Archive for November, 2009

Real Estate Settlement Procedures Act (RESPA)

RESPA was designed to give home buyers and sellers better disclosure of settlement costs; and to elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services.

Prohibition Against Kickbacks and Referral Fees

12 U.S.C. §2607(a); 24 C.F.R. § 3500.14(b). RESPA prohibits the giving or receiving of any fee, kickback or other thing of value for the referral of a “settlement service” (defined at 12 U.S.C. § 2602(3) and 24 C.F.R. § 3500.2).

One court has stated that, in order to state a claim alleging a violation of this section, one must demonstrate:
1) an agreement between the parties to refer settlement service business,
2) the transfer of a thing of value, and
3) the referral of settlement service business. “An agreement or understanding for the referral of business incident to or part of a settlement service need not be written or verbalized but may be established by a practice, pattern or course of conduct.” 24 C.F.R. § 3500.14(e).

Yield-spread premiums: A yield spread premium is a fee paid by a mortgage lender to a mortgage broker for arranging a loan with an interest rate at a higher amount than the par rate. Payment of a yield spread premium is not a per se violation of this section, but may be illegal under RESPA based on a factual inquiry into the circumstances surrounding the payment.

HUD (the agency charged with interpretative, investigative and enforcement powers under RESPA) recommends a two-step inquiry to determine whether a yield spread premium is illegal. First, one determines whether the payment of the yield spread premium was for services actually performed; if it is not, then the payment is an illegal kickback. If the payment was for services actually performed, then one looks at whether the total compensation paid to the broker reasonably related to the value of the services; if the compensation does not reasonably relate to the value of the services, the payment is a violation of this section.

Recently, some Courts have fashioned a five-part pleading standard for alleging a YSP-based violation of RESPA, three-part test and on HUD statements:

“(1) the existence of an agreement between the lender and broker whereby the broker promises to refer settlement service business to the lender;

(2) the transfer of a thing of value between the lender and broker based upon that agreement;

(3) the referral of settlement service business by the broker to the lender and either that

(4) the broker received a YSP without providing any goods or services of the kind typically associated with a mortgage transaction or (5) if the broker did provide such goods or services, the total compensation paid to the broker was not reasonably related to the total value of the goods or services actually provided.. As part of pleading (4) or

(5), a borrower must plead what services were offered, the reasonable value of those services, and the fact that total broker compensation exceeded that value. Also, a borrower alleging a YSP-based violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, or a YSP-based breach of fiduciary duty, can only do so by (also) meeting the RESPA pleading standard.

Prohibition Against Unearned Fees and Fee Splitting 12 U.S.C. §2607(b); 24 C.F.R. §3500.14(c). RESPA prohibits the giving or receiving of “any portion, split or percentage of any charge made or received for the rendering of a settlement services in connection with a transaction involving a federally related mortgage loan other than for services performed.” The regulations further state that, “A charge by a person for which no or nominal services are performed or for which duplicative fees are charged is an unearned fee and violates this section.”
Remedies

There is a private right of action for violation of § 2607 (Illegal referral fee or kickback and fee splitting). Statutory damages: person charged for the settlement service can recover an amount equal to “three times the amount of any charge paid for such settlement service,” plus attorney’s fees and costs. 12 U.S.C. § 2607(d).

Practice Tip:

The bottom line is that any payment by the lender to the broker is illegal if it is not for the reasonable value of services actually performed. So if you see a high up-front broker’s fee plus a yield-spread premium or other broker fee paid by the lender, there’s a good chance the lender-paid is fee is “unearned gravy” and constitutes a violation.

There is a private right of action for violation of § 2605 (Servicing requirements and administration of escrow accounts). Actual damages for each failure to comply, additional damages for a pattern and practice of noncompliance, plus attorney’s fees and costs. 12 U.S.C. § 2605(f).

Statute of Limitations

• 1 year for affirmative (kickback and fee-splitting) claims. 12 U.S.C. § 2614;
• Unlimited as a defense to foreclosure in the nature of a recoupment or setoff.

When someone is considering filing for bankruptcy, chances are that they aren’t thinking of all the repercussions that they are going to have after it’s over. Here are negative affects of filing for bankruptcy.

Feelings of embarrassment and defeat, since everyone knows that you have filed for bankruptcy in California.

No say in how much you will have to repay to your creditors, since the decision isn’t in your hands any more.

Loss of assets or treasured items, such as your house or car, or even your business if you are business owner.

Payments to repay creditors can be garnished from wages for as many as five years.

Consumer debtors have to attend credit counseling within the first six months after they file for bankruptcy.

Debtors have to finish an education in personal financial management before they are able to get a discharge.

If it’s a chapter 13 bankruptcy, it will be your personal credit report for 7 years, if it’s a chapter 7 it stays on for 10 years.

When someone is considering filing for bankruptcy, they need to think about the negative affects of what they are doing and ask themselves if there isn’t a better way to help themselves out of a financial mess. Chances are that there is, they just have to do some research and ask for some advice from other people. Credit counseling is a good place to start. Bankruptcy is not the only option that they have to go on.

It pays to get multiple opinions before you end up filing. Bankruptcy stays on your record for 10 years, so you need to go into this knowing everything in advance.

When someone is considering filing for bankruptcy, chances are that they aren’t thinking of all the repercussions that they are going to have after it’s over. Here are negative affects of filing for bankruptcy.

Feelings of embarrassment and defeat, since everyone knows that you have filed for bankruptcy in California.

No say in how much you will have to repay to your creditors, since the decision isn’t in your hands any more.

Loss of assets or treasured items, such as your house or car, or even your business if you are business owner.

Payments to repay creditors can be garnished from wages for as many as five years.

Consumer debtors have to attend credit counseling within the first six months after they file for bankruptcy.

Debtors have to finish an education in personal financial management before they are able to get a discharge.

If it’s a chapter 13 bankruptcy, it will be your personal credit report for 7 years, if it’s a chapter 7 it stays on for 10 years.

When someone is considering filing for bankruptcy, they need to think about the negative affects of what they are doing and ask themselves if there isn’t a better way to help themselves out of a financial mess. Chances are that there is, they just have to do some research and ask for some advice from other people. Credit counseling is a good place to start. Bankruptcy is not the only option that they have to go on.

It pays to get multiple opinions before you end up filing. Bankruptcy stays on your record for 10 years, so you need to go into this knowing everything in advance.

Even before deciding to file bankruptcy, which might tarnish your reputation, spend your precious time, and money, and put you into a stressful situation, why not consider avoiding bankruptcy. Find out how you can trim down expenses, boost earnings, bargain rates and put up for sale assets to eventually keep you away from falling into debts or help you pay off your debts.

The ultimate question to ask yourself is whether or not you can avoid personal bankruptcy and how you could manage to do that.

There are two alternatives to bankruptcy: Avoiding bankruptcy on your own and avoiding bankruptcy with an external support.

Avoiding Bankruptcy on Your Own

To explore non-bankruptcy options, you can build a financial plan for your realistic, monthly expenses for current living. Take account of your car and mortgage expenses, whilst you eliminate all other existing liability service. For a satisfactory and effect result, you can explore some budgeting tools that are purchasable online. Make sure that with your monthly income, you are able to reimburse your existing debts at the current interest rates in the next few years, after you had forfeited your present living costs. Focus on what it truly takes to reimburse credit cards at credit card interest rates. Consequently, it will be preferable you do put aside minimum monthly expenses and consider how you could invest this money.

Avoiding Bankruptcy with an External Support

In case you are finding complications in reimbursing your debts within the period assigned on the current terms, you should consider taking in an organization such as Consumer Credit Counsellors, which can assist you to create a financial plan and bargain a re-imbursement plan. This should incorporate a cut seeing zero interest rate on your active debts. Usually, individual debtors, who partake in Consumer Credit Counsellors plans, see their collection actions ceased by creditors, because these plans are generally effective when the debt is first and foremost credit card debt.

To facilitate the relief the debtor requires, CCC counsellors at times leave out non-dischargeable tax debt from the re-imbursement plan, letting the consumer forfeiting unsecured, dischargeable credit card liability, whilst non-dischargeable taxes or back support still remain on the owing list. But, this solution hardly ever reprieves the debtor.

Debt settlement programs are rarely effective. There are countless dangers of debt repayment plans. Consequently, individual debtors must think about the bankruptcy’s option to debt reimbursement. You should regard Bankruptcy as an alternative and connect with a bankruptcy lawyer to take up your bankruptcy case.

The basic qualifications to file bankruptcy again remain the same. U.S. citizens, army personnel serving over seas, and any person who owns property or does business within the U.S. may file bankruptcy. Chapter 7 imposes additional restrictions based on a previous case. You cannot re-file Chapter 7 within eight years of a prior Chapter 7 discharge, or within six years of a prior Chapter 13 discharge (unless unsecured creditors received at least 70% of their total debt), or if a prior case was dismissed with prejudice within the last 180 days.

The means test poses the greatest hurdle if filing Chapter 7 again, and determines the amount of the monthly payment owed to a Chapter 13 trustee.

The means test became effective in late 2005. Since that time, all people who file bankruptcy under either Chapter 7 or Chapter 13 must take the test. In theory, the test measures monthly disposable income for each debtor. The calculation starts with total income, subtracts expenses, to find disposable income (Accountants call this discretionary income). If filing jointly with a spouse, total household income, less allowed monthly expenses, determines disposable income.

Importantly, disposable income is a far different measure under the U.S. Code than the common understanding of discretionary income. In the later case, expenses include all basic necessities based the current cost of goods. This basic concept is absent in the U.S. Code definition of disposable income.

The test imposes national standard allowances and local standard allowances for the majority of allowed expenses used in the test. Debtors may not deduct any expense unless specifically authorized. Further, as a rule, necessities, the actual cost of living, actual cost of goods, and historical expenses of each debtor are irrelevant.

In a few important expense categories however, the test does permits debtors to deduct actual expenses. Additionally, debtors may also petition the court for a 5% increase in a few standard allowances for good cause shown.

The test uses monthly disposable in a three-pronged test. First, if the debtor(s) earns more than their state median income, Chapter 7 is not available unless qualifying under two exceptions. These exceptions apply in limited circumstances when the means test measure of disposable income is less than $200.

Taking the test the first time is frustrating for most people. The mandatory allowed budget is not adequate in many situations. Yet many opportunities exist to change results, and even improve results substantially over time.

The test relies on income and expenses over last full six months. Each month, test results change. The oldest month disappears and latest month becomes part the test. Over six months, the test result is entirely new.

Small changes in lifestyle may qualify a debtor to file Chapter 7. Debtors who become acquainted with the test and a few advanced bankruptcy strategies may swing the test result dramatically. To swing the test in your favor, you must know how to calculate income, the expenses used in the test, and the expenses that remain irrelevant. When taking the test, time and knowledge combine into the power to exert great influence over next five years of your life.

If you pass the test, you may discharge all debt in as little as four months and receive a final order closing the case. If you fail the test, you must repay at least a portion of all debts and live on a mandatory budget under court supervision for the next five years.

The thought of filing bankruptcy might be more than you can bear, but something you have to contemplate given the current financial landscape. The question for many is whether bankruptcy is the end of the road from a financial perspective.

The first thing to understand is there are many different forms of bankruptcy. Chapter 7 is a form of liquidation where every debt and asset, for the most part, is wiped out. Chapter 11 is more of a reorganization approach where the debtor gets to keep more assets, but must come up with a plan to pay back much of the debt owed to creditors. Chapter 13 is a variation of this.

Filing for bankruptcy protection has long been an acceptable act for businesses. Many use it as a tactic to force creditors to negotiate new positions on debt. Personally, however, bankruptcy has long been associated with embarrassment. Most people assume a person that files for bankruptcy is someone who had no financial discipline and just ran up a bunch of debts. In truth, the number one cause of personal bankruptcies is huge medical bills, but that is another subject.

So, is bankruptcy the end of the road for you from a financial perspective? Absolutely not. In fact, you’ll be shocked that certain creditors will be offering you deals immediately. Why? Because they know you can’t file for bankruptcy for another seven years or so.

Ah, but what about the stigma? Well, there may have been a stigma ten years ago, but can that really be said to be true today? The last three years have seen such a financial meltdown that millions of people have sought bankruptcy protection. Given the sheer numbers, how can one assume there is any stigma left whatsoever? It seems a dubious distinction at best.

Filing bankruptcy is not the end of your financial life. Instead, it is a new beginning. Just make sure you learn the lessons of your previous financial follies and don’t repeat your mistakes.

In Foreclosure

Power of Sale Foreclosure vs. Judicial Foreclosure, how fast can the bank foreclose?

First of all, most lenders will not begin foreclosure proceedings until a borrower is 3-6 months behind on their payments. Although missing a single payment is a default under the terms of most loan documents, lenders have neither the time nor the desire to foreclose on borrowers who have missed one payment. The process will be initiated when it becomes clear that the debt can no longer be serviced. This post deals with the timing of a foreclosure once your lender has started the process and has instituted a foreclosure action against your property.

The speed with which a bank can foreclose on a borrower varies based on state law. There are basically two different types of jurisdictions for foreclosure purposes: power of sale jurisdictions and judicial foreclosure jurisdictions. In over half the states, the prevailing method of foreclosure is non-judicial power of sale foreclosure. What does this mean? If you have entered into a deed of trust with your mortgage lender, your deed is held by a Trustee pending full payment of your note. In the event you fail to make your mortgage payments the trustee has authority to sell your home at auction. Power of sale foreclosure can occur much more quickly than judicial foreclosure because the trustee vested with the power of sale does not need court oversight to sell the property. The trustee will give Notice of a public foreclosure sale and then sell the distressed property to the highest bidder. A court will usually not oversee the process. If a default has occurred the trustee is permitted to go through with the

foreclosure sale after a relatively short notice period (usually two to three months from the date foreclosure proceedings are instituted). If you live in a power of sale Jurisdiction, your mortgage lender can complete the foreclosure process in two to three months. Today, 29 states (Alabama, Alaska, Arizona, California, Colorado, the District of Columbia, Georgia, Hawaii, Idaho, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, North Carolina, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia and Wyoming) allow foreclosure by the power of sale

Judicial foreclosure is available in every state and is the required method of foreclosure in many states. Judicial foreclosure jurisdictions require a court to oversee the foreclosure process. Like power of sale jurisdictions, all interested parties must receive notice of the foreclosure sale. Judicial foreclosure proceedings can take a year or more to be completed . The requirement that the lender foreclose through the court system slows down the process considerably. While either method of foreclosure can be successfully challenged by an attorney, the court oversight of judicial foreclosure allows more procedural leverage to slow down aggressive lenders.

It is important for consumers to understand that they have rights in the fight against foreclosure. Power of sale jurisdictions allow for your property to be sold outside of court supervision but they still require you receive adequate notice of the sale and that your property be sold for a reasonable price. Hiring an experienced foreclosure defense attorney in a judicial foreclosure jurisdiction could buy you months while you fight back against the bank. Bankruptcy, although a last resort, will stop a foreclosure dead in its tracks due the Automatic Stay that freezes all creditor collection actions the minute a case is filed. I have filed many bankruptcy cases for clients the night before their home was scheduled to be sold at auction and had the process stopped. Chapter 13 bankruptcy may allow you to stay in your home while getting caught up on mortgage arrearages that have spiraled out of control. You have options and there is help available, but remember if you are in a power of sale jurisdiction and have

executed a deed of trust with your lender, the foreclosure process can be completed in a matter of months.

Chicago Criminal Defense Lawyers: Among The Best In The US

Chicago is a city in the state of Illinois, USA. Chicago”>http://chicagodefenselawyer.net/â?”>Chicago defense lawyers are some of the best available defense lawyers in the country. These well educated and qualified lawyers are highly diligent and efficiently protect the constitutional rights of the clients who come to them for assistance.

People go to lawyers when they are faced with issues where there are unlawfully indicted or when their constitutional right is being threatened in any way. They look for somebody capable enough to handle their concerns and who can bring them out of the situation safely. A Chicago defense lawyer is a person who is ever ready to take on new challenges and protect the rights of his/her customers and get them out of trying situations. They assist their clients in fighting against their opponents and get justice.

A Chicago criminal defense attorney may specialize in any field of law. It might range from theft of vehicles to big bank robberies. There are some very capable defense lawyers in Chicago who can handle your case with care and precaution. Whether you are indicted in cases relating to racial discrimination, pornography, copyright issues, business frauds, embezzlement of funds, or unlawful trespassing, the defense lawyers in Chicago are well equipped to handle all types of cases.

There are a few things you need to keep in mind when you decide to request for the services of a Chicago”>http://chicagodefenselawyer.net/â?”>Chicago defense attorney. First of all, ensure that you maintain a cordial relationship with him/her so that your case can proceed smoothly. Next, remember that your lawyer is there to help you; hence, do not hide any facts from your defense lawyers. It is imperative for them to get the true picture to be successful in their roles. Next, ensure that your attorney is clear about his/her terms and conditions and the fees involved. Make sure that all your files and other details are handled confidentially with care. At any point, if you feel that you are not being treated well or the case is not being handled efficiently, ensure that you have a conversation with your lawyer to get things going on the right track.

Remember, if you are looking for good professional help in any type of case, do not forget to contact a good Chicago defense lawyer.