According to Reuters, Borders is currently negotiating to sell its remaining stores still in operation to a private equity firm, the Gores Group. If Borders was not granted the extension, it had until June 16 to come up with an exit plan. If Borders did not come up with an exit plan by June 16, other groups would be allowed to come up with a plan for reorganization or to purchase Borders.
]]> Borders filed for Chapter 11 bankruptcy protection in February. The store has struggled to keep up with competitors whose business is mostly online. For example, Borders has struggled to compete with Amazon.com, much the way that Blockbuster struggled to compete with Netflix.The Chapter 11 bankruptcy filing has given Borders the chance to reorganize their business and improve it for the long term. Borders now has 120 more days to come up with a plan to do so, which will likely include plans to sell its stores. Borders is also working on a plan to replace Seattle's Best Coffee shops in its stores with its own coffee shops.
Source:
Borders lawyer says multiple parties eyeing stores (Reuters)
]]>The daughter-in-law says that there were problems with setting up the service and months later it still was not working. When the mother-in-law passed away, the service still had not been set up. The service was ordered with the daughter-in-law's credit card and she canceled the services a few days after her mother-in-law died. A few months later, however, she was still receiving bills for the services for over $100. When she told the company that her mother-in-law had died, they still apparently did not get the message because, soon after, they turned the bill over to a collection agency and the daughter-in-law started getting calls from creditors.
]]> Eventually, with the help of the columnist publicizing her story, Verizon took a second look at the issue and decided to cut her bill down. She again reminded the company that services were never provided and finally Verizon agreed to waive the entire bill.Source:
Verizon continues billing customer months after death (Los Angeles Times)
]]>According to a recent article on the case in The New York Times, the two lenders agreed to compensate victims of illegal foreclosure practices, to improve any damage to credit scores from the wrongful foreclosures, and to upgrade training practices to ensure that employees know how to comply with the Servicemembers Civil Relief Act.
]]> According to the Times, the lenders did not obtain court orders to foreclose on some active-duty military service members like they were required to do under the federal law. The Bank of America case involves a subsidiary formerly known as Countrywide Home Loans Servicing and wrongful foreclosures on 160 service members. The Saxon Mortgage Services case involves 18 service members.The reason why there is a Servicemembers Civil Relief Act is to help protect people's civil rights while they are serving the country in the military and protect against wrongful foreclosure. If a person is serving in the war in Iraq, that person can't immediately defend their home from foreclosure; they are far from home and sometimes injured or suffering from post-traumatic stress disorder while these foreclosure proceedings are happening.
Some military service members were wrongfully foreclosed upon before 2006 as well, but the Justice Department chose that date because that is when foreclosures in the U.S. began to spike as the economic downturn began.
Source:
Mortgage Companies Settle Suits on Military Foreclosures (The New York Times)
]]>Several companies that owned the chain and 150 restaurants filed for Chapter 7 bankruptcy protection in 2008, but the chain is under new management and is staging a comeback here and elsewhere.
]]> Independent franchises weren't affected by the bankruptcy. Many of them remained open for business, including one in Tampa.But many Bennigan's restaurants in Florida were shuttered, apparently victims of the downturn in the economy and rising food and fuel prices, among other financial pressures.
At the time of the bankruptcy filing, Time magazine opined that the restaurants were outdated, serving fatty foods no longer popular with a belt- and wallet-tightening America.
Bennigan's franchisees were steadfast, however. They had an identifiable brand and faithful following that would stand with them until the economy began to lift.
While few would say the U.S. economy is fully healthy again, there are some signs that it's slowly improving; a prognosis the Dallas-based Bennigan's Franchising Co. apparently shares.
While many people think of Chapter 7 bankruptcy as a legal protection strictly for individuals, it can be used by partnerships, corporations and individuals. The biggest difference Chapter 7 offers from Chapter 11 and Chapter 13 bankruptcies is that it can eliminate most debt.
When it comes to a business filing for Chapter 7 in Florida, it typically means a liquidation of assets with proceeds going to creditors.
Source: Orlando Business Journal: "Bennigan's returns to Central Florida" by Anjali Fluker: May 19, 2011
]]>There are many ways that Tampa area residents can defend against foreclosures and remain in their homes. Many mortgage companies break the terms of their own mortgage contracts and these mistakes can be used by homeowners as defenses against a foreclosure. Many Florida residents may have to wait to bring their foreclosure defenses however because state lawmakers recently decided not to extend a court stipend targeted at reducing Florida's enormous foreclosure backlog.
]]> The Palm Beach Post reports that there were 462,339 backlog foreclosure cases around Florida in June 2010. The special stipend poured funds into Florida courts for additional staff and helped reduce the foreclosure backlog by 139,615 cases. This means that over 300,000 foreclosure cases are still clogging the court system.Many judges are temporarily canceling foreclosure cases because their courts simply cannot deal with the crippling amount of foreclosures. This gives homeowners more time to pursue short sales or negotiate loan modifications. The foreclosure backlog also means that many foreclosure-ridden housing developments will remain empty and abandoned for the foreseeable future.
Some legal experts worry that the backlog of foreclosures will make homes harder to sell in some communities. Abandoned homes may deteriorate and negatively impact the home values of surrounding pre-foreclosure properties, thus making these properties harder to sell.
Source: Palm Beach Post, "Fewer judges will be hearing Florida foreclosures as state money runs out," Kimberly Miller, 5/19/11
]]>Blixseth said that the government treated him badly. He said that he was glad that he at least had the resources to mount a strong defense against the forced liquidation of his assets, and hoped the same thing wouldn't happen to other Americans who might not be able to fight it as aggressively as he could.
]]> The 60-year-old has been in disputes with a few state governments related to the bankruptcy of the Yellowstone Club in 2008. The authorities accuse him of taking money out of the Yellowstone Club before it filed for bankruptcy. These authorities and creditors claimed that the money he took out totaled in the hundreds of millions.Blixseth claims that this money was a legitimate loan and says that the Internal Revenue Service viewed it as such in the past. The loan came from Credit Suisse and totaled $375 million, according to the AP. He says that it was a loan; the authorities say it should be taxable income, but failed in the attempt to force him to pay back taxes on the money.
Source:
Ex-billionaire's bankruptcy tossed (The Sacramento Bee)
]]>Creditors or third-party agencies looking to collect a debt cannot threaten harm or legal action. They cannot say you will be arrested or lie or bluff about other legal actions they are going to take unless they truly are going to take them as permitted by law.
If a creditor cannot find a person through other means, they may contact a family member to get contact information, but at least two people in Florida have said that debt collection agencies had their contact information and still contacted friends and family about a debt on Facebook in order to harass and embarrass them.
]]> A Tampa, Florida, woman whose case is discussed in a recent MSN Today piece says that she had even already agreed to a payment plan with the company to pay her debt on a car payment before the company contacted her family and friends. The woman sued the debt collection agency for violating state and federal law in its debt collection practices. The case is still pending, but so far a judge has told the debt collection company to stop contacting the woman via Facebook.While it is illegal for creditors to harass people through Facebook, it is still best to review your privacy settings to make sure that your contact information and lists of friends and family and other personal information is not available to creditors trolling Facebook.
Source:
Debt collectors troll Facebook -- are they going too far? (MSN Today)
]]>An attorney quoted in a recent MSN Today article on the topic said that some debt collectors are deliberately using social media as a tool to harass people. A debt collector can find one person and easily find their friends and family on their profile page and contact them, telling them about the debt and asking them to have the person they are targeting call the debt collection agency. This is an illegal practice, but some people may just pay the debt to get the harassment or public embarrassment to stop.
]]> Some of these debt collectors that use Facebook to contact people's friends and relatives aren't doing it because they can't find them. The MSN Today piece cited a case where a debt collection agency definitely knew how to contact a woman, but still contacted her friends and family with her personal financial information, clearly just to embarrass and harass her.The next post will look further into this case and this issue.
Source:
Debt collectors troll Facebook -- are they going too far? (MSN Today)
]]>According to a recent piece in the Herald-Tribune, a Congressional Oversight Panel made up of economic experts and former regulators reviewed the situation at the beginning of last year. The panel noted that $1.4 trillion in loans for commercial properties would be coming due in the upcoming four years. Because of the market crash, more than half of these loans are twice the value of the commercial property's current value.
]]> When these loans come due it is possible that property owners will not be able to get refinancing because of the large difference between the loan value and the current property value. Currently, according to the Herald-Tribune, there is 2 million square feet of vacant commercial space in Sarasota and Manatee counties and this trend could continue to grow. In Sarasota County, larger apartment buildings have mostly avoided foreclosure, but foreclosures on smaller apartment buildings with fewer than 10 residences have been on the rise.According to the Herald-Tribune, some property owners are leasing space at levels that do not cover their loan payments. Banks may foreclosure on owners for doing this if they do not pay the lenders the difference or "write a check" to lower the principal.
Source:
Commercial properties largely ducking wave of foreclosures (Herald-Tribune)
]]>Homeowner Protection Economics, DC Financial Group and Deleverage America have been accused of illegally charging up-front fees of $495 to $2000 for lender-negotiated loan modifications and home-foreclosure mitigations.
According to Consumer Affairs, the complaint alleges the companies never even tried to contact mortgage lenders or to provide the services they claimed. The accused companies had used media blitzes to advertise that they were able to work with lenders to lessen the debt-load of homeowners and to fend off property foreclosures -- promises they allegedly never kept.
]]> It is against the law for companies to charge up-front fees for the types of services that these organizations are accused by the state Attorney General of offering. A Palm Beach County Circuit judge has frozen the companies' assets and barred them from doing any business while the state's lawsuits are pending.State prosecutors have filed lawsuits that demand the foreclosure-rescue firms reimburse homeowners and the state's legal costs. The suit also requests that the companies pay civil penalties of $15,000 for each instance of fraud under the Foreclosure Fraud Prevention Act. Authorities say that U.S. states hardest hit by the decline in the real estate market are the ones most preyed upon by fake foreclosure-rescue firms.
Source:
Florida Sues Three Foreclosure Rescue Firms (Consumer Affairs)
]]>The main problem is that mediations are not happening for cases that are referred to the process. According to the Sun Sentinel, of the cases that actually make it through mediation, the rate of an agreement being reached between banks and homeowners is around 27 percent. Lenders say it is hard to reach borrowers by phone or have them respond by mail. Homeowners in foreclosure may have their phone service shut off and their letters about mediation may be lost in all their foreclosure-related mail.
]]> The idea behind the mediation program was to help people in Florida to reach agreements with lenders in order to stay in their homes or reach a settlement around a loan modification, short sale or deed-in-lieu of foreclosure. Lenders pay for the mediation, which costs $750. Some homeowners do not want to go through the process of mediation or the paperwork they have to supply or foreclosure counseling because they may feel that foreclosure is their best or only option.Banks have also presented obstacles to success through the foreclosure mediation program. Sometimes lenders showed up to the mediation sessions without the required paperwork or without the ability to negotiate a settlement.
Source:
Foreclosure mediation helps few in South Florida, according to first statewide report (Sun Sentinel)
]]>Barnes & Noble, the largest book chain, has also struggled to compete with online book sales from such companies as Amazon.com, but was much quicker than Borders to create its own website and e-book reader, the Nook. Borders originally made the mistake of using Amazon to run its website, which ended up just helping Amazon to compete against Borders. After filing for Chapter 11 bankruptcy in February, Borders is working on closing about a third of its stores across the U.S., or around 225 stores, according to Bloomberg Businessweek.
]]> Borders' bankruptcy case experienced a setback Friday. According to Bloomberg Businessweek, on Friday, the U.S. Trustee said that it should be denied requests to pay the attorneys and professionals working on its case.The U.S. Trustee is a bankruptcy watchdog for the Justice Department. The U.S. Trustee said that Borders has not proved that it can pay for its bankruptcy case costs because it has failed to file a financial report with the bankruptcy court. Borders also owes fees to the U.S. Trustee that it has not yet paid. Since Borders has not demonstrated that it can pay other fees associated with its bankruptcy case, the U.S. Trustee said that it should not be granted its requests to pay the professionals working on its bankruptcy case.
Source:
Borders Hasn't Shown It Can Pay for Bankruptcy, U.S. Says (Bloomberg Businessweek)
]]>These companies include certain third-party debt collection agencies that violate the Fair Debt Collection Practices Act by harassing consumers or making legal threats against them in order to collect on a debt. These companies may have bought debt from another company cheaply and then try to retrieve it for profit from a consumer that might not even know about the debt or is falsely believed to have a debt.
These companies can also include those purporting to have special connections with mortgage lenders that can help them save a family's home from foreclosure. They charge an up-front fee and a desperate family might pay it. The Federal Trade Commission seeks to end such practices and to make sure consumers are compensated if possible. The agency recently mailed refund checks to consumers who were defrauded by a so-called foreclosure rescue company that charged an up-front fee to supposedly rescue people's homes from foreclosure.
]]> The FTC is mailing $2.3 million in 1,410 checks to consumers. The amount is the total that consumers paid to Home Assure LLC. The company claimed that it could help consumers get the loan modifications they needed. In the settlement with the FTC, the company agreed to pay back consumers and stop trying to sell foreclosure rescue services. The FTC encourages consumers to file a complaint with them if they believe they are the victim of unfair, fraudulent or deceptive business practices.Source:
FTC Returns $2.3 Million to Consumers; Mortgage Foreclosure Rescue Scam Victims Receive Full Refunds (Federal Trade Commission)
]]>The U.S. Justice Department, the Department of Housing and Urban Development and 10 state attorneys general negotiated the settlement with banks last week. They are still working on what kinds of fines they will charge the banks. The regulators were trying to reach a consensus for addressing the problems, which they believed would be best for consumers.
]]> According to Bloomberg, the regulators and attorneys general are deciding whether they will require banks to lower principals on some mortgages. They are also trying to work with banks to change and improve certain practices related to foreclosures, loan modifications, and refinancing. The banks will review the foreclosures they processed between 2009 and 2010.In the settlement, the banks agreed to hire outside consultants who will work to identify any instances where a homeowner was improperly foreclosed upon because of mistakes by the banks.
Some have questioned whether the settlement goes far enough. The regulators say they are seeking to overhaul the system and make sure it is working for consumers as much as for banks and investors. The regulators want to make sure that the system is fair. It is certain that the mortgage lenders will be fined, but the amount and timing is not yet known.
Source:
Banks to Pay Victims of Botched Foreclosures in Settlement With Regulators (Bloomberg)
]]>According to the Sun Sentinel, the 4th District Court of Appeal asked the Florida Supreme Court to hear the case because they said a decision in the issue by the state's high court is of "great public importance" as the state in embroiled in the foreclosure crises.
The case, Roman Pino vs. The Bank of New York Mellon, involves a South Florida homeowner. The plaintiff claims that the bank included fraudulent documents when pursuing a foreclosure on his Palm Beach County home.
]]> Pino says in his case that the bank should not have been allowed to dismiss its foreclosure case against him when he and his attorney accused the bank of using fraudulent documents to try to foreclose on his home. Since the bank was allowed to dismiss the case, Pino and his attorney could not pursue sanctions against the bank for its actions. Instead, the bank simply filed a new foreclosure case against Pino with new documents. Pino is still fighting this case.The decision by the Florida Supreme Court could impact the many, many cases in Florida that succeeded by using faulty documents or were dismissed because of faulty documents. If those cases involved fraud, the decision by the high court could impact how the cases proceed.
Source:
Homeowner's foreclosure case alleging fraud heads to state's high court (Sun Sentinel)
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