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Tag Archives: chapter 13

Housing prices will not return to previous levels for 13 years – commercial space could be vacant for 10 years – NY Times

Median house prices have dropped 20 percent since 2005. Given an inflation rate of about 2 percent – a common forecast – it would take 13 years for housing prices to climb back to their previous levels – and that assumes no further value/price drops.

In Atlanta, the Southeast’s tallest building, the Bank of America tower, is one-fifth vacant – and the B of A just wrestled a rent decrease from the developer of the building.

In Cherry Hill, NJ, 10 percent of the houses on the market are so-called short sales, in which sellers ask for less than they owe lenders.

Commercial vacancies are soaring, and it could take a decade to absorb the excess in many of the largest cities. The commercial vacancy rates (end of June 2010) stand at 21.4% in Phoenix, 19.7% in Las Vegas, 18.3% in Dallas/Fort Worth & 17.3% in Atlanta, according to data firm CoStar Group.

According to the NY Times’ MIchael Powell and Motoko Rich’s October 13, 2010, article, "Some of the homes being offered at distressed prices are dragging down prices for less troubled homeowners who hope to sell. And with [some] foreclosures in disarray, the market could be further weakened."

"Even someone who is trying to sell a normal, well-maintained house is at the mercy of these low prices," said Walter Bud Crane, agent with Re/Max of Cherry Hill, NJ, as uoted by Powell and Rich.

http://query.nytimes.com/gst/fullpage.html?res=9D06E7DC173EF930A25753C1A9669D8B63&scp=1&sq=Across+the+U.S.%2C+a+Long+Recovery+Looks+Much&st=nyt

Gold, gold, gold – religion, politics and voicing lack of confidence – but is it an investment?

I grew up in "gold bug" days of the late 1970s and early 1980s. There was even a gold mine up the street from my home during the mid 1980s (no joke!).

Nevertheless, I have never owned any gold. But I find gold fascinating.

Here is an article for you that I found interesting, it is Floyd Norris’ NY Times article from Friday, November 26, 2010 (Black Friday!) about investing in gold.

Gold is perhaps more of a statement than an investment, is what Mr. Norris points out. Read on, and I hope that you are as fascinated as was I. The article gave voice to feelings I held since I was a youngster 12-13 years old trying to understand Howard Ruff’s "How to Proposer in the Coming Bad Years" a popular book in the late 1970s early 1980s – which was a popular title in the hard-hit apple-belt of Wenatchee, WA, where I grew up.

http://www.nytimes.com/2010/11/26/business/26norris.html

Charity Ripoffs: Charity Navigator seeks to help you avoid “ineffective charities” in your annual donations

An "ineffective charity" is the name given to a charity which consumes a substantial portion of its gifts and donations in management and administration fees. The charity is thus "ineffetive" at serving its intended beneficiaries.

The organization Charity Navigator seeks to guide you towards more effective charities that truly benefit the intended recipients of your donated funds. www.charitynavigator.org

There is one caveat to Charity Navigator raised by critics of Charity Navigator – a focus placed solely on an a charity’s organizational expenses may shortchange some worthwhile charities. Focusing solely on (a) how much an organization spends of fund raising and (b) the ratio of administrative costs to their overall revenue may end up giving an undeserved poor rating to some worthy charities, critics counsel.

"By focusing on administrative costs,’ said Sean Stannard-Stockton, a consultant on philanthropies, "it encouraged donors to steer resources toward organizations pushing everything into the cause rather than investing in people with expertise, new technology and other things that make a nonprofit strong." As quoted by Stepanie Strom, NY Times, Saturday, November 27, 2010, "To help Donors Choose, Web Site Alters How It Sizes Up Charities"

Charity Navigator is growing more sophisticated in response to these critics, reports Ms. Strom of the NY Times. Over the next three years, Charity Navigator plans to add evaluations of a nonprofit’s accountability and transparency to its ratings, as well as research on its impact and research by other organizations, reports Ms. Strom, so it would appear that Charity Navigator is still a good "starting point", and is going to continue in its relevancy over the coming years.

Oly about 35% of donors do any research before making a gift, and only 10% use a service like Charity Navigator as their primary source of information about nonprofits, according to research by the firm Hope Consulting, reports Ms. Strom in her 11/27/10 NY Times Article.

The best $20.00 you may spend this year: The National Consumer Law Center’s “Guide to Surviving Debt”

Don’t wait..don’t walk…don’t meander…but RUN!!!! to your computer and buy this book: "Guide to Surviving Debt", by the National Consumer Law Center, with principal author Deanne Loonin. See www.consumerlaw.org to order it directly from the NCLC.

What is the National Consumer Law Center? It is a group of people who care about you! "NCLC is the nation’s expert on the rights of consumer borrowers. Since 1969, NCLC has been at the forefront in representing low income consumers, before the courts, government agencies, Congress, and state legislatures. [] NCLC publishes nationally acclaimed series of manuals on all major aspects of consumer credit and sales" – Excerpted from the 2010 edition of "Guide to Surviving Debt".

Frankly, how can you go wrong with a book that offers the following chapters (this is just a sampling, not an exhaustive list of the 21 Chapters of the 493 page "Guide to Surviving Debt"):

-Choosing which Debts to Pay First

-Establishing a Budget

-What You Need to Know About Your Credit Report – How to Obtain a Home Mortgage with a Blemished Credit Report

-Credit Counseling and "Debt Relief" Companies

-Responding to Debt Collectors

-Collection Lawsuits

-Mortgage Workouts

-What You Need to Know About Your Mortgage

-Defending Your Home From Foreclosure – Your Rights in the Mortgage Foreclosure Process

-Utility Terminations

-Automobile Repossessions – Your Rights When the Creditor Makes a Mistake

-Student Loans – Pros and Cons of Consolidation and Rehabilitation

-Many, many more topics and chapters beyond just the preceding!!!!!

Here are some of the "Guide to Surviving Debt" reviews, excerpted:

"A gold mine on topics like how to handle collectors, which debts to pay first and how collection lawsuits work" – U.S. News and World Report

"Great advice, from the nation’s experts, on how to pull yourself out of debt." – Jane Bryant Quinn

This book has been around for many years, but is updated every couple of years, with the most recent udpate completed for 2010. Prior editions were completed for 1992, 1996, 1999, 2002, 2005, 2006 and 2008. Make sure you nail down the 2010 edition.

This book is helpful to me as an attorney (even though it is clearly written for "the man/woman on the street") – because it is so well written in its approach. It really tells you step #1, step #2 etc, in its "what to do/what not to do" approach, that you will find much assistance.

This book is great. Even if you should file bankruptcy with our office, when your bankrutpcy is all done, gone and settled, I can assure you that you will find helpful info that will keep you out of bankruptcy court again.

University of Phoenix – “for profit” school – criticized by Bill and Melinda Gates’ education advocacy group “The Education Trust” – U of Phoenix produces low graduation rates and leaves students saddled with huge student loans

The National Consumer Law Center’s 2006 publication "Student Loans" (see also the 2009 Supplement) pointed out that for-profit schools signed up many, graduated few, but left most all (graduated or not) saddled with substantial student debt which experienced much higher default rates than student loans originated by students attending non-profit public and non-profit private colleges and universities.

Consequently, it was no suprise to me when the NY Times reported on Wednesday, November 24, 2010, that the Education Trust (a non-profit research and advocacy group) which is a Bill and Melinda Gates Foundation funded organization, released a report entitled "Subrime Opportunity" which charges that such for-profit schools like the University of Phoenix deliver "little more than crippling debt" citing federal data taht suggests only 9 percent of the first-time, full time bachelor’s degree students at the Univeristy of Phoenix, the nation’s largest for-profit college, graduate within six years.

I quote from Tamar Lewin’s 11/24/2010, NY Times Article (page A18) "Report Finds Low Graduation RAtes at For-Profit Colleges": "…only 22 percent of the first-time, full-time bachelor’s degree students at for-profit collees over all graduate within six years, compared with 55 percent at public institutions and 65 percent at private non-profit colleges. Among Phoenix’s online students, only 5 percent graduated within six years, and at the campuses i Cleaveland and Wichita, Kansas, only 4 percent graduated within six years.[]…for-profit students graduate with so much more debt than community college students. Many either default on their loans, or struggle to make payments but find that their lives are taken over by debt. In a separate study also released Tuesday [11/23/10], the Pew Research Center reported that almost one-quarter of those who received bachelor’s degrees at for-profit schools in 2008 borrowed more than $40,000, comapred with 5 percent at public institutions and 14 percent at not-for-profit state colleges."

Interesting, Mr. Lewin points out that (as perhaps a sign of subtle protest) Melinda Gates resigned from the board of the Washington Post Company, which gets most of its revenues from its for-profit higher-education unit, Kaplan, Inc. http://www.nytimes.com/2010/11/24/education/24colleges.html?

Forbearance on student loans – interest continues to accrue but other collection stops. tax refund intercepts, collection calls/letters and garnishments cease during forbearance

Forbearance is not as helpful as deferment. During forbearance, interest will still accrue, but there is some benefit to forbearance on student loans because collection actions such as 1040 tax retur refund intercepts, garnishments and collection calls/letters will cease during a forbearance period.

On the issue of deferments, a distinction must be made. First, you must figure out what type of loan that you have, whether it is "subsidized" or "unsubsidized".

A "subsidized" loan, such as a Direct Student Loan, the government pays the interest during any deferal period, but in an "unsubsidized" loan such as some Federal Family Education Loans (FFEL), the loan always is accruing interest (thus no interest is paid by the Government on behalf of the student like in a subsidized loan during deferal) so any interest that accrues during the deferal of an unsubsidized loan is usually capitalized into the loan and added to the loan balance.

One important distinction is that even a loan in "default" may receive a forbearance, although it can take some arguing and pushing with the student loan agency to achieve the forbearance. Generally, though, once a loan is in "default" it is no longer eligible for "deferal", and "deferal" of a subsidized loan can be quite valuable. But just beause a loan is not eligible for deferal does not mean that it is likewise ineligible for forbearance.

FFEL loans have two types of forbearances, known as "mandatory" and "discretionary". The Direct Loan proram does not make this distinction.

The area of FFEL and Direct Loans forbearances is vast, and this post can only scratch the surface, however, note that both the FFEL and Direct Loan regulations provide for forbearances if borrowers are in poor health or have other ersonal problems that affect the ability o the borrower to make the scheduled payments. Forbearance for these reasons is discretionary under FFEL regulations. The forbearance is granted up to a year at a time under FFEL but there are no limits to the number of years this type o forbearance may be granted. While you are seeking one of these one-year discretionary forbearances, do not forget to ask for an "administrative" forbearance – generally with a few exceptions, the FFEL "administrative" forbearance is granted by discretion.

When seeking a forbearance, I would suggest that you do so in writing (even if the writing is to confirm an oral understanding of forbearance) by using a form available at the Department of Education’s website www.ed.gov.

Genesis of “foreclosuregate” and “robosigners” – it all began in Denmark, Maine with Nicole Bradbury, retired lawyer Thomas A. Cox, Pine Tree Legal Assistance and GMAC’s Jeffrey Stephan

NY Times’ David Streitfeld assembles a fascinating and historically important article "From This House, a National Foreclosure Freeze" NY Times October 15, 2010.

Retired banking lawyer Thomas A. Cox, working as a volunteer at Pine Tree Legal Assistance in Maine, launched a national firestorm which helped bring the terms "foreclosuregate" and "robosigners" to the common lexicon.

Mr. Cox, a retired volunteer legal aid attorney, begain working on Ms. Bradbury’sGMAC foreclosure file in the summer of 2009.

Mr. Streitfeld’s reporting is concise: "Mr. Cox voiced to a colleague that he would expose GMAC’s proces and its limited signing officer Jeffrey Stephan, but Mr. Cox wanted to take the questioning much further. In June, he got his chance. A few weeks later, he spelled out in a court filing what he had learned from the robo-signer: ‘When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn’t. When he says that he has custody and control of the loan documents, he doesn’t. When he says that he is attaching a true and accurate copy of a note or a mortgage, he has no idea if that is so, because he does not lok at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn’t.’… it was not a complete loss for GMAC – Judge Powers declined to find the lender in contempt – but nearly so."

The article by Mr. Streitfeld alleges that GMAC had been admonished in another legal battle in Florida some four years ago for having used "robosigners".

Mr. Cox’s legal savvy is to be commended. But frankly, doesn’t the entire "foreclosuregate" dispute really beg the question: that despite the allegedly flawed attestation of "robosigner" Jeffrey Stephan on GMAC’s behalf – why should Ms. Bradbury of Denmark, Maine, get to live for free? Don’t you have to pay your mortgage or rent? How much free housing will Ms. Bradbury receive because of Mr. Stephan’s "robosigner" position with GMAC?

http://www.nytimes.com/2010/10/15/business/15maine.html?scp=1&sq=from+this+house%2C+a+national+foreclosure+freeze&st=nyt

There are easily two sides to this coin….

Did Debt Kill Mozart? – Composer faced Garnishment of Half of his Income regarding May 2, 1789 loan & judgment – Owed Two Years’ Salary

The NY Times reporter Daniel J. Wakin reports on Monday, November 29, 2010, that famous composer Mozart died just two weeks after the entry of a judgment for twice his annual

income.

http://www.nytimes.com/2010/11/29/arts/music/29mozart.html

"When his [Mozart's] name was discovered two decades ago in a Viennese archive from 1791, it caused a stir. The archive showed that an aristocratic friend and fellow Freemason, Prince Karl Lichnowsky, had sued Mozart over a debt and won a judgment of 1,435 florins and 32 kreutzer in Austrian currency of the time (nearly twice Mozart’s yearly income) weeks before the composer died. …scholars have generally assumed that it concerned a loan connected with a trip the two men made to Berlin."

‘"It gives us a concrete picture of the misery level that Mozart lived with in the last two and a half years of his life,’ Mr. Hoyt said in a recent interview."

Peter Hoyt is a Mozart scholar and assistant profesor of music history at the University of South Carolina and serves as a program annotator and lecturer for the Mostly Mozart Festival in New York. It is largely believed that the loan from Lichnowsky to Mozart carried a 4.0% interest rate, and had been unpaid for two years.

Mr. Wakin reports that the judgment against Mozart called for the garnisheering of half of his salary. Lichnowsky is not known to have pressed Mozart’s widow Constanze for repayment following Mozart’s debt.

Did this judgment and looming garnishment contribute to the death of one of the world’s leading composers?

Bankruptcy relief is there for you… it might not have been as freely available to Mozart in the form in which it is offered to Americans…don’t let your debts impact your ability to care for yourself and your family.

Debt may have contributed to the death of the world’s finest musical mind….think about it. The world is so much worse off for the early and untimely death of Mozart.

"If true, the conclusion could add depth and texture to our understanding of Mozart’s anxieties over financial problems at the end of his life and of his reception during one of his last journeys."

On-line Retail Scams: Tips on researching your vendor’s website before purchasing on-line

If you are going to purchase something over the internet from a non-national "name" vendor such as Costco, Best Buy, Nordstroms, Radio Shack etc, you should REALLY take a few moments to research the website before you hand out your credit card number.

According to a recent NY Times article, the following sites may help you avoid retail grief: Get Satisfaction, ComplaintsBoard.com, ConsumerAffairs.com and RipoffReport.com .

One word of caution about these sites, though. Sometimes an unreasonable customer can in fact post something damaging so I suppose take one or two postings with a grain of salt…the key is to look for multiple postings from a variety of customers which sound in the same complaint. An isolated complaint or two is not key…but ten or 15 negative postings can perhaps be telling.

If you have already been ripped-off, then consider a complaint made to the Internet Crime Complaint Center, or IC3, a partnership between the F.B.I. and the National White Collar Crime Center,

The following November 26, 2010 NY Times Article (link below) is almost unbelievable. It concerns a "new breed" of internet commerce where businessowners are intentionally foul and inappropriate in order to get "links" to their websites. These "inbound links" from postings on consumer complaint websites ironically help the fraudulent company to secure top locations in Google search-engine standings. Here is a link to the article – it is sickeningly fascinating:

http://www.nytimes.com/2010/11/28/business/28borker.html

After Ms. Rodriguez had a contacts and eyeglass purchase go horribly wrong (she was sold counterfeit goods – and the immigrant business owner was threatening, harassing and even posed as Ms. Rodriguez to try to cause trouble with Ms. Rodriguez’s credit card issuing company Citibank, she decided to investigate and push authorities to do something about a company called DecorMyEyes. Here is an excerpt from the investigative article of 11/26/2010 of

(Beginning of quote from NY Times Article of David Segal)

By then, Ms. Rodriguez had learned a lot more about DecorMyEyes on Get Satisfaction, an advocacy Web site where consumers vent en masse.

Dozens of people over the last three years, she found, had nearly identical tales about DecorMyEyes: a purchase gone wrong, followed by phone calls, e-mails and threats, sometimes lasting for months or years.

Occasionally, the owner of DecorMyEyes gave his name to these customers as Stanley Bolds, but the consensus at Get Satisfaction was that he and Tony Russo were the same person. Others dug around a little deeper and decided that both names were fictitious and that the company was actually owned and run by a man named Vitaly Borker.

Today, when reading the dozens of comments about DecorMyEyes, it is hard to decide which one conveys the most outrage. It is easy, though, to choose the most outrageous. It was written by Mr. Russo/Bolds/Borker himself.

“Hello, My name is Stanley with DecorMyEyes.com,” the post began. “I just wanted to let you guys know that the more replies you people post, the more business and the more hits and sales I get. My goal is NEGATIVE advertisement.”

It’s all part of a sales strategy, he said. Online chatter about DecorMyEyes, even furious online chatter, pushed the site higher in Google search results, which led to greater sales. He closed with a sardonic expression of gratitude: “I never had the amount of traffic I have now since my 1st complaint. I am in heaven.”

That would sound like schoolyard taunting but for this fact: The post is two years old. Between then and now, hundreds of additional tirades have been tacked to Get Satisfaction, ComplaintsBoard.com, ConsumerAffairs.com and sites like them.

Not only has this heap of grievances failed to deter DecorMyEyes, but as Ms. Rodriguez’s all-too-cursory Google search demonstrated, the company can show up in the most coveted place on the Internet’s most powerful site.

Which means the owner of DecorMyEyes might be more than just a combustible bully with a mean streak and a potty mouth. He might also be a pioneer of a new brand of anti-salesmanship — utterly noxious retail — that is facilitated by the quirks and shortcomings of Internet commerce and that tramples long-cherished traditions of customer service, like deference and charm.

Nice? No.

Profitable?

“Very,” says Vitaly Borker, the founder and owner of DecorMyEyes, during the first of several surprisingly unguarded conversations.

“I’ve exploited this opportunity because it works. No matter where they post their negative comments, it helps my return on investment. So I decided, why not use that negativity to my advantage?”

(End of Quote)

Note that I DID NOT link this blog post to the DecorMyEyes website – any sort of link to DecorMyEyes would help the Google standing of DecorMyEyes.

Get the picture?

Be careful out there…

Seattle home sales drop 32% – worst October since record-keeping started in 1994 – “shadow inventory” of 2 million homes

Nationally, 26% drop in sales of existing homes for October 2010. This was reported to have been the worst October in at least twenty years, according to the NY Times’ David Streitfeld (NY Times, Wednesday, November 24, 2010)

Portland, OR home sales droped 39%, Minneapolis saw a 41% drop and Massachussets and Illinois saw drops of 28% and 34%.

According to Mr. Streitfeld, aout 4.43 million homes were sold on a seasonally adjusted annual basis in October 2010, compared with nearly 6 million in October 2009. In October 2008, at the height of the financial crisis, about 5 million homes were sold. Distressed sales, including foreclosures, have ben about a third o the market, while first-time buyers ahve ben as much as 50 percent. Both are high by historic levels, reports Mr. Streitfeld.

Mr. Streitfeld reports taht short sales, where the sellers negotiate with their lender to sell thier house and repay less than the full amount owed, are rising in popularity although they are still outnumbered by foreclosures. Bank of America, for instance, said it had agreed to more than 60,000 short sales this year.

It appears to Mr. Streitfeld that the slight drop off in foreclosures is in turn increasing the likelihood of a successful "short sale" – he reports that lenders see themselves under pressure from shoddy documentation procedures, so with all 50 state attorneys general investigating foreclosure procedures, the banks have de-emphasized foreclosrues and have emphasized short sales.

Mr. Streitfeld also notes that there still remains a large "shadow inventory" of more than two million delinquent and foreclosed homes that banks will ultimately have to bring to the market in order to dispose of the homes. For this reason, the sales of previously foreclosed houses has dropped. By way of example, in California, there were 19,925 foreclosed homes sold by the banks in October 2008, and that number had dropped to 15,621 in October 2009, and then down to 10,367 in October 2010.

http://www.nytimes.com/2010/11/24/business/economy/24foreclosure.html