Business and Tax Lawyer Blog

Bank of America has agreed to a $20 million settlement for wrongfully foreclosing on 160 service members without checking on their military status. The suit was filed by the U.S. Department of Justice against BAC Home Loans Servicing, formerly Countrywide Home Loans Servicing. Allegedly, the lender did not consistently check the active duty status of borrowers on whom it foreclosed. The Justice Department asserts that Countrywide knew, or should have known, about their military status prior to initiating foreclosure proceedings. The Servicemembers Civil Relief Act was implemented by Congress in order to protect military personnel from civil requirements, such as mortgage payments, pending trials, outstanding credit-card debt and taxes.

To learn more about this article, visit BofA unit to pay $20M settlement.

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Over the past several decades, the average American household's debt level has consistently grown. However, with the recent economic hardship our country's endured, many people have found a way to pay down their total debt. Unfortunately, many of those who work hard to get out of debt often find themselves in debt again later.
Here are a few suggestions to help you stay out of debt:
(1) Start by making a budget. Determine your Net Monthly Income and deduct from it your regular monthly expenses, this should leave you with an idea what you have left as Disposable Income. Once you establish your disposable income, determine whether you can live within your means without using a credit card. (2) Do not get tricked into rewards that credit cards lenders offer. (3) Do not borrow money to pay off other credit card debt. (4) Understand the problem and change your habits. (5) Save up to purchase certain non-essential items, do not charge it. (6) When deciding to rebuild your credit, stay smart and start small, pay off charges every month. Paying off and staying out of debt is tough. After you create new habits, you will feel the happiness that comes with financial security.

To learn more about this article, visit 10 ways to avoid creeping credit card debt.

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Since Blockbuster Video filed bankruptcy back in September, its stock price has fluctuated from 4 cents to 23 cents, yet some investors are undeterred and still purchasing those shares.
This is not a new investment strategy; for years investors have bought stock in bankrupt companies with the hope there will be money remaining once all the company's creditors are repaid.
Some investment analysts view this as very risky, given that when a company files Chapter 11 restructuring, shareholders are the last to be paid. Therefore, unless the creditors are fully satisfied, shareholders will receive nothing.
In 2009 and 2010, only 4 out of 41 public companies delivered returns to shareholders after emerging from bankruptcy.

To learn more about this article, visit Why People Buy Stock in Bankrupt Companies.

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Due to the amount of layoffs during the Great Recession, 9 million more Americans joined the ranks of the uninsured. A 60% increase in skipped health care is due to the increase in cost in the past decade. There has also been an increase in problems with medical debt and out-of-pocket spending costs, leading many more to consider bankruptcy.

According to the Biennial Health Insurance Survey, individuals who lost employer-based health insurance had a hard time finding it elsewhere. Only 25% of these individuals were able to find health insurance elsewhere, with only 14% continuing their coverage through Consolidated Omnibus Budget Reconciliation Act (COBRA), which allows an employee to continue their coverage under the employee-based health plan for a certain period of time. However, even this plan is still unaffordable for most.

The Patient Protection and Affordable Care Act has begun to bring relief to struggling families. After the full implementation of the law, any future recession will not have the power to strip so many Americans of their health security. Currently, the Act protects individuals from being denied healthcare due to a pre-existing condition, allows individuals up to age 26 to state on their parents’ plans, gives small businesses tax credits, has no lifetime limits on benefits, and mandates coverage of some preventive care with co-payments. When the provisions of the Act are in full effect in 2014, health insurance plans will be required to meet a basic benefit standard and will not be allowed to deny coverage or charge more due to a pre-existing health condition.

To learn more about this article, visit Unemployment adds 9 million uninsured in U.S.

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If you have ever been in an airport or mall, then you've most likely seen a Sbarro pizza kiosk. The Wall Street Journal has reported that the pizza chain is filing for Chapter 11 bankruptcy protection.
The New York based pizzeria cites a decline in mall traffic, less consumer spending, and rising costs of ingredients for its current financial woes.
According to Sbarro's Chapter 11 Petition, it has an asset-to-debt ratio of $471B to $486.6B, respectively.
Sbarro currently operates more than 1,000 restaurants in over 40 countries.

You Can Read More by Visiting Sbarro files for Chapter 11.

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Always be on the lookout to protect yourself and your family against consumer scams. The following are some helpful tips to protect against common consumer scams.
You should always make sure that websites are secure before providing financial information over the internet. Web addresses that start with “https” and are secure and scramble inputted data as it is transmitted over the web.
Debt collection is the most frequent form of credit fraud. Consumers must know that debt collectors may not harass or abuse customers, nor supply misleading information. Make sure to have a written contract with defined restrictions and obligations for any service that you may have done.
Look out for mortgage rescue scams that offer to stop or delay foreclosure payments for a fee. The most important investment a person makes is the purchase of their home, and improvements to the home. It is smart to obtain estimates from multiple businesses and check with the Better Business Bureau before entering into a contract for improvements on your home. So before entering into a contract or purchasing items from a business that is unknown to you, it is always smart to research the company to ensure their legitimacy.

To learn more about this article, visit Tips To Avoid Common Consumer Scams.

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Most people wouldn't think twice about signing a personal guarantee for their business. However, most financial advisers and business attorneys advise to only do so as a last resort. The reason being, you stand to lose a lot more than your business and any assets it may hold. You, as the guarantor, could lose personal assets such as your home.

Perhaps the most important factor to keep in mind is that the guarantee will only apply to you, not to your partners or managers. It means that you are pledging to make good on the loan. In some instances, you may be responsible for the loan even if your business is protected by limited liability laws. Therefore, when you sign a personal guarantee, you are acting as a cosigner on the loan. As such, creditors are legally entitled to come after you in the event the debtor, your business, defaults or misses a payment.

A lender may also seek to have your spouse sign the guarantee. This would put all marital assets at risk of seizure/liquidation by the creditor. However, most states allow for protection against such actions through various innocent spouse provisions.

Guaranteeing a loan for your business demonstrates a strong level of personal commitment to your business, which can provide the incentive to convince a bank to loan you the money. In some instances, however, you may not have a choice. The Small Business Administration (SBA) requires that any loan they provide must be personally guaranteed by every person with a 20 percent or larger ownership interest in the business.

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Attorney David J. Stern, also known as the "Foreclosure King", has announced that he will cease all Florida-based foreclosure work by the end of March. Stern's firm has come under great scrutiny over the last year as evidence of robo-signing has surfaced. The Florida Attorney General's Office began investigating Mr. Stern's firm following such allegations. As a result of the investigation, more evidence of fraud has emerged, forcing Stern to cease all foreclosure activity in Florida. Presently, the firm that filed over 70,000 foreclosures in 2010 has over 138,000 square feet of vacant office space and has laid off hundreds of employees. In addition, the firm has filed notices to withdraw from over 750 cases in St. Johns County alone.

Continue reading "Florida Based Foreclosure Attorney Closing Shop" »

In recent blog posts, we discussed how foreclosure rates have increased from a year ago. However, homes in some stage of foreclosure are down nearly 42% from last November.

One of the major reasons fewer homes are in foreclosure has to do with lenders not being able sell these homes at foreclosure auctions. Therefore, lenders are forced to maintain possession of the property and continue paying property taxes and other expenses on these homes. More and more lenders have offered alternatives to foreclosure such as deed in lieu of foreclosure and short sale agreements.

If the borrower qualifies for a deed in lieu of foreclosure, the lender will offer to release the borrower from personal liability on the mortgage if the borrower(s) sign over the deed to the property.

Short sale agreements have to do with the lender accepting offers from buyers in which the offer is lower than what the borrower owes on the mortgage. Afterwards, the lender should release the borrower from any personal liability on the mortgage. If you are currently facing foreclosure you should consult with an experienced attorney to discuss your options. To learn more about this article, please visit Jax foreclosures drop 42% in November.

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As many Jacksonville residential homeowner's are aware, most homes are and have been declining in value for a while now. Many Florida residents are "underwater" on their homes. Underwater means they owe more on the house than the house is worth.

The Obama administration passed legislation designed to help Americans with the foreclosure crisis. The Home Affordable Modification Program (HAMP) was passed in 2009 and, if eligible, the applicant can apply to have the terms of the mortgage adjusted to something more affordable.

Government agencies have helped finance the program and, for the most part, servicers seem to approve the program. If you are not eligible for HAMP, there may be other alternatives offered by your mortgage provider. If you have questions about foreclosure or bankruptcy, you should consult and experienced attorney. To learn more about options for troubled homeowners, please visit 44% of Jax properties underwater.

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A recent Commerce Department report indicates that new online privacy legislation is coming. It is expected to have a substantial impact on all technology with internet capabilities. It is also geared at social media sites, such as Facebook and MySpace.

The legislation is hoping to have voluntary compliance from online companies but also addresses industry standards that will be enforced if need be. The growing concern for personal information breaches and companies marketing to minors leads the cause for the proposed legislation. It will be interesting to see what penalties and consequences will be imposed on violators should this legislation pass. Privacy rights exist in this country and if those rights are violated you may have a cause of action against the party in violation. There are federal and state laws that protect privacy rights and if you feel your rights have been compromised, you should contact an experienced attorney. To learn more about this article, please visit, New report calls for online privacy bill of rights.

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The Bankruptcy Trustee in the Bernie Madoff saga has filed a lawsuit against JP Morgan Chase for $6.4 billion dollars. The Trustee believes JP had involvement in Madoff's scheme of defrauding investors. The suit was filed in a New York Bankruptcy Court.

The lawsuit seeks to recover over $1 billion in profits and fees and over $5 billion in damages. If the Trustee is able to recover adequate damages, disgruntled Madoff investors may be able to receive some of the funds they lost in investing with Madoff.

The Trustee alleges JP Morgan should have known not to accept fees and profits because it was aware or should have been aware of suspicious activity by Madoff.

To learn more about this article, visit Madoff trustee sues JPMorgan, others for $6.4B.

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The Federal Trade Commission (FTC) has dropped the hammer on Debt consolidation & settlement companies, announcing that these companies can no longer charge upfront fees for their services, effective October 27, 2010.

A series of previously posted blogs discussed prohibited and acceptable debt collection practices. Add this blog concept to that series.

Debt collection companies have always claimed that they can settle your debts for less than you owe, but have charged costly fees upfront before beginning work. In many cases, debtors used these services but were still forced to file for bankruptcy anyway.

Under the new rule, Debt consolidation & settlement companies are required to work out agreements with the debtor's creditors, present the agreements to the debtor indicating how much debt the debtor will actually owe, and then the debtor can decide whether or not to move forward in paying the company service fees.

Although this is a step in the right direction for consumer protection, these companies still are unable to provide debtors all of the protections available under the bankruptcy laws. Once a debtor files a petition for bankruptcy, a mechanism called the automatic stay kicks in. Because it is in the form of a court order, this is one of the most powerful elements in filing for bankruptcy. It essentially makes all of a debtor's creditors cease contacting the debtor.

Creditor phone calls, letters, or any other type of correspondence are strictly prohibited. In fact, if a creditor is in willful violation of the automatic stay, there are civil rights and remedies for each violation that a debtor can pursue. In addition, any pending court cases where the debtor is named as a defendant (notwithstanding a few exceptions such as criminal, alimony, child support cases) must stop until after the bankruptcy. The automatic stay is not available if a debtor chooses to use a debt consolidation company. Creditors are in no way obligated to negotiate with Debt Settlement companies. To learn more, visit New rule: No more up-front fees for debt fixers.

There are a lot of different factors to consider before filing for bankruptcy and there may be other options available.

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Recent blog posts, have addressed the foreclosure chaos going on resulting from allegations of "robo-signing" surfacing among several large lending firms. Former Bank of America employee, Tam Doan, is speaking out on these allegations. He says he was a former "robo-signer" in southern California. He claims he signed thousands of documents a day without reading the content within those documents; specifically that his unit was responsible for pre-foreclosure procedure and his branch could not move forward with the foreclosure process until those documents were signed. Doan claims that there was not enough time in the day to review each document and that it was company policy to sign these documents depsite not reading them.

These documents were, he said, basically an affirmation that BOA had done everything it could do to help the borrower keep the home and prevent foreclosure. Doan had no idea whether BOA had done everything it could possibly do - he just signed whatever came to his desk.

However, Doan stated that he didn't "robo-sign" all documents that came across his desk. He carefully reviewed and set appraisal values on homes going into foreclosure. He claims that he would set the values at 100% of the debt owed if he did not see proper certification documents in which he was asked to "robo-sign." Allegedly, company policy mandated that he set the values at 85% and Doan was fired for doing this and is now "spilling the beans" on BOA business practices. He claims he feels a level of guilt and responsibility in contributing to the foreclosure crisis and knows that he helped cause a lot of people to lose their homes. To learn more about the article, visit I was a robo-signer.

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In a blog posted late last week, we discussed that the Florida Supreme Court announced, through its clerk of Court, that it has no Constitutional authority to interfere with pending foreclosure actions because of alleged attorney misconduct.

Attorney General, Bill McCollum, is now stepping in and investigating several foreclosure firms for possible fraudulent activity. He has subpoenaed certain Lender Processing Documents (LPS) including network agreements with law firms.

Back in September, Congressman, Alan Grayson, asked Chief Justice Canady to suspend foreclosure actions until McCollum had a chance to investigate fraudulent allegations against particular foreclosure law firms. It is rumored that McCollum is currently investigating: The Law Offices of David J. Stern, Florida Default Law Group, Shapiro & Fishman, and the Law Offices of Marshall C. Watson.

In addition to the network agreements, LPS training manuals and policies have been subpoenaed. The review of these documents will most likely take time. Therefore, any type of resolution probably will not be reached any time soon. To learn more about the article, visit McCollum subpoenas LPS documents.

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Recently, the Florida Supreme Court was asked to suspend Florida foreclosure cases until Attorney General, Bill McCollum, had a chance to investigate several allegations of fraud against particular foreclosure firms.

The allegations assert that key documents are being forged in identifying mortgage ownership and many mistakes are being made by these firms due to the high volume of cases they are taking on. However, the Florida Supreme Court responded with a letter, through the Clerk of the Court, Thomas Hall, that they have no Constitutional right to interfere with cases because of attorney misconduct allegations.

One of the many duties the Clerk of the Florida Supreme Court is responsible for is releasing orders and opinions of the Court to the public. You can see more of the Clerk's duties at Florida State's Court System.The Florida Supreme Court has the authority to regulate attorney misconduct but cannot suspend cases simply because fraudulent acitivity is alleged.

Currently, GMAC, now owned by Ally Bank, will not continue with eviction or foreclosure proceedings in 23 states, for the time being, because a former employee admitted to forging documents and committing several frauds. JP Morgan, based out of New York, is asking courts to suspend final orders in pending cases because several employees admitted that they had not reviewed documents and material they should have been reviewing prior to moving forward with foreclosure proceedings.

Find out more about the issue at Florida Supreme Court can’t halt foreclosures.

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Florida's Task Force on Residential Mortgage Foreclosure Cases was established to help the state of Florida respond to the foreclosure crisis that has hit the state in the latest recession. The fifteen member task force made its final report and recommendations to the Florida state supreme court in August of 2009. In light of the task force's findings, the court has issued an administrative order to enact the recommendations.

One of the key elements of the order is a provision for creating a statewide foreclosure mediation program. Under the order, any foreclosure on a residential homestead property with a loan that originated under federal truth in lending regulations will be required to go into mediation unless both parties agree otherwise.

The goal of the order is to encourage parties to mediate outside of the courts, which should ease the burden on the already strained court system. At issue is whether there are enough professionally trained mediators to hear all of the suits and whether the new requirements would cause the already slow foreclosure process to a come to a virtual standstill.

You can read more about the Florida foreclosure crisis and the supreme court's response to it at Florida Supreme Court Orders Mediation in Foreclosure Cases!

If you need an attorney to assist you in defending your rights, please contact Wood, Atter & Wolf, P.A. for legal counsel.