Archive for October, 2011
The Broke and the Beautiful: World Series Edition
This week on The Broke and the Beautiful, the Texas Rangers come closer to winning their first World Series, the Los Angeles Dodgers and owner Frank McCourt are fraught with drama, and a $ 10 million home on South Florida’s Star Island that was once owned by rapper Vanilla Ice is hitting the auction block.
- EPA
- Texas Rangers right fielder Nelson Cruz fails to catch a two-run triple in the bottom of the ninth inning of Thursday night’s World Series game.
A little over a year ago, the Texas Rangers were striking out in bankruptcy. But even though they lost Thursday to the St. Louis Cardinals in a dramatic 11-inning Game 6, they’re closer than ever to clinching their first World Series title. Nolan Ryan, a former Rangers player himself and the team’s chief executive, president and part owner, is still “bringing the heat” to the team, according to the Associated Press. Ryan even caught (or tried to, anyway) a ceremonial first pitch in Game 4 on Monday.
As USA Today noted, Chuck Greenberg, who helped Hall of Famer Nolan Ryan buy the team out of Chapter 11, is watching from afar. Greenberg, who was ousted as chief executive in March and hasn’t attended a Rangers game this season, is calling the Series “bittersweet.”
- Associated Press
- Los Angeles Dodgers owner Frank McCourt in a September 2010 file photo
The Los Angeles Dodgers are having yet another drama-filled week. First, ESPN LA reported, the MLB accused owner Frank McCourt of “looting” the team out of nearly $ 190 million. Then, as the team cut season-ticket prices, a group of season-ticket holders abandoned their efforts for their own committee in the Dodgers’ bankruptcy case. As Bankruptcy Beat noted, the group, which includes descendants of crooner Frank Sinatra and entertainment lawyer Jack Stutman, instead got two seats on the official committee representing all unsecured creditors.
And the idea of McCourt selling the team may not be out in left field at all. As the Los Angeles Times reported, the Dodgers postponed their bankruptcy trial to Nov. 29 from next Monday as McCourt discussed a potential deal with the MLB.
But that’s not all for the Dodgers. As we noted in Friday’s Daily Docket, McCourt attorney Jerome Jackson said San Francisco Giants fan Bryan Stow—who was brutally beaten at Dodger Stadium on Opening Day and is now one of the team’s biggest creditors—should share some of the liability with his attackers, also noting that the team shouldn’t be held liable.
- Reuters
The Dallas Stars may be on top in the NHL’s Western Conference, but the hockey team isn’t scoring any favors with the Internal Revenue Service. As Daily Bankruptcy Review reported, the IRS wants the Wilmington, Del., bankruptcy court to block the team’s reorganization plan, which calls for the Stars to exit Chapter 11 in the hands of businessman Tom Gaglardi. The IRS said the plan doesn’t account for its rights under bankruptcy law.
A South Florida home once owned by rapper Vanilla Ice is hitting the auction block next week, the Miami Herald reported. The Star Island home, which is currently owned by bankrupt businessman Claudio Osorio, is set to start off with a $ 10.5 million starting bid. Osorio, whose InnoVida Holdings LLC also fell into bankruptcy, has been forced to sell his home as part of his bankruptcy plan. Some of the home’s finer perks? A three-bedroom guest house, a powder room finished in Tiger’s Eye stone and Venezuelan cedar front door, according to the South Florida Business Journal.
Banks’ Stranglehold Tightens: We’re Almost out of Air
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“That means no jobs for the foreseeable future — not just for us but for the children moving back in with us and our grandchildren. Forget retirement. That pension you were counting on is finally going to be announced as cut off or reduced because of the massive losses taken by the pension funds who bought the bogus securitization bonds for credit cards, auto loans, mortgages, student loans, furniture loans etc.” Neil F Garfield, livinglies.me
CALL OUT TO WHITE HAIRS WHO VOTE: PROTECT YOUR GRANDCHILDREN!
EDITOR’S COMMENT AND ANALYSIS: If you are around my age, approaching 65 in a couple of months, you want to retire, kick back, stay retired and never work again. You’ve paid your dues. But it is likely that you will soon be back at some job that you can barely perform just to make ends meet. And your dependent children over the age of 45 in some cases are going to hear the word “no” from the lips of people who want to help, but can’t.
The recession continues to deepen for most Americans. And the capital that would reverse the trend in directly in the hands of the megabanks who are “awash in money.” That capital was siphoned out of the U.S. Economy through fraud, deception and other egregious, even criminal behavior. It is unfathomable why we allow this continue. I guess the real question is whether we, as a society are going to permit the banks to divide us into camps that oppose each other instead of realizing we are all in the same boat.
The employment figures are grim and nobody is able to put a happy face on it anymore. There won’t be any jobs until the banking crisis is over — until all aspects of the consumer credit market have leveled off, until all credit-worthy risks are funded, and until the bank’s control over our government is ended — really stopped, as opposed to some public relations stunt like the “settlement” they are trying to get at least some states to sign onto that amounts to Amnesty for the banks and continuing control of our democracy.
Our democracy has been corrupted and our capitalist economy has been cornered and, controlled and manipulated by just a few people pulling the levers of power performing acts that everyone knew 100 years ago were against the interest of the financial system and the society that allows that financial system to exist. Crony capitalism and and corrupt politicians make for some “fun” Halloween parties (see article on Steven Baum Law Firm), but for those of us who don’t walk in the clique of power brokers, we don’t enjoy the benefits of our real life Boardwalk Empire.
In India, the unlikely source of a surge for reform comes from the middle class that are still doing well, but who are tired of political corruption in their system and who fear for their futures. Somebody with the experience and brains and wisdom must take the longer view, like the middle class Indian families, and see where this is headed.
Here, maybe it could be the white haired people, like myself, who vote every time and who remember a time when America was #1 in just about everything. We reject the system that reduced our educational system to rubble, created millions of homeless people, and can’t give a job to trained, experienced, hardworking job-seekers. We reject the right of banks to steal and we reject their ability to keep what they stole. We want the money back but more important, we want our country back.
Employment Probably Cooled in October: U.S. Economy Preview
Oct. 30 (Bloomberg) — Employment probably cooled in October, indicating the U.S. recovery remains too weak, economists said before reports this week.
Payrolls climbed by 95,000 workers after a 103,000 September increase, according to the median forecast of 65 economists surveyed by Bloomberg News ahead of Nov. 4 data from the Labor Department. The jobless rate was 9.1 percent for a fourth consecutive month, the report may also show.
Hiring slowed even as the economy grew in the third quarter at the fastest pace in a year, showing why some Federal Reserve policy makers have said in advance of their meeting this week that the central bank should be prepared to do more. While retailers like Macy’s Inc. are boosting staff ahead of the holidays, bigger job gains are needed to spur consumer spending.
“Yes, there’s job growth, but it’s not good enough,” said Jonathan Basile, an economist at Credit Suisse in New York. “We have a labor market that is very frustrating for policy makers. They’ve tried a bunch of things but the unemployment rate remains elevated.”
The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.
Private payrolls, which exclude government jobs, rose 125,000 after a gain of 137,000 in September, economists forecast the Labor Department report will show.
The projected gain in total payrolls would bring the average for July through October to 96,000, compared with 131,000 in the first six months of the year.
More Needed
Sustained increases of around 150,000 a month are needed to bring unemployment down about half a percentage point over a year, according to Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Through September, the economy had recovered about 2.09 million of the 8.75 million jobs lost as a result of the 18- month recession that ended in June 2009.
Faster hiring would spur bigger gains in incomes and bolster confidence, helping cushion against declines in home prices and allowing households to sustain their spending. Purchases grew at a 2.4 percent annual rate in the third quarter and the economy expanded at a 2.5 percent pace, the Commerce Department reported last week.
Investors are turning more optimistic about the global economic outlook as Europe takes steps to limit the damage from its credit crisis. The Standard & Poor’s 500 Index last week extended its biggest monthly rally since 1974 as European leaders agreed to expand a bailout fund to $ 1.4 trillion and American growth accelerated.
Holiday Hiring
Some retailers are betting last quarter’s gain in spending will be sustained during the November-December holiday shopping season. Macy’s, the second-biggest U.S. department-store chain, is stepping up hiring of mostly part-time employees by 4 percent for the period. Kohl’s Corp., the fourth-largest U.S. department-store chain, plans to add more than 40,000 holiday workers, a 5 percent gain from 2010.
President Barack Obama is seeking ways to take action to spur hiring without congressional approval after the Senate blocked his $ 447 billion proposal. The plan included expanding a payroll tax break due to expire at the end of 2011, lifting spending on public works and extending jobless benefits.
Fed officials pledged in August to hold the benchmark interest rate near zero at least through the middle of 2013 so long as joblessness stays high and the inflation outlook is subdued. On Sept. 21, the central bank announced a plan to replace debt in its portfolio with longer-term Treasuries to help cut borrowing costs. Policy makers meet on Nov. 1 and 2.
More Stimulus
Fed Vice Chairman Janet Yellen, Governor Daniel Tarullo and Federal Reserve Bank of New York President William C. Dudley were among the policy makers this month saying additional stimulus by the central bank may be needed.
Some companies continue to pare staff. Whirlpool Corp., the world’s largest maker of household appliances, said it planned to cut more than 5,000 jobs and trimmed its earnings forecast. The workforce reductions will be primarily within North America and Europe and include the closure of the refrigeration manufacturing site in Fort Smith, Arkansas, by mid-2012.
“We are taking necessary actions to address a much more challenging global economic environment,” Chief Executive Officer Jeff Fettig said in a statement on Oct. 28.
One bright spot for the recovery is manufacturing, which accounts for about 12 percent of the economy. A report on Nov. 1 may show the Institute for Supply Management’s factory index rose to 52 this month from 51.6 in September, according to the Bloomberg survey median. A reading above 50 signals expansion.
Economists also projected the Tempe, Arizona-based ISM group’s gauge of service industries, due on Nov. 3, climbed to a five-month high of 53.6 in October.
Bloomberg Survey Release Period Prior Median Indicator Date Value Forecast
Construct Spending MOM% 11/1 Sept. 1.4% 0.3% ISM Manu Index 11/1 Oct. 51.6 52.0 ISM NonManu Index 11/3 Oct. 53.0 53.6 Factory Orders MOM% 11/3 Sept. -0.2% -0.1% Nonfarm Payrolls ,000’s 11/4 Oct. 103 95 Private Payrolls ,000’s 11/4 Oct. 137 125 Manu Payrolls ,000’s 11/4 Oct. -13 4 Unemploy Rate % 11/4 Oct. 9.1% 9.1%
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net <mailto:schandra1@bloomberg.net>
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net <mailto:cwellisz@bloomberg.net>
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Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, pension, pension funds, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND 
Livinglies’s Weblog
Bankruptcy and Foreclosure
The most common question I get these days is whether filing Chapter 7 or Chapter 13 bankruptcy will stop a foreclosure.
Chapter 7 Bankruptcy and Foreclosure
The simple answer is, Chapter 7 bankruptcy can keep you in your home for an additional two to three months, and that’s about it. But, and it’s a big “but,” because you will be getting free shelter when you aren’t paying your mortgage, a three month delay can be worth three times what you would be paying for a monthly rental, or a total of between $ 4,000 and $ 6,000 for the typical family.
To learn more about what happens to your home when you file for Chapter 7 bankruptcy, read Nolo’s article Your Home in Chapter 7 Bankruptcy.
Chapter 13 Bankruptcy and Foreclosure
If you file a Chapter 13 bankruptcy and can propose a feasible repayment plan, you may be able to stave off the foreclosure for up to five years. Just how long will depend on your income and basic living expenses, and how far behind you are on your payments.
Even if can’t propose a feasible plan, you may be able to put off the foreclosure for a much longer time than would be the case under Chapter 7. The rub is that you will probably need an attorney to achieve this result. But because you aren’t paying your mortgage you can divert some of your “shelter money” to hiring an attorney, who will typically charge between three and four thousand dollars to handle a Chapter 13 bankruptcy. While this may seem like a lot, it likely will be only two or three months worth of mortgage payment and you’ll likely come out ahead in terms of the total amount saved by staying in your home payment free.
To learn more about what happens to your home in Chapter 13 bankruptcy, read Nolo’s article Your Home in Chapter 13 Bankruptcy.
Chapter 13 bankruptcy can have other advantages over Chapter 7. Bankruptcy attorneys are starting to successfully use Chapter 13 procedures to challenge the very validity of the mortgage, which means you may have a shot either at never having to pay the mortgage or at least being able to negotiate lower principle and payment amounts. You also can use Chapter 13 to get rid of second mortgage liens when your home’s value is not enough to provide security for the amount owed on the second mortgage (called mortgage lien strip-offs).
To learn more about the interplay between bankruptcy and foreclosure, read Nolo’s article How Bankruptcy Can Help With Foreclosure.
Nolo’s Bankruptcy & Foreclosure Blog
Types of Bankruptcy
There are three types of bankruptcy, Chapter 7, Chapter 11 and Chapter 13 which are part of Federal law. Bankruptcy is filed with the federal court, not state court. The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy a debtor’s debts are discharge and he/she has no obligation to repay them. In most Chapter 7 bankruptcy cases all of the debtor’s property is exempt. If there is non-exempt property it will be sold and the proceeds used to repay creditors. Chapter 13 bankruptcy, which is most often used by those who want to keep a house, car or other assets, the debtor repays all or part of their debts over a period of 3 – 5 years. Chapter 11 bankruptcy is used by businesses and individuals who do not qualify for a Chapter 13 bankruptcy because their debts exceed the limit.
Video Rating: 5 / 5
Minneapolis area bankruptcy attorney David Kelly discusses income and other requirements for filing personal Chapter 7 bankruptcy in Minnesota, from Attorney David Kelly, Minnetonka, near Minneapolis, St. Louis Park, Hopkins, Golden Valley and Plymouth. This is the kind of bankruptcy which is the usually first choice of individuals who are in serious financial difficulty. It is very well suited to consumer debts, but often works well for self-employed individuals and small businesses too. It is commonly called a “straight” bankruptcy, and is also often referred to as a “liquidation.” The bankruptcy court appoints a trustee who reviews what assets the debtor has available for distribution to creditors. Those would be only the assets that the debtor is unable to claim as exempt. If some assets are available, the creditors are notified. Those who submit claim forms will be given their proportionate share of the available assets, but that is ordinarily all they are going to receive. Since this video was made the median income requirements which the video refers to have gone up twice, so those numbers in the video are out of date. Up to date numbers for median income in Minnesota can be found on Dave Kelly’s web site at www.mn-bankruptcy.com Kelly Law Office 1013 Ford Rd. Minnetonka, MN 55305 952-544-6356 www.mn-bankruptcy.com Kelly Law Office represents bankruptcy clients throughout the Twin Cities – Minneapolis, Minnesota area including Bloomington, Edina, Minnetonka, Eden …
Video Rating: 5 / 5
New York high court exonerates advisers for aiding and abetting corporate fraud
Carlos F. Gonzalez, a partner at Diaz, Reus & Targ, analyses the reasoning behind the New York Court of Appeals’ recent decision on the in pari delicto defense and forecasts the impact the Delaware Supreme Court’s application of that opinion in a case against AIG’s accountants and auditors will have on shareholders’ ability to sue advisers for aiding corporate fraud.
Thomson Reuters News & Insight: Bankruptcy Law – Insight
MERS: The Elephant in the Foreclosure Room
If you are a homeowner, chances are that the current owner of your mortgage is an entity known as MERS (Mortgage Electronic Recording System). This is true even though you are making your payments to one of the major banks or a dedicated mortgage servicing company. Nobody borrows from MERS in the first instance but somewhere in the chain of title the likelihood is that MERS became (and continues to be) the owner despite a series of transfers to banks, trusts, and investment vehicles. In legal parlance, MERS will be identified in your mortgage documents as the “mortgagee of record,” and will also be identified as the “nominee,” or agent for the purpose of making future transfers to other entities.
What Is MERS and How Does It Work?
Like a lot of what has transpired in the mortgage industry, it’s hard to get a handle on how MERS works and what exactly is wrong with it. Fortunately, very-readable testimony offered by Professor Christopher Peterson before the House Judiciary Committee casts much light on the subject and is available for your reading pleasure.
MERS is essentially a large electronic database of mortgages and mortgage transactions. It was invented in the mid 1990s as a legal device to replace the county land title recording system. It is MERS that made the real estate boom feasible by (supposedly) allowing electronic transfers of mortgage ownership among bank and investors in a variety of forms known as real estate trusts, securitized mortgage bonds, and other miscellaneous financial derivatives — all backed by packages of mortgages consisting of various risk levels.
The lion’s share of the financial entities dealing with mortgages were and are members of MERS, and under the MERS rules are also agents which are authorized to effect transfers to other members. These transfers have seldom been recorded in county land records offices — since ownership never (supposedly) changed but rather remained with MERS. Thus, not only does MERS facilitate transfers of real estate interests, it saves the real estate and banking industries millions if not billions of dollars in recording fees by eliminating all those recording transactions that would otherwise have to be made, at an average pop of $ 35 per transaction. Avoiding these fees was a major reason that MERS was created in the first place.
Problems Created by the MERS System
The most profound problem that the courts and commentators have with MERS is that it purports to replace the way in which land transaction records have been created and stored since the beginning of the country — all without the benefit of authorizing legislation. Under the traditional (and legally authorized) method of keeping track of who owns what, any person is free to walk into a land records office and search the entire historical record of who bought and sold any particular piece of property. This is what is known as a “title search.” Under the MERS system, however, no such search is possible. MERS Members are not required to report transfers to the database and so there is no real way to be sure about who owns what.
One Court Says: MERS Doesn’t Deliver Clear Title
In In re Agard, a bankruptcy judge analyzed MERS for the purpose of deciding whether a bank seeking foreclosure could prove that it owned the promissory note accompanying the mortgage — a prerequisite in bankruptcy court when asking the court for permission to proceed with the foreclosure. Previously, MERS had attempted to assign the mortgage and promissory note to the foreclosing bank and the question was whether it successfully did so.
Although for procedural reasons the Court allowed the bank to proceed with the foreclosure, the Court went on to analyze the role of MERS in the chain of title for the debtors’ home. It concluded that MERS, as currently structured, did not deliver clear title to the foreclosing bank. Although the court’s analysis does not, strictly speaking, count as precedent because it wasn’t necessary to the court’s ultimate decision (that is, it was dicta only), it should still prove persuasive with other courts dealing with cases involving MERS ownership.
MERS Announces Some Changes
Because of the various problems it faces in the Courts, MERS has recently announced that it is changing one of its membership rules (Rule 
to require that members no longer foreclose in MERS name. MERS has also told its members that assignments out of MERS’s name should be recorded in the county land records even if the state law doesn’t require it. In short, MERS is on the defensive. These are welcome changes for the future, but the degree to which MERS past practices have placed clouds on current real estate titles remains to be seen.
Nolo’s Bankruptcy & Foreclosure Blog
Chapter 13 Bankruptcy Video – DebtStoppers Videos
Chicago bankruptcy lawyer Patrick Semrad of debt relief firm DebtStoppers discusses the Chapter 13 bankruptcy process. Learn more about personal bankruptcy, how to stop foreclosure and save your home and more on the DebtStoppers website – www.debtstoppers.net Disclosure: DebtStoppers…
Video Rating: 5 / 5
KRISTOF ON CRONY CAPITALISM
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EDITORIAL NOTE: I think Kristof hits the nail right on the head of the spinners — and I hope it leaves a mark. His hammer is the truth. The answer to the never asked question is of course we favor capitalism. It’s not the greatest thing since the wheel but it works far better than anything else we have come up with so far. What we oppose is Crony Capitalism which is what leads to oligopoly — control of the government by a select few whose power from wealth alone has grown disproportionate to the opportunities that should be present for everyone.
On a good note, history shows that these cronies eventually turn on each other because, after all, the relationship is based upon money, not friendship. And their success is based upon a lack of morality, conscience or even willingness to obey the law, not from extreme competence and brilliance. If you look at the late Steve Jobs, Gates, Buffet, you see brilliance, creativity, and a great deal of wealth — but not measured in the trillions.
The object, lest we forget, is to have a society that actually works — i.e., one that gives us reason to stay together as opposed to dog eat dog. Fear works for a while but eventually fear leads to fracture. So unless we want the Untied States to dissolve into regional countries, we need to address those factors in our society that are simply not working. If safety, hunger and housing are not addressed then the society isn’t working. Yet we are quickly giving those up in the name of “austerity” when that is just code for the bankers saying “keep the money.”
For me, to say that the mega banks “earned” the trillions of dollars they stole and diverted is like providing justification for genocide. In a word where there are only $ 50 trillion dollars worth of world currency, it is not possible that anyone could “earn” 1/3 of that. “Income redistribution” is a word used by bankers because they want to keep what they stole. Balancing of wealth throughout society through incentives and opportunity is what the rest of us are talking about.
The American public agrees by a wide margin. Bankers: your 15 minutes are up.
Crony Capitalism Comes Home
By NICHOLAS D. KRISTOF
Whenever I write about Occupy Wall Street, some readers ask me if the protesters really are half-naked Communists aiming to bring down the American economic system when they’re not doing drugs or having sex in public.
The answer is no. That alarmist view of the movement is a credit to the (prurient) imagination of its critics, and voyeurs of Occupy Wall Street will be disappointed. More important, while alarmists seem to think that the movement is a “mob” trying to overthrow capitalism, one can make a case that, on the contrary, it highlights the need to restore basic capitalist principles like accountability.
To put it another way, this is a chance to save capitalism from crony capitalists.
I’m as passionate a believer in capitalism as anyone. My Krzysztofowicz cousins (who didn’t shorten the family name) lived in Poland, and their experience with Communism taught me that the way to raise living standards is capitalism.
But, in recent years, some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us. They’re not evil at all. But when the system allows you more than your fair share, it’s human to grab. That’s what explains featherbedding by both unions and tycoons, and both are impediments to a well-functioning market economy.
When I lived in Asia and covered the financial crisis there in the late 1990s, American government officials spoke scathingly about “crony capitalism” in the region. As Lawrence Summers, then a deputy Treasury secretary, put it in a speech in August 1998: “In Asia, the problems related to ‘crony capitalism’ are at the heart of this crisis, and that is why structural reforms must be a major part” of the International Monetary Fund’s solution.
The American critique of the Asian crisis was correct. The countries involved were nominally capitalist but needed major reforms to create accountability and competitive markets.
Something similar is true today of the United States.
So I’d like to invite the finance ministers of Thailand, South Korea and Indonesia — whom I and other Americans deemed emblems of crony capitalism in the 1990s — to stand up and denounce American crony capitalism today.
Capitalism is so successful an economic system partly because of an internal discipline that allows for loss and even bankruptcy. It’s the possibility of failure that creates the opportunity for triumph. Yet many of America’s major banks are too big to fail, so they can privatize profits while socializing risk.
The upshot is that financial institutions boost leverage in search of supersize profits and bonuses. Banks pretend that risk is eliminated because it’s securitized. Rating agencies accept money to issue an imprimatur that turns out to be meaningless. The system teeters, and then the taxpayer rushes in to bail bankers out. Where’s the accountability?
It’s not just rabble-rousers at Occupy Wall Street who are seeking to put America’s capitalists on a more capitalist footing.
“Structural change is necessary,” Paul Volcker, the former chairman of the Federal Reserve, said in an important speech last month that discussed many of these themes. He called for more curbs on big banks, possibly including trimming their size, and he warned that otherwise we’re on a path of “increasingly frequent, complex and dangerous financial breakdowns.”
Likewise, Mohamed El-Erian, another pillar of the financial world who is the chief executive of Pimco, one of the world’s largest money managers, is sympathetic to aspects of the Occupy movement. He told me that the economic system needs to move toward “inclusive capitalism” and embrace broad-based job creation while curbing excessive inequality.
“You cannot be a good house in a rapidly deteriorating neighborhood,” he told me. “The credibility and the fair functioning of the neighborhood matter a great deal. Without that, the integrity of the capitalist system will weaken further.”
Lawrence Katz, a Harvard economist, adds that some inequality is necessary to create incentives in a capitalist economy but that “too much inequality can harm the efficient operation of the economy.” In particular, he says, excessive inequality can have two perverse consequences: first, the very wealthy lobby for favors, contracts and bailouts that distort markets; and, second, growing inequality undermines the ability of the poorest to invest in their own education.
“These factors mean that high inequality can generate further high inequality and eventually poor economic growth,” Professor Katz said.
Does that ring a bell?
So, yes, we face a threat to our capitalist system. But it’s not coming from half-naked anarchists manning the barricades at Occupy Wall Street protests. Rather, it comes from pinstriped apologists for a financial system that glides along without enough of the discipline of failure and that produces soaring inequality, socialist bank bailouts and unaccountable executives.
It’s time to take the crony out of capitalism, right here at home.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND 
Livinglies’s Weblog
Same Sex Couple Files Joint Chapter 13 Bankruptcy Petition
On February 24, 2011, a same-sex couple filed a joint Chapter 13 bankruptcy petition in Los Angeles, California. Why is this big news?
Bankruptcy is one of the many (thousands, actually) areas in which same-sex couples are treated differently from opposite-sex couples. Even if a same-sex couple is legally married (for example, the couple lives and marries in Massachusetts) or has formed a domestic partnership in a state that provides such partnerships with the same benefits as marriages (as in California), because federal law does not recognize the marriage or partnership, the couple must act as if they are not married when it comes to bankruptcy. That means filing separate bankruptcies, even if filing a joint bankruptcy would make more sense or confer legal benefits. And filing two separate bankruptcy petitions is always more expensive than filing a joint petition. Not only does the couple have to pay two filing fees, but same sex couples also pay double attorneys fees since the attorney must prepare not one, but two, petitions. (Some bankruptcy attorneys waive the fees incurred in preparing the second petition because they recognize and loathe the unfairness of the system. Of course, this means that the attorney must eat those fees.)
In some instances couples who are not considered married under DOMA are better off filing separately in that they each are able to independently claim exemptions on their property –which may lessen the amount required to be paid under the plan — and aren’t required to include all “marital” property in one petition, as is the case with community property belonging to a married couple. Still, if called on to choose between a better result in the bankruptcy and equal treatment currently being denied under DOMA, most filers would likely opt for equal treatment.
Amidst this backdrop comes big news in the bankruptcy world: On February 24, 2011 a same sex couple filed a joint petition for Chapter 13 bankruptcy in the Los Angeles bankruptcy courts. The filing came on the coattails of the Obama administration’s announcement that it would not defend the Defense of Marriage Act in court (although it will continue to enforce DOMA unless and until the courts rule it unconstitutional). Many bankruptcy attorneys and same-sex couples are waiting to see how the court treats this bankruptcy case.
By Guest Blogger Kathleen Michon
Nolo’s Bankruptcy & Foreclosure Blog
Reestablishing Credit During the Recession
A number of the people I counsel want to know how soon they can restore their credit after bankruptcy. The prerecession standard advice was two years for a credit card with decent interest and four years for a mortgage with indecent interest.
But that was then. Now, because so many people have bad credit because of foreclosures, late payments, and bankruptcies, it’s hard to say what decisions the credit issuers will be making in the next several years. Will they be more forgiving because of the need to pull in people who might not have qualified a few years ago, or will they get tighter and not give credit at all until more time has elapsed after the bankruptcy? Only Fair Isaac (FICO) knows for sure, sort of.
For sure, if you want to reestablish credit, the old ways are probably still the best ways. Get a major credit card, periodically make purchases, scrupulously make your payments on time, get a second card, same thing, work to build your credit line, never max-out your cards, and so on. There are a number of other tips on the Fair Isaac website at http://www.myfico.com that will help you lift your credit score to the maximum extent possible. The more you follow that advice, the better off you’ll be. You can get Nolo’s Credit Repair, by Robin Leonard and Margaret Reiter (Nolo) for even more on this subject. Or check out the free articles and FAQs in Nolo’s Credit Repair for Bad Credit area of its website.
But should you even try to get your credit back? I often tell people I’m counseling that working to get your credit back is like an alcoholic learning how to drink better. Credit is simply the opportunity to go into debt, and once in debt it’s really hard to get out. When you’ve received your bankruptcy discharge you will usually be completely solvent (except perhaps for debts like student loans and recent income taxes). Why spend energy for the privilege of going back into debt? There are lots of reasons why people feel it’s a rational thing to do, but all you’re really doing is preparing to live beyond your means.
Sure it’s nice to have credit for an emergency, but people would be much better off reigning in their spending and saving as much and as fast as possible, and using their savings if necessary for an emergency. You may not feel like you’re addicted to credit or spending (same thing), but chances are you are and are just in denial. Now I would never say this to your face because you would just deny it and be angry at me. Well, maybe you’re still angry at me but at least I don’t have to see it. Please accept the fact that my intentions are good — to keep you solvent and out of debt.
Nolo’s Bankruptcy & Foreclosure Blog