As many of us recall from our civics lessons in school, the United States is a common law country. That means when judges issue opinions in legal cases, they often establish precedents that will guide the rulings of other judges in similar cases and jurisdictions. Over time, these legal opinions build, refine and clarify the laws that govern our land. For average citizens, however, it can be difficult to find or even read these landmark opinions.
Happy Thanksgiving
November 25th, 2009
To our clients and to our many friends:
We thank you and wish you a Happy Thanksgiving.
The words of President Lincoln’s Thanksgiving Proclamation ring as true today as they must have in 1863 in the midst of the Civil War:
“It has seemed to me fit and proper that the gifts of God should be solemnly, reverently and gratefully acknowledged with one heart and one voice by the whole American people. I do, therefore, invite my fellow citizens to set apart and observe the last Thursday of November next as a day of thanksgiving and praise to our beneficent Father who dwelleth in the heavens.”
Veterans Day 2009 – 11 November
November 10th, 2009
Veterans Day
by Cheryl Dyson
On Veterans Day we honor all,
Who answered to a service call.
Soldiers young, and soldiers old,
Fought for freedom, brave and bold.
Some have lived, while others died,
And all of them deserve our pride.
We’re proud of all the soldiers who,
Kept thinking of red, white and blue.
They fought for us and all our rights,
They fought through many days and nights.
And though we may not know each name,
We thank ALL veterans just the same.
Veterans Day is celebrated on 11 November, the anniversary of the signing of the Armistice that ended World War I. The main hostilities of World War I ended on the 11th hour of the 11th day of the 11th month of 1918.
An Act (52 Stat. 351; 5 U. S. Code, Sec. 87a) dated 13th May, 1938, made the 11th of November “a day to be dedicated to the cause of world peace and to be thereafter celebrated and known as ‘Armistice Day’.” Congress modified this act in 1954, replacing “Armistice” with “Veterans”. In 1971, the Uniform Monday Holiday Act moved Veterans Day to the fourth Monday of October, and in 1978 it was moved back to the 11th of November.
My House Is Being Foreclosed. What Can I Do?
November 5th, 2009
While the Obama administration battles to keep people from losing their homes, many homeowners may have to fight foreclosure actions in order to buy themselves time to take advantage of recent legislation like the Helping Families Save Their Homes Act. Stalling or even stopping foreclosures is possible in some instances because loan servicers are bringing most of the foreclosure actions in the country, and they often don’t own the mortgages and have no standing to enforce them.
If you have resolved to fight your foreclosure and to try to save your home, you need to file a timely answer or responsive motion to the foreclosure petition. It is best to hire a lawyer to defend the foreclosure action. However, whether you have a lawyer or not, and regardless of whether you are a victim of a mortgage fraud, or misrepresentations by mortgage brokers, you have the right and the obligation to question the validity and accuracy of your mortgage foreclosure.
In nearly all cases of foreclosure, when the bank files its initial lawsuit, the homeowners have a chance to respond to the complaint and file their own answer. The problem is that, while mortgage companies hire local lawyers, the owners of the house may have little idea of how to go about filing an answer. Also, you may not have the time or money to hire a lawyer before you are in default in your foreclosure case. While only you or your attorney can mount a defense in court, and we can’t provide near enough information in a blog article to adequately assist you, attached to this article is a generic answer to a foreclosure petition to aid you in your defense. This form answer is not intended to be legal advice or a substitute for an attorney. It is merely a tool to help protect your rights by requiring the mortgage company to prove every element of its case: answer to petition for foreclosure
Finally, there may be a Mortgage Foreclosure Assistance Hotline in your state, or HUD-Approved Housing Counselors in your area that help homeowners who are behind on their mortgages. Check with your state agency or HUD (www.hud.gov) to see if there is a Housing Counselor near you.
Breaking News: Congress Extends, Expands Housing Tax Credit
November 5th, 2009
House approves extension by vote of 402-12; buyers now have until June 30, 2010 to close on a home.
- By: Alison Rice
Lawmakers in the U.S. House of Representatives on Thursday voted 402-12 to approve an extension and expansion of the popular housing tax credit and, they hope, supporting the fragile housing market until the economy improves. The Senate passed the measure 98-0 Wednesday; the bill will now go to the White House, where President Obama is expected to sign it.
Builders, who say the tax credit has revived their buyer traffic and sales in a very difficult year, promptly celebrated.
“We commend lawmakers for acting in a bipartisan manner to extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers,” said Joe Robson, who is chairman of the National Association of Home Builders and a builder in Tulsa, Okla. “The tax credit has proven to be a powerful economic incentive. Today’s action by Congress will further stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices.”
Mortgage bankers agreed. “At a time when we are finally starting to see some signs of life in the housing and mortgage markets, extending and expanding the home buyer tax credit is a critical step to keeping the momentum,” said Robert E. Story, Jr., who chairs the Washington, D.C.-based Mortgage Bankers Association.
The tax credit approved today will take the housing market into the critical spring selling season. To receive the credit, buyers must sign a purchase agreement by April 30, 2010, and close on the home by June 30, 2010. As was the case with the credit that has been in use for most of this year, the extended credit will provide first-time home buyers up to $8,000, depending on the price of the home and their household income.
But there are several important differences, too. The newly approved tax credit also covers people who have lived in their homes for at least five years; they can claim a credit of up to $6,500 if they purchase a new home. Finally, Congress raised the income limits on the program, which will now allow singles who make up to $125,000 and married couples with a household income of $225,000 to be eligible for the credit.
The new version of the credit has a price tag for the government of $10.8 billion in lost taxes.
Alison Rice is senior editor, online, at BUILDER magazine.
Loan Modification Myths
November 2nd, 2009
Myth No. 1: You must be behind on your payments to qualify for a loan modification.
This belief is patently false. However, the reason why this belief exists is because it was once true. Before the U.S. government got involved, most banks could not be convinced that you were suffering a financial hardship (and thus warranting their attention as a default risk) unless you were one, two or three payments behind. This is no longer true. On March 3, 2009, the U.S. government passed the Making Home Affordable plan to help fill some of the gaps in the process. One of those gaps was to assist homeowners who were experiencing financial hardship but were hanging onto their credit with everything they had, while keeping their payments current. Maintaining your credit or minimizing the damage is paramount. There is no guarantee that your lender is going to offer you a loan modification.
Myth No. 2: If you qualify under the government criteria, then your lender must modify your loan.
The U.S. Making Home Affordable plan is just that — a plan. The plan is not a law that obliges lenders to modify all qualifying persons’ loans. The government plan provides the lender with a financial incentive to offer loan modifications to persons who qualify under the plan’s criteria. If you are current on your payments, occupy the property as your primary residence, obtained your loan before January 1, 2009 and meet some other basic criteria, then you are a candidate for the program. If the lender approves your loan modification, then the lender receives a cash-back of close to $2,250 (depending on circumstances) for having approved your loan. It is neither obligated to do so, nor is it obligated to take the government assistance money.
Myth No. 3: My loan must be a FannieMae or Freddiemac loan to qualify for a loan modification.
In the early days of the government plan, both lenders and homeowners alike strove to digest its terms, causing much confusion. One of the most common misconceptions was that your loan must have originally been processed or backed by one of the above-mentioned loan giants in order to qualify under the loan modification plan. This is not true. The government’s plan has two programs; one offering assistance with loan modifications, and the other with refinances. Your loan need not be a FannieMae- or FreddieMac-backed loan in order to qualify for a loan modification. However, if you plan to apply for a refinance under the government plan, then the above requirement applies.
The government plan for refinances was designed to assist those homeowners who were close to qualifying for a refinance but fell short by about 25 percent. If you owe more on your house than it is worth (i.e. the property is “upside down” or “underwater”), then no one will refinance your loan because your home does not offer sufficient collateral to cover the refinanced amount. However, in this case, you may qualify under the government’s refinance plan. Its plan does require that the loan you are attempting to refinance have originally been a FannieMae- or Freddiemac-backed loan. How do you find out if your loan was a FannieMae or Freddiemac loan? For an immediate answer, visit their websites (fanniemae.com and freddiemac.com), and simply enter your street address.
Myth No. 4: A loan modification will reduce the principal owed on the loan.
In a loan modification situation, this scenario is so rare that expecting it would simply be foolish. Please do not expect the first mortgage holder on your home to forgive the principal on your loan. If someone is promising you that it can be done, be careful. Is it unheard of? No. Is it extremely unlikely? YES. Lenders are far more inclined to forgive principal on your second mortgage, and then only in a short sale situation (where you are selling your home, not simply attempting to modify your loan).
Lenders can and will do many adjustments to the principal to reduce your monthly payment. One of the most common things that lenders do to the principal in a loan modification is to defer payment of a large portion of the principal to the maturity date of the loan (i.e a balloon payment) with no interest accruing on that principal (you could call this free money). Another principal modification that many lenders offer is to extend the term of the loan (e.g. convert a 30-year loan into a 40-year loan starting today) to keep the monthly payment amount within a tolerable range.
Myth No. 5: Under a loan modification, the lender will only consider the income of the debtor.
In reviewing your application for a loan modification, the bank will consider the total income of the household. If your spouse works, then their income is considered. It doesn’t matter if you are the only one on the loan and the only one on title to the property. The bank will ask for the total income of all adults contributing to the household’s income. If there are adult children who work and contribute, their income will be considered too. Understand that your lender will review your tax returns and determine the total income of the household by your (most likely) jointly filed tax return.
Myth No. 6: Foreclosure can be averted at the last minute by applying for a loan modification or a bankruptcy.
The common advice of “Never leave anything to the last minute” could not be truer than in a foreclosure situation. Many states’ laws require that a lender give you several months’ notice before a foreclosure goes forward. Use this time wisely. Consult with an attorney. Find out what your options are. A lender will typically cancel, pause or postpone an upcoming foreclosure sale if you have applied for some form of assistance (loan modification, short sale, deed in lieu of foreclosure, forbearance agreement). However, your application will take several days to be inputted into the system and assigned to a negotiator. Most banks will not promise to stall a sale until your file is assigned to a negotiator. Don’t put yourself in the uncomfortable situation of waiting for good or bad news on the foreclosure sale. Send in your paperwork at least two weeks (if not more) before a scheduled foreclosure date.
Myth No. 7: The banks are obligated to help you.
No lender is obligated to modify your loan. No lender is going to cut you slack simply because you asked for it. Did the U.S. taxpayer just foot the bill to save our banking system from collapse? Yes. Was this collapse caused primarily by banks offering bad home loans? Yes. Does the plan obligate the banks to cut homeowners some slack? No.
When a lender decides to modify your loan, they do so because they feel it is in their best interest to do so. Keeping this truth in mind is key when preparing an application for a loan modification. The bank does not want to go through the expense of foreclosing (a typical foreclosure may cost your bank six months of time and over $10,000 in hard expenses). The bank does not want to become the new owner of yet one more foreclosed property. Having said that, the bank cannot stand aside and watch a bad loan get worse if there is any chance of saving it. If a borrower has some income, at least enough to keep the bank from losing money, then it will be interested in negotiation. By the same vein, banks want assurance that the new monthly payment is an amount that is not going to overburden the borrower (and hence cause them to be back at “square one” with a delinquent borrower in a few months’ time). This delicate balance is what will make the difference between your loan modification being approved or denied. Keep in mind that for all of the above reasons, you simply will not qualify if you have no income. But if you can show that you can afford some amount, then you should at least try to apply.
Put your best foot forward financially. This is not the time to exaggerate your financial hardship. Be honest and offer what you can. If you simply have nothing to offer, then your next best option is to sell the property short or simply give it back to the bank. Both options have advantages that a loan modification cannot offer (such as forgiveness of principal).
Be vigilant, seek assistance from reputable professionals and explain your financial situation sincerely and frankly.
Suit Claims That Redbox Charges Late Fees Despite Promise Not to
November 2nd, 2009
Amanda Bronstad
11-02-2009
A class action has been filed against Redbox Automated Retail LLC on behalf of consumers who claim they were charged late fees on DVD rentals, even though the kiosk retailer advertises that it does not charge late fees.
The suit comes as Redbox, a subsidiary of Coinstar Inc., has filed suits against three Hollywood studios asserting antitrust violations.
Redbox, which was founded in 2002, rents DVDs through 17,000 kiosks nationwide via venues including Wal-Mart Stores Inc. and McDonald’s Corp.
Laurie Piechur, a resident of St. Clair, Ill., who claims to have rented numerous DVDs from Redbox during the past year, said she was charged “excessive and illegal late fees,” along with a “maximum charge” of $25 after she did not return two videos, “Fool’s Gold” and “27 Dresses,” on time. She filed the suit against Redbox on Oct. 21 in St. Clair County, Ill., Circuit Court.
“While it boasts ‘easy $1 a night DVD Rentals’ ‘[w]ith no late fees … ever’ that is not the truth,” the suit says. “Instead, Redbox charges its customers who return a movie even one minute late a late fee in the form of an illegal penalty.”
Specifically, she said, if a customer does not return a video by 9 p.m. on the day following the rental, Redbox charges that customer another $1 for renting the video the second day. Under this scenario, she said, “Redbox can effectively double, if not triple, its revenue on a single DVD, with virtually no increase in its costs, thus in fact closely matching the point of sales price of its competitors, meaning Redbox is not a lower-cost alternative at all.”
After 24 days, the customer can keep the DVD, but Redbox issues a maximum charge of $25 — a price that is “much higher than compared to retail prices for the same disc, which would not be previously viewed or used,” the suit says.
Since Jan. 1, 2002, the fees have amounted to $100 million dollars, according to the complaint.
The suit seeks damages for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, the Illinois Rental-Purchase Agreement Act and the Automatic Contract Renewal Act, as well as for unlawful penalties and unjust enrichment. The suit was filed on behalf of two sets of nationwide classes: Those who paid $1 to rent a DVD for one night but were charged a $1 fee after returning the disc after 9 p.m. the following day, and those who were charged $25 for failing to return a DVD.
Thomas Maag, a lawyer at Wendler Law in Edwardsville, Ill., who represents Piechur, and Chris Goodrich, a spokesman for Redbox, which is based in Oakbrook Terrace, Ill., declined to comment.
Redbox has filed suits against Universal Studios Home Entertainment, Warner Home Video and 20th Century Fox Home Entertainment, alleging that the studios have established an illegal monopoly over the DVD market and are violating §1 of the Sherman Act, the federal antitrust law. The studios have disputed those claims in court.
Copyright 2009. ALM Media Properties, LLC. All rights reserved.
Page printed from: http://www.law.com
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