With a vote of 228-205 and more Republicans than Demcrats opposing the package, the bailout won’t occur…or at it didn’t occur this time, as a revote is scheduled.
For more, see http://www.nytimes.com/2008/09/30/business/30bailout.html?hp
Though homeowners are definitely in need of help, this may not be the silver lining that all had hoped for.
FORECLOSURE DEFENSE NATIONWIDE.COM ANNOUNCES UPCOMING SEMINAR ON INTRODUCTORY LEVEL FORECLOSURE DEFENSE (FLORIDA BAR APPROVED FOR 9.5 CLE CREDITS)
Foreclosure Defense Nationwide.com announces its first seminar in introductory level foreclosure defense which has been approved by The Florida Bar for 9.5 Continuing Legal Education (CLE) credits. Most states with mandatory CLE requirements will accept these credits as Florida is a mandatory CLE state.
The seminar is scheduled to be held on Friday, October 3, 2008 in the Embassy Suites in Boca Raton, Florida. Topics include contemporary foreclosure defense issues, securitization of mortgage instruments, choosing the proper course of defense for the client, client goals and objectives, initial Motion practice, substantive pleading practice, discovery and settlement strategies.
A full agenda is available upon request, as is information as to registration and cost for the seminar. Attendance is limited to 150 attendees.
Please contact [email protected] with inquiries and for further information. Please allow 5 days for response.
To-Do List For IRS
Michelle Singletary, www.PE.com
The official appointed to speak out on behalf of U.S. taxpayers has a few major gripes about the Internal Revenue Service. Among them, she believes the agency needs to better protect victims of tax-related identity theft and should get more information out to homeowners about a new law eliminating taxes on debt canceled as a result of foreclosure.
Nina E. Olson, the national taxpayer advocate, issued a summer report to Congress identifying areas of concern the IRS needs to focus on in the 2009 fiscal year.
This year marks the 10th anniversary of the enactment of the IRS Restructuring and Reform Act of 1998, which created the Office of the Taxpayer Advocate to identify problems within the IRS and help taxpayers resolve conflicts.
Olson, who has served as the taxpayer advocate for seven years, works independently within the IRS and is required by law to submit two annual reports to Congress.
As the founder of the Community Tax Law Project, a low-income taxpayer clinic, Olson says it is her experience working with taxpayer disputes that has helped her appreciate the frustration so many people have had with the IRS.
Olson said the creation of the taxpayer advocate office has “substantially improved tax administration and fairness for taxpayers.”
Here are three major areas Olson wants to focus on in 2009:
Tax-related identity theft, which Olson called a serious problem. In one type of scam, an identity thief may file a return using a victim’s Social Security number. The motive is refund fraud. The identity thief will use the personal information belonging to someone else to file a false return, typically early in the filing season before the innocent taxpayer files his or her own legitimate return.
Olson’s report faults the IRS for not having adequate procedures in place to assist victims of identity theft. “While the IRS is reforming some aspects of its approach to identity theft, its procedures for dealing with victims have been a significant part of the problem,” she wrote.
To help alleviate this problem, the IRS is implementing a new servicewide identity theft indicator. However, Olson has concerns about the effectiveness of the system.
Cancellation of debt income. When an individual or business borrows money and the debt is canceled, the borrower generally must include the amount of the canceled debt in gross income. Last year, Congress passed a law giving temporary tax relief to homeowners who had mortgage debt canceled.
Here’s the problem. The tax relief isn’t given automatically. You have to file IRS Form 982 “Reduction of Tax Attributes Due to Discharge of Indebtedness,” and the form has to be attached to the federal tax return. Many people entitled to this tax break aren’t filing the form. Olson said she wants to work with the IRS to get the word out to more people.
IRS collection practices. Olson remains concerned about collection issues, including the seizure of assets before other collection alternatives have been exhausted.
If you are having trouble resolving a tax problem, contact the taxpayer advocate service by calling 1-877-777-4778 or TTY/TDD 1-800-829-4059. The service is free and confidential. For more information online, go to www.irs.gov/advocate.
Courtesy of the Las Vegas Review Journal
By John L. Smith
Gerald and Katrina Thitchener lost nearly all their material possessions thanks to an arrogant error by Countrywide Home Loans officials.
They weren’t just stripped of their furniture and clothing when a mistake by Countrywide in 2002 set in motion a foreclosure procedure that resulted in their condominium being “trashed out.” Couches and coats can be replaced.
These little people with little money and no political clout also lost precious and irreplaceable things. There were Gerald’s service medals from the Persian Gulf War and the picture he cherished of his Air Force unit’s meeting with President George H.W. Bush. There was Katrina’s wedding band and dress, and the video taken the day they were married.
Then there were the lost pictures, photos of departed family members, of high school days, of their children.
The Thitcheners lost a lot back in 2002, including some of their faith in the system; but on Thursday the Nevada Supreme Court determined that their losses, and the actions of the mortgage giant, deserved compensation in the approximate amount of $2 million.
It took a six-year fight, but Thitchener is no stranger to battle.
A Gulf War veteran, he served 15 years in the Air Force as an F-16 mechanic before being honorably discharged in April 2001. On the same week he left active duty, he signed on with Nevada’s Air National Guard.
There was little time to rest.
Thitchener quickly returned to active duty following the events of Sept. 11, 2001. He was transferred from Las Vegas to Tucson, Ariz.
Katrina, pregnant at the time, remained in the family’s condominium with the couple’s children, Kaitlyn and Steven. When it became apparent Gerald wouldn’t be returning to Las Vegas soon, Katrina made occasional commutes to Tucson and eventually took an apartment there.
Although they had missed some payments on the condo to Countrywide in early 2002, their mortgage was current in June of that year, and the family’s monthly bills were forwarded to their Tucson address.
They left their power on in Las Vegas and paid their property taxes and homeowner association’s dues. In addition to all the personal items, food was left in the cupboards and refrigerator.
But when Countrywide moved to foreclose on another condo in the Thitchener’s complex, a mistake was made that resulted in the Air Force man and his family losing almost everything. The Thitcheners lived in unit 118. Unit 10 was in foreclosure.
When the time came to “trash out” the foreclosed-upon condo, unit 118 was selected despite all the warning signs of occupancy. The result was devastating.
Not that Countrywide admitted the gravity of its mistake. The Thitcheners through their lawyers, Terry Coffing and Terry Moore, fought for more than two years before winning a $3.4 million judgment in District Court. Before trial, they had sought to settle the case for $400,000.
During trial, Thitchener wore his Air Force uniform to court. While some might have groused that he was playing up his military status during a time of heightened patriotism, it was also true that his only suit was thrown away during the assault on his condominium.
Countrywide lost, but wasn’t chastened. It appealed to the state Supreme Court.
The state Supreme Court on Thursday not only agreed with the Thitcheners that the punitive damage award in the case “was supported by substantial evidence,” but it used the case as a vehicle to “clarify” the state’s case law on the subject. In doing so, it overruled two previous decisions and refined its own legal language regarding punitive damages.
That amounts to a substantial amount of fine-tuning in this area of Nevada law. It also should mean that the Thitcheners will be compensated for their losses.
“Despite the fact Countrywide knew where the Thitcheners were, the foreclosure went forward,” Coffing says. “Despite all the red flags going up that said, ‘This is wrong,’ they went ahead and did it anyway.
“Here’s a guy, a salt-of-the-Earth, good-hearted guy who never harmed a fly, slugging it out for our country and enduring incredible hardship. And then this happens to him. It’s very fulfilling to help those kinds of people.”
It is, in fact, enough to restore your faith in a legal system known all too often for comforting the comfortable and trashing the little people.
FORECLOSURE DEFENSE NATIONWIDE.COM ANNOUNCES UPCOMING SEMINAR ON INTRODUCTORY LEVEL FORECLOSURE DEFENSE (FLORIDA BAR APPROVED FOR 9.5 CLE CREDITS)
Foreclosure Defense Nationwide.com announces its first seminar in introductory level foreclosure defense which has been approved by The Florida Bar for 9.5 Continuing Legal Education (CLE) credits. Most states with mandatory CLE requirements will accept these credits as Florida is a mandatory CLE state.
The seminar is scheduled to be held on Friday, October 3, 2008 in the Embassy Suites in Boca Raton, Florida. Topics include contemporary foreclosure defense issues, securitization of mortgage instruments, choosing the proper course of defense for the client, client goals and objectives, initial Motion practice, substantive pleading practice, discovery and settlement strategies.
A full agenda is available upon request, as is information as to registration and cost for the seminar. Attendance is limited to 150 attendees.
Please contact [email protected] with inquiries and for further information. Please allow 5 days for response.
Foreclosure Defense Seminar I Agenda: page 1 of 2
8:30-9:00 a.m.: Registration and sign in.
9:00-9:45 a.m.: Introduction to Contemporary Foreclosure Litigation
– The old days versus now: Impact of securitization process
– Banking regulations: Compliance with Truth in Lending Act (TILA)
– The Various Stages of the Foreclosure Process
9:45-10:30 a.m.: Determining the Proper Course of Defense
– Identification of Real Parties in Interest and Indispensable Parties
– Use of third-party mortgage loan audits to validate claims
– Determination of Defenses (client objectives; stage of proceeding)
10:30-10:45 a.m.: Break
11:00 a.m.-noon: Substantive Pleadings and Motion Practice I
– Complaints to Stay Foreclosure (on Notice of Default from “lender”)
– Initial Motion practice on Procedural Defenses (existing litigation)
– “Unwinding” Foreclosure (post-Judgment or post-sale)
Noon-1:00 p.m.: Lunch: Discussion of Common Themes of Predatory Lending
1:00-2:00 p.m.: Substantive Pleadings II
– Challenging Motions for Relief from Stay in Bankruptcy Court
– Challenging relief from Bankruptcy Stay in State Court proceeding
– Federal Remedies: TILA, RESPA, HOEPA, FCRA, etc.
2:00-2:45 p.m.: State Law Claims
– Fraud-based claims
– Breach of Fiduciary Duty (including appraisers and brokers)
Foreclosure Defense Seminar I Agenda: page 2 of 2
2:00-2:45 p.m.: State Law Claims (continued)
– State Consumer Protection Statutes (e.g. FUDTPA)
2:45-3:00 p.m.: Break
3:00-3:45 p.m.: Discovery and Ancillary Remedies
– Discovery relating to standing, assignments, and parties
– Declaratory Relief, Quiet Title, Summary Judgment
– Attorneys’ Fees and Costs (e.g. Fla.Stat. 57.105, FUDTPA)
3:45-4:30 p.m.: Mediation and Settlement
– Preliminary Considerations: client objectives
– Indemnification and Hold Harmless Agreements, Bond Issues
– Requisites of Formal Written Settlement Agreements
4:30-5:00 p.m.: Representation Agreements, Fee Structures
The foreclosure crisis, along with the general state of the economy, has had far-reaching effects on many, including but not limited to schoolchildren returning to school. Sadly, as a result, many children are returning to school this year as homeless.
Hard Times Hitting Students and Schools
Tyler Bissmeyer for The New York Times
Correction Appended
LOUISVILLE, Ky. — With mortgage foreclosures throwing hundreds of families out of their homes here each month, dismayed school officials say they are feeling the upheaval: record numbers of students turning up for classes this fall are homeless or poor enough to qualify for free meals.
“We’re seeing a lot more children in poverty,” said Lauren Roberts, spokeswoman for the Jefferson County school system, a 98,000-student district that includes Louisville and its suburbs.
At the same time, the district is struggling with its own financial problems. Responding to a cut of $43 million by the state in education spending and to higher energy and other costs, school officials in Jefferson County have raised lunch prices, eliminated 17 buses by reorganizing routes, ordered drivers to turn off vehicles rather than letting them idle and increased property taxes.
The Jefferson County system is typical this school year.
As 50 million children return to classes across the nation, crippling increases in the price of fuel and food, coupled with the economic downturn, have left schools from California to Florida to Maine cutting costs. Some are trimming bus service, others are restricting travel, and a few are shortening the school week. And as many districts are forced to cut back, the number of poor and homeless students is rising.
“The big national picture is that food and fuel costs are going up and school revenues are not,” said Anne L. Bryant, executive director of the National School Boards Association. “We’re in a recession, and it’s having a dramatic impact on schools.”
Louisville’s pain is minor compared with the woes of some cities. Detroit has laid off at least 700 teachers, Los Angeles 500 administrators and Miami-Dade County hundreds of school psychologists, maintenance workers and custodians.
Schools in many states have cut bus stops to save diesel. Districts in California and Ohio have gone further and eliminated bus service either completely or for high schools, leaving thousands of students to find their own way to school.
In Maine, officials worried about the cost of heating their classrooms this winter have restricted travel for field trips to save money. Districts in Louisiana, Minnesota and elsewhere have taken a more radical measure and adopted four-day school weeks. Hundreds of districts, responding to higher food prices, are charging more for cafeteria meals.
In interviews, educators in many states said they were seeing more needy families than at any time in memory. Two charities in suburban Detroit announced in August that they would hand out student backpacks, attracting hundreds of families.
“They went through all 300 backpacks in three hours, boom, and that was that,” said Kathleen M. Kropf, an official in the Macomb Intermediate School District. “We’re seeing a lot of desperate people.”
There were no giveaways for Jacci Murray, 28, a single mother in West Palm Beach, Fla., who said she lost her job six months ago. Ms. Murray bought pencils and crayons for her son, Cameron, who is in the second grade, from a discount bin at Office Depot. Saying she felt “cheap and broke,” she pored fretfully over her school supplies list, afraid to waste gas by making more than one shopping trip.
“It’s been tough this year,” Ms. Murray said. “I’m depressed about school.”
And so are many educators.
West Virginia officials issued a memorandum recently to local districts titled “Tips to Deal With the Skyrocketing Cost of Fuel.” Last week, David Pauley, the transportation supervisor for the Kanawha County school system, based in Charleston, met with drivers of the district’s 196 buses to outline those policies. Mr. Pauley told them to stay 5 miles per hour below the limit, to check the tire pressure every day and to avoid jackrabbit starts.
The Caldwell Parish School District, in northern Louisiana, took a more sweeping approach to saving fuel by eliminating Monday classes. The district joined about 100 systems nationwide, most of them rural, that in recent years have adopted a four-day schedule.
The district’s superintendent, John Sartin, said the move should save $145,000 in a $15 million budget. The decision, made in June, came after crude oil prices had risen for 29 consecutive days, Mr. Sartin said.
“People here worry that they won’t have enough money to last through the month,” he said.
Similar concerns in the Southern Aroostook Community School District in Maine have delayed adoption of the budget.
“We’ve tried to pass it twice, and we’re trying a third,” said Terry Comeau, the superintendent, who has restricted field trips and taken a bus off the road.
Tom Collins contributed reporting from Florida, Joel Elliott from Maine and Sean D. Hamill from Pennsylvania.
This article has been revised to reflect the following correction:
Correction: September 2, 2008
An article on Monday about the financial problems that many schools are having at the same time that some of their students’ families are struggling economically omitted the names of three contributing reporters. Tom Collins reported from Florida, Joel Elliott from Maine and Sean D. Hamill from Pennsylvania.
Courtesy of the New York Times…
Alabama county mulls bankruptcy; could be largest failure in history
With irresponsible borrowing and excessive leverage threatening the financial well-being of so many families, at least one county may be joining them in the soup line.
Jefferson County, Alabama, with a population of 662,047, according to the 2000 U.S. Census, is preparing for a possible bankruptcy filing, according to The New York Times.
The culprit? $3 billion in bonds with rapidly escalating interest rates resulting from the exact same short-sighted financial planning that got so many home owners into trouble: adjustable rate loans (In this case, auction rate securities) that require higher interest payments as interest rates move up. The current turmoil in the credit market has sent the county’s rates as high as 10%.
Town officials told the Times that a bankruptcy filing is not a sure thing and that efforts to negotiate with the creditors, Citigroup (NYSE: C) and JPMorgan (NYSE: JPM) have “some likelihood to work.” If it doesn’t, this will be the largest municipal bond default in U.S. history, and will etch Jefferson County’s name in the annals of infamy alongside Orange County and the Washington Public Power Supply System.
More bad news: more trouble ahead for numerous banks means increased worries for homeowners
FDIC Says At-Risk Banks at 5-Year High
By MARCY GORDON
AP
WASHINGTON – U.S. banking industry profits plunged by 86 percent in the second quarter and the number of troubled banks jumped to the highest level in about five years, as slumps in the housing and credit markets continued.
Federal Deposit Insurance Corp. data released Tuesday show federally-insured banks and savings institutions earned $5 billion in the April-June period, down from $36.8 billion a year earlier. The roughly 8,500 banks and thrifts also set aside a record $50.2 billion to cover losses from soured mortgages and other loans in the second quarter.
The FDIC said 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003.
“By any yardstick, it was another rough quarter for bank earnings,” FDIC Chairman Sheila Bair said in a statement. However, the results were not surprising “as the industry coped with financial market disruptions, the housing slump, worsening economic conditions and the overall downturn in the credit cycle,” she added.
Total assets of troubled banks jumped from $26 billion to $78 billion in the second quarter, the FDIC said, with $32 billion of the increase coming from IndyMac Bank, which failed in July — the biggest regulated thrift to fail in the United States.
The $50.2 billion set aside to cover loan losses in the April-June period was four times the $11.4 billion the banking industry salted away a year earlier. Nearly a third of the industry’s net operating revenue went into building up reserves against losses in the latest quarter, according to the FDIC.
Except for the fourth quarter of 2007, the earnings reported Tuesday were the lowest for the banking industry since the final quarter of 1991, the agency said.
Concern has been growing over the solvency of some banks amid the housing slump and the steep slide in the mortgage market. The pressures of tighter credit, tumbling home prices and rising foreclosures have been battering banks of all sizes nationwide.
The FDIC has been keeping an especially close eye on banks and thrifts with high levels of exposure to the riskiest borrowers and markets, agency officials say, including subprime mortgages and construction loans in overbuilt areas.
Troubled assets — loans that are 90 or more days past due — continued to rise in the second quarter, jumping by $26.7 billion, or 19.6 percent, over the first quarter. It was the first time since 1993 that the percentage of total loans that were troubled broke 2 percent, at 2.04 percent.
The FDIC doesn’t disclose the names of institutions on its internal list of troubled banks. On average, 13 percent of banks that make the list fail.
Nine FDIC-insured banks have failed so far this year, compared with three in all of 2007. More banks are in danger of collapsing this year, agency officials say, and they expect turbulence in the banking industry to continue well into next year.
“More banks will come on the (troubled) list as credit problems worsen,” Bair said. “Assets of problem institutions also will continue to rise.”
Pasadena, Calif.-based IndyMac was taken over by the FDIC on July 11 with about $32 billion in assets and deposits of $19 billion. It was the second-largest financial institution to close in U.S. history, after Continental Illinois National Bank in 1984.
Its failure is expected to cost the federal deposit insurance fund, currently at $53 billion, between $4 billion and $8 billion.
Last week, the FDIC announced a program under which thousands of troubled home borrowers with loans from IndyMac will be able to switch into 30-year, fixed-rate mortgages with interest rates capped at around 6.5 percent, in what could be an important test case for future bank resolutions.
FDIC officials have said the agency expects to raise insurance premiums paid by banks and thrifts to replenish its reserve fund after the payout to depositors at IndyMac.
Copyright 2008 The Associated Press.