Libel Trial Begins In Dallas
January 26, 2009
Arguments began this morning in Dallas that pit a mortgage loan servicer against a member of a family that owned a property that it foreclosed on.
Orix Capital Markets and Wells Fargo Bank filed the suit against Cyrus Rafizadeh and his Web site Predatorix.com. The two companies say that Rafizadeh has defamed and libeled their companies in retaliation for their foreclosure on an apartment complex in Louisiana that was owned by his family.
The libel claim was filed in a counter suit to a claim filed in connection to the Louisiana foreclosure by a company called Super Future Equities, for which Rafizadeh was a corporate officer.
Super Future Equities owned shares in the securitized mortgage trust that owned the loan on the apartment complex that was owned by Rafizadeh’s family.
The original suit claimed that Orix engineered the foreclosure on the apartment complex, even though the payments were up to date.
U.S. District Judge Jane J. Boyle, who is also hearing the libel case, dismissed the original lawsuit filed by Super Future Equities because the company could not show that it had suffered any damages by investing in the trust. The 95 page suit is available for view on the Preditorix Web site.
Orix’s libel case says that Super Future Equities was incorporated in the thick of the foreclosure battle in Louisiana for the express purpose of exacting revenge. The trial is expected to last five days.
February Foreclosure Auction Numbers Down In Tarrant County
January 15, 2009
The number of homes scheduled for auction in the February auction on the Tarrant County Courthouse steps is down by 14 percent from 2007.
Numbers released by Addison-based Foreclosure Listing Service show that 1,521 homes are scheduled for February 3 auction, down from 1,775 in February 2008. It is suspected that the February 2008 number was artificially high since the January foreclosure auction fell on New Year’s Day, a holiday.
Dallas and Denton counties postings fell 8 and 5 percent respectively to 2,171 and 540.
Promises To Modify Mortgages “Mere Commercial Puffery?”
January 15, 2009
Countrywide Home Loans has made a concerted effort to tell everyone, including Congress, that they are working hard to modify mortgages for borrowers caught up in the sub-prime lending crisis, except maybe for their attorneys who are defending them in a lawsuit in New Hampshire, according to an article on MSNBC.
Attorneys for the California-based mortgage giant told a New Hampshire court in a filing seeking dismissal of a suit that alleges breach of good faith, fraud, negligence and misrepresentation, that modification offers are “only vague advertisements.”
That might explain why more than 860,000 homes were foreclosed on in 2008, and why most banks and their trade organizations oppose allowing bankruptcy judges to modify mortgage loans.
Congressional leaders are pushing to allow judges to modify interest rates, terms and balances of mortgages for homeowners in Chapter 13 bankruptcy.
Bankruptcy attorneys across the country have pushed for the change since the foreclosure crisis began in late 2007.
They point to the successful use of Chapter 12 bankruptcy and the modifications to farm loans that led bankers to negotiate with family farmers and slowed the rate of foreclosures in the 1980s. A Tennessee bankruptcy judge even wrote an opinion piece for the Daily Tennessean that outlined how he believed changes to Chapter 13 that would allow judges to modify first mortgages would help.
Bankruptcy law already allows judges to modify mortgage terms on business property or a second home in a Chapter 13 case. Why not allow homeowners the same option to stay in their first home?
Citibank Voices Support Of “Cramdown” Legislation
January 9, 2009
In a dramatic about-face Citibank’s chief executive voiced support Thursday for a Senate bill that would allow bankruptcy judges to modify mortgages for persons seeking Chapter 13 bankruptcy.
In letters to congressional leaders, Vikram Pandit praised the measure, saying that “given today’s exceptional economic environment, we support its swift passage.”
The bill, sponsored by Democratic Senator Dick Durbin of Illinois, would allow bankruptcy judges to modify the terms of mortgage holders who are seeking bankruptcy protection. Judges will be allowed to extend the term and/or lower the interest rate and principal on the loans.
Under terms negotiated with Citibank and other banking interests, the law will apply only to mortgage loans made before the bill is enacted.
Congressional leaders say that the bill will force the hand of banks who have been slow to negotiate loan modifications with homeowners who have fallen on hard times financially. Democrats are pushing for banks to modify mortgages in an attempt to halt the rise of foreclosures in the United States.
Critics point to a report issued by the Comptroller of the Currency shows that 37% of homeowners whose mortgages were modified in the first quarter of 2008 were in default again in six months to argue against the plan.
They also say that it will undermine contract law and drive up the cost of borrowing for everyone.
Since the November election gave Democrats larger majorities in both the House and Senate, many expect that the measure will pass. President-elect Barack Obama has voiced his support in the past for allowing bankruptcy judges to modify mortgages.
Newsweek Article: Resolve To Go Bankrupt In 2009
January 5, 2009
A Newsweek article published in the January 12, 2009 issue and available online tells readers that bankruptcy is something that more people should consider.
The article explains why most people facing large consumer or medical debts should file bankruptcy before tapping into retirement savings or their children’s education savings, which are largely protected in bankruptcy.
The article advises everyone to evaluate their own financial situation and make the decision that is best for themselves. Consulting an experienced bankruptcy attorney is an important step.
A qualified bankruptcy attorney can explain how Chapter 7 bankruptcy can clear your unsecured debt, or how Chapter 13 bankruptcy can help you catch up on past due mortgage payments so you can stop foreclosure on your home.