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Tag Archives: Kent bankruptcy attorney

1959 Cadillac tail fins, chrome and post-war exhuberance – GM designer Chuck Jordan dies at 83

In this dark and ongoing recession, or lukewarm recovery (whatever you want to call it) perhaps a revisit of 1959 would be a welcome diversion.

1959 marked the huge tail-fins of the Cadillac. Chuck Jordan was the designer. He just passed at his home in Rancho Santa Fe, California.

Alfred P. Sloan, Jr., the General Motors patriarch, had hired the first design director of General Motors in 1927, Harley Earl. Mr. Earl was a confidant of movie stars and like his close friend Cecil B. DeMille, favored Jodhpurs.

Mr. Jordan was the third successor to Mr. Earl as G.M.’s vice president of design, and his boldness echoed that of Mr. Earl. The tail fins on the 1959 Cadillac El Dorado was “letting the tiger out of the cage” in the words of Mr. Jordan.

Mr. Jordan also designed the “wide track” Pontiac, the baby boomers’ cherished muscle cars. Other designs included the 1963 Buick Riviera, the 1967 Cadillac Eldorado, and the 1973 Chevrolet Monte Carlo. His vision was that of longer, lower, wider–and intended to excite.

At age 30, Mr. Jordan was named to one of G.M.’s most prestigious posts, chief designer for Cadillac.

He also worked on the 1990s design team for the Chevrolet Camaros and Pontiac Firebirds.

He did have one dog…or rather “whale”…which was the 1991 Chevrolet Caprice, which was derided as “Shamu the Whale”.

So long, Mr. Jordan. Thank you for something so wonderfully American. Thank you for the tail fins.

Lukewarm recovery will continue; no significant decreases in unemployment for 2011 or 2012.

[categories: Washington Bankruptcy Attorney]

The Seattle Times, Kristi Keim, page A13, January 14, 2011:

The U.S. is expected to chip away at unemployment only very slowly reports Michael Dueker, Russell Investments’ head economist for North America.

Usually, a recession is followed by a fast snap back to growth, as happened in the early 1980s. The economy grew 7.0% annually for the next year and one-half. This is not happening, says Mr. Dueker, and it will take all of 2011 to get the unemployment rate reduced by a mere 1/2 percentage point.

In contrast to slow U.S. growth, the world economy is expected to grow at 4.0% to 5.0% this year.

Ken Goldstein, an economist with The Conference Board, notes that the U.S. will grow only 2.5% this year and 2.6% in 2012. Confidence in the economy is a major problem, according to Ken Goldstein.

Foreclosures are likely to peak in 2011, but can be stopped by a bankruptcy filing

Foreclosure woes for Washington homeowners are far from over, and bankruptcy filings may be the next step.

According to an article by Janna Herron of the Associated Press that was published in the Seattle Times, January 14, 2011, on page A13, the last three years of foreclosures in Western Washington:

Year 2008  2009  2010

King 2,052 4,190 6,063

Snohomish 911 1,968 3,240

Pierce 2,258 3,782 3,773

Kitsap 430 671 652

Total 8,802 16,017 20,749

One in every 45 U.S. households received a foreclosure filing last year, a record 2.9 million of them, and these lead to bankruptcy filings everywhere in order to stop foreclosure in Tacoma and also other jurisdictions. That’s up 1.67% from 2009. About 5 million borrowers are at least two months behind on their mortgages.

The firm Realty-Trac predicts 1.2 million homes will be repossessed this year 2011.

In Washinton, the housing crisis started later than the rest of the country and also appears to be peaking later; total foreclosure filings were up 24 percent from 2009. Foreclosure filings in King County rose 29%; there were also increases of 32% in Snohomish and 8% in Pierce County.

Nevada posted the highest foreclosure rate in 2010 for the fourth straight year. Washington state ranked 18th, with Snohomish County seeing the top foreclosure rate. Pierce County, Clark, Grays Harbor, and Cowlitz counties rounded out the top five.

The Law Offices of James H. MaGee can answer your questions about bankruptcy and foreclosure anywhere in the State of Washington. Contact us at our offices in Tacoma, Renton, Puyallup, Olympia, Chehalis, and Bremerton to learn more about your options. We strive to answer your questions in a courteous, confidential, and caring manner.

Mortgage modifications failing, meeting only 16% of intended goals, says NY Times

NY Times columnist David Streitfeld reports that the dropout rate from the Making Home Affordable Program (HAMP) is very high. 96,000 trial modifications were canceled by the lenders in July 2010. The number of canceled trial modifications now exceeds 616,000.

Those numbers are leading some housing experts to call the program, which modestly rewards lenders for modifying mortgages, a failure.

About 422,000 mortgage modifications overseen by the government were considered permanent as of July 2010, up from 389,000 in June. But the pool of candidates is shrinking rapidly. Only 17,000 trial modifications were started in July, down sharply from the 150,000 enrolled in September 2009 when the program was new according to a report by NY Times columnist David Streitfeld.

After reviewing the new data, Calculated Risk, a popular financial blog, wrote, “Those borrowers are still up to their eyeballs in debt after the modification,” and many will default again.

“My concern is that if we have another protracted housing dip, it’s going to bring the economy down.” Mr. Feder, chief executive of the real estate data firm Radar Logic explains, saying that he expects prices to ‘get whacked’  in the Fall of 2010.

“If consumers don’t think their houses are worth what they were six months ago, they’re not going to go out and spend money. I’m concerned this problem isn’t being addressed,” says Mr. Feder as quoted in the article by Mr. Streitfeld of the NY Times, published on Saturday, August 21, 2010.

Mortgage modifications well below target: Americans need more help says NY Times 300,000 foreclosure filings for third month in a row — 92,858 homes repossessed in July, 2010

“As repossessed homes are put up for sale, house prices are likely to fall further. As prices fall, more borrowers end up “underwater”–they owe more on their mortgages than their homes are worth. That’s a big risk factor for default.

Moody’s Economy.com estimates that 1.9 million homes will be lost this year, down only slightly from 2 million in 2009.

So far only 398,198 loans have been permanently modified, and only $321 million of the $30.1 billion allocated to the home modification program has thus far been spent.

Part of the problem is poor administration. Homeowners, who apply to their bank or mortgage service company, complain about confusing procedures and lost paperwork. Banks have complained of frequent rule changes from the government.

Another big problem is that many lenders, whose participation in the program is voluntary, have been reluctant to aggressively rework bad loans. Reducing a loan’s principal balance–rather than lowering interest levels or extending pay out periods–is often the chance of keeping underwater borrowers in their homes. Banks have been loath to accept the bigger losses that come with lowering principal. Fearing that banks will drop out of the program altogether, the Treasury has not pushed them hard enough.”

The August 20, 2010 NY Times OpEd piece proposes that the use of the states to give money directly to temporarily unemployed or under-employed individual homeowners to make mortgage payments through the Hardest Hit program (part of HAMP, which is part of TARP), through about which 4.1 billion has thus far been disbursed, may be a better route than the loan modification programs emphasized thus far to date.

Ideas for Action: Don’t expect to modify yourself out of a bad situation. You will never see a mortgage loan principal balance deduction. If you don’t mind a temporarily lower payment but still remaining underwater on your home, then I suppose a mortgage modification is not so bad. You might want to consider a “lien strip” through Chapter 13 bankruptcy if you have a second mortgage and if the value of the home is less than the amount owed on the first mortgage.

Financial Reform: Will the Dodd-Frank Financial Reform Law destroy the private mortgage industry and lead to risky government lending?

Banks lend money (a mortgage) against your house. The banks then put 1,000 mortgages or so together and sell the package of mortgages to an investor in a “pooled mortgage”. Some pooled mortgages have held a government guarantee of performance through FHA (Federal Housing Administration), Fannie Mae, or Freddie Mac, other pools were not insured because they were supposedly riskier loans, as the borrowers did not qualify under loan risk guidelines established for Fannie Mae or Freddie Mac.

Under the new rules contained in Dodd-Frank, the original lender must retain 5% of the risk in the pool if it is not a federally guaranteed (e.g. FHA, Fannie Mae or Freddie Mac) loan pool.

CNBC.com editor John Carney writes that exempting FHA, Fannie Mae and Freddie Mac from the 5.0% risk retention requirement will destroy the private mortgage industry and make the US government the unintentional backer of all mortgages:

“…a little-noticed provision of the Dodd-Frank act threatens to undermine efforts at rebuilding an innovative and healthy private sector for mortgages. Under Dodd-Frank, financial firms that securitize mortgages are required to retain 5.0% of the risk of those securities. The goal, a laudable one, is to encourage companies to more closely monitor the quality of the mortgages they securitize (sell off in pooled bundles). But it is also likely to increase the cost of affected mortgages, because banks will seek to pass on the costs of the risk to home buyers. Mortgages guaranteed by the F.H.A., however, are exempt from the 5 percent risk-retention requirement. This means that lenders will find that it costs far more, and involves more risk, to offer mortgages they back themselves than those covered with a guarantee from the agency. There’s little doubt this will lead to a huge increase int he volume of business done by the F.H.A., as banks creating securities will seek out mortgages on which they don’t have to cover the risk. Purely private mortgages will quickly be pushed out of the market.”

The complete article by Mr. Carney was published in the NY Times on August 12, 2010.

Is there a “flexible mortgage” in your future? – new thoughts and trends in mortgages – article by UCLA Law Professor Katherine V.W. Stone

Professor Katherine V.W. Stone, of UCLA law school writes that in the “old economy”, periods of joblessness were a clear sign of an unreliable borrower, but not any more, as we are in a “new economy”. Professor Stone’s article is entitled “The 30 Year Prison”, and appears in the August 12, 2010 edition of The NY Times.

Professor Stone calls for a major changes to mortgages–a “flexible” mortgage with the borrower having an option to request a two-year period of “interest only” payments. She suggests that the Federal Housing Administration require that any mortgages it insures be set up to mandate that borrowers who are involuntarily out of work be allowed to convert to an interest-only loan for up to two years. She points out that since the FHA insures almost one-third of the mortgage housing market, in short order the mortgage industry would very likely follow suit, and that this practice would become the norm for all mortgages.

Professor stone writes: “It’s not as if the 30-year self-amortizing mortgage has been around forever. In fact, it is a fairly recent invention. Before the 1930s, homes were financed by three-to-five-year balloon loans. Homeowners made interest-only payments for the duration of the loan, then typically rolled them over into new loans when they came due. During the Great Depression, however, many borrowers were unemployed when their loans came due; banks were reluctant to offer new loans, and owners had not accumulated enough money to pay off their loans. The result was a wave of foreclosures. In response the Home Owners’ Loan Corporation, created as part o the New Deal, developed a new kind of loan: instead of a few years of small payments followed by a very large one, homeowners would make regular payments of interest and principal for 30 years. In the old economy, periods of joblessness were a clear sign of an unreliable borrower. Today, they are simply a function of the job market, which flexible mortgages would take into account.”

Loan Modifications in Washington: How much is the government spending through HAMP and TARP?

Washington will get some share of the $1 billion disbursed to HUD to help with house payments so if you are unemployed and falling behind on house payments, hit HUD up for a loan.

Unfortunately, Washington homeowners get NOTHING from the recent $2 billion disbursed by the Troubled Asset Relief Program to other states. The benefited states as to the $2 billion include Alabama, Illinois, Kentucky, Mississippi, New Jersey, and Washington D.C., as part of the Hardest Hit Fund disbursements.

This $2 billion is the third large grant to the Hardest Hit Fund. Washington has not received any portion of those three grants. The Hardest Hit Fund receives disbursements from the $45.6 billion set aside for housing issues in the Troubled Asset Relief Program. Hardest Hit Fund disbursements to those favored states to date now total about $4.1 billion in three disbursement. The Hardest Hit Fund is, for now, out of money.

To date, the other funds in the $45.6 billion earmarked from TARP to be expended for housing issues include $30.6 billion for loan modification programs (such as HAMP, AKA the Housing Made Affordable Program) and $11 billion for a FHA refinancing program. Thus, there would now seem to be no funds–zero dollars–left to disburse to the Hardest Hit Fund except that, as reported by Mr. Streitfeld in the New York Times, the government has up until October 3, 2010 (the two-year anniversary of TARP) to shift the $45.6 billion in committed funds around within the housing assistance program. Perhaps the government could issue one more Hardest Hit Fund disbursement which would make house payments for people by giving them outright grants or interest free loans to make house payments while unemployed, underemployed or suffering from some other sort of financial stress or strain. If the past is a guide to future policy actions, I doubt that Washington state would be a beneficiary.

While frozen out of the $2 billion Hardest Hit Fund to date, Washingtonians may see a little benefit from the $1 billion that was just disbursed to HUD (Housing and Urban Development) from the new Financial Overhaul Law. This $1 billion HUD disbursement apparently is not part of TARP, so it is $1 billion in “new money” in addition to the $45.6 billion in TARP for housing issues. As to this $1 billion, Mr. Streitfeld reports that HUD indicates it will work with local aid groups to offer bridge loans of up to $50,000 to eligible borrowers to help them pay their mortgage principal, interest, insurance and taxes for up to 24 months by way of interest-free loans to such affected homeowners.

Mr. Streitfeld reports that between the $1 billion HUD funds from the Financial Overhaul Law and the $4.1 billion pumped into the Hardest Hit Fund in three installments, up to 400,000 borrowers could ultimately benefit. However, given the reported 14.6 million unemployed or the 3 million households contemplating foreclosure, this assistance is modest, given the size of the foreclosure problem.