Thinking of Divorce and Bankruptcy? Think Bankruptcy First.

You Save Time Money. When you file a joint bankruptcy, you pay 1 filing fee, not 2. Better yet, you can share the cost of the lawyer’s legal fee instead of you both paying the full fee.

You Ensure You Listed All Debt. When you divorce first and file bankruptcy second, you may miss some of your debt that that you and your spouse thought was your spouse’s individual debt, but was in reality your debt too.

Your May Qualify for Chapter 7 (as opposed to Chapter 13 repayment plan.) When you are married and living together, your household size is necessarily larger (two people, not one person)(and even more you have children living with you) and so does the qualifying income level under the means test.

Your Divorce Will Be Easier. You and your spouse will have addressed the issue of your debts. It is one less item for your divorce lawyer to do for you (and one less item to bill for.)

Contact New Jersey Bankruptcy Lawyer Marc P. Feldman at 973-267-7555 for a Free Initial Consultation before you file for divorce.

What the $25 Billion Foreclosure Settlement Means for Homeowners

By RUTH SIMON, Wall Street Journal 02/09/2012
The $25 billion foreclosure settlement unveiled Thursday is expected to help many borrowers who are struggling to make their loan payments, owe more than their homes are worth or have lost their homes to foreclosure.
But the rules of the deal are complicated and banks have three years to meet their obligations.
The questions and answers below should help borrowers figure out if they qualify for help and what to expect from the process.
Who does the settlement cover?
The settlement covers borrowers who have loans that are serviced by one of the five big banks: Ally Financial Inc./GMAC Mortgage, Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. These banks handle payments on 55% of U.S. mortgages, according to Inside Mortgage Finance.

WSJ’s Nick Timiraos has details of a $26 billion settlement struck between the U.S. government and large banks over foreclosure abuses. AP Photo/Ross D. Franklin, file
My mortgage is with one of these banks. How do I know if I qualify for help?
It’s going to take some time to figure that out because the settlement has so many wrinkles. One group who will be excluded: borrowers from Oklahoma. They won’t be eligible for relief because the state’s attorney general opted not to join the deal.
What if my loan isn’t with one of the banks?
For now, the settlement covers only the five big banks. Government officials hope to strike a similar deal with nine additional banks.
How long is it going to take for me to get help?
Government officials advise borrowers to be patient. Over the next 30 to 60 days, settlement negotiators will pick an administrator to handle the logistics of the deal. Over the next six to nine months, the administrator, attorneys general and mortgage servicers will work to identify which borrowers get help. Servicers expect to begin reaching out to borrowers in the coming weeks, but they have three years to provide the required help.
How will I find out if I qualify?
Borrowers will get letters from their mortgage company. Each of the five servicers also has a website and a toll-free number for borrowers to get more information. Government officials are encouraging borrowers to contact their mortgage company to see if they qualify for aid.
Here are the links for each servicer:
Ally/GMAC

https://www.gmacmortgage.com/finform/hhstart.htm

800-766-4622
Bank of America

http://homeloanhelp.bankofamerica.com/en/index.html?cm_sp=CRE-Mortgage-Refi-_-Home%20Loan%20Assistance%20Q3-_-MR16000S_marketing%20strip_%20ooo-123_hp_lahUmbrella-o

877-488-7814 (Available Monday to Friday from 7 a.m. to 9 p.m. Central time, and Saturdays from 8 a.m. to 5 p.m. Central time)
Citigroup

https://www.citimortgage.com/Mortgage/displayHomeOwnerAssistance.do?page=overview

866-272-4749
J.P. Morgan Chase

https://www.chase.com/chf/mortgage/keeping-your-home

866-372-6901
Wells Fargo

https://www.wellsfargo.com/homeassist/

800-288-3212 (Available M-F 7 a.m. to 7 p.m. CST)
What are the rules for the principal reduction program?
To qualify for a principal reduction, borrowers have to clear several hurdles. For one thing, borrowers have to be behind on their payments or at “imminent risk” of default. The owner of your loan also makes a difference. Most of the principal reductions are expected to go to borrowers whose loans are owned by the banks, though some borrowers whose loans were packaged into securities may also qualify. The settlement calls for principal reductions on both first and second mortgages.
The deal doesn’t cover loans owned or backed by Fannie Mae or Freddie Mac, the government-controlled mortgage companies.
You can go to these websites to find out if you have a Fannie Mae or Freddie Mac loan:

http://www.fanniemae.com/loanlookup

http://www.freddiemac.com/mymortgage

What about the refinance program?
The refinance program applies only to loans owned by the banks. Also, borrowers have to be current on their loan payments and owe more than their home is worth.

N.J. judge allows 4 major banks to resume uncontested foreclosure proceedings

By Sarah Portlock / The Star-Ledger The Star-Ledger

Published: Monday, August 15, 2011, 9:52 PM Updated: Tuesday, August 16, 2011, 10:44 AM

TRENTON — Four of the country’s biggest banks can now resume their uncontested residential mortgage foreclosures in state court, a Superior Court judge ruled today.

The decisions come nearly nine months to the day after New Jersey Supreme Court Chief Justice Stuart Rabner cracked down on more than 30 residential mortgage lenders and servicers over fears judges had inadvertently “rubber-stamped” files with inadequate or inaccurate paperwork and people were unnecessarily put out of their homes.

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo were among six financial institutions that filed more than 40 percent of foreclosures in state court last year. They were also selected for a document review because testimony nationwide indicated that the companies had previously encountered “robo-signing,” when employees of mortgage lenders sign foreclosure claims without any personal knowledge of the application’s contents.

Today’s decisions mean the banks — most of which have effectively stopped filing new foreclosures since December because of the court’s actions — can now go forward with thousands of pending and future cases.

Under the court’s order, the banks were required to submit paperwork explaining how they process foreclosures, including how they review documents, train employees and keep records.

Going forward, the banks will also be subject to a monitoring process to ensure that the servicers’ processes and procedures are effective and are being followed, wrote retired Judge Richard Williams, the special master who is reviewing the banks’ paperwork.

Based on their submissions, Williams determined the banks had met the court’s standards in individual reports to the judge overseeing the case, Superior Court Judge Mary Jacobson.

For Bank of America’s Home Loan Servicing division, Williams wrote that the company’s submissions showed “that it has processes and procedures in place” to ensure the information it submits in foreclosure cases is based on personal knowledge of the relevant records, “which were made in the regular course of business.”

“Bank of America makes every effort to reach out to delinquent customers to offer home retention options as well as foreclosure avoidance programs,” said Jumana Bauwens, spokeswoman for Bank of America Home Loans. “Foreclosure is always our last resort.”

Wells Fargo spokesman Kevin Friedlander said the bank works with its customers to help retain their homes in times of financial distress, but in some cases “no reasonable, investor-approved options are possible.”

“When that happens, it is important for the surrounding community that banks move forward with foreclosure sales to prevent problems with vacant and unkempt homes,” Friedlander said in a statement.

Williams, the special master, has not yet completed or submitted his reports about two remaining lenders in the case, Ally Financial and OneWest Bank, said court spokeswoman Winnie Comfort.

As of July, foreclosure filings are down 83 percent compared to last year at this time, according to court figures. Only about 6,100 cases have been filed since January, compared with nearly 35,000 this time last year.

Uncontested foreclosures represent nearly 95 percent of all foreclosure cases with the court, Rabner has said.

Housing experts fear deluge when foreclosure filings start again

njo-foreclosure-aid.jpgHousing experts fear the deluge of work once foreclosure filings pick back up in the state’s court system.

In the past six months, an eerie feeling has settled in the offices of housing counselors and attorneys who confront the foreclosure crisis head-on and help distressed homeowners in New Jersey. The phone hasn’t been ringing any less than it did at the height of the storm, but what is about to hit may be greater than anything the group has seen so far.

Foreclosure filings are down 86 percent so far this year from last, owing in part to a December crackdown by the state’s chief justice that effectively halted proceedings by the country’s biggest mortgage lenders and service companies, according to court data. But lenders are waiting to file an estimated 28,500 foreclosures, and another 55,000 mortgage loans are currently more than 90 days delinquent, according to LPS Applied Analytics, a real estate data firm that tracks mortgage performance. At the current rate, it would take 49 years for banks to clear the logjam of mortgage loans that are currently in the foreclosure process or are more than 90 days delinquent, LPS found.

Those figures are a sign of what is to come when lenders are able to begin filing again, and the pipeline speeds up.

“It’s what keeps me awake at night,” said Peggy Jurow, who leads Legal Service of New Jersey’s Foreclosure Defense Initiative. “It’s what keeps my colleagues and me strategizing all the time.”

“What are we going to do,” she asked, when these cases get filed?

The work is taking its toll on those trying to help homeowners. Last week, housing counselors, attorneys, community leaders and county officials gathered at the Bloustein School of Planning and Public Policy at Rutgers University to share what they have learned battling the foreclosure crisis. The goal was to let the stakeholders discuss what has worked and what hasn’t, said Kathe Newman, an urban planning professor who studies the foreclosure issue and hosted the conference.

During one of the discussions, the question posed to the group was straight and to the point. What do you do to stay motivated in the face of this daunting and challenging problem? The consensus came quickly: We just have to remember that behind the numbers and paperwork are humans who are at risk of losing their homes.

A sudden halt

The foreclosure process came to a halt on Dec. 20, when Chief Justice Stuart Rabner announced an initiative to address fears homeowners were unnecessarily put into foreclosure and judges had inadvertently “rubber-stamped” files that had inaccurate or inadequate paperwork.

In March, six of the country’s biggest financial institutions — Bank of America, JP Morgan Chase, GMAC Mortgage, Citibank, OneWest Bank and Wells Fargo — agreed to submit extensive documentation of their foreclosure processes and outline any revisions they have made. A court-appointed special master, retired Superior Court Judge Richard Williams, is reviewing the material and will report on whether the banks have satisfied a number of changes.

Rabner’s order also addressed the concern that employees of the lender or servicer had signed thousands of foreclosure claims without any personal knowledge of their contents, a process known as “robo-signing.” As of June 9, foreclosure paperwork for pending and future cases is required to include an affidavit certifying that either an employee of the lender or an employee of the lender’s servicer has personally reviewed the case and confirmed its accuracy.

The court’s actions have slowed foreclosures in the state. And because there is no deadline for Williams to submit his findings, the storm can start at any point, advocates fear. There is one heartening fact, they said. Williams will issue his report regarding each bank as he finishes it rather than waiting, said court spokeswoman Winnie Comfort.

Bankers in New Jersey have told John McWeeney Jr., president and CEO of the New Jersey Bankers Association, that the time it now takes to complete a foreclosure has stretched to nearly three years.

“The reaction of the Supreme Court certainly delayed a large volume of foreclosures that otherwise would have been put in process, so I would expect that that will eventually hit and increase the number of foreclosure filings,” McWeeney said.

Bracing for onslaught

When the foreclosure filings start winding their way through courts again, the influx will affect everyone in the industry.

“There are going to be very substantial numbers of foreclosures that are going to hit the market, all of which is problematic and obviously has a negative impact on housing values,” said Robert Levy, executive director of the Mortgage Bankers Association of New Jersey.

Asked what the financial institutions are doing now, representatives of Wells Fargo and GMAC said their attorneys are working closely with the court and documenting their improved and enhanced foreclosure procedures. The other financial institutions declined to comment.

In the interim, there is no shortage of homeowners seeking mortgage assistance. There is a three-month waiting list at some of the offices of New Jersey Citizen Action, said Executive Director Phyllis Salowe-Kaye. Some clients are coming in later in the foreclosure process, claiming they had not received earlier notification from their lenders. Others are borrowers who can’t afford to pay their mortgages because someone lost a job or as a result of another financial change. Activity could also pick up in mid-2012, Salowe-Kaye said, when homeowners with predatory loans begin facing ballooning payments.

The delays have done nothing to relieve homeowners’ stress. The process of finding a workable resolution can take longer, and it is difficult to try to sell or refinance a home that is worth less than its mortgage, said Jurow, the Legal Services foreclosure point person.

What homeowners who are either in foreclosure or late on payments should be doing now is organizing their finances and preparing for when activity picks back up again, Salowe-Kaye advised. That goes for homeowners who may have just lost their job and could face problems with their mortgage down the road.

When the wave hits, advocates said, they will have a plan. For its part, attorneys at Legal Services are studying defenses they can use to promote their clients’ abilities to get a loan modification, and, Jurow said, plan to reach out within the legal community for help.

“We’re happy that the court took the action that it took,” she said. “But, coupled with what we know is coming, it’s like bus-bunching — there hasn’t been a bus for an hour, but now five are going to come at once.”

Bankruptcy Court Launches Forum To Avoid Foreclosures

Mary Pat Gallagher ; New Jersey Law Journal; July 28, 2011

A new program debuting Monday in New Jersey’s U.S. Bankruptcy Court is aimed at helping debtors and mortgage lenders find common ground to avert foreclosure.

The Loss Mitigation Program — so called because it allows for an array of solutions besides mortgage modification — is open to individual debtors who face the loss of their homes.

It is described as “a forum for debtors and lenders to reach a consensual resolution when a debtor’s residential property is at risk of foreclosure” by opening lines of communication between the debtors’ and lenders’ decision makers and encouraging them to reach agreement.

Solutions may include loan refinance, forbearance, short sale or surrender of the property to satisfy the debt.

Though broader in scope than the foreclosure-mediation program run by the New Jersey state courts, it is narrower as well in that there are no counselors or mediators — just debtors and creditors and their lawyers.

New Jersey’s Chief Bankruptcy Judge Judith Wizmur, who sits in Camden, says the impetus for the program was “the plight of debtors” faced with the “loss of value in their homes, arrearages and almost inevitable foreclosure,” combined with the “difficulties that both debtors and lenders were having in terms of connecting.”

Debtors seeking modifications complain that the materials they submit to lenders are being lost, while lenders grouse that debtors are not giving them information they need to process the modifications, she says.

Either side can initiate the process by submitting a Notice of Request for Loss Mitigation with a copy to the other party. They have until three days before the first creditors’ meeting to do so.

If a creditor has a stay relief motion pending when the parties start the program or files one during it, the judge can condition the stay on the debtor’s compliance with the program.

Participants have 90 days from the entry of a loss-mitigation order to reach a result. Within 14 days, they have to designate a contact person and request information, and they have 21 days to respond to requests. The court can allow more time if one or both parties request.

As originally proposed, the program would have lasted for 45 days but it was lengthened based on comments from lawyers and trustees.

Within seven days of identifying a contact person, the parties must agree on what solutions they are willing to consider as well as a time, place and method for loss-mitigation sessions, which can be held in person, on the telephone or by video conference. Someone with full settlement authority must be present.

A party can leave the program early only for cause.

Good faith is required, and lack of it can subject participants to sanctions.

New Jersey’s bankruptcy court is following in the footsteps of at least three others with similar programs: the Southern and Eastern Districts of New York and the District of Rhode Island.

Its program resembles theirs but has some distinctive features.

For example, instead of postponing confirmation of a Chapter 13 while awaiting the outcome of loss mitigation, judges here can enter interim confirmation orders on the recommendation of the trustee, thus not holding up payment to other creditors.

Interim confirmation was added at the request of Chapter 13 trustees.

Also unique to New Jersey are “adequate protection payments.” During the program, debtors have to pay at least 60 percent of the monthly principal and interest, plus 100 percent of any required monthly escrow.

The idea is “that the debtor can’t use this process just to have a free ride, to put off the inevitable, to stop paying the mortgage and have the benefit of months of delay,” says Wizmur.

The payments are also “seen as a show of good faith by debtors and a reflection that mortgage companies are entitled to some protection during this period” to cover expenses like taxes and insurance, she says.

The program can provide a meeting ground in more than one sense.

Some mortgage lenders have adopted the use of electronic portals that enable debtors to file information electronically. The Rhode Island court website contains a link to one such portal, which is used by more than a dozen lenders and servicers, including Bank of America, Chase and Wells Fargo.

That link and possibly others will also be available on the New Jersey website, Wizmur says.

The process of putting together the program began in March, when the court called together a group of lawyers for consumer debtors and lenders, judges and trustees to discuss the idea.

The court then drafted a set of protocols based largely on those used by other courts and posted them on July 1 for a period of public comment that ended July 22.

New Jersey Bankruptcy Filings on the Increase

According to an analysis of the Bankruptcy Court statistics for the District of New Jersey, the number of filings have increased 10% (ten percent) for Chapter 7 cases and 7% (seven percent) for Chapter 13 cases . This was determined by comparing the year period falling between April 2009 and March 2010 with the year falling between April 2010 and March 20011.

Mortgage Foreclosure Fraud

Mortgage foreclosure fraud has come to the forefront of national attention in recent weeks. As a lawyer familiar with this crisis, I will fight to force lenders to prove that their documentation is complete and legitimate.

The following links provide information about Foreclosure Fraud.

Fraud Factories: Rep. Alan Grayson Explains the Foreclosure Fraud Crisis

Untangling the Complex Foreclosure Mess
NPR.org, October 27, 2010

Lawyers Got It Right on the Foreclosure Mess
The Washington Post, October 22, 2010

The Road to “Robo-Signing”
PBS NewsHour, October 18, 2010

Faulty Paperwork Prompts Deepening Foreclosure Problem
PBS NewsHour Video, October 14, 2010

Did Robo-signing Lawyers Knowingly Commit Fraud?
Daily Finance, October 13, 2010

Fraudulent Foreclosure Documents?
CNN.com video, October 12, 2010

A Primer on the Foreclosure Crisis
CNBC, October 11, 2010

The Real Meaning of the Foreclosure Scandal
Market Watch, October 5, 2010

The Gathering Storm Over Foreclosures
The New York Times, October 4, 2010

The Latest on Action (and Inaction) on Foreclosure Fraud
The Examiner, October 2, 2010

Company Stops Insuring Titles in Chase Foreclosures
The New York Times, October 2, 2010

Ally Financial: Here’s How Not to Do It
HousingWire, September 27, 2010