The North Carolina Bankruptcy Information Blog

Jobs in the private sector may be on the way up—a complete change of pace from the post-Recessionary years—but optimism about the mortgage industry is still way down in the wake of massive foreclosure abuses at major mortgage lenders.

In fact, The New York Times recently published a shocking article detailing the struggles of homeowners facing foreclosure framed by mortgage servicing horror stories piling up all across the nation.

According to the Times, dubious mortgage practices— widespread document execution fraud, misrepresenting fees, forgeries on signatures for your key mortgage documents, and making deceptive statements about efforts to correct paperwork—have become the norm, not the exception, for many a major mortgage lender from the West Coast to the East Coast.…

The nation’s income dropped in August 2011, for the first time in nearly two years, according to a government report released last week. The drop was precipitated by a weak labor market and falling consumer confidence.

According to Reuters, “Weak incomes as employment growth ground to a halt and earnings fell hurt spending in August. Income slipped 0.1 percent, the first decline since October 2009, with private wages and salaries dropping $12.2 billion. Economists had expected income to edge up 0.1 percent. Consumer spending growth slowed sharply to a 0.7 percent annual pace in the second quarter after advancing 2.1 percent in the first three months of the year.…

Foreclosures? Theeeey’re Baaaaack.

After several months of falling default rates, foreclosures were up again in August 2011, rising by about 7 percent compared to the month before. In fact, according to new numbers from the real estate firm RealtyTrac, some of the biggest increases were in the nation’s wealthier places: suburbs, industrial hubs, as well as small town service worker centers, already hard-hit by the great recession.

According to a new report from PBS Newshour, that’s bad news to anyone hoping for a speedy economic recovery. “The bumps represent different sets of problems, both disheartening. First, the increases in the wealthy communities suggest that people in those counties still may be leery of spending money in the months ahead – something they need to do if the economy is to turn around.…

The big news recently seems to be rising unemployment, with jobs coming back into focus as yet another election season begins to heat up. But a recent jump in another bad economic bellwether—home foreclosures—is a new cause for concern in these uncertain economic times.

According to a latest reports, the number of mortgage-default notices filed by banks climbed 33 percent between July and August — the biggest single-month increase in four years, according to the data provider RealtyTrac.

As The Huffington Post put it, “Default notices are the first step in the foreclosure process, and the uptick in August may mean that lenders are beginning to clear the logjam that has held up home foreclosures since 2010.…

In the years since the end of America’s recent Great Recession, there have been plenty of ups and downs in economic forecasts, fiscal prognostications, and financial facts and figures. But as mortgages rates rose forcing many into foreclosure, the personal health of those impacted went on the decline, as the real estate reckoning wrought a wave of depressed homeowners.

In fact, according to a new article by The Huffington Post, “The damaging mental-health effects of the fragile economy have been a subject of study since the throes of the Great Recession, and with the economy now settling into a state of near-inertia, those same health consequences appear likely to continue to afflict Americans who view their financial position as precarious.…

Historically low interest rates haven’t really reaped the kind of benefits they normally would in a post-recessionary period. In reality, economic growth has stagnated, the real estate market remains in the gutter, and consumer confidence has yet to recover to pre-recessionary levels.

But bargain-basement interest is also having unintended effects, including what the Associated Press called “killing savers”—like retirees and others who depend on interest income. In turn, the Federal Reserve’s low-rate policies may actually be hurting the country’s economic prospects, reducing the income of these “savers” by some 27 percent in the last three years, and therefore decreasing the amount they can pump back into U.S.…

Amid the lingering housing crisis, full of fraudulent foreclosures, falling home prices, missed mortgage modifications, and underwater homes drowning in delinquencies, many disenfranchised Americans have turned to renting to keep a roof over their heads, and their heads above financial water.

But new numbers from the Census Bureau and Morgan Stanley reveal that home ownership rates have fallen even more dramatically than previously thought, with average Americans avoiding the real estate reckoning through a variety of rental safety nets.

While, the official home ownership rate is around 66 percent, if you take out the widening number of mortgage delinquencies, this figure is actually 59.7 percent.…

It’s no secret that a big reason for our country’s lingering financial malaise is the real estate market’s seemingly unending mortgage crisis—forcing many Americans out of house and home while also contributing to a bleak economic environment for home purchases, investment and spending.

But along with the knowledge that the mortgage servicing industry foreclosed on more than one million homes last year and is on track to do better in 2011, comes more bad news for the beleaguered economy: high unemployment is now further dragging down the housing market and subsequent prospects for our country’s economic recovery.

This news comes according to a new report from The Huffington Post.…

Two years after experts found the recession to have ended, real estate prices continue to fall in major cities all across the country according to a new report—in some cases to their lowest level since the housing bubble burst in 2006—signifying a true recovery has yet to materialize in the beleaguered housing market.

According to a report from Arthur Delaney for The Huffington Post, this latest data “confirms that the housing market’s ‘double dip’ is at hand, and many economists say prices will continue to decline through the rest of this year. Home values dropped from February to March in 18 of the 20 cities tracked by the Standard & Poor’s/Case-Shiller index, which is widely considered the leading gauge of the housing market’s health.…

When markets crashed, home prices fell, and unemployment rates rose, many desperate debtors were left destitute, depressed and feeling without hope in the height of our recent Great Recession. And as you might imagine, and as researchers at the Centers for Disease Control and Prevention confirmed last week, some of these desperate Americans even took their own lives—in greater number—during the tough economic times of the 2000s.

These troubling stats were confirmed in the CDC’s latest study, published online in the American Journal of Public Health. According to Reuters, the new study was the first of its kind to evaluate suicide trends by age and business cycles, revealing that working Americans, aged 25 to 64, are significantly more likely to commit suicide when facing the feeling of insurmountable economic struggles.…

While many are led to believe that filing for bankruptcy can kill your credit score, it turns out missing a single mortgage payment—a common symptom of recent economic malaise—may be just as deadly to your credit’s near future.

According to a recent article from The New York Times, “Missed mortgage payments, serious loan delinquencies, loan modifications, short sales, foreclosures and bankruptcies all drag down credit scores. Because a mortgage is such a big slice of anyone’s credit profile, it carries more weight than other loans. Both FICO and VantageScore have studied and quantified those impacts. They reached similar conclusions: for people with near-perfect records, a single mortgage payment that’s 30 days late reduces a credit score enough to hurt.…

Pick up any newspaper or turn on any news channel and you’ll see economists and financial experts pointing to signs of a slow and steady economic recovery, including facts and  figures showing spikes in consumer savings, spending and home sales. Unfortunately, you can also hear about average Americans, joining those who are down on their luck, who are simply choosing to walk away from their monthly mortgage payments.

According to an article from Dina ElBoghdady for The Washington Post with Bloomberg, “a growing body of research shows that these so-called “strategic defaulters” defy the tell-tale characteristics of most people whose loans go bad.…

In 2010, the President Obama reworked his $75 billion foreclosure prevention plan. The second incarnation of the Home Affordable Modification Program (or HAMP) added new incentives to help those hardest hit by the housing crisis, targeting homeowners who were unemployed or underwater in their mortgages (i.e., folks owing more on their loans than their homes were worth).

Unfortunately, shortly after this revamp of a program meant to stymy the real estate reckoning, data revealed that more than twice as many homeowners were kicked out of HAMP as were granted permanent relief. HAMP was further criticized in the beginnings of 2011 following a sharp drop in the amount of loan modifications that were processed through the program at the end of 2010 and the power shift in Washington following November’s elections, ushering in even more Republican scrutiny of the President’s economic policies.…

We recently shared a sampling of the Federal Trade Commission’s recent tips for saving your home amid the financial fears of foreclosure. Being proactive, applying for a loan modification, and working directly with your mortgage servicer to for a better financial future in your own home sweet home.

But amid this timely advice for those seeking shelter from those who might otherwise take theirs, it’s worth mentioning news that when banks won’t help a beleaguered borrower modify his or her mortgage, scammers are stepping in to take advantage of these households in need.

According to a new report from Laura Bassett of The Huffington Post, an “elaborate network” of affiliated con artist companies, operating under such names as “Save My Home,” “Save My Home Now,” “Express Modifications” and “Express Home Solutions,” have become very good at making bad promises to average Americans that, in exchange for thousands of dollars, they could, in return, get their paying clients lower monthly mortgage rates 60 to 90 days.…

To commemorate the Federal Trade Commission’s annual National Consumer Protection Week (March 6 – 12, 2011), the FTC is providing a budget-load of handy-dandy information designed to protect your money, your credit, and your overall post-recessionary financial future. So whether you’re rebuilding your economic life post-bankruptcy, or simply trying to speed up your savings, the NCPW blog can yield a wealth of resources exactly at a time when average Americans need a financial infusion, including information about:

• Avoiding foreclosure rescue and other mortgage-related scams;
• Knowing how to spot employment opportunity scams;
• Making the most of your money in the early stages of your career;
• Building and maintaining a budget to improve financial stability;
• Avoiding time-share and credit-card scams offered via text messages; and
• Learning what steps to take to save your home from foreclosure.

…

With its many Armed Forces outposts, bases and camps, North Carolina is among a select group of states that are home to a storied U.S. military tradition as well as large military and veteran populations. As such, citizens of North Carolina and other states are often familiar not only with the duties and honorable service of these military men and women, but are also aware of the many laws passed to give veterans preferred status as a token for their former and continuing sacrifice. Common veteran’s status benefits can include continued health care following discharge for those wounded in active service and, particularly salient in the current economic climate, preference in job hiring pools.…

We talk a lot about the real estate reckoning and its effects on companies, individuals, municipalities, and sometimes states. But these days the mortgage crisis is even handing the family pet a raw deal, as families are forced into foreclosure and out of their homes, and the animals they owned are left behind in animal shelters, or worse yet, in the empty houses to languish alone.

A recent USA Today article reported that some of these same pet owners, befuddled by their beleaguered budgets, astonishingly enough will leave their pets behind with small amounts of food and water. In the best of cases, these animals are found days later, starving and near death.…

As countless bankruptcy clients in this country have made clear, seeking the debt dissolution solutions of a personal bankruptcy can help free up finances that help with home mortgage payments—even amid the real estate reckoning of the recent recession—and, as such, aid many households in avoiding the perils of foreclosure.

But now the proof is in the reporting.

In a report released Tuesday, New York Federal Reserve researchers Donald P. Morgan, Benjamin Iverson and Matthew Botsch determined that there is a direct link between the October 2005 change in bankruptcy laws via bankruptcy abuse reforms (or BAR)—a change that made it more difficult for ordinary Americans to eliminate debts in bankruptcy—and approximately 116,000 additional subprime mortgage foreclosures in 2006.…

When asked in a recent interview by Anna Robertson of Yahoo! News what he had to say to America’s 14.5 million unemployed, the Vice President Joe Biden responded, “hang in there.” Pointing to a slow and gradual national recovery, Biden said that while the unemployment rate is only “dropping minimally,” the economy is slowly improving, leaving Americans to wait it out. “A significant portion of the companies out there … are saying now that they’re gonna begin to hire this year,” he said. “The message is hang in there, things are coming back.”

While millions of hopeful men and women attempt to heed the Vice President’s advice and wait for things to return to pre-recessionary “normality,” the realities of the current economic malaise are bleaker.…

Amid a 2010 marred by some of the highest foreclosure rates ever recorded, came the news that many of the nation’s largest mortgage lenders had been forced to suspend foreclosure proceedings following charges that these same “mega mortgage-holders” rushed the recordation process by forcing thousands of borrowers from their “home sweet homes” without the appropriate documentation to do so.

Well, welcome to 2011, a year when many experts believe nationwide foreclosures will reach their peak, just as state courts are finding themselves tasked with determining whether many of these actions are the result of banks jumping the proverbial gun on the foreclosure process.…