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Tag Archives: Bankruptcy

Ally’s Mortgage Unit Files for Bankruptcy; New Strategies Announced

Ally Financial announced Monday that its mortgage arm Residential Capital (ResCap) filed for bankruptcy, enabling the bank to focus on strategies to pay back remaining bailout funds still owed to Treasury. ResCap filed for Chapter 11 bankruptcy in Manhattan federal court, and Ally announced it will sell some its international operations to pay back Treasury. The financial institution will also focus on strengthening its auto and banking businesses.

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Ally Extends ResCap’s Debt Maturity, Signals Possible Bankruptcy

Ally Financial has agreed to extend the maturity of its secured debt facility with its wholly owned mortgage subsidiary Residential Capital LLC (ResCap). Shortly following the announcement, Fitch Ratings issued a research note on the action, saying that Ally's decision is in line with the agency's expectation of continued moderate support to ResCap from its parent company. That moderate support, however, may be short-lived. With the debt renewal only extended through mid-May, Ally may be planning for a bankruptcy resolution in the near future.

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Arizona Woman Sentenced to 15 Years of Prison for Fraud

An Arizona woman was sentenced to 15 years in prison and ordered to pay $22 million in restitution after pleading guilty to various charges related to a mortgage fraud scheme and to charges of bankruptcy, wire, mail, and bank fraud in two separate indictments, according to a March 8 release from the U.S. attorney's office. Paige Kinney, also known as Jamie Lee Lawler, led a $40 million mortgage fraud scheme that targeted Countrywide Home loans and other lenders.

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Consumers Still in Distress Despite Job Gains and Credit Boost

Overall, the addition of 683,000 new jobs and the best credit picture in more than 15 years helped improve the financial health for the average U.S. household, but these gains were offset somewhat by a decline in net worth and tight household budgets, according to the Q4 2011 report from CredAbility. A score below 70 indicates financial distress, with U.S. households scoring 67.6 on the 100-point scale for this quarter, a smidge higher than the previous quarter, which was at 66.7.

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Sirote Expands Pensacola Office with Addition of Clifton Gavin

Sirote & Permutt announced Tuesday that Clifton D. Gavin, Esq. has joined the firm's Pensacola, Florida, office and will practice in the mortgage litigation group. Gavin brings with him legal experience in commercial litigation and transactional law. His practice focuses on representing secured creditors, including national, regional, and local mortgage lenders, in addition to other secured creditors and servicers in consumer bankruptcy cases.

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Fiserv Prepares Mortgage Servicers for Changes to Bankruptcy Rules

In conjunction with the changes to the Federal Rules of Bankruptcy Procedure (FRBP) which go into effect on December 1, Fiserv, Inc. announced Wednesday that its LoanServ solution offers the capabilities to help ensure mortgage servicers remain compliant amidst evolving regulations. The rules amend the procedures and policies for servicing loans in bankruptcy and aim to enhance transparency in the process. FRBP governs the filing of proofs of claim and notice issues related to payment changes, post-petition fees, and other accuracy checks related to servicer actions.

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Fed Records First Rise in New Mortgage Delinquencies in a Year

About 2.5 percent of current mortgage balances in the U.S. transitioned into delinquency during the third quarter, the Federal Reserve Bank of New York said Monday. That assessment reverses a recent trend of reductions in the measure of newly delinquent mortgage balances, going back to the third quarter of 2010. Some 264,000 individuals had a foreclosure notation added to their credit reports between June 30 and September 30. New bankruptcies over the period tallied 423,000.

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Mortgage Insurer PMI Files Bankruptcy

The PMI Group, Inc. says it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. According to PMI, the move is a direct result of the seizure of its subsidiaries PMI Mortgage Insurance Co. and PMI Insurance Co. by the Arizona Department of Insurance on October 20, 2011. PMI sought to overturn the regulator's seizure of its mortgage insurance operations, but that motion was denied on Friday.

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Trott & Trott Attorneys Recognized as ‘Top Lawyers’

Three attorneys with the Farmington Hills, Michigan-based law firm Trott & Trott P.C. have been recognized as ""Top Lawyers"" by dbusiness magazine. Honorees with the firm include: Marcy J. Ford, Kenneth E. Kurel, and William D. Meagher. The magazine's Top Lawyers list recognizes attorneys practicing in Wayne, Oakland, and Macomb counties in Michigan who possess the highest professional ability and ethical standards. The designation is achieved through peer voting, which is based on the annual Martindale-Hubbell Peer Review Ratings listing.

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Baum Law Firm Barred from Handling GSEs’ New Foreclosures

Fannie Mae and Freddie Mac have notified servicers that they can no longer refer foreclosure or bankruptcy cases to the law firm of Steven J. Baum, P.C. in upstate New York. The Baum law firm has found itself at the center of controversy. In early October, the firm agreed to pay $2 million to end an investigation by the U.S. Department of Justice into its foreclosure practices. Two weeks after the DOJ settlement was announced, the New York Times ran photos of the firm's 2010 Halloween party, which depicted a mockery of homeowners who had been foreclosed on.

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