices.
Fraudulent Classified Ads and Auction Sales
Internet criminals post classified ads and auctions for products they do not have and make the scam work by using stolen credit cards. Fraudsters receive an order from a victim, charge the victim’s credit card for the amount of the order, then use a separate, stolen credit card for the actual purchase. They pocket the purchase price obtained from the victim’s credit card and have the merchant ship the item directly to the victim. Consequently, an item purchased from an online auction but received directly from the merchant is a strong indication of fraud. Victims of such a scam not only lose the money paid to the fraudster, but may be liable for receiving stolen goods.
Shoppers may help avoid these scams by using caution and not providing financial information directly to the seller, as fraudulent sellers will use this information to purchase items for their schemes. Always use a legitimate payment service to ensure a safe, legitimate purchase.
As for product delivery, fraudsters posing as legitimate delivery services offer reduced or free shipping to customers through auction sites. They perpetuate this scam by providing fake shipping labels to the victim. The fraudsters do not pay for delivery of the packages; therefore, delivery service providers intercept the packages for nonpayment and the victim loses the money paid for the purchase of the product.
Diligently check each seller’s rating and feedback along with their number of sales and the dates on which feedback was posted. Be wary of a seller with 100 percent positive feedback, with a low total number of feedback postings, or with all feedback posted around the same date and time.
Gift Card Scam
Be careful when purchasing gift cards through auction sites or classified ads. It is safest to purchase gift cards directly from the merchant or retail store. If the gift card merchant discovers that your card is fraudulent, the merchant will deactivate the gift card and refuse to honor it for purchases. Victims of this scam lose the money paid for the gift card purchase.
Phishing and Smishing Schemes
In phishing schemes, a fraudster poses as a legitimate entity and uses e-mail and scam websites to obtain victims’ personal information, such as account numbers, user names, passwords, etc. Smishing is the act of sending fraudulent text messages to bait a victim into revealing personal information.
Be leery of e-mails or text messages that indicate a problem or question regarding your financial accounts. In this scam, fraudsters direct victims to follow a link or call a number to update an account or correct a purported problem. The link directs the victim to a fraudulent website or message that appears legitimate. Instead, the site allows the fraudster to steal any personal information the victim provides.
Current smishing schemes involve fraudsters calling victims’ cell phones offering to lower the interest rates for credit cards the victims do not even possess. If a victim asserts that they do not own the credit card, the caller hangs up. These fraudsters call from TRAC cell phones that do not have voicemail, or the phone provides a constant busy signal when called, rendering these calls virtually untraceable.
Another scam involves fraudsters directing victims, via e-mail, to a spoofed website. A spoofed website is a fake site that misleads the victim into providing personal information, which is routed to the scammer’s computer.
Phishing schemes related to deliveries are also rampant. Legitimate delivery service providers neither e-mail shippers regarding scheduled deliveries nor state when a package is intercepted or being temporarily held. Consequently, e-mails informing of such delivery issues are phishing scams that can lead to personal information breaches and financial losses.
Tips
Here are some tips you can use to avoid becoming a victim of cyber fraud:
Do not respond to unsolicited (spam) e-mail.
Do not click on links contained within an unsolicited e-mail.
Be cautious of e-mail claiming to contain pictures in attached files, as the files may contain viruses. Only open attachments from known senders. Scan the attachments for viruses if possible.
Avoid filling out forms contained in e-mail messages that ask for personal information.
Always compare the link in the e-mail with the link to which you are directed and determine if they match and will lead you to a legitimate site.
Log directly onto the official website for the business identified in the e-mail, instead of “linking” to it from an unsolicited e-mail. If the e-mail appears to be from your bank, credit card issuer, or other company you deal with frequently, your statements or official correspondence from the business will provide the proper contact information.
Contact the actual business that supposedly sent the e-mail to verify if the e-mail is genuine.
If you are asked to act quickly, or there is an emergency, it may be a scam. Fraudsters create a sense of urgency to get you to act quickly.
Verify any requests for personal information from any business or financial institution by contacting them using the main contact information.
Remember if it looks too good to be true, it probably is.
To receive the latest information about cyber scams, sign up for e-mail alerts on this website. If you have received a scam e-mail, please notify the IC3 by filing a complaint at www.ic3.gov.
FBI — New E-Scams & Warnings
Dykstra's Calif estate sold at bankruptcy auction - Pasadena Star-News
The Associated Press
Posted: 11/22/2010 08:22:47 AM PST
VENTURA, Calif.—Former New York Mets outfielder Lenny Dykstra took out $18 million in loans three years ago to buy a California estate overlooking the Sherwood Country Club Golf Course.
It sold at bankruptcy auction last week for $760,712.
A junior lienholder bought the 12,713-square-foot Lake Sherwood home. Index Investors representative Jeff Smith says he was the lone bidder at the Ventura County courthouse on Nov. 17.
There's still a $13.5 million senior mortgage held by J.P. Morgan Chase & Co. The Oregon-based private equity firm is negotiating with J.P Morgan to deal with that debt.
Dykstra filed for bankruptcy protection in July, saying he owed more than $31 million and had about $50,000 in assets.
Dykstra told the Ventura County Star on Saturday that he doesn't know anything about the auction.
Dykstra's Calif estate sold at bankruptcy auction - Pasadena Star-News
Posted: 11/22/2010 08:22:47 AM PST
VENTURA, Calif.—Former New York Mets outfielder Lenny Dykstra took out $18 million in loans three years ago to buy a California estate overlooking the Sherwood Country Club Golf Course.
It sold at bankruptcy auction last week for $760,712.
A junior lienholder bought the 12,713-square-foot Lake Sherwood home. Index Investors representative Jeff Smith says he was the lone bidder at the Ventura County courthouse on Nov. 17.
There's still a $13.5 million senior mortgage held by J.P. Morgan Chase & Co. The Oregon-based private equity firm is negotiating with J.P Morgan to deal with that debt.
Dykstra filed for bankruptcy protection in July, saying he owed more than $31 million and had about $50,000 in assets.
Dykstra told the Ventura County Star on Saturday that he doesn't know anything about the auction.
Dykstra's Calif estate sold at bankruptcy auction - Pasadena Star-News
Abraham Lincoln's October 3, 1863 Thanksgiving Proclamation
Abraham Lincoln's October 3, 1863 Thanksgiving Proclamation.
Please circulate it!
"It is the duty of nations as well as of men to own their dependence upon the overruling power of God; to confess sins and transgressions in humble sorrow, yet with assured hope that genuine repentance will lead to mercy and pardon; and to recognize the sublime truth, announced in the Holy Scriptures and proven by all history, that those nations are blessed whose God is the Lord (Psalm 33:12). We know that by His divine law, nations, like individuals, are subjected to punishments and chastisements in this world. May we not justly fear that the awful calamity of civil war which now desolates the land may be a punishment inflicted upon us for our presumptuous sins, to the needful end of our national reformation as a whole people?
We have been the recipients of the choicest bounties of heaven; we have been preserved these many years in peace and prosperity; we have grown in numbers, wealth and power as no other nation has ever grown.
But we have forgotten God. We have forgotten the gracious hand which preserved us in peace and multiplied and enriched and strengthened us, and we have vainly imagined, in the deceitfulness of our hearts, that all these blessings were produced by some superior wisdom and virtue of our own. Intoxicated with unbroken success, we have become too self-sufficient to feel the necessity of redeeming and preserving grace, too proud to pray to the God that made us.
It has seemed to me fit and proper that God should be solemnly, reverently and gratefully acknowledged, as with one heart and one voice, by the whole American people. I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November as a day of Thanksgiving and praise to our beneficent Father who dwelleth in the heavens."
We, as a nation must fall to our knees!
Please circulate it!
"It is the duty of nations as well as of men to own their dependence upon the overruling power of God; to confess sins and transgressions in humble sorrow, yet with assured hope that genuine repentance will lead to mercy and pardon; and to recognize the sublime truth, announced in the Holy Scriptures and proven by all history, that those nations are blessed whose God is the Lord (Psalm 33:12). We know that by His divine law, nations, like individuals, are subjected to punishments and chastisements in this world. May we not justly fear that the awful calamity of civil war which now desolates the land may be a punishment inflicted upon us for our presumptuous sins, to the needful end of our national reformation as a whole people?
We have been the recipients of the choicest bounties of heaven; we have been preserved these many years in peace and prosperity; we have grown in numbers, wealth and power as no other nation has ever grown.
But we have forgotten God. We have forgotten the gracious hand which preserved us in peace and multiplied and enriched and strengthened us, and we have vainly imagined, in the deceitfulness of our hearts, that all these blessings were produced by some superior wisdom and virtue of our own. Intoxicated with unbroken success, we have become too self-sufficient to feel the necessity of redeeming and preserving grace, too proud to pray to the God that made us.
It has seemed to me fit and proper that God should be solemnly, reverently and gratefully acknowledged, as with one heart and one voice, by the whole American people. I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November as a day of Thanksgiving and praise to our beneficent Father who dwelleth in the heavens."
We, as a nation must fall to our knees!
Debt collectors utilize Facebook to embarrass those who owe | Tampa Bay, St. Petersburg, Clearwater, Sarasota | WTSP.com 10 News
Tampa, Florida -- Debt collectors can be relentless and downright rude on the phone, but now a St. Petersburg woman is filing suit alleging the company that financed her car loan began harassing family members over the social networking website Facebook.
Melanie Beacham says she fell behind on her car payment after getting sick and taking a medical leave from work. She contacted MarkOne Financial to explain the situation but says the harassing phone calls, as many as 20 per day, kept coming. Then one day she got a call from her sister saying the company contacted her in Georgia.
"I was telling her, 'No way, because you're not even a reference,'" said Beacham, who later found out MarkOne contacted her sister and other relatives via Facebook.
Beacham says the company claimed they were doing nothing wrong but, upset over what happened, she contacted Tampa based consumer attorney Billy Howard of Morgan & Morgan.
"Now Facebook does a debt collectors work for them. Now it's not only family members, it's all of your associates. It's a very powerful tool for debt collectors to use," says Howard.
He believes Facebook will soon become a regular method for contact if nothing is done.
"It's getting the desired result, and that is to start a domino effect of panic and embarrassment among family and friends, and people will do anything to stop that."
Howard has now filed a first of its kind lawsuit against MarkOne asking a judge to ban the company from using Facebook and other social networking websites to contact friends and family members over a debt.
10 News was unable to reach MarkOne Financial for comment Monday regarding the suit filed in Pinellas County.
Beacham hopes the lawsuit will keep debt collectors from exploiting consumers on Facebook.
"Nobody should have to go through what I went through," said Beacham. "I was hurt because I just felt I didn't need my family going through that."
Beau Zimmer, 10 News
Debt collectors utilize Facebook to embarrass those who owe | Tampa Bay, St. Petersburg, Clearwater, Sarasota | WTSP.com 10 News
Melanie Beacham says she fell behind on her car payment after getting sick and taking a medical leave from work. She contacted MarkOne Financial to explain the situation but says the harassing phone calls, as many as 20 per day, kept coming. Then one day she got a call from her sister saying the company contacted her in Georgia.
"I was telling her, 'No way, because you're not even a reference,'" said Beacham, who later found out MarkOne contacted her sister and other relatives via Facebook.
Beacham says the company claimed they were doing nothing wrong but, upset over what happened, she contacted Tampa based consumer attorney Billy Howard of Morgan & Morgan.
"Now Facebook does a debt collectors work for them. Now it's not only family members, it's all of your associates. It's a very powerful tool for debt collectors to use," says Howard.
He believes Facebook will soon become a regular method for contact if nothing is done.
"It's getting the desired result, and that is to start a domino effect of panic and embarrassment among family and friends, and people will do anything to stop that."
Howard has now filed a first of its kind lawsuit against MarkOne asking a judge to ban the company from using Facebook and other social networking websites to contact friends and family members over a debt.
10 News was unable to reach MarkOne Financial for comment Monday regarding the suit filed in Pinellas County.
Beacham hopes the lawsuit will keep debt collectors from exploiting consumers on Facebook.
"Nobody should have to go through what I went through," said Beacham. "I was hurt because I just felt I didn't need my family going through that."
Beau Zimmer, 10 News
Debt collectors utilize Facebook to embarrass those who owe | Tampa Bay, St. Petersburg, Clearwater, Sarasota | WTSP.com 10 News
Rancho Cordova lawyer charged with swindling distressed homeowners
Rancho Cordova lawyer charged with
swindling distressed homeowners
Sacramento-area lawyer James Sandison, already facing State Bar charges of misusing his client trust account and named in a $60 million loan modification fraud suit by the attorney general, has now been charged by the State Bar with “swindling distressed homeowners.”
Principal and founder of U.S. Loan Auditors and general corporate counsel for My U.S. Legal Services, Inc., Sandison, 55, provided forensic loan audits, guaranteed foreclosure prevention and then did nothing to help prevent the foreclosures, according to bar prosecutors. One of 11 homeowners named in the State Bar complaint paid Sandison $56,000 over a nine-month period. Others paid him between $2,000 and $24,000 after he promised to stop foreclosure. Some clients lost their homes.
Sandison [bar number 148812], whose businesses are located in Rancho Cordova, is charged with 11 counts of moral turpitude, dishonesty and corruption. He also was charged Oct. 27 with making untrue or misleading representations, unfair competition, collecting advance fees, failure to provide proper disclosures, collecting advance fees from clients in foreclosure and failure to register his businesses as foreclosure consultants.
“The State Bar continues to aggressively prosecute those lawyers engaging in loan modification misconduct,” said Chief Trial Counsel James Towery. “We have removed from practice 17 of these lawyers with more disciplinary proceedings pending. This small group has caused significant public harm.”
According to the State Bar charges, Sandison defrauded the homeowners by making promises to avoid foreclosure that he never kept. Those allegations are similar to charges filed against Sandison, his companies and four others by Attorney General Jerry Brown on Oct. 6. In that suit, Brown seeks $60 million in civil penalties, restitution for victims and permanent injunctions to keep the defendants from fraudulently marketing forensic loan audits and legal services that have no value. The State Bar assisted Brown’s office and the Department of Real Estate in the investigation.
The attorney general’s suit alleged that homeowners paid thousands of dollars for forensic loan audits, which the companies said could be used as the basis for suits against lenders. Forensic loan audits purportedly show instances in which lenders have violated rules ranging from consumer privacy requirements to calculating mortgage amounts. Many homeowners were persuaded to stop making their loan payments and instead file lawsuits. As a result, they lost thousands of dollars and, in some cases, their homes.
The suit said the lawyers used “a variety of deceptive advertising and marketing techniques to persuade homeowners they had been victims of ‘predatory lending.’” They claimed that suing the lenders would give the homeowners leverage in obtaining a loan modification, staving off foreclosure or collecting damages.
Many clients took the advice “and as a result placed themselves in even greater danger of losing their homes,” the attorney general’s suit said. “Defendants then bilk their clients for months, collecting thousands of dollars in fees for ‘legal services,’ when in reality [they] do little more than file and serve a boiler-plate complaint. In order to keep the monthly payments flowing, Defendants dodge their clients’ phone calls, refuse to provide their clients any accounting of how their money is being spent and/or string their clients along with false assurances that a settlement is in progress, or that litigation takes time.”
Sandison also was named by the State Bar in a separate case in October. He was charged with hiding $300,000 in collections he received on behalf of his client, failing to put funds into a client trust account and stealing money from his partner and client.
http://www.calbarjournal.com/November2010/TopHeadlines/TH9.aspx
swindling distressed homeowners
Sacramento-area lawyer James Sandison, already facing State Bar charges of misusing his client trust account and named in a $60 million loan modification fraud suit by the attorney general, has now been charged by the State Bar with “swindling distressed homeowners.”
Principal and founder of U.S. Loan Auditors and general corporate counsel for My U.S. Legal Services, Inc., Sandison, 55, provided forensic loan audits, guaranteed foreclosure prevention and then did nothing to help prevent the foreclosures, according to bar prosecutors. One of 11 homeowners named in the State Bar complaint paid Sandison $56,000 over a nine-month period. Others paid him between $2,000 and $24,000 after he promised to stop foreclosure. Some clients lost their homes.
Sandison [bar number 148812], whose businesses are located in Rancho Cordova, is charged with 11 counts of moral turpitude, dishonesty and corruption. He also was charged Oct. 27 with making untrue or misleading representations, unfair competition, collecting advance fees, failure to provide proper disclosures, collecting advance fees from clients in foreclosure and failure to register his businesses as foreclosure consultants.
“The State Bar continues to aggressively prosecute those lawyers engaging in loan modification misconduct,” said Chief Trial Counsel James Towery. “We have removed from practice 17 of these lawyers with more disciplinary proceedings pending. This small group has caused significant public harm.”
According to the State Bar charges, Sandison defrauded the homeowners by making promises to avoid foreclosure that he never kept. Those allegations are similar to charges filed against Sandison, his companies and four others by Attorney General Jerry Brown on Oct. 6. In that suit, Brown seeks $60 million in civil penalties, restitution for victims and permanent injunctions to keep the defendants from fraudulently marketing forensic loan audits and legal services that have no value. The State Bar assisted Brown’s office and the Department of Real Estate in the investigation.
The attorney general’s suit alleged that homeowners paid thousands of dollars for forensic loan audits, which the companies said could be used as the basis for suits against lenders. Forensic loan audits purportedly show instances in which lenders have violated rules ranging from consumer privacy requirements to calculating mortgage amounts. Many homeowners were persuaded to stop making their loan payments and instead file lawsuits. As a result, they lost thousands of dollars and, in some cases, their homes.
The suit said the lawyers used “a variety of deceptive advertising and marketing techniques to persuade homeowners they had been victims of ‘predatory lending.’” They claimed that suing the lenders would give the homeowners leverage in obtaining a loan modification, staving off foreclosure or collecting damages.
Many clients took the advice “and as a result placed themselves in even greater danger of losing their homes,” the attorney general’s suit said. “Defendants then bilk their clients for months, collecting thousands of dollars in fees for ‘legal services,’ when in reality [they] do little more than file and serve a boiler-plate complaint. In order to keep the monthly payments flowing, Defendants dodge their clients’ phone calls, refuse to provide their clients any accounting of how their money is being spent and/or string their clients along with false assurances that a settlement is in progress, or that litigation takes time.”
Sandison also was named by the State Bar in a separate case in October. He was charged with hiding $300,000 in collections he received on behalf of his client, failing to put funds into a client trust account and stealing money from his partner and client.
http://www.calbarjournal.com/November2010/TopHeadlines/TH9.aspx
Short Sales Resisted as Foreclosures Are Revived
From the N.Y. Times:
By MICHAEL POWELL
PHOENIX — Bank of America and GMAC are firing up their formidable foreclosure machines again today, after a brief pause.
But hard-pressed homeowners like Lydia Sweetland are asking why lenders often balk at a less disruptive solution: short sales, which allow owners to sell deeply devalued homes for less than what remains on their mortgage.
Ms. Sweetland, 47, tried such a sale this summer out of desperation. She had lost her high-paying job and drained her once-flush retirement savings, and her bank, GMAC, wouldn’t modify her mortgage. After seven months of being unable to pay her mortgage, she decided that a short sale would give her more time to move out of her Phoenix home and damage her credit rating less than a foreclosure.
She owes $206,000 and found a buyer who would pay $200,000. Last Friday, GMAC rejected that offer and said it would foreclose in seven days, even though, according to Ms. Sweetland’s broker, the bank estimates it will make $19,000 less on a foreclosure than on a short sale.
“I guess I could salute and say, ‘O.K., I’m walking, here’s the keys,’ ” says Ms. Sweetland, as she sits in a plastic Adirondack chair on her patio. “But I need a little time, and I don’t want to just leave the house vacant. I loved this neighborhood.”
GMAC declined to be interviewed about Ms. Sweetland’s case.
The halt in most foreclosures the last few weeks gave a hint of hope to homeowners like Ms. Sweetland, who found breathing room to pursue alternatives. Consumer advocates took the view that this might pressure banks to offer mortgage modifications on better terms and perhaps drive interest in short sales, which are rising sharply in many corners of the nation.
But some major lenders took a quick inventory of their foreclosure practices and insisted their processes were sound. They now seem intent on resuming foreclosures. And that could have a profound effect on many homeowners.
In Arizona, thousands of homeowners have turned to short sales to avoid foreclosures, and many end up running a daunting procedural gantlet. Several of the largest lenders have set up complicated and balky application systems.
Concerns about fraud are one of the reasons lenders are so careful about short sales. Sometimes well-off homeowners want to portray their finances as dire and cut their losses on a property. In other instances, distressed homeowners try to make a short sale to a relative, who would then sell it back to them (a practice that is illegal). A recent industry report estimates that short sale fraud occurs in at least 2 percent of sales and costs banks about $300 million annually.
Short sales are also hindered when homeowners fail to forward the proper papers, have tax liens or cannot find a buyer.
Because of such concerns, homeowners often are instructed that they must be delinquent and they must apply for a modification first, even if chances of approval are slim. The aversion to short sales also leads banks to take many months to process applications, and some lenders set unrealistically high sales prices — known as broker price opinions — and hire workers who say they are poorly trained.
As a result, quite a few homeowners seeking short sales — banks will not provide precise numbers — topple into foreclosure, sometimes, critics say, for reasons that are hard to understand. Ms. Sweetland and her broker say they are confounded by her foreclosure, because in Arizona’s depressed real estate market, foreclosed homes often sit vacant for many months before banks are able to resell them.
“Banks are historically reluctant to do short sales, fearing that somehow the homeowner is getting an advantage on them,” said Diane E. Thompson, of counsel to the National Consumer Law Center. “There’s this irrational belief that if you foreclose and hold on to the property for six months, somehow prices will rebound.”
Homeowners, advocates and realty agents offer particularly pointed criticism of Bank of America, the nation’s largest servicer of mortgages, and a recipient of billions of dollars in federal bailout aid. Its holdings account for 31 percent of the pending foreclosures in Maricopa County, which includes Phoenix and Scottsdale, according to an analysis for The Arizona Republic.
The bank instructs real estate agents to use its computer program to evaluate short sales. But in three cases observed by The New York Times in collaboration with two real estate agents, the bank’s system repeatedly asked for and lost the same information and generated inaccurate responses.
In half a dozen more cases examined by The New York Times, Bank of America rejected short sale offers, foreclosed and auctioned off houses at lower prices.
“When I hear that a client’s mortgage is held by Bank of America, I just sigh. Our chances of getting an approval for them just went from 90 percent to 50-50,” said Benjamin Toma, who has a family-run real estate agency in Phoenix.
Bank of America officials also declined interview requests. A Bank of America spokeswoman said in an e-mail that the bank had processed 61,000 short sales nationwide this year; she declined to provide numbers for Arizona or to discuss criticisms of the company’s processing.
Fannie Mae, the mortgage finance company with federal backing, gives cash incentives to encourage servicers, who are affiliated with banks and who oversee great bundles of delinquent mortgages, to approve short sales.
But less obvious financial incentives can push toward a foreclosure rather than a short sale. Servicers can reap high fees from foreclosures. And lenders can try to collect on private mortgage insurance.
Some advocates and real estate agents also point to an April 2009 regulatory change in an obscure federal accounting law. The change, in effect, allowed banks to foreclose on a home without having to write down a loss until that home was sold. By contrast, if a bank agrees to a short sale, it must mark the loss immediately.
Short sales, to be sure, are no free ride for homeowners. They take a hit to their credit ratings, although for three to five years rather than seven after a foreclosure. An owner seeking a short sale must satisfy a laundry list of conditions, including making a detailed disclosure of income, tax and credit liens. And owners must prove that they have no connection to the buyer.
Still, bank decision-making, at least from a homeowner’s perspective, often appears arbitrary. That is certainly the view of Nicholas Yannuzzi, who after 30 years in Arizona still talks with a Philadelphia rasp. Mr. Yannuzzi has owned five houses over time, without any financial problems. When his wife was diagnosed with bone cancer, he put 20 percent down and bought a ranch house in North Scottsdale so that she would not have to climb stairs.
In the last few years, his wife died, he lost his job and he used his retirement fund to pay his mortgage for five months. His bank, Wells Fargo, denied his mortgage modification request and then his request for a short sale.
The bank officer told him that Fannie Mae, which held the mortgage, would not take a discount. At the end of last week, he was waiting to be locked out of his home.
“I’m a proud man. I’ve worked since I was 20 years old,” he said. “But I’ve run out of my 79 weeks of unemployment, so that’s it.”
He shrugged. “I try to keep in the frame of mind that a lot of people have it worse than me.”
Back in Phoenix, Ms. Sweetland’s real estate agent, Sherry Rampy, appeared to receive good news last week. GMAC re-examined her client’s application and suggested it might be approved.
But the bank attached a condition: Ms. Sweetland must come up with $2,000 in closing costs or pay $100 a month for 50 months to the bank. Ms. Sweetland, however, is flat broke.
A late afternoon desert sun angles across her Pasadena neighborhood.
“After this, I’ll never buy again,” Ms. Sweetland says. “This is not the American dream. This is not my American dream.”
By MICHAEL POWELL
PHOENIX — Bank of America and GMAC are firing up their formidable foreclosure machines again today, after a brief pause.
But hard-pressed homeowners like Lydia Sweetland are asking why lenders often balk at a less disruptive solution: short sales, which allow owners to sell deeply devalued homes for less than what remains on their mortgage.
Ms. Sweetland, 47, tried such a sale this summer out of desperation. She had lost her high-paying job and drained her once-flush retirement savings, and her bank, GMAC, wouldn’t modify her mortgage. After seven months of being unable to pay her mortgage, she decided that a short sale would give her more time to move out of her Phoenix home and damage her credit rating less than a foreclosure.
She owes $206,000 and found a buyer who would pay $200,000. Last Friday, GMAC rejected that offer and said it would foreclose in seven days, even though, according to Ms. Sweetland’s broker, the bank estimates it will make $19,000 less on a foreclosure than on a short sale.
“I guess I could salute and say, ‘O.K., I’m walking, here’s the keys,’ ” says Ms. Sweetland, as she sits in a plastic Adirondack chair on her patio. “But I need a little time, and I don’t want to just leave the house vacant. I loved this neighborhood.”
GMAC declined to be interviewed about Ms. Sweetland’s case.
The halt in most foreclosures the last few weeks gave a hint of hope to homeowners like Ms. Sweetland, who found breathing room to pursue alternatives. Consumer advocates took the view that this might pressure banks to offer mortgage modifications on better terms and perhaps drive interest in short sales, which are rising sharply in many corners of the nation.
But some major lenders took a quick inventory of their foreclosure practices and insisted their processes were sound. They now seem intent on resuming foreclosures. And that could have a profound effect on many homeowners.
In Arizona, thousands of homeowners have turned to short sales to avoid foreclosures, and many end up running a daunting procedural gantlet. Several of the largest lenders have set up complicated and balky application systems.
Concerns about fraud are one of the reasons lenders are so careful about short sales. Sometimes well-off homeowners want to portray their finances as dire and cut their losses on a property. In other instances, distressed homeowners try to make a short sale to a relative, who would then sell it back to them (a practice that is illegal). A recent industry report estimates that short sale fraud occurs in at least 2 percent of sales and costs banks about $300 million annually.
Short sales are also hindered when homeowners fail to forward the proper papers, have tax liens or cannot find a buyer.
Because of such concerns, homeowners often are instructed that they must be delinquent and they must apply for a modification first, even if chances of approval are slim. The aversion to short sales also leads banks to take many months to process applications, and some lenders set unrealistically high sales prices — known as broker price opinions — and hire workers who say they are poorly trained.
As a result, quite a few homeowners seeking short sales — banks will not provide precise numbers — topple into foreclosure, sometimes, critics say, for reasons that are hard to understand. Ms. Sweetland and her broker say they are confounded by her foreclosure, because in Arizona’s depressed real estate market, foreclosed homes often sit vacant for many months before banks are able to resell them.
“Banks are historically reluctant to do short sales, fearing that somehow the homeowner is getting an advantage on them,” said Diane E. Thompson, of counsel to the National Consumer Law Center. “There’s this irrational belief that if you foreclose and hold on to the property for six months, somehow prices will rebound.”
Homeowners, advocates and realty agents offer particularly pointed criticism of Bank of America, the nation’s largest servicer of mortgages, and a recipient of billions of dollars in federal bailout aid. Its holdings account for 31 percent of the pending foreclosures in Maricopa County, which includes Phoenix and Scottsdale, according to an analysis for The Arizona Republic.
The bank instructs real estate agents to use its computer program to evaluate short sales. But in three cases observed by The New York Times in collaboration with two real estate agents, the bank’s system repeatedly asked for and lost the same information and generated inaccurate responses.
In half a dozen more cases examined by The New York Times, Bank of America rejected short sale offers, foreclosed and auctioned off houses at lower prices.
“When I hear that a client’s mortgage is held by Bank of America, I just sigh. Our chances of getting an approval for them just went from 90 percent to 50-50,” said Benjamin Toma, who has a family-run real estate agency in Phoenix.
Bank of America officials also declined interview requests. A Bank of America spokeswoman said in an e-mail that the bank had processed 61,000 short sales nationwide this year; she declined to provide numbers for Arizona or to discuss criticisms of the company’s processing.
Fannie Mae, the mortgage finance company with federal backing, gives cash incentives to encourage servicers, who are affiliated with banks and who oversee great bundles of delinquent mortgages, to approve short sales.
But less obvious financial incentives can push toward a foreclosure rather than a short sale. Servicers can reap high fees from foreclosures. And lenders can try to collect on private mortgage insurance.
Some advocates and real estate agents also point to an April 2009 regulatory change in an obscure federal accounting law. The change, in effect, allowed banks to foreclose on a home without having to write down a loss until that home was sold. By contrast, if a bank agrees to a short sale, it must mark the loss immediately.
Short sales, to be sure, are no free ride for homeowners. They take a hit to their credit ratings, although for three to five years rather than seven after a foreclosure. An owner seeking a short sale must satisfy a laundry list of conditions, including making a detailed disclosure of income, tax and credit liens. And owners must prove that they have no connection to the buyer.
Still, bank decision-making, at least from a homeowner’s perspective, often appears arbitrary. That is certainly the view of Nicholas Yannuzzi, who after 30 years in Arizona still talks with a Philadelphia rasp. Mr. Yannuzzi has owned five houses over time, without any financial problems. When his wife was diagnosed with bone cancer, he put 20 percent down and bought a ranch house in North Scottsdale so that she would not have to climb stairs.
In the last few years, his wife died, he lost his job and he used his retirement fund to pay his mortgage for five months. His bank, Wells Fargo, denied his mortgage modification request and then his request for a short sale.
The bank officer told him that Fannie Mae, which held the mortgage, would not take a discount. At the end of last week, he was waiting to be locked out of his home.
“I’m a proud man. I’ve worked since I was 20 years old,” he said. “But I’ve run out of my 79 weeks of unemployment, so that’s it.”
He shrugged. “I try to keep in the frame of mind that a lot of people have it worse than me.”
Back in Phoenix, Ms. Sweetland’s real estate agent, Sherry Rampy, appeared to receive good news last week. GMAC re-examined her client’s application and suggested it might be approved.
But the bank attached a condition: Ms. Sweetland must come up with $2,000 in closing costs or pay $100 a month for 50 months to the bank. Ms. Sweetland, however, is flat broke.
A late afternoon desert sun angles across her Pasadena neighborhood.
“After this, I’ll never buy again,” Ms. Sweetland says. “This is not the American dream. This is not my American dream.”
Lawyers got it right on the foreclosure mess
By Eugene Robinson
Friday, October 22, 2010; A25
Don't blame the lawyers. The crisis over faulty or fraudulent paperwork in mortgage foreclosures -- which is either a big deal or a humongous deal, depending on which experts you believe -- is the fault of arrogant, greedy lenders who played fast and loose with the basic property rights of homeowners.
Banks and other lenders, it seems, made statements in courts of law that turned out not to be true. Because judges have such an underdeveloped sense of humor when it comes to prevarication, this mess may be with us for a while.
The mortgage industry would love to blame the whole thing on predatory, opportunistic lawyers who are seizing on mere technicalities to forestall untold numbers of foreclosures that should legitimately proceed. The bankers are right when they complain that the delays are gumming up the housing market, as potential buyers for soon-to-be-foreclosed properties are forced to bide their time until all the questions about documentation and proper title are answered.
But it's the bankers' fault that there are so many instances of foreclosure documentation with legal loopholes big enough to drive a moving van through. During the years of the real estate boom, lenders cut corners with paperwork to make as many loans -- and sell them to other lenders, which often sliced and diced them into securities that were then sold to investors -- as quickly as possible. This haste and inattention to detail, now coming to light, are partly responsible for the current crisis.
Laws vary from state to state, but all accept the principle that borrowers who fail to meet the contractual obligation to pay their mortgages can be subject to foreclosure and eviction. The process is devastating for families and for neighborhoods. In many cases, I believe, all parties would be better off if some way could be found to avoid foreclosure -- modifying the terms of the loan, say, by lowering the interest rate or even reducing the principal to reflect the fall in housing prices. I recognize, however, that there are many other cases in which foreclosure is the preferable option or perhaps the only option.
But it's also necessary that the mortgage holder have the legal right to foreclose. Anyone who has ever bought a house is familiar with the inches-thick stack of documents that have to be signed, sealed, initialed and notarized. It turns out that financial institutions often didn't dot every "i" or cross every "t" -- meaning that in some cases, it may not be clear that the nominal mortgage holder has the clear and undisputed right to take possession of the property.
These may be technicalities, but there's nothing mere about them. For one thing, if borrowers are expected to play by the rules, lenders should be expected to do the same. For another, there can't be a functioning real estate market without the ability to establish clear title. Lawyers probing this aspect of the foreclosure crisis are doing the system a favor.
The other big problem is that lenders have been processing foreclosures with assembly-line speed, eliminating delay wherever possible -- sometimes substituting electronic signatures for the ink-on-paper kind, for example. In the information age, some of this qualifies as sensible streamlining. But what doesn't make sense is moving the foreclosure documents along so quickly, and in such overwhelming volume, that the people signing them -- whether by computer or quill pen -- couldn't possibly have time to read them. We now know that some individuals, working as processors, have been signing off on up to 10,000 foreclosure documents a month.
In 23 states, every foreclosure must involve a court hearing. Sharp-eyed attorneys, representing delinquent homeowners, have unearthed cases in which high-volume "robo-signers" submitted affidavits attesting that they reviewed all the loan files personally -- when, in fact, they had not. This is just the sort of thing that puts judges in a really bad mood.
The Obama administration has declined to call for an official moratorium on foreclosures. This is understandable: In most cases a moratorium would just delay the inevitable, while impeding any momentum the housing market might otherwise be able to build.
But maybe the crisis will make the banks realize that they ought to be doing fewer foreclosures and more loan modifications -- sensible adjustments that allow deserving families to stay in their homes. And if this happens, we'll have the lawyers to thank.
eugenerobinson@washpost.com
Friday, October 22, 2010; A25
Don't blame the lawyers. The crisis over faulty or fraudulent paperwork in mortgage foreclosures -- which is either a big deal or a humongous deal, depending on which experts you believe -- is the fault of arrogant, greedy lenders who played fast and loose with the basic property rights of homeowners.
Banks and other lenders, it seems, made statements in courts of law that turned out not to be true. Because judges have such an underdeveloped sense of humor when it comes to prevarication, this mess may be with us for a while.
The mortgage industry would love to blame the whole thing on predatory, opportunistic lawyers who are seizing on mere technicalities to forestall untold numbers of foreclosures that should legitimately proceed. The bankers are right when they complain that the delays are gumming up the housing market, as potential buyers for soon-to-be-foreclosed properties are forced to bide their time until all the questions about documentation and proper title are answered.
But it's the bankers' fault that there are so many instances of foreclosure documentation with legal loopholes big enough to drive a moving van through. During the years of the real estate boom, lenders cut corners with paperwork to make as many loans -- and sell them to other lenders, which often sliced and diced them into securities that were then sold to investors -- as quickly as possible. This haste and inattention to detail, now coming to light, are partly responsible for the current crisis.
Laws vary from state to state, but all accept the principle that borrowers who fail to meet the contractual obligation to pay their mortgages can be subject to foreclosure and eviction. The process is devastating for families and for neighborhoods. In many cases, I believe, all parties would be better off if some way could be found to avoid foreclosure -- modifying the terms of the loan, say, by lowering the interest rate or even reducing the principal to reflect the fall in housing prices. I recognize, however, that there are many other cases in which foreclosure is the preferable option or perhaps the only option.
But it's also necessary that the mortgage holder have the legal right to foreclose. Anyone who has ever bought a house is familiar with the inches-thick stack of documents that have to be signed, sealed, initialed and notarized. It turns out that financial institutions often didn't dot every "i" or cross every "t" -- meaning that in some cases, it may not be clear that the nominal mortgage holder has the clear and undisputed right to take possession of the property.
These may be technicalities, but there's nothing mere about them. For one thing, if borrowers are expected to play by the rules, lenders should be expected to do the same. For another, there can't be a functioning real estate market without the ability to establish clear title. Lawyers probing this aspect of the foreclosure crisis are doing the system a favor.
The other big problem is that lenders have been processing foreclosures with assembly-line speed, eliminating delay wherever possible -- sometimes substituting electronic signatures for the ink-on-paper kind, for example. In the information age, some of this qualifies as sensible streamlining. But what doesn't make sense is moving the foreclosure documents along so quickly, and in such overwhelming volume, that the people signing them -- whether by computer or quill pen -- couldn't possibly have time to read them. We now know that some individuals, working as processors, have been signing off on up to 10,000 foreclosure documents a month.
In 23 states, every foreclosure must involve a court hearing. Sharp-eyed attorneys, representing delinquent homeowners, have unearthed cases in which high-volume "robo-signers" submitted affidavits attesting that they reviewed all the loan files personally -- when, in fact, they had not. This is just the sort of thing that puts judges in a really bad mood.
The Obama administration has declined to call for an official moratorium on foreclosures. This is understandable: In most cases a moratorium would just delay the inevitable, while impeding any momentum the housing market might otherwise be able to build.
But maybe the crisis will make the banks realize that they ought to be doing fewer foreclosures and more loan modifications -- sensible adjustments that allow deserving families to stay in their homes. And if this happens, we'll have the lawyers to thank.
eugenerobinson@washpost.com
Foreclosure Furor Rises - Many Call for a Freeze - NYTimes.com
By DAVID STREITFELD and GRETCHEN MORGENSON
The uproar over bad conduct by mortgage lenders intensified Tuesday, as lawmakers in Washington requested a federal investigation and the attorney general in Texas joined a chorus of state law enforcement figures calling for freezes on all foreclosures.
Representative Nancy Pelosi, the House speaker, and 30 other Democratic representatives from California told the Justice Department, the Federal Reserve and the comptroller of the currency that “it is time that banks are held accountable for their practices.”
In a request for an investigation into questionable foreclosure practices by lenders, the lawmakers said that “the excuses we have heard from financial institutions are simply not credible."
Officials from the federal agencies declined to comment.
Texas Attorney General Greg Abbott, a Republican, sent letters to 30 lenders demanding they stop foreclosures, evictions and the sale of foreclosed properties until they could provide assurances that they were proceeding legally.
Both developments indicated that scarcely two weeks after the country’s fourth-biggest lender, GMAC Mortgage, revealed that it was suspending all foreclosures in the 23 states where the process requires judicial approval, concerns about flawed foreclosures had mushroomed into a nationwide problem.
Some of the finger-pointing was also being directed back at Congress. The Ohio secretary of state, Jennifer Brunner, suggested in a telephone interview on Tuesday that a bill passed by Congress last week about notarizations could facilitate foreclosure fraud.
Dubious notary practices used by banks to justify foreclosures have come under scrutiny in recent weeks as GMAC and other top lenders suspended homeowner evictions over possible improper procedures.
Ms. Brunner, who has recently referred possible cases of notary fraud in her state to federal authorities, worries that the legislation would allow the lowest standard for notaries to become a nationwide practice. She said she also worried that the changes were coming in the middle of a foreclosure storm where people could lose their homes improperly.
“A notary’s signature is that of a trusted, impartial third party, whose notarization bolsters the integrity of the document,” Ms. Brunner said. “To take away the safeguards of notarization means foreclosure procedures could be more susceptible to fraud.”
As banks’ foreclosure practices have come under the microscope, problems with notarizations on mortgage assignments have emerged. These documents transfer the ownership of the underlying note from one institution to another and are required for foreclosures to proceed.
In some cases, the notarizations predated the preparation of the legal documents, suggesting that signatures were not reviewed by a notary. Other notarizations took place in offices far away from where the documents were signed, indicating that the notaries might not have witnessed the signings as the law required.
Notary practices vary from state to state and the bill, sponsored by Representative Robert B. Aderholt, a Republican from Alabama, would essentially require that one state’s rules be accepted by others. If one state allows its notaries to sign off on electronic signatures, for example, documents carrying such signatures and notarized by officials in that state would have to be recognized and accepted in any state or federal court.
Ms. Brunner pointed out that some states had adopted “electronic notarization” laws that ignored the requirement of a signer’s personal appearance before a notary. “Many of these policies for electronic notarization are driven by technology rather than by principle, and they are dangerous to consumers,” she said.
Mr. Aderholt had introduced the bill twice before and both times it passed the House of Representatives but not the Senate. Mr. Aderholt reintroduced the bill last October and it passed the Senate on Sept. 29. It is awaiting President Obama’s signature.
Mr. Aderholt’s press secretary, Darrell Jordan, said there was no connection between the timing of the bill and the current notarization problems with foreclosures. In a statement announcing the bill’s passage, Mr. Aderholt said: “This legislation will help businesses around the nation by eliminating the confusion which arises when states refuse to acknowledge the integrity of documents notarized out of state.”
Last week, JPMorgan Chase and Bank of America joined GMAC in suspending foreclosures in the states where they must be approved by a judge. The judicial states do not include California or Texas. But Mr. Abbott, the Texas attorney general, told lenders in letters dated Oct. 4 that if they used so-called robo-signers — employees who signed thousands of foreclosure affidavits a month, falsely attesting that they had reviewed the material — it would be a violation of Texas law.
As a result, he wrote, “the document and therefore the foreclosure sale would have been invalid.”
The three lenders who are at the center of the controversy, GMAC Mortgage, JPMorgan Chase and Bank of America, declined to comment. Other lenders singled out by Mr. Abbott include Wells Fargo, CitiMortgage, HSBC and National City.
Meanwhile, shares of a major foreclosure outsourcing company, Lender Processing Services of Jacksonville, Fla., fell 5 percent on Tuesday, adding to a slide that began last week.
The company’s documentation practices are stirring questions, including how the same employee can have wildly varying signatures on mortgage documents. L.P.S. blamed a midlevel manager’s decision to allow employees to sign forms in the name of an authorized employee. It says it has stopped the practice.
The United States Attorney’s Office in Tampa began investigating L.P.S. in February. An L.P.S. representative could not be reached Tuesday for comment.
Other calls for investigations came from Senators Al Franken, a Democrat from Minnesota, and Robert Menendez, a Democrat from New Jersey.
Foreclosure Furor Rises - Many Call for a Freeze - NYTimes.com
The uproar over bad conduct by mortgage lenders intensified Tuesday, as lawmakers in Washington requested a federal investigation and the attorney general in Texas joined a chorus of state law enforcement figures calling for freezes on all foreclosures.
Representative Nancy Pelosi, the House speaker, and 30 other Democratic representatives from California told the Justice Department, the Federal Reserve and the comptroller of the currency that “it is time that banks are held accountable for their practices.”
In a request for an investigation into questionable foreclosure practices by lenders, the lawmakers said that “the excuses we have heard from financial institutions are simply not credible."
Officials from the federal agencies declined to comment.
Texas Attorney General Greg Abbott, a Republican, sent letters to 30 lenders demanding they stop foreclosures, evictions and the sale of foreclosed properties until they could provide assurances that they were proceeding legally.
Both developments indicated that scarcely two weeks after the country’s fourth-biggest lender, GMAC Mortgage, revealed that it was suspending all foreclosures in the 23 states where the process requires judicial approval, concerns about flawed foreclosures had mushroomed into a nationwide problem.
Some of the finger-pointing was also being directed back at Congress. The Ohio secretary of state, Jennifer Brunner, suggested in a telephone interview on Tuesday that a bill passed by Congress last week about notarizations could facilitate foreclosure fraud.
Dubious notary practices used by banks to justify foreclosures have come under scrutiny in recent weeks as GMAC and other top lenders suspended homeowner evictions over possible improper procedures.
Ms. Brunner, who has recently referred possible cases of notary fraud in her state to federal authorities, worries that the legislation would allow the lowest standard for notaries to become a nationwide practice. She said she also worried that the changes were coming in the middle of a foreclosure storm where people could lose their homes improperly.
“A notary’s signature is that of a trusted, impartial third party, whose notarization bolsters the integrity of the document,” Ms. Brunner said. “To take away the safeguards of notarization means foreclosure procedures could be more susceptible to fraud.”
As banks’ foreclosure practices have come under the microscope, problems with notarizations on mortgage assignments have emerged. These documents transfer the ownership of the underlying note from one institution to another and are required for foreclosures to proceed.
In some cases, the notarizations predated the preparation of the legal documents, suggesting that signatures were not reviewed by a notary. Other notarizations took place in offices far away from where the documents were signed, indicating that the notaries might not have witnessed the signings as the law required.
Notary practices vary from state to state and the bill, sponsored by Representative Robert B. Aderholt, a Republican from Alabama, would essentially require that one state’s rules be accepted by others. If one state allows its notaries to sign off on electronic signatures, for example, documents carrying such signatures and notarized by officials in that state would have to be recognized and accepted in any state or federal court.
Ms. Brunner pointed out that some states had adopted “electronic notarization” laws that ignored the requirement of a signer’s personal appearance before a notary. “Many of these policies for electronic notarization are driven by technology rather than by principle, and they are dangerous to consumers,” she said.
Mr. Aderholt had introduced the bill twice before and both times it passed the House of Representatives but not the Senate. Mr. Aderholt reintroduced the bill last October and it passed the Senate on Sept. 29. It is awaiting President Obama’s signature.
Mr. Aderholt’s press secretary, Darrell Jordan, said there was no connection between the timing of the bill and the current notarization problems with foreclosures. In a statement announcing the bill’s passage, Mr. Aderholt said: “This legislation will help businesses around the nation by eliminating the confusion which arises when states refuse to acknowledge the integrity of documents notarized out of state.”
Last week, JPMorgan Chase and Bank of America joined GMAC in suspending foreclosures in the states where they must be approved by a judge. The judicial states do not include California or Texas. But Mr. Abbott, the Texas attorney general, told lenders in letters dated Oct. 4 that if they used so-called robo-signers — employees who signed thousands of foreclosure affidavits a month, falsely attesting that they had reviewed the material — it would be a violation of Texas law.
As a result, he wrote, “the document and therefore the foreclosure sale would have been invalid.”
The three lenders who are at the center of the controversy, GMAC Mortgage, JPMorgan Chase and Bank of America, declined to comment. Other lenders singled out by Mr. Abbott include Wells Fargo, CitiMortgage, HSBC and National City.
Meanwhile, shares of a major foreclosure outsourcing company, Lender Processing Services of Jacksonville, Fla., fell 5 percent on Tuesday, adding to a slide that began last week.
The company’s documentation practices are stirring questions, including how the same employee can have wildly varying signatures on mortgage documents. L.P.S. blamed a midlevel manager’s decision to allow employees to sign forms in the name of an authorized employee. It says it has stopped the practice.
The United States Attorney’s Office in Tampa began investigating L.P.S. in February. An L.P.S. representative could not be reached Tuesday for comment.
Other calls for investigations came from Senators Al Franken, a Democrat from Minnesota, and Robert Menendez, a Democrat from New Jersey.
Foreclosure Furor Rises - Many Call for a Freeze - NYTimes.com
Consumer bankruptcy filings climb 11% - MarketWatch
By Alistair Barr
SAN FRANCISCO (MarketWatch) -- U.S. consumer bankruptcy filings rose 11% in the first nine months of this year, versus the same period in 2009, the American Bankruptcy Institute said Monday, citing data from the National Bankruptcy Research Center. Filings totaled 1,165,172 nationwide during the first nine months of 2010, compared to 1,046,449 total consumer filings during the same period a year ago. The bankruptcy filings so far in 2010 represent the highest total since 2005. "We expect that there will be nearly 1.6 million new bankruptcy filings by year end," ABI Executive Director Samuel Gerdano said in a statement. Consumer bankruptcies totalled 130,329 in September. That was 3.3% up from August 2010.
Consumer bankruptcy filings climb 11% - MarketWatch
SAN FRANCISCO (MarketWatch) -- U.S. consumer bankruptcy filings rose 11% in the first nine months of this year, versus the same period in 2009, the American Bankruptcy Institute said Monday, citing data from the National Bankruptcy Research Center. Filings totaled 1,165,172 nationwide during the first nine months of 2010, compared to 1,046,449 total consumer filings during the same period a year ago. The bankruptcy filings so far in 2010 represent the highest total since 2005. "We expect that there will be nearly 1.6 million new bankruptcy filings by year end," ABI Executive Director Samuel Gerdano said in a statement. Consumer bankruptcies totalled 130,329 in September. That was 3.3% up from August 2010.
Consumer bankruptcy filings climb 11% - MarketWatch
Subscribe to:
Posts (Atom)