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Tag Archives: Bankruptcy

Mortgage Cram-Downs by Bankruptcy Judges Are Taking Place: DBRS

The research firm and ratings agency DBRS says it has learned from various servicers that although Congress never authorized bankruptcy judges to modify mortgages on primary residences, these ""cram-downs,"" as they have been termed, are currently being performed in some courts. The agency's analysts say the amount of the cram-down varies by state, property value, and borrower situation but usually includes a reduction in the principal amount of the loan to fair market value.

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Senate Panel Advances Bankruptcy Foreclosure Mediation Bill

The Senate Judiciary Committee on Thursday approved legislation that would give bankruptcy courts the authority to order face-to-face meetings between homeowners and their lenders for foreclosure mediation, clearing the way for it to move on to the full Senate. The legislation does not give bankruptcy judges the power to modify mortgages like the controversial bankruptcy cramdown proposals that have repeatedly failed in Congress. Instead, it would give them a mechanism for opening up the lines of communication between homeowners and creditors.

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Default Attorney Group Adds Potestivo and Reisenfeld Firms as Members

Default Attorney Group (DAG), a consortium of creditors' rights law firms from across the United States, announced Wednesday that the organization has welcomed two new firms to its membership. Potestivo & Associates P.C., which offers representation in Michigan and Illinois, and Reisenfeld & Associates LPA, LLC, which covers Ohio, Indiana, and Kentucky, have both joined the group of seasoned legal professionals serving the mortgage lending and servicing community.

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Gerner & Kearns Adds Two New Associate Attorneys

The creditor's rights law firm Gerner & Kearns, Co., L.P.A. recently announced the appointment of D. Anthony Sottile as a senior associate in the firm's default services practice group as its lead bankruptcy attorney, and Crystal L. Saresky as an associate also in the firm's default services practice group. Both attorneys join the firm with nearly 10 years' experience.

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Fannie Mae Adds 14 States to Mandatory Foreclosure Attorney Network

Fannie Mae issued a servicing guide update Tuesday, which adds 14 additional states to the GSE's list of jurisdictions in which its servicers must use one of the legal firms approved by Fannie Mae to handle all foreclosure and bankruptcy matters. As specified by the GSE, the firms within its retained attorney network must handle all issues relating to mortgage loans held in Fannie Mae's portfolio as well as certain securities. As of now, the District of Columbia and all states except for six are subject to the GSE's retained attorney requirements.

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Rowell Auctions Names Doug Dennison National Sales Coordinator

Rowell Auctions, Inc. has announced the hiring of Douglas G. Dennison as national sales coordinator for the firm. Dennison has 20 years of auction experience and has specialized in large real estate government auctions throughout the country. He has served as auction project manager for the FDIC, U.S. General Services Administration (GSA), U.S. Marshals Service, Small Business Administration (SBA), Resolution Trust Corporation (RTC), and U.S. bankruptcy auctions in more than 30 states.

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California Appeals Court Rules Oral Promises Are Binding

A California appeals court ruling could have far reaching effects for the mortgage servicing community. The three judges hearing the case of Aceves v. U.S. Bank found that the bank had promised to negotiate a loan modification for a customer while intending to proceed with the foreclosure on the customer's house. The bank claimed an oral promise to postpone foreclosure is unenforceable. But the court ruled against the bank because the homeowner had opted against other actions to keep her home based on the bank's word it would offer a modification.

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Bill Introduced for Bankruptcy Court-Ordered Foreclosure Mediation

Sen. Sheldon Whitehouse is pushing legislation that would allow bankruptcy court judges to order foreclosure mediation between homeowners and lenders. His proposal is modeled after a program in his home state of Rhode Island. He says it would not give judges the power to slash mortgage debt like the many bankruptcy cramdown measures that have fallen short, but instead would force lenders to open up the lines of communication to find a solution that is in the best interest of both homeowners and investors.

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Experian Designs Program to Help Underbanked Consumers

Experian announced this week that it will incorporate positive rental data into the traditional credit file in an effort to help underbanked consumers build credit. According to the FDIC Web site, an estimated 17.9 percent of U.S. households, roughly 21 million, are underbanked. Experian says having positive rental history reflected in their credit scores will help consumers who may have faced financial hardships such as foreclosure or bankruptcy rebuild their credit.

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FinCEN Announces 7 Percent Rise in Mortgage Fraud Related Reports

The Financial Crimes Enforcement Network (FinCEN) said this week that suspicious activity reports (SARs) indicating mortgage loan fraud increased seven percent in the first half of this year. Banks and thrifts filed 35,135 mortgage-related SARs from January to June 2010. The federal agency found that reports referencing the term short sale appeared 827 times, and SARs referencing broker price opinion appeared 41 times during the first quarter of this year alone.

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