The ongoing wave of foreclosures continues to drag home prices lower.

Foreclosure-related properties, which made up roughly one in five home sales in the third quarter of last year, sold for an average 34 percent less than homes that were not “distressed sales,” according to the latest data from RealtyTrac, a housing data research firm.

Foreclosures accounted for a smaller share of total sales as banks already glutted with properties slowed the pace of new seizures until they could unload the houses they already owned. The share of distressed sales also slowed last year following a slowdown in new foreclosures after consumer complaints and lawsuits challenging seizures that resulted from “robo-signing” and other questionable document practices.

“The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties,” said Brandon Moore, chief executive officer of RealtyTrac.

Reforms of those procedures are part of a recently proposed, comprehensive settlement with lenders over abusive foreclosure practices. But the settlement, which is being touted as a program to save homes from the sheriff’s sale, could have the perverse effect of increasing the pace of foreclosures if it helps insulate bankers from potential lawsuits.

Even with the slowdown in home seizures and the legal complications often involved in buying those properties, foreclosure sales represent a historically high percentage of all sales, according to RealtyTrac. During the housing boom years of 2005 and 2006, less than 5 percent of all home sales were foreclosure-related. In the third quarter, the share reached 20 percent, down from 22 percent in the second quarter and 30 percent in the third quarter of 2010.

Those percentages are much higher in the states hardest hit by the housing collapse. In Nevada, foreclosure-related sales accounted for nearly 57 percent of all residential sales during the third quarter, the highest percentage of any state. In California 44 percent of the sales were foreclosure related, followed by Arizona (43 percent), Georgia (34 percent), Colorado (26 percent) and Michigan (23 percent).

Some sellers and real estate agents have tried to draw a distinction between foreclosure-related truncations and “non-distressed” sales in determining the price of the next sale of a comparable home. But just as the latest sale of a share of stock determines the starting point for the next transaction, home buyers are using those distressed sales as a benchmark when making their bid.

The result is that sellers have been marking down their asking prices to match those distressed sales, according to separate research by FNC, another housing research firm. The company found that price cuts in December rose to their highest levels in nearly a year. The average markdown for non-distressed properties rose in the fourth quarter to 4 percent by December. Discounts were higher in the weakest local markets; one in four “non-distressed” houses was marked down by more than 16.2 percent from the initial asking price.

Distressed sales fall into roughly two categories: properties already owned by banks and those at various stages of foreclosures, some of which may be sold in a “short sale” before the foreclosure is final. Once owners have moved out, bankers who own the property are much more willing to cut prices because they now bear the cost of maintaining it. Compared to a non-distressed sale, the average discount for a bank-owned property was nearly 42 percent in the third quarter of 2011, according to RealtyTrac. That compares with a discount of just 24 percent for properties earlier in the foreclosure pipeline.

Some local markets are seeing much bigger price-cutting. The Trenton-Ewing, N.J., metro area posted the biggest foreclosure discount of 68 percent below the average sales price of homes not in foreclosure. Discounts were also steeper than average in St. Louis (55 percent), Milwaukee (53 percent), Springfield, Mass. (52 percent), Saginaw, Mich. (52 percent), New Haven-Milford, Conn. (51 percent), Memphis (51 percent), San Francisco (51 percent), Toledo, Ohio (50 percent), Bridgeport-Stamford-Norwalk, Conn. (50 percent), and Atlanta (50 percent).

By John W. Schoen, Senior Producer
http://bottomline.msnbc.msn.com/_news/2012/01/26/10237449-foreclosures-keep-pushing-house-prices-lower

The Florida Bar is investigating practices by the KEL law firm that may have played a role in it being bilked out of more than $285,000 in a high-tech flim-flam, the Bar confirmed this week.

Staff investigators are looking at whether the Orlando law firm violated the Bar’s rules of financial conduct when it moved funds in and out of a trust account while becoming ensnared in the international scam, a spokeswoman said.

The inquiry was launched after a confidential complaint was filed, the spokeswoman said. Such complaints are routinely investigated by staff; if enough evidence is found, a complaint is then referred to the Bar’s disciplinary committee.

The complaint is the latest in a series filed during the past year against KEL’s partners — Jeffrey Kaufman, Matthew Englett and Craig Lynd. The Bar is also looking into allegations of suspect practices involving consumer-bankruptcy and loan-modification/foreclosure law. KEL officials have denied any wrongdoing.

In the latest incident, KEL finds itself both the victim of wrongdoing and the target of the complaint that accuses it of flouting Florida Bar rules.

U.S. Attorney Robert E. O’Neill for the Middle District of Florida announced last week that KEL had been defrauded and that federal authorities have taken action to recover $285,833 stolen from the firm. The U.S. has filed a civil-forfeit lawsuit against JPMorgan Chase Bank as part of that effort, O’Neill said.

Contacted Tuesday, the law firm welcomed the federal action and insisted it had complied with all Florida Bar regulations regarding due diligence and trust accounts. In short, the firm fell prey to a sophisticated scam that has victimized many other businesses, including law firms, a KEL spokesman said.

“Since this happened last August, we have definitely increased our oversight and adjusted our policies accordingly,” spokesman Christian Hertenstein said. “We have learned a great deal about scammers and the sophisticated things they are capable of doing.”

Hertenstein declined to comment further on the case, citing the ongoing investigation.

Details of the alleged scam as laid out by investigators indicate the perpetrators circumvented KEL’s due-diligence policies without much difficulty and exploited the law firm’s call-center-based legal counsel.

According to a Secret Service investigator’s affidavit, KEL was contacted by phone last summer by a prospective client named “David Benson,” who claimed to be a business consultant. He wanted to sue a former boss, identified as “Fred Sanders,” for wrongful termination. The sum in dispute: $90,000.

After receiving a $500 retainer check, KEL took the case, contacted Sanders and obtained a settlement, the affidavit states. The firm later received a check in the mail for $285,833. It deposited the check in its business account and wired the money to Benson before the check cleared, apparently feeling “obligated” to get the money to him as soon as possible, according to the investigator.

But KEL didn’t have enough money in the business account to wire the full amount, so it transferred funds from its title-work subsidiary account, the federal affidavit states. When it wired the money to Benson at an account in Shinsei Bank in Japan, someone withdrew the entire amount. Later, both the retainer check and the settlement check were found to be counterfeit; and everything else about the people involved had been fabricated, according to the affidavit.

KEL’s money was gone, and the law firm had never met its client face-to-face.

To recover the money, federal authorities have filed a claim against JPMorgan Chase because it is a correspondent bank in the U.S. for Japan’s Shinsei Bank, according to the U.S. Attorney’s Office.

It is rare for a law firm to get caught up in such a scheme, said William Daniels, a spokesman for the U.S. Attorney’s Office. “It is the first case of this type that I’m familiar with,” he said, “and I’ve been in this Tampa office for 13 years.”

There have been only a “handful of such cases” in Florida before, said Amy R. Mashburn, a law professor at the University of Florida who specializes in lawyer regulation. “… Basically, lawyers must follow those trust-account rules to the letter,” she said. “Otherwise, it is really a fast track to disciplinary action.”

By Richard Burnett, Orlando Sentinel, January 24, 2012
http://www.orlandosentinel.com/business/os-kel-draws-another-bar-probe-20120124,0,3547072.story

Flori-duh: Bank Foreclosing on O.J. Simpson’s House But Can’t Find Him!

Posted by Jose Lambiet on Jan 15, 2012 in Broward, Miami

Memo to JP Morgan Chase Bank: O.J. Simpson‘s safely tucked away in a Nevada prison.

So, if you need to serve him about foreclosing on his South Florida house, send your process server to 1200 Prison Road, Lovelock, Nevada!

Showing once again the ridicule in mass foreclosures, JP Morgan’s process server tried to hand their filing to the fallen NFL icon on a daily basis at the former running back’s homestead on SW 112 Street in Kendall, according to court records.

Couldn’t find the former Buffalo Bills running back at home.

Maybe that’s because The Juice is dwelling in a desert prison the next 33 years after being found guilty of armed robbery and kidnapping in 2008?

Somehow, Simpson figured out the bank was after him and decided to fight the attempt to have the ranch house sold on the courthouse steps!

Records show Simpson, 64, took out a mortgage after he arrived in Florida in 2000. At the time, he avowedly moved here to escape paying a $33.5 million civil judgment to the family of Ron Goldman, the man he was accused of killing along with his ex-wife Nicole in 1994. While he was found not guilty of the murders, Simpson was found liable in a civil trial.

Simpson eventually settled on the four-bedroom crib in Kendall after several gated communities rejected him.

And he took out a $592,000-mortgage to buy the $575,000-house, according to property records.

The former Heisman Trophy winner, however, quit making payments in March 2010, according to the filing. By then, he’d been in prison for nearly two years.

He currently owes $724,354.15, including interests, fees and penalties. And attorney Leonardo Starke reps Simpson.

Starke didn’t return calls but his pleadings deem JP Morgan’s filing “ambiguous and vague.” While JP Morgan’s going after him, the loan was made with the defunct Washington Mutual.

By Jose Lambiet

http://www.floridatoday.com/article/20120111/BUSINESS/301110025/Twinkies-maker-Hostess-seeks-bankruptcy-protection

NEW YORK — Hostess Brands Inc., the maker of Twinkies and Wonder Bread, is seeking bankruptcy protection, blaming its pension and medical benefits obligations, increased competition and tough economic conditions.

The filing on Wednesday comes just two years after a predecessor company emerged from bankruptcy proceedings.

That company, called Interstate Bakeries and based in Kansas City, Missouri, filed for bankruptcy protection in 2004. It emerged in February 2009.

But Hostess said Wednesday that its previous efforts to produce incremental change, including the prior bankruptcy case, were insufficient.

In its filing with the U.S. Bankruptcy Court for the Southern District of New York, Hostess disclosed that its biggest unsecured creditor is the Bakery & Confectionary Union & Industry International Pension Fund, which it owes approximately $944.2 million.

Its second-largest unsecured creditor, Central States, Southeast and Southwest Areas Pension Plan is owed far less, about $11.8 million.

Hostess President and CEO Brian Driscoll said in a statement that the company is working to reach a consensual agreement with its unions to modify its collective bargaining agreements. The company said that its current cost structure is not competitive mostly because of legacy pension and medical benefit obligations and restrictive work rules.

Hostess said those issues, coupled with more competition and the difficult economic conditions, created a worsening liquidity situation that drove its need to reorganize.

In its bankruptcy filing, Hostess also listed its estimated assets between $500 million and $1 billion and its estimated liabilities at more than $1 billion.

The privately held Irving, Texas-based company said that it will be able to maintain routine operations thanks to a $75 million financing commitment from a group of lenders led by Silver Point Capital LP.

Reports had surfaced earlier in the week that the bakery company was planning to make such a filing.

Hostess said that it will look to restructure into a “strong, competitive” company. It will continue to run bakeries, outlet stores and distribution centers and deliver its goods during the process.

Hostess has about 19,000 employees and operates in 49 states. Annual sales are about $2 billion, according to the company’s website.

1. Home Values: Home values will continue to decline during 2012 and I do not expect the bottom of the real estate market to be reached until the 3rd Quarter of 2014. My best guess for any type of sustained recovery in the housing market is no sooner than the 3rd Quarter of 2021. The number of homes in foreclosure will double or triple from 2011 levels and home values will drop by another 15% to 20% by the end of year. I do not expect to see any real recovery in the housing market until at least 2022. A massive number of bank-owned homes (Real Estate Owned or REO property) will be turned into rental properties by the banks and/or mortgage servicers and many more foreclosed on homes will be sold in bulk sales to investors for the same purpose.

2. New Home Construction: At its peak at the end of 2005, homebuilding accounted for about 6.2 percent of overall economic activity. Now, it is only about 2.4 percent. U.S. housing starts in April 2009 hit their lowest level on records dating to January 1959. While multifamily starts (mainly for apartment units) have given them a lift, 2012 be the weakest year ever for construction of single-family homes. We are turning into a Nation of renters rather than homeowners and I anticipate that trend will really take-off next year.

3. Big Banks: One of the top 10 United States banks will fail or be forced into a take over by the end of the year. My best guess is Bank of America. BOA will be forced into liquidation under the too big to fail provisions of the Dodd Frank Act. The FHFA as conservator of BOA may impose the Chapter 13 principal reduction program for all loans owned and serviced by the Bank.

4. Unemployment: The unemployment rate will not drop below 7.00% at any point during the year and will be above 8.00% for at least half of the year. With our educational system in disarray, and technical skills at an all time low among US workers, the fact of the matter is that all of the good jobs are in China, India, Viet Nam, Brazil, Thailand, and Argentina.

5. DOW Jones: I expect the DOW to drop below 8,000 based on the failure of at least 2 of the major Euro-Zone banks, the devaluation of the Euro, the bankruptcy of at least 3 Euro Zone countries, the failure of the Iraqi state, and the need for further US military intervention in Iraq.

6. Chapter 13 Relief: FHFA will implement the NACBA Chapter 13 mortgage principal reduction program for all Fannie and Freddie owned residential mortgage loans by June and the number of new Chapter 13 cases filed in the 3rd and 4th Quarters of 2012 will reach historic levels.

7. Fannie and Freddie: The Federal Reserve will continue to loan billions of dollars to Fannie and Freddie to cover repurchase obligations and to purchase RMBS bonds in an effort to save the secondary markets, the investors and US and foreign banks. Fannie and Freddie will enter the final liquidation process after the November elections. The Fed will also make every effort to keep interest rates near zero and we will probably see another effort at Quantitative Easing, Round 3.

12. Gas: With all of the problems in the Mid-East, not to mention the financial crisis in Europe, I expect the price of a regular gallon of gas to top $5.00 by the 2nd Quarter, with a substantial chance of going much higher. If you happen to have large petroleum storage tanks on your property, then you need to fill them up while gas prices are still hovering around the $3.10 per gallon range.

Check out O Max Gardner III’s Top 12 Predictions for 2012 @ http://t.co/qILMugVK

PALM BAY and COCOA, Fla. – Brevard County Agriculture and Extension Service and the University of Florida Institute of Food and Agricultural Sciences will offer classes on credit and financial management, budgeting, saving, and purchasing in January and February.

“Budgeting Basics” teaches participants how to prepare a budget, the importance and how-to of reconciling accounts, and how to stretch dollars using coupons, rebate and sales. The class will be held on Tuesday, January 10 from 11 a.m. to 12:30 p.m., and on Thursday, February 2 from 3:30 p.m. to 5 p.m. at the Palm Bay Extension Office; and on Wednesday, January 11 from 3:30 to 5 p.m., and on Wednesday, February 8 from 9 to 10:30 a.m. at the Cocoa Extension Office. The cost to attend is $10.

“Credit 101” teaches participants how to use credit wisely and how to pay down debt. The class will be offered on Wednesday, January 11 from 9 to 10:30 a.m., and on Wednesday, February 8 from 3:30 to 5 p.m. at the Cocoa Extension office; and on Tuesday, January 31 from 3:30 to 5 p.m., and on Thursday, February 23 from 9 to 10:30 a.m. at the Palm Bay Extension Office. The cost to attend is $10.

“Become Captain of Your Financial Ship” will be held on Tuesday, January 24 from 1 to 5 p.m., and on Monday, February 13 from 9 a.m. to 1 p.m. at the Palm Bay Extension Office; and on Saturday, January 28 from 9 a.m. to 1 p.m., and on Friday, February 17 from 1 p.m. to 5 .m. at the Cocoa Extension Office. This four-hour financial management program, which meets bankruptcy debtor education requirements, is designed to provide information to participants to help them better manage their available resources. The cost to attend is $20 per person or couple.

“Saving and Investing” will be held on Wednesday, January 25 from 3:30 to 5 p.m., and on Wednesday, February 22 from 11 a.m. to 12:30 p.m. at the Cocoa Extension Office; and on Tuesday, January 31 from 9 to 10:30 a.m., and on Thursday, February 23 from 3:30 to 5 p.m. at the Palm Bay Extension Office. Participants will learn how to get on the path to financial security through the accumulation of wealth and compound interest. The cost to attend is $10.

“Consumer Savvy” will be held on Wednesday, January 25 from 11 a.m. to 12:30 p.m., and on Wednesday, February 22 from 3:30 to 5 p.m. at the Cocoa Extension Office; and on Thursday, January 26 from 3:30 to 5 p.m., and on Tuesday, February 28 from 11 a.m. to 12:30 p.m. at the Palm Bay Extension Office. Participants will learn consumer skills that can help them save money and make wise purchasing decisions. The cost to attend is $10.

For more information, or to pre-register, visit http://brevard.ifas.ufl.edu or call (321) 633-1702.

Not true. Lenders will look at your past and use the bankruptcy as a factor to assess the loan’s risk. Mortgage lenders will try to determine if it has been long enough since your bankruptcy for them to see what is your current credit worthiness. Some lenders may look at what caused your bankruptcy and ask for a letter explaining what led to your decision to file bankruptcy.

Many of my client’s who file bankruptcy are not irresponsible but unlucky. I often recommend to client who intend to purchase a new home as soon as possible or client’s who have security clearances to write a letter to themselves before the file bankruptcy or shortly afterwards. Two years or more from now when the underwriter or security manager asks you why you filed bankruptcy it may be hard to remember all the details. If you write the letter now, it will be easier to get all the little details down while they are fresh in your mind. You can then rewrite the letter in the future and remove any emotionally charged information or unnecessary details.

Your first mortgage loan after bankruptcy may have a higher interest rate, the lender may require you to pay for mortgage insurance or they may require a larger down payment. The lender may see you as a higher risk due to your prior bankruptcy or your credit history prior to filing the bankruptcy.

Some of my associates in the lending field recommend a couple options to appear a lower risk and avoid some of these issues are: first, to have a larger down payment or second, buy less house than you can really afford. Having more than enough income to make the mortgage payment is one way to reduce the banks perceived risk. Instead of a mortgage payment of $1500/month, which you could technically afford, try for a $1200/month payment. In addition, if you do get a higher interest rate or mortgage insurance added in you can focus on refinancing in the future after demonstrating your ability to pay a mortgage on time.

I will lose my home if I file bankruptcy. This is not always true, in fact many factors determine if you could lose your home in a bankruptcy. Being current on the payments is a primary factor. In Florida, if the home you are concerned about saving is your homestead (primary residence) and you are current on your mortgage payments or have no mortgage it is usually safe in bankruptcy.

The Florida Constitution Article X, § 4(a)(1) and Florida Statutes § 222.01 & 222.02 define and provide for an exemption to equity in your homestead.

If you are not current on your mortgage, the filing of a Chapter 13 bankruptcy will allow you to reorganize your debts and develop a plan to save your home. Chapter 13 offers several ways to help save a home such as mortgage modification, traditional payment restructuring or stripping off a second or third mortgage along with any additional liens.

To summarize, if you are current with taxes, insurance and your mortgage payment you will in most situations get to keep your home. If you are not current, you should seek the advice of an experienced Chapter 13 bankruptcy attorney to find out what options are available to you.

In the end, it is up to you to decide who to tell and whom those people tell about your bankruptcy. Gossip is easily spread, so if you want no one to know, tell no one. Bankruptcy is a matter of public record and will be reported on your credit report so people will know but those individuals are usually strangers. Individuals who access credit reports are governed by privacy laws that prohibit them from disclosing personal information contained in your credit report.

Bankruptcy is filed in the Federal Court system, the Court uses a system called PACER to provide access to the public records. In order to access this system a person must create an account and be willing to pay $.08 per page for everything they look at on PACER. It is unlikely that someone in your life is willing to search Federal Court records and pay the necessary fees to simply snoop around on their neighbors.