San Francisco Bankruptcy Lawyer Blog

Far from the Bay Area, let us pause this New Year's Eve to note the Chapter 7 Bankruptcy of New York's famed Tavern on the Green. The Central Park West landmark is scheduled to serve patrons for the last time tonight. Its famously glitzy décor goes on the auction block in two weeks as the owners struggle through bankruptcy proceedings and seek funds to pay off their debts. The restaurant is reported to have hundreds of creditors.

The tale of Tavern's Chapter 7 bankruptcy also is a reminder of how complex and acrimonious liquidation can be. According to a recent article in the Wall Street Journal, Tavern's "closing has touched off a flurry of litigation." Among other things, members of the family that owns the restaurant are reportedly suing each other. The family is also locked in a dispute with New York City over ownership of the restaurant's name (which, the Journal reports, has been appraised at $19 million).

It is all a very fast and hard come-down for a property that as recently as last year was the second-highest grossing independent restaurant in the country (though, as a number of media observers have noted in recent months, with the Tavern's famous glitz came extremely high overheads).

The restaurant business, of course, is notorious for both low margins and a fickle clientele. San Francisco, with its many restaurant bankruptcies, is no exception to this rule. The Tavern's woes are, however, a reminder of the importance of having an experienced Bay Area Chapter 7 Bankruptcy law firm behind you when tackling the often messy process of liquidating a business. The number of creditors, lawsuits and counter-suits associated with Tavern's closing may be a bit extreme, but the idea that bankruptcies can generate litigation and bad feeling is not. Enlisting the services of an experienced California bankruptcy attorney early in the process is a good first step toward keeping things orderly and ensuring that these difficult situations unfold smoothly.

Wall Street Journal: Lights go out at famed New York eatery

Reuters: NY's Tavern on the Green to sell art, chandeliers

One aspect of foreclosure prevention that is rarely discussed here in Northern California and elsewhere around the country involves renting; specifically, holding onto your property by moving out of it yourself and becoming a landlord. A recent article in the New York Times examines this phenomenon of the 'accidental landlord', as well as offering tips for those finding themselves in such a situation.

More than a few California foreclosure prevention programs are out there: from the federal government's Making Home Affordable initiative to various - sometimes rather dubious - private schemes. Many of these focus on refinancing, or arranging California mediation or loan modification schemes. For some Bay area homeowners, however, it may be viable to move to a smaller, cheaper apartment while putting one's own house, condo or apartment on the market as a rental. As the Times outlines, this can create new and unforeseen problems for some: learning how to assess tenants, and how to deal with a landlord's responsibility for maintenance, for example.

Making the transition from owner-occupier to landlord also, however, entails significant changes in the way you approach such issues as taxes, government permits and relations with your own lenders. These are areas where the services of an experienced Bay Area foreclosure prevention law firm can be invaluable. Skilled legal consul is essential if this is your first experience as a landlord and should be a component of a business plan even for experienced property owners. A full-service San Francisco foreclosure prevention lawyer can advise whether becoming a landlord is a Walnut Creek foreclosure prevention strategy that makes sense for you.

New York Times: Resources for Accidental Landlords

As I have noted on several recent occasions, the government's Making Home Affordable program has come under criticism on several fronts. The program was intended to help responsible homeowners in California and elsewhere in the country hold onto their properties by assisting them with California loan modifications.

New proof that this program and numerous similar efforts have failed to live up to their promise came a few days ago in the San Francisco Chronicle. As the paper reports, only about 31,000 homeowners nationwide have received government-assisted loan modifications this year, even as the number of homes facing foreclosure in 2010 is now estimated at around 1.7 million.

It is at times like these that the assistance of a Bay Area loan modification attorney can be invaluable. A skilled San Francisco loan modification lawyer can advise you on the advantages and disadvantages of both government and privately arranged programs, as well as representing you when you do, finally, sit down with your lenders.

Holding onto your home in these economically difficult times can be a challenge. Putting an experienced loan and negotiation professional in your corner can make all of the difference between success and failure.

San Francisco Chronicle: 2009's mortgage modifications pretty minor

Though there have been some hints of good economic news, as a wrenching 2009 draws to a close, California foreclosures remain among the highest in the nation. For many Northern California residents the housing and mortgage crises are still very real. The longer-term picture is equally mixed. Nationally, many trends look good. As the links below outline, however, new potential problems also loom.

The latest California real estate complication concerns what are known as 'shadow foreclosures' or, alternately, 'shadow inventory.' These are homes that have already been foreclosed on by banks (by some measures it also includes homes on the brink of foreclosure). Because banks own these home outright they are not, technically, part of the housing stock available for sale. Banks, however, do intend to sell them, hence the term 'shadow': these units are not, formally, available but can be expected to flood into the market soon, likely depressing home prices when they do. A new round of depressed home prices could, in turn, drive more homeowners who are currently 'one the bubble' into foreclosure.

As this short summary indicates, the complications associated with Bay Area foreclosures and loan modifications are many. Whether you are trying to hold onto your property or are considering the purchase of a foreclosed, or soon-to-be-foreclosed, home consulting with a San Francisco bankruptcy and foreclosure attorney is a prudent course of action. A full-service San Francisco, Alameda County and Contra Costa County bankruptcy and loan modification law firm can help you deal with lenders, and navigate the complex and confusing foreclosure process.

KCBS: Shadow foreclosures could weigh down 2010 housing market

Bloomberg: 'Shadow' inventory of U.S. homes climbs, report says

A bit of good news on the housing front as we head into the holiday weekend: new data indicates that home prices rose slightly in the southern part of the state during November, according to the Los Angeles Times. Higher prices typically mean both that more buyers are now in the market and that the number of houses coming into the system may be declining. That, in turn, may mean that we will soon see light at the end of the tunnel of the long California foreclosure crisis.

The data, compiled by a California real estate data company, MDA DataQuick, show the median Southern California home price rising 1.8% from October to November. As the Times notes, that would make November "the seventh consecutive month in which prices have improved or held steady."

As I've noted in this blog on several recent occasions, there are a number of public and private resources available to help homeowners avoid California foreclosure through loan modification and other negotiation and mediation programs. In the broadest of senses, keeping your home out of foreclosure through a California loan modification proceeding helps not only you (because you get to keep your home) but helps the state as well (because it improves the state's housing statistics and, through them, the overall economy).

An experienced California loan modification and mediation attorney can help plan a strategy for holding onto your property and navigating the complex world of foreclosure and bankruptcy law.

Los Angeles Times: Southern California home prices and sales improve in November

A measure proposed by Congresswoman Doris Matsui (D-Sacramento) this month and approved unanimously by the US House of Representatives aims to help California homeowners seeking loan modifications through President Obama's Making Home Affordable program.

The measure requires that lenders taking part in the program "publicly report their progress in helping responsible homeowners stay in their homes." The Making Home Affordable program has recently drawn criticism after it emerged that some lenders were trumpeting the number of homeowners who had filled out preliminary paperwork while playing down the fact that very few had completed the program and successfully received loan modifications. California loan modification issues are on the mind of many Northern California homeowners because the region is among the worst hit in the nation's on-going housing and mortgage crisis.

Matsui proposed the amendment to HR 4173, the Wall Street Reform and Consumer Protection Act. The bill passed the House 223-202. A Senate version of the bill is currently stalled in committee, but may make it to the floor for consideration by the full Senate early in the New Year.

Navigating the complexities of Sacramento and Bay Area loan modification programs is a difficult and often confusing process. A Walnut Creek loan modification lawyer with experience throughout Northern California can offer crucial advice about available programs and the best way to approach your lender or lenders. Many programs are out there, but not all of them are good deals - or even reputable. Consulting with an experienced Fairfield loan modification attorney should be an essential, early step in your battle to keep your home.

RealEstateRama: Matsui anti-foreclosure amendment adopted into Wall Street Reform Act

Statement released by Rep. Matsui's office

GovTrack: Legislative history, text & status of HR 4173

Despite technical signs that the recession may be over and repeated predictions that things are getting better, new data released last week indicates that the US is on course for a second straight year of record home foreclosures. The foreclosure data, compiled by California-based RealtyTrac, is cited in a recent Bloomberg News article, reprinted in Business Week.

An ongoing national jobs crisis, combined with a weak credit market, led to more than 300,000 foreclosure filings in November, the article says. This marked the ninth straight month that foreclosures have hit that level. The numbers indicate that 2009 foreclosures will eventually total around 3.9 million, well ahead of last year's record total of 3.2 million.

Separate reports that I have frequently blogged about indicate that California foreclosure numbers are among the highest in the nation, with some Bay Area communities among the worst-hit.

Data like this highlights the need for the assistance of a Contra Costa County foreclosure lawyer if you are facing financial troubles. In San Francisco, Fairfield, Walnut Creek and elsewhere in the Bay Area a foreclosure attorney can also help you handle loan modification issues and can serve as a mediator between you and your creditors. Consulting with a Bay Area loan modification attorney can be a key step in keeping control of the foreclosure process, or preventing foreclosure entirely.

Business Week: U.S. foreclosures to reach 3.9 million in second record year

San Diego-based Fairfield Residential LLC has filed for California Chapter 11 bankruptcy, according to a recent Associated Press article. The news agency reports that the company, which owns apartment buildings throughout California and the nation, approached the California bankruptcy court with a "pre-negotiated" settlement.

Pre-negotiated California Chapter 11 bankruptcy settlements are ones in which a company only goes to court and formally declares bankruptcy after meeting with creditors and devising a reorganization plan (the General Motors bankruptcy earlier this year followed a similar format, albeit with significant government involvement). The goal is to move the company through the bankruptcy process as quickly as possible in the hope of speeding its return to profitability.

According to the AP, Fairfield says it has $958 million in assets against $835 million in debt. It hopes to emerge from bankruptcy early in the New Year.

This California pre-packaged bankruptcy is an example of one of the options about which a Northern California bankruptcy law firm can offer advice. When considering bankruptcy in San Francisco, Alameda County, Contra Costa County or elsewhere in the Bay Area it is important to have a complete picture of your options. Pre-negotiated California bankruptcies are easier to arrange when one consults with a Bay Area bankruptcy lawyer before a company's financial situation reaches critical condition.

AP: Fairfield Residential files Chapter 11 Bankruptcy

Local media reports indicate that San Francisco's landmark Four Seasons hotel may be close to filing for California Chapter 7 bankruptcy. According to an article in the San Francisco Business Times, a debt service company has rejected a request by the hotel's owners, Millennium Partners, to renegotiate a $90 million loan against the 277-room property.

Chapter 7 is the portion of the United States bankruptcy code that covers the liquidation of assets, with the bulk of the proceeds being used to pay off a bankrupt firm's creditors. It differs substantially from the better-known Chapter 11 bankruptcy, under which businesses often seek to reorganize with the goal of keeping their doors open.

The hotel's owners withheld payment on the $90 million loan in June in a bid to put pressure on their lender, LNR Property Corporation. After LNR rejected a renegotiation proposal put forward by Millennium it moved to begin California foreclosure proceedings on the property, the newspaper reported citing the credit-rating agency RealPoint.

San Francisco Chapter 7 Bankruptcies can be complex and are often difficult to manage. The assistance of an experienced California Chapter 7 bankruptcy attorney is crucial if you and your company hope to navigate your way through the process successfully. Early consultation with a Bay Area bankruptcy lawyer is a key first step.

San Francisco Business Times: Four Seasons Close to Foreclosure

Resource:
US Court System Official Website - Information page on Chapter 7 Bankruptcy

Bay Area home values continue to fall, but at a less stomach-wrenching rate. That is the nugget of good news emerging from new data reported recently by the San Francisco Chronicle.

Plunging home values and Bay Area foreclosures have made California in general, and the Bay Area in particular, among the hardest-hit parts of the country, as the nationwide housing slump continues. The data from real estate website Zillow.com, quoted by the Chronicle, shows Bay Area real estate losing over $38 billion in value during the first 11 months of 2009. While not good by any stretch of the imagination, that is still an improvement on the $233 billion wiped off Bay Area property values during 2008.

The paper also quotes housing experts noting that the decline has, to some extent, been slowed by government programs. That is good up to a point, but it also indicates that the slower pace of decline may, itself, be fragile. As the California real estate crisis continues, San Francisco loan modification services are becoming more and more important to homeowners as they seek to avoid California foreclosure proceedings at a time when their property is depressed.

It is also worth noting that the decline was far from uniform across the nine-county Bay Area. According to the Chronicle, prices dropped only slightly in the City of San Francisco while the decline was much steeper in other areas, such as San Mateo County. In Napa County prices have actually gone up.

Consulting with a Bay Area loan modification lawyer can be a crucial step in holding onto your property in these difficult economic times.

San Francisco Chronicle: Decline in home values levels off

A recent op-ed published in the Bakersfield Californian highlights an important aspect of the housing crisis that often fails to get the attention it deserves: mediation. This is an area in which many people are not aware that a Northern California bankruptcy lawyer can be helpful.

As I noted in a recent blog post, the government is moving to help stem the tide of foreclosures here in California and nationwide. The centerpiece of this effort is the Treasury Department's Making Home Affordable program.

The program, however, has been plagued by delays - partly because it is complex, and partly, the government believes, because many lenders are less than eager to reach final settlements with distressed homeowners. In situations like this, Bay Area homeowners should consider consulting with a Contra Costa County mediation attorney. As the op-ed details, a bill now being considered by the California Assembly would establish a private-sector driven mediation process, modeled on the one already in place in Nevada (by some measures the worst hit state in the current housing crisis).

Even without this legislation, however, California mediation is worth considering as a way of bridging the gap between lenders and distressed homeowners faced with San Francisco or Alameda County foreclosure. An experienced San Francisco mediation lawyer can advise clients on California bankruptcy and loan modification options, and represent clients once they move forward in substantive discussions with their mortgage lenders.

Bakersfield Californian: As foreclosure crisis keeps growing, lenders, borrowers need mediation

Obama administration officials announced last week that they are moving to break the logjam that has developed around their Making Home Affordable program. Bay Area homeowners, as well as those in the rest of California and the country at large, should soon find it easier to get much-needed loan modifications and mortgage relief, according to government officials.

According to a report in The Washington Post, about 650,000 homeowners have enrolled in the program since it débuted in March. Barely one percent of the enrollees, however, have successfully negotiated permanent modifications to their mortgages. The program was designed to offer lenders incentives to extend loan modifications to homeowners in distress, thereby helping them avoid foreclosure and bankruptcy. Homeowners who meet the program's strict criteria can have their mortgages reduced to no more than 31 percent of their incomes.

The program offers lenders financial incentives to make the cuts in mortgage payments. But the Post reports that Treasury Department officials are now threatening financial penalties if lenders across the nation do not become more cooperative, making it easier for homeowners to get first temporary, and later permanent, mortgage loan modifications.

If you do not qualify for the Making Home Affordable program - or if you do but are finding it impossible to obtain a modification - consulting with a Bay Area loan modification attorney can be a helpful step. The housing crisis has hit California harder than almost any other state, leaving banks and the government alike struggling to keep up with the demand for mortgage modifications. Mediation, or the negotiation of a loan modification agreement through a private attorney may be among the options available to you as you struggle to make payments and keep your house. An experienced Northern California loan modification lawyer can help you explore your private and public sector options.

Washington Post: U.S. steps up pressure on lenders to modify more mortgages

Canopy Financial, a San Francisco-based company making software for the medical and medical insurance industries, filed for California Chapter 11 bankruptcy last week, leaving many questions about its business activities unanswered, according to media reports.

According to a recent article in the San Francisco Business Times, the company discovered early last month that fraudulent reports had been sent to its lenders and investors. As the business-news website Venture Beat asked in the wake of Canopy's San Francisco Chapter 11 Bankruptcy filing, the real question this raises - one that remains unanswered - is how the company's backers failed to notice its troubles until management itself revealed them in November.

The difficulties at Canopy highlight the important role a San Francisco bankruptcy attorney can play in helping both to prevent a California Chapter 11 filing, and in managing the fallout from bankruptcy if it becomes inevitable.

An experienced Bay Area bankruptcy law firm can work with clients: assisting with California mediation services and helping to negotiate loan modification agreements in an effort to stave off bankruptcy.

Obviously, cases of outright fraud, as appears to have been the situation at Canopy, are a different matter entirely. For companies genuinely seeking to dig themselves out of a hole, however, consulting with a San Francisco bankruptcy lawyer can be a key step in rescuing one's business.

San Francisco Business Times: Canopy Financial Files Chapter 11

Venture Beat: Canopy Financial files for bankruptcy. Still no answers on how this happened

A recent article in the San Francisco Chronicle details how legislators in Sacramento hope to assist California homeowners facing foreclosure by setting up a state-sponsored mediation program. Similar measures have already been enacted in more than a dozen other states. California, as one of the epicenters of the national mortgage and foreclosure crisis, would seem to be a prime candidate for further assistance.

Under the proposal, lenders would not be able to reject a mediation request from homeowners facing the prospect of a California foreclosure. The article quotes Assemblyman Pedro Nava, the measure's sponsor, as saying the measure is still a "work in progress" and that any final legislation will need to include a financing mechanism.

The problem is that many people are in trouble now, and can't wait for the legislature to act. California loan modification is, of course, already available to homeowners in San Francisco, Contra Costa County and elsewhere in the Bay Area facing foreclosure. The problem is that lenders are often uncooperative. In such situations consulting a San Francisco loan modification attorney may be your best avenue.

Several federal programs seeking to help distressed homeowners already exist. An experienced Bay Area bankruptcy attorney will be aware of these, can advise clients on the options that may be available to them. A lawyer can also help in the California loan modification and mediation process, including going to bat for homeowners in dealing with uncooperative lenders. Even if the legislature does act, skilled legal assistance with your California loan modification will remain a wise choice as you fight to keep your home.

San Francisco Chronicle: State considers foreclosure mediation program

The federal government and the State of California are working together to crack down on mortgage relief scams. According to the government, con artists are seeking to exploit the economic downturn, preying on homeowners desperate to avoid foreclosure or hoping to negotiate a loan modification. Homeowners in dire financial straits should seek the services of a reputable San Francisco loan modification attorney, and avoid any offer of a loan modification that requires them to pay upfront fees.

In a press release detailing the crackdown - officially dubbed "Operation Stolen Hope" - Federal Trade commission Chairman Jon Leibowitz said of the scam artists, "These operators targeted consumers who were on the brink of financial disaster, and instead of holding them back, they pushed them over." He warned consumers against doing business with any company that demanded large advance fees or counseled homeowners to stop paying their mortgages. Leibowitz says the federal government has launched 28 legal cases against scam artists so far. Another 112 actions have been initiated by state attorneys general and other state and local agencies.

In fact, it is now illegal in California for attorneys or real estate agents to charge upfront fees for loan modification or mortgage loan forbearance services. A new law to that effect was signed by Governor Arnold Schwarzenegger in October.

A reputable, experienced Contra Costa County and Alameda County Bankruptcy lawyer can offer invaluable advice to homeowners struggling to hold onto their property. In addition to loan modifications, negotiation and other mediation services are often offered as part of a full-service California bankruptcy law practice. Consulting with a Bay Area bankruptcy attorney, and avoiding scam artists, is a key first step in the battle to keep your home.

Federal Trade Commission Press Release on "Operation Stolen Hope"

California Attorney General's press release on 'upfront fees'

Sausalito's historic Casa Madrona continued its maneuvering last week in an effort to stave off a California foreclosure sale. According to a recent report in the Marin Independent Journal a bankruptcy court has given the owners of the troubled property until next March to stabilize and reorganize their finances. The twists and turns of what is becoming a lengthy saga highlight the complexities of Bay Area Chapter 11 bankruptcy proceedings.

The historic Marin County hotel is struggling to deal with $24 million in debt, plus an unpaid tax bill of $763,000 and an additional debt of $122,000 to the Federal Deposit Insurance Corporation. It was scheduled to be sold at auction on the Marin County courthouse steps in San Rafael last August. The owners, however, bought some extra time with a last minute California Chapter 11 bankruptcy filing that initially caused the sale to be postponed until October, when it was again rescheduled. The property is currently owned by a Miami-based investment group.

Casa Madrona's troubles highlight both the flexibility and the complexity of the bankruptcy code. A skilled California bankruptcy lawyer can help clients navigate this complex legal process, searching for every possible avenue to keep your property out of foreclosure. For example, a full-service San Francisco bankruptcy law firm can assist with mediation services and loan modifications. If bankruptcy proves to be the best way forward, an experienced bankruptcy attorney can walk you through the different sections of the US bankruptcy code and help determine type of bankruptcy proceeding for particular circumstances.

Marin Independent Journal: Owners of Casa Madrona in Sausalito given more time to stabilize finances

MarinScope Sausalito: Casa Madrona Auction Delayed Again