San Francisco Bankruptcy Lawyer Blog

In May 2010, the Mortgage Bankers Association released its latest national delinquency survey. According to the survey, the "delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 10.06 percent of all loans outstanding as of the end of the first quarter of 2010, an increase of 59 basis points from the fourth quarter of 2009, and up 94 basis points from one year ago."

At the same time, the survey reported the non-seasonally adjusted delinquency rate decreased from 10.44% in the fourth quarter of 2009 to 9.38% in the first quarter, and the rate of serious delinquencies declined to 9.54% in the first quarter, down 13 basis points from the fourth quarter. Serious delinquencies are loans more than 90 days past due.

The new foreclosures remained flat, at 1.23% of outstanding loans, up 3 basis points from the fourth quarter and down 14 basis points from the 2009 first quarter.

If you have any questions with regard to bankruptcy or foreclosures, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

According to a study by the LexisNexis® Mortgage Asset Research Institute, mortgage fraud and misrepresentation increased 7% from 2008 to 2009.

Reasons the LexisNexis® Mortgage Asset Research Institute cited for the increase include "new opportunities to take advantage of consumers, maintenance of lifestyles obtained during the boom period, consumers who are desperate for the American dream of home ownership, and the need for new, creative methods of moving illicit funds." It also states that the fraud is being facilitated by technology which provides "fraudsters with the ability to access information, conduct criminal activities and remain anonymous via the internet, and manipulate processes that rely on the need for expediency."

Appraisers had a role in fraud in that "[t]he most prevalent types of appraisal fraud and misrepresentation for loans originated in 2009 involve incorrect comparables, omitted information, and value inflation. Thirty-six percent of loans with reported appraisal fraud and/or misrepresentation have misused comparables. Thirty-three percent involve a material omission of relevant information that would have affected the value. Value inflation . . . is also a large portion of reported appraisal fraud and misrepresentation."

Sometimes mortgage fraud may occur in false advertising and email scams. Consumers receiving emails should know they can file suit for unwanted emails, even when it is from banks or companies they have done business with. California's anti-spam law prohibits the sending of an uninvited commercial e-mail from California or to a state resident that misrepresents either the source or the subject of the message.

California's law allows private suits and recovery at $1000 per violation even when someone does not actually lose money or accept an offer from the unwanted email. For example, Daniel Balsam filed suit against Trancos Inc., a Redwood City, California advertising company, after he received a number of unwanted e-mails in 2007.

In Balsam's case, Balsam complained the "from" line in the eight e-mail messages he received from Trancos did not name Trancos as the sender. None of the e-mails provided a toll-free number to opt out and seven of them did not provide the ability "unsubscribe" by e-mail.

Rinne Legal provides counseling to individuals, families and small businesses in financial difficulties. Call for a no charge initial consultation.

In a speech at the Economic Club of Washington on December 7, 2009, Federal Reserve Chairman Ben S. Bernanke addressed frequently asked questions on Federal Reserve:

1. What has the Federal Reserve been doing to support the economy and the financial system?
2. Will the Federal Reserve's actions lead to higher inflation?
3. How can we avoid a similar crisis in the future?

Bernanke stated improving conditions in housing, consumer expenditure, business investment and global economic activity, but tight credit conditions and a weak job market remain. The Federal Reserve purchased "unprecedented volumes" of mortgage-related securities and Treasury debt.

After Bernanke's speech, on December 8, 2009, the House Financial Services Committee held a hearing entitled "The Private Sector and Government Response to the Mortgage Foreclosure Crisis" to review the results of the federal government's actions in preventing additional mortgage foreclosures and encouraging existing loan modifications. Chairman Barney Frank (D-MA) opened the hearing with frustration of the Committee and the public with the federal government's failure to prevent mortgage foreclosures. Committee Member Ron Klein (D-FL) said the problem with the Making Home Affordable program was the lack of documentation. JPMorgan Chase offered over 560,000 modifications to struggling homeowners through November 30, 2009, and had approved or completed over 112,000 permanent modifications under the Making Home Affordable program. Bank of America had over 160,000 customers enrolled in a trial modification program and, combined with Bank of America's loan modification programs, over 615,000 homeowners modified their loans.

These loan modification concerns raise the issue whether a lender's failure to offer loan modification is privately actionable. California has a loan modification law under Civil Code 2923.6. A district court in Fresno in Nool v. Homeq Servicing, No. 1:09-CV-0885 OWW (E.D. Cal., Sept. 4, 2009), Judge Wanger held that "the language of section (b) belies the imposition of any duty to engage in loan modification discussions, as the provision merely expresses legislative 'intent' that the mortgagee, beneficiary, or authorized agent offer the borrower a loan modification if doing so is consistent with its authority." Another case agreeing with Judge Wanger is Farner v. Countrywide Home Loans, 2009 WL 189025, at *2 (S.D. Cal. Jan.26, 2009) ("[N]othing in Cal. Civ.Code § 2923.6 imposes a duty on servicers of loans to modify the terms of loans or creates a private right of action for borrowers.").

To listen to a bankruptcy audio on mortgage cram downs and strip downs (Teleconference recorded on Dec 13, 2009 with special guest: Leanne Levett, Esq, a foreclosure specialist in Florida), go to: http://www.713training.com/mortgagecramdown/

Continue reading "Where is the Economy Headed?" »

In a sign that business conditions remain bad for many in Silicon Valley, the San Jose Mercury News reported recently that around 20% of all commercial office space in the Valley stood empty at the end of 2009 - and that experts believe office vacancies will only rise in 2010.

Citing figures from NAI/BT Commercial, a broker, the paper reports that this is the Valley's worst vacancy rate for four years. It quotes a local economist who notes that, like Bay Area home foreclosures, vacant office space represents a stock of real estate that must be "worked off" as part of the painful process of economic recovery.

As vacancy rates rise, rents are also falling. This situation could, in turn, lead to an increase in Bay Area bankruptcies if a lack of tenants leaves building owners unable to service their mortgages. Signs of a downward spiral of this sort can already be seen. The paper quotes a managing director at Silicon Valley's BT commercial saying some landlords are already in "giveaway" mode, anxious, as the paper puts it, "for any lease revenue they can get in the worst market since at least 1995." A Walnut Creek foreclosure attorney can counsel distressed property owners on loan modifications and other foreclosure prevention options.

Times like these are also a reminder of the importance of planning ahead. Beginning consultations with a San Francisco bankruptcy lawyer at an early stage - well before bankruptcy has become a certainty - can be a decisive factor in how your home or business makes it through these troubled times. A Bay Area bankruptcy attorney with a specialization in loan modification and foreclosure prevention can be a key ally in your efforts to save your property.

San Jose Mercury News: Silicon Valley office vacancies to remain high this year

Northern California's weak economy is affecting everyone but, according to a recent report in the Contra Costa Times a case can be made that the hotel industry is feeling even more pain than the rest of us. The paper reports that over $1 billion worth of Bay Area hotel properties are now in default - about 12 times the value of the hotel properties in default just one year ago.

Contra Costa County loan modifications and other measures companies can take to avoid California foreclosure do not always work. The paper notes that in this distressed economy, "fewer people are traveling for business or pleasure, or finding ways to reduce their expenses when they do travel. Cutting back on hotel stays is one way to cope with a downbeat economy."

With at least 82 Bay Area hotels currently behind two months or more on their mortgages, according to the Contra Costa Times, this is a time when the advice an experienced San Francisco bankruptcy lawyer can offer becomes more important than ever. A full-service Bay Area bankruptcy attorney can offer advice on a wide range of issues, including California foreclosure and foreclosure prevention, negotiations with creditors and loan modification programs.

As the Contra Costa Times indicates, the reasons for the decline in traffic at any particular hotel vary from one property to another. Hotels close to the Oakland Airport, for example, have suffered from a 17 percent drop off in passenger traffic there compared to 2008. An experienced Oakland and Alameda County foreclosure attorney can help make a clear-eyed assessment of your situation, a key first step in getting out from under the debts that trouble you.

Contra Costa Times: Bay Area Hotel Problems Mount

The Irvine-based data company RealtyTrac predicts that 2010 foreclosures will touch the 3 million mark, surpassing even 2009's record total of 2.82 million, according to a recent article published by Bloomberg News.

The news service also quotes a Berkeley professor saying "this will be the peak year" for California foreclosures, with the rising numbers spurred by persistent high unemployment and housing prices that have only barely begun to recover from the drop-off of the last two years.

This is, in short, an economy in which a San Francisco foreclosure attorney remains a key resource if you are struggling to make ends meet in a slowly recovering economy. As Bloomberg notes, the Obama administration has targeted 4 million homeowners nationwide for mortgage relief. Lenders, however, have been reluctant to move ahead with administration-supported loan modification programs. As a result only about 31,000 homeowners actually received 2009 mortgage loan modifications designed to help them avoid foreclosure.

The California foreclosure process can be complex and emotionally stressful. Especially in hard-hit portions of the East Bay, an Alameda County or Contra Costa County foreclosure lawyer can be a key ally, helping you navigate the process and making difficult legalisms understandable.

Bloomberg: U.S. foreclosures may rise to 3 million this year

A recent ABC News profile highlights the fact that Stockton, California was, for much of last year, the single hardest-hit community in the country in terms of America's housing crisis. At one point, 10% of all the city's homes were in California foreclosure. Some homeowners have seen their pre-crash $500,000 homes drop in value to around $200,000 today.

The ongoing distress in Northern California highlights the need for advice from a strong, experienced Bay Area foreclosure lawyer when you are facing this difficult situation. A Stockton or Walnut Creek foreclosure attorney can advise you on the best ways to approach this complex legal process. If you start the process soon enough, he or she may also be able to advise regarding Contra Costa County loan modifications and other ways to avoid foreclosure.

As ABC reports, San Joaquin County, of which Stockton is the county seat, was the fourth-most distressed county in the country with a population greater than 25,000. As a result, "whole neighborhoods have been decimated by the mortgage disaster."

The trying economic times we are all experiencing show no sign of easing in the immediate future. This is a moment when a San Francisco foreclosure lawyer can be an important ally as you fight to overcome bad economic times and emerge stronger for the future.

ABC News: In Foreclosureville, USA, So Much Change

In a development illustrating how much worse the home foreclosure situation can get, Florida's Supreme Court is ordering the use of managed mediation proceedings as a way of clearing the state's backlog of foreclosure and loan modification cases. The order, of course, does not apply here in California, but since the two states are closely linked as centers of the mortgage and housing crisis it can be seen as an indication of how bad things might soon get.

According to a report in the online industry publication eCreditDaily.com last week's order by Florida's chief justice supported the findings of a task-force appointed by the court itself. It requires lenders and distressed homeowners to meet and attempt to resolve their differences with the help of a legal mediator who is paid a fee of no more than $750. Florida trails only California and Nevada in the number of pending foreclosure actions on the state's legal docket. The court-mandated mediation sessions are an attempt to get a slow-to-stalled system moving again.

In recent months California has enacted new laws regulating California loan modifications. The recent action in Florida raises new questions: Would a mandated California mediation program be a good idea here as well? Especially in hard hit Bay Area districts including Alameda County and Contra Costa County? Is managed mediation actually a good choice for individual homeowners?

These are issues a California mediation attorney is well-situated to help you consider. An experienced Contra Costa County loan modification and mediation lawyer can explain your options and help distressed home and business owners determine whether California bankruptcy or some form of Bay Area mediation leading to a loan modification is best for them.

eCreditDaily.com: Florida's Fix: Can 'managed mediation' stem foreclosures?

There has been much talk about the national economy turning the corner (or at least hitting bottom) sometime soon. A couple of end-of-year analyses took a good news-bad news view with Northern California, as it so often is, at the epicenter of things.

US News & World Report cites an analysis by Mark Zandi, chief economist at Moodys.com, that housing prices will continue to fall before they begin a widespread rebound. Zandi does not expect the housing market to hit bottom until the third quarter of 2010. Of course, this will vary from place to place, even across the Bay Area (the city of San Francisco, for example, has not been hit nearly as badly as many parts of the East Bay), but the overall message is clear: there are at least a few more months of rough sailing ahead for homeowners. That means Oakland, Walnut Creek and Fairfield foreclosure prevention will remain a priority for many homeowners at least for the foreseeable future.

The continued drop in home prices in a market where many Bay Area homeowners are already underwater is likely to mean the local market in California loan modification remains brisk. As I have outlined in earlier blog posts, new state laws on loan modifications make it imperative that you seek out an experienced and reputable Bay Area loan modification attorney as you embark on the process of California foreclosure prevention, and holding onto your property.

The trick in the coming months will be to watch the California loan market and Bay Area foreclosure situation closely. A Contra Costa County bankruptcy and foreclosure prevention attorney can and should be one of your key allies throughout this process.

US News & World Report: 10 Things to Know About Real Estate in 2010

Economist: Off the Road

The final round of housing and foreclosure data for 2009 was released as the year drew to a close. The numbers cover October, and contain some surprisingly good news regarding California foreclosures.

According to a brief analysis published earlier this week in the New York Times, seasonally-adjusted "price recovery in California seems to be strong." This is in contrast to Florida and Nevada - both, along with California, among the worst hit parts of the country in the housing and foreclosure crisis - where housing prices fell again in October. This, the paper reported, "could mean foreclosure sales are once again dragging prices down." The newspaper was looking at data from S&P Case-Schiller.

In San Francisco and throughout Northern California, Bay Area foreclosure prevention efforts consumed much of 2009. In addition to helping families keep their homes, Contra Costa and Alameda County foreclosure prevention also helps stem the broader slide in the region's housing prices.

When tackling this complex area of financial and real estate law it is especially important to seek the advice and assistance of an experienced San Francisco foreclosure attorney. Loan modification, foreclosure and bankruptcy prevention are all areas in which a Bay Area bankruptcy lawyer can offer help. The fact that we wrapped up 2009 with a smattering of good news does not change the fact that 2010 promises to be another challenging year both for the country's economy as a whole and for the Walnut Creek and broader San Francisco and Oakland housing markets in particular.

New York Times: Bubbles keep bursting

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

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

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

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