Saturday, December 19, 2009

California Mortgage Defaults Trend Down Again research 20091020

RRFor091020.aspx

California Mortgage Defaults Trend Down Again

October 20, 2009

La Jolla, CA.--The number of mortgage default notices filed against California homeowners fell last quarter compared with the prior three-month period, the result of lenders' evolving foreclosure policies, an uncertain legislative environment and an uptick in the number of mortgages being renegotiated, a real estate information service reported.

A total of 111,689 default notices were sent out during the July-through-September period. That was down 10.3 percent from 124,562 for the prior quarter, and up 18.5 percent from 94,240 in third quarter 2008, according to San Diego-based MDA DataQuick.

The number of recorded default notices peaked in the first quarter of this year at 135,431, although that number was inflated by deferred activity from the prior four months.

"It may well be that lenders have intentionally slowed down the pace of formal foreclosure proceedings. If so, it's not out of the goodness of their hearts. It's because they've concluded that flooding the market with cheap foreclosures in this economic environment may not be in their best financial interest. Trying to keep motivated, employed homeowners in their homes might be the most cost-efficient way to stem losses," said John Walsh, DataQuick president.

The median origination month for last quarter's defaulted loans was July 2006, the same as during this year's first and second quarters. A year ago the median origination month was June 2006, so the foreclosure process has moved one month forward during the past 12 months.

"There's a batch of truly nasty loans that were made in mid 2006. There's another batch made in late 2006. These are worse than the mortgages before and after, and it's taking a long time to process them," Walsh said.

The lenders that originated the most loans that went into default last quarter were Countrywide (7,583), Washington Mutual (5,146) and Wells Fargo (4,425). Along with Bank of America (1,979) and World Savings (4,237), they were also the most active lenders in the second half of 2006. Last quarter's default rate on loans originated in the second half of 2006 ranged from 1.7 percent for Bank of America to 11.9 percent for World Savings.

Smaller subprime lenders had far higher default rates for that period: ResMAE Mortgage was at 73.9 percent, Ownit Mortgage 69.5 percent, BNC Mortgage 61.4 percent, Argent Mortgage 59.9 percent and First Franklin 59.4 percent. While these and most other subprime lenders are long gone, their loans were bundled, resold and now live on as "troubled assets".

Indeed, many, if not most, of the loans made in 2006 are owned and/or serviced by lending institutions other than those that made the loans. The servicers pursuing the highest number of delinquencies last quarter were ReconTrust Co, Quality Loan Service Corp and Cal-Western Reconveyance Corp.

While most foreclosure activity was still concentrated in affordable inland communities, the foreclosure problem continued to slowly migrate into more expensive areas. The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 52.2 percent of all default activity a year ago. In third-quarter 2009 it fell to 42.9 percent.

On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the notice of default. The borrowers owed a median $12,665 on a median $343,200 mortgage.

On home equity loans and lines of credit in default, borrowers owed a median $3,948 on a median $62,800 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.

San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

Although 111,689 default notices were filed last quarter, they involved 108,372 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit). Multiple default recordings on the same home are trending down, DataQuick reported.

Mortgages were least likely to go into default in San Francisco, Marin and Santa Cruz counties. The probability was highest in Merced, San Joaquin, and Riverside counties.

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 50,013 during the third quarter. That was up 9.5 percent from 45,667 for the prior quarter, and down 37.1 percent from 79,511 for third-quarter 2008, which was the all-time peak.

In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The state's all-time low was 637 in the second quarter of 2005, MDA DataQuick reported.

There are 8.5 million houses and condos in the state.

Foreclosure resales continued to decline as a market factor, accounting for 42.8 percent of all California resale activity last quarter. It was 49.9 percent the prior quarter, and a year ago it was 47.5 percent. It peaked at 57.8 percent in the first quarter of this year. Foreclosure resales varied significantly by area last quarter, from 9.6 percent in San Francisco County to 70.2 percent in Merced County.

Of the homes foreclosed on statewide in an 18-month period ending this July, about 82 percent have re-sold on the open market, while 18 percent, or more than 57,000 homes, have not. Of those that have not re-sold, it cannot be determined from public records what portion is currently being marketed for sale, as opposed to, among other things, being used as rentals or being left vacant and not for sale. Over the past year California buyers have snapped up an average of nearly 18,000 foreclosure resales a month.

A year ago the percentage of foreclosures that had not yet re-sold was about twice as great, while the number of unsold foreclosures from the 18-month period ending in July 2008 was about 50 percent higher than it is now.

Notices of Default (first step in foreclosure process)
houses and condos

County/Region	2008Q3	2009Q3	Yr/Yr%

Los Angeles	17,073	21,850	28.00%
Orange	5,692	7,436	30.60%
San Diego	7,062	8,702	23.20%
Riverside	11,714	12,113	3.40%
San Bernardino	9,110	9,833	7.90%
Ventura	1,676	2,146	28.00%
Imperial	568	692	21.80%
SoCal	52,895	62,772	18.70%

San Francisco	353	607	72.00%
Alameda	3,482	3,940	13.20%
Contra Costa	4,103	4,753	15.80%
Santa Clara	2,814	4,035	43.40%
San Mateo	797	1,263	58.50%
Marin	258	428	65.90%
Solano	1,934	2,164	11.90%
Sonoma	1,021	1,282	25.60%
Napa	265	340	28.30%
Bay Area	15,027	18,812	25.20%

Santa Cruz	342	419	22.50%
Santa Barbara	593	739	24.60%
San Luis Obispo	370	539	45.70%
Monterey	1,260	1,115	-11.50%
Coast	2,565	2,812	9.60%

Sacramento	5,541	6,098	10.10%
San Joaquin	3,432	3,371	-1.80%
Placer	973	1,414	45.30%
Kern	2,774	3,166	14.10%
Fresno	2,202	2,758	25.20%
Madera	499	570	14.20%
Merced	1,399	1,245	-11.00%
Tulare	883	1,178	33.40%
Yolo	405	443	9.40%
El Dorado	342	629	83.90%
Stanislaus	2,636	2,482	-5.80%
Kings	140	247	76.40%
San Benito	202	210	4.00%
Yuba	307	312	1.60%
Colusa	68	62	-8.80%
Sutter	269	403	49.80%
Central Valley	22,072	24,588	11.40%

Mountains*	526	932	77.20%

North Calif*	1,155	1,773	53.50%

Statewide*	94,240	111,689	18.50%

* includes additional counties

Trustees Deeds Recorded (signal homes were lost to foreclosure)
houses and condos

County/Region	2008Q3	2009Q3	Yr/Yr%

Los Angeles	11,690	7,927	-32.20%
Orange	3,997	2,238	-44.00%
San Diego	5,797	3,601	-37.90%
Riverside	10,813	6,776	-37.30%
San Bernardino	7,930	4,999	-37.00%
Ventura	1,420	793	-44.20%
Imperial	476	365	-23.30%
SoCal	42,123	26,699	-36.60%

San Francisco	192	179	-6.80%
Alameda	2,521	1,760	-30.20%
Contra Costa	3,662	2,053	-43.90%
Santa Clara	2,165	1,237	-42.90%
San Mateo	515	370	-28.20%
Marin	149	110	-26.20%
Solano	1,754	1,025	-41.60%
Sonoma	933	585	-37.30%
Napa	202	143	-29.20%
Bay Area	12,093	7,462	-38.30%

Santa Cruz	276	158	-42.80%
Santa Barbara	629	340	-45.90%
San Luis Obispo	248	223	-10.10%
Monterey	1315	575	-56.30%
Coast	2,468	1,296	-47.50%

Sacramento	5,643	3,384	-40.00%
San Joaquin	3,862	1,919	-50.30%
Placer	766	610	-20.40%
Kern	2,488	1,855	-25.40%
Fresno	1,891	1,279	-32.40%
Madera	433	355	-18.00%
Merced	1,639	819	-50.00%
Tulare	687	536	-22.00%
Yolo	364	238	-34.60%
El Dorado	243	243	0.00%
Stanislaus	2,816	1,476	-47.60%
Kings	82	88	7.30%
San Benito	191	100	-47.60%
Yuba	297	196	-34.00%
Colusa	40	41	2.50%
Sutter	291	152	-47.80%
Central Valley	21,733	13,291	-38.80%

Mountains*	324	424	30.90%

North Calif*	770	841	9.20%

Statewide*	79,511	50,013	-37.10%

* includes additional counties

Source: DataQuick Information Systems

Media calls: Andrew LePage (916) 456-7157 or John Karevoll (909) 867-9534

Wednesday, December 9, 2009

Subprime Suits Unlikely to Succeed, Insurer Says 20091209 research Fwd: CAALA Eclips - Wednesday, December 9, 2009

Subprime Suits Unlikely to Succeed, Insurer Says

Subprime mortgage-related lawsuits against company executives or board members have little chance of succeeding, according to a firm that provides insurance against such claims. XL Capital Ltd. CEO Michael McGavick said yesterday that it will be tough for investors to meet the legal threshold required to extract damages. Investors filed about 100 class-action securities lawsuits in 2008 seeking to recover losses related to more than $1.7 trillion in global writedowns and other credit losses. Jamie McGee, Bloomberg 12/09/2009

Read Article: Bloomberg

http://www.bloomberg.com/apps/news?pid=20601103&sid=aT1Y2wmqS91s#

Subprime Losses Don't Warrant Lawsuits, XL CEO Says (Update1)

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By Jamie McGee

Dec. 9 (Bloomberg) -- Investors have little chance of extracting damage awards from executives and board members at firms that lost money betting on subprime mortgages, said the chief executive officer of XL Capital Ltd., which insures directors and officers against legal claims.

"It's very hard to pick out the management team that did something wrong to the level that the law requires," Michael McGavick said yesterday at a Goldman Sachs Group Inc. conference in New York. "Being collectively stupid is not a basis for a lawsuit."

U.S. securities class action suits climbed to a four-year high in 2008 with almost half of the 210 claims related to the collapse of the subprime mortgage market, according to a report by Stanford Law School and Cornerstone Research. Investors are seeking to recoup losses from a crisis that contributed to more than $1.7 trillion in writedowns and credit losses worldwide.

XL is among insurers, including Ace Ltd. and Chubb Corp., that sell coverage for lawsuit costs tied to management errors or negligence. The Bermuda-based insurer and reinsurer said claims rose in its professional liability business in 2008 as the pace of lawsuits increased.

XL reported 45 claims related to Bernie Madoff's $65 billion Ponzi scheme and said it had three new subprime-related claims in the third quarter. The insurer said in October it has confidence in its reserve levels for claims.

'Early Days'

"You also have this global economic downturn, which will give rise to greater failure and greater opportunity for losses as well, and I think that's still pretty early days in evaluating" losses, McGavick said.

Federal securities class actions fell to 87 claims in the first half of 2009, a 22 percent drop from the year-earlier period, Stanford and Cornerstone said in a separate statement.

"The market was much more volatile in the second half of 2008," John Gould, vice president of Cornerstone research, said in the statement. "Moving forward, greater market stability may signal a reduced number of securities class action filings."

New directors and officers claims at Chubb dropped 5 percent in the third quarter, the insurer's Chief Operating Officer John Degnan said in October.

"The predicted wave of directors and officers litigation does not seem to be materializing yet," Degnan said in a conference call in July. "We are now about two years into this developing claims scenario in an arena which has been traditionally characterized by a rush to the courthouse on the part of plaintiffs' lawyers."

'Really Big'

Chubb's rates for the coverage increased 22 percent in the three months ending Sept. 30 for financial companies, Degnan said. This compares to a 5.8 percent rate decline in overall U.S. commercial insurance in the same period, according to the Council of Insurance Agents and Brokers.

"This is an issue that was six months ago a really big topic for insurance investors, and it has largely kind of gone away and the reason is we just haven't seen the lawsuits," Paul Newsome, an analyst at Sandler O'Neill & Partners LP, said yesterday in an interview.

XL has more than quadrupled this year and is the best performer in the 24-company KBW Insurance Index. The company closed at $17.74 yesterday after dropping 33 cents in New York Stock Exchange composite trading. Chubb, based in Warren, New Jersey, has fallen 4.7 percent this year.

McGavick said the acquittals last month of two former Bear Stearns Cos. hedge-fund managers bode well for the industry, and similar defenses will "for the most part hold ground."

Acquitted

Ralph Cioffi and Matthew Tannin were acquitted of six counts including conspiracy and fraud in the first trial stemming from a federal probe of the subprime crisis. The men were accused of misleading investors about the health of two hedge funds that later collapsed, erasing $1.6 billion of investor assets.

"You had at least some damning evidence," McGavick said. "And yet the defense was in essence, 'We were caught up in tsunami not of our own making, we didn't see it for what it was, we were more optimistic than that, but that's no crime.' And the jury agreed. That message I think is very positive and powerful for where this all goes."

The Bear Stearns hedge funds collapsed in 2007. Bear Stearns itself failed less than a year later and was bought by JPMorgan Chase & Co.

To contact the reporter on this story: Jamie McGee in New York at jmcgee8@bloomberg.net.

Last Updated: December 9, 2009 09:09 EST

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Wednesday, December 2, 2009

research Justices Weigh Case Over Attorney Bankruptcy Advice Fwd: CAALA Eclips - Wednesday, December 2, 2009

Justices Weigh Case Over Attorney Bankruptcy Advice

The U.S. Supreme Court heard arguments Tuesday in a case that challenges a 2005 law that restricts what advice bankruptcy lawyers may give their clients. At issue is whether provisions of the law are in violation of free speech protections. The justices seemed to indicate that they might. "Congress often forgets about the First Amendment," Justice Anthony M. Kennedy said, "but lawyers don't." Adam Liptak, The New York Times 12/01/2009

Read Article: The New York Times

http://www.nytimes.com/2009/12/02/us/02scotus.html?_r=3&ref=us

December 2, 2009

Federal Law Limiting Legal Advice Draws Particular Interest at the Supreme Court

By ADAM LIPTAK

WASHINGTON — Several justices seemed convinced on Tuesday that a federal law restricting the advice bankruptcy lawyers may offer was a bad idea. But they had differing ideas about what the Supreme Court should do about it.

"It's a stupid law," Justice Antonin Scalia said. "Where is the prohibition of stupid laws in the Constitution?"

Chief Justice John G. Roberts Jr., on the other hand, appeared receptive to the argument that the law violated the First Amendment by intruding into the relationship between lawyers and clients.

The justices, all of whom are lawyers, seemed to take particular interest in the case, presumably because it concerns lawyers' free speech rights.

"Congress often forgets about the First Amendment," Justice Anthony M. Kennedy said, "but lawyers don't."

The law forbids advising clients "to incur more debt in contemplation of" a bankruptcy filing. Piling on debt just before filing for bankruptcy in the hope that it will not have to be repaid is, all concerned agreed, an abuse of the system and may amount to fraud. But state ethics rules already forbid lawyers to advise their clients to break the law.

On the other hand, some new debt is both legal and prudent. It may be a good idea to refinance a mortgage to pay down credit card debt or to take out a loan to buy a car to get to work. The 2005 law seems to forbid lawyers to give advice about that second sort of action.

Justice Ruth Bader Ginsburg asked about medical expenses. Suppose, she said, that a woman was "just told by her doctor that she has a serious cancer that needs operation and radiation and she is at the end of the line on resources." Could the woman's lawyer advise her to take on more debt to treat the cancer?

It depends, said William M. Jay, a lawyer for the government. Lawyers may not advise clients to add debt in two situations, he said: in an effort to abuse the bankruptcy system or to defraud creditors.

That answer did not satisfy Chief Justice Roberts. "Under your construction," he told Mr. Jay, "it seems to me that a lawyer trying to give correct, legal, ethical advice has got to pause before every sentence" and worry about whether the advice will later be seen as a violation of the law.

The case, Milavetz, Gallop & Milavetz v. United States, No. 08-1119, was brought by a Minnesota law firm that objected to three parts of the law. In addition to the core First Amendment challenge, the firm argued that Congress had not meant to cover lawyers in the first place. That argument did not seem to gain much traction with the justices.

The firm also objected to a requirement in the law that its advertising include this statement or something like it: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code."

Justice Samuel A. Alito Jr. said he was troubled by that requirement. "A prospective client looks at that," he said, "and they say, 'Well, I don't want a debt relief agency, I want a lawyer.' "

Mr. Jay said the firm was free to add to and clarify the statement. "There is no restriction on what content goes in the ad," he said, "only that it include this disclaimer."

As for the part of the law restricting legal advice, Mr. Jay said it should be narrowed rather than struck down.

The law, the government said in a brief, should be read to bar "only advice to take on debt with an intent to abuse the bankruptcy laws, such as advice to charge a vacation, concert tickets or some similar purchase to a credit card, knowing that the purchaser will enjoy the full benefit of the purchase and then shed most or all of the debt in bankruptcy."

But G. Eric Brunstad Jr., a lawyer for the Minnesota law firm, said the law "whipsaws the attorneys who are trying to apply it." State ethics rules "say you have to give unfettered, candid advice to your client," he said, while the federal law says "you must give truncated advice."

---------- Forwarded message ----------
From: <stuart@caala.org>
Date: Wed, Dec 2, 2009 at 11:10 AM
Subject: CAALA Eclips - Wednesday, December 2, 2009
To: EClips for CAALA Members <eclips_caala@lists.trialsmith.com>

CAALA Eclips

• CAALA Home • Search Litigation Bank • About	December 02, 2009

-	Texas Settles Suit Over Parking Permits for Disabled
-	Justices Weigh Case Over Attorney Bankruptcy Advice
-	City Settles Firefighter Promotion Lawsuit
-	Amazon Denied Overtime Pay, Lawsuit Claims
-	High Court Could Hear Pennsylvania Vaccine Case
-	Court to Consider Mass-Tort Status for Employee Benefit Suit
-	Jury to Weigh Case of Brain Injured Soldier
-	Lawsuit Filed Over Alleged Pension Switch

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Laws/Cases

Texas Settles Suit Over Parking Permits for Disabled

The state of Texas has agreed to pay $24 million to settle a long-running class-action lawsuit over a fee charged for disabled parking placards. According to the Texas suit and others filed nationwide, the practice violates the Americans with Disabilities Act. The settlement must still be approved by a federal judge before it becomes final. Eric Dexheimer, Austin American Statesman 12/02/2009

Read Article: Austin American Statesman

Justices Weigh Case Over Attorney Bankruptcy Advice

Read Article: The New York Times

City Settles Firefighter Promotion Lawsuit

A Connecticut fire department has agreed to promote twelve white firefighters who claimed they were discriminated against when the department threw out the results of a 2006 lieutenant promotion exam. Attorneys for the Bridgeport firefighters said that this summer's U.S. Supreme Court decision involving white firefighters in New Haven strengthened their case. In addition to promotions, the settlement calls for Bridgeport to compensate the plaintiffs for back pay and lost seniority. Keila Torres, The Connecticut Post 12/01/2009

Read Article: The Connecticut Post

Amazon Denied Overtime Pay, Lawsuit Claims

Attorneys filed a lawsuit last week on behalf of a former Amazon.com worker that accuses the online retailer of failing to pay overtime wages to warehouse employees nationwide. According to the lawsuit, Amazon.com rounded off overtime hours by requiring workers to clock in and clock out prior to their scheduled start and end times. The lawsuit seeks class-action status. Steve Green, Las Vegas Sun 12/01/2009

Read Article: Las Vegas Sun

High Court Could Hear Pennsylvania Vaccine Case

In a closely watched case, Georgia parents who claimed a childhood vaccine caused their son's neurological problems have decided to drop their lawsuit – at least for now. The move opens the door for a similar Pennsylvania case to be heard by the U.S. Supreme Court. In the Georgia case, the state high court previously ruled that drug makers could be held liable for vaccine-related injuries. Alyson M. Palmer, Law.com 12/02/2009

Read Article: Law.com

Court to Consider Mass-Tort Status for Employee Benefit Suit

An attorney for hundreds of former Prudential Insurance Co. employees is urging the New Jersey Supreme court to grant mass-tort status to a group of lawsuits alleging that the insurer conspired to defraud workers out of employment benefits. Attorney Angela Roper filed an application Monday to add the matter to the mass-tort docket. An attorney for another group of plaintiffs reportedly is opposed to a mass-tort designation. Henry Gottlieb, Law.com 12/01/2009

Read Article: Law.com

Jury to Weigh Case of Brain Injured Soldier

A federal jury is scheduled to hear arguments this week in a case involving a former soldier who suffered severe brain damage after slipping into a coma in an Arkansas jail. According to the lawsuit, the Garland County Sherriff's Office violated the plaintiff's civil rights by failing to provide necessary medical care. The sheriff's office maintains that the plaintiff's brain damage was caused by drugs he ingested prior to his arrest. Ginny LaRoe, Arkansas Democrat-Gazette 12/02/2009

Read Article: Arkansas Democrat-Gazette

Lawsuit Filed Over Alleged Pension Switch

A group of Verizon Communication retirees has filed a class-action lawsuit accusing the telephone company of illegally moving their pension funds to a now defunct company, the Boston Herald reports. In the lawsuit, plaintiffs claim their retirement funds were involuntary switched to the bankrupt spin-off company Idearc. The lawsuit seeks for class members to be returned to Verizon's pension plan Thomas Grillo, Boston Herald 12/01/2009

Read Article: Boston Herald

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Thursday, November 19, 2009

A Pasadena school for kids in trouble finds a partner in Father Greg Boyle by Joe Piasecki 20091112

Dear Joe:

Thanks for this article; it is a gift.

Father Greg and Mikala are believers who never give up and they are supported by courageous soldiers for peace. Their genius is an uncommon blessing to behold to be sure. I don't know how they do it, but they do it. By my reckoning, they are the only games in town and it looks like they will transcend tragic non-profit isolationism through this partnership!!!

You captured the irony of Senator Liu's statements. Sadly, the system ain't broke at all; it functions with death camp efficiency - just as it is designed and funded to function - in its vain attempts to immolate audacious youth. And it turns otherwise honorable men (mostly) and women into bumbling (or dutiful?) ushers of children into chambers of injustice. Most of us avert our gaze - these are not our kids after all - because of our misguided, anti-evolutionary superstitions about personal and family safety and we believe we are safer somehow for not knowing.

But you and Father Greg and Mikala remind us adults that no (human) being is more sacred than any other and our crystal spirits are indestructible. And that real children lead us everyday on the path to peace - if only we were brave enough to follow them.

with peace and respect,

PHiLiP KOeBeL
(626) 797-6342

http://pasadenaweekly.com/cms/story/detail/at_home_with_the_homeboys/7913/

At home with the homeboys

A Pasadena school for kids in trouble finds a partner in Father Greg Boyle

By Joe Piasecki 11/12/2009

Celebrated for his successful gang intervention and youth rehabilitation efforts in LA's inner city, Homeboy Industries founder Father Greg Boyle was in Pasadena Monday to announce a new education and job training partnership with Pasadena's Learning Works charter high school.

Learning Works serves some of Pasadena's toughest students. All have been expelled from or dropped out of the district's traditional public high schools, and more than one third are on criminal probation from LA County juvenile halls and camps — kids who had otherwise exhausted their chances to earn a diploma and, in some cases, to start adulthood outside a jail cell.

Starting in January, Homeboy Industries will provide job training and placement for the nearly 300 students at Learning Works, each of which receive individualized classroom attention and crisis intervention. In return, the school will help operate Homeboy Industries' downtown LA charter school, a recent addition to its longstanding social services network.

"This place stands at the margins with the poor, the powerless and the voiceless, with the easily despised and the readily left out," said Boyle to a crowd of several dozen gathered at the East Walnut Street school. "I think we both occasionally stand with the demonized so that the demonizing will stop and with the disposable so that the day will come when we stop throwing people away, especially kids."

The message resonated with state Sen. Carol Liu, D-Pasadena, who praised both programs for their efforts to rehabilitate formerly incarcerated youth.

"We know the juvenile justice system is broken and needs to be fixed, and with it the adult prison system. Spending on corrections [will in 2012] surpass spending on higher education in the state. We need to take another look at what we value," she said.

Each year some 20,000 youth spend time in LA County's 18 probation camps and three juvenile halls. The Children's Council of Los Angeles County reports that incarcerated LA youth, most of whom are 14 to 17 years old, read on average at below fifth-grade level and do little better in math.

State Assemblyman Anthony Portantino, D-La Cañada Flintridge, Pasadena City Councilwoman Jacque Robinson, Pasadena Unified School District Superintendent Edwin Diaz and Pasadena Star-News Public Editor Larry Wilson also attended the open-house event, as did Pasadena Board of Education members Bob Harrison, Elizabeth Pomeroy and Renatta Cooper.

"PUSD has a goal to cut our dropout rate in half this year, and a program like this is very helpful," said Harrison. "Comprehensive high schools don't work for every kid."

Learning Works' first graduating class last year numbered 42, but since then its student body has grown by 25 percent.

Portantino praised Learning Works and Homeboy Industries as part of the solution to the state's growing prison population. Instead of letting people out of prison early, "We need to focus on cutting down the supply of inmates by making sure people have access to education and opportunity," he said. "It's not about letting people out of prison; it's about keeping them out in the first place."

Many in the crowd were simply star-struck with Boyle, who in the 1980s served as a Jesuit missionary in Bolivia and LA's Boyle Heights neighborhood and for a brief time was a prison chaplain. Following the 1992 Los Angeles riots, Boyle founded his first of now five nonprofit businesses as both a job-training center and refuge from gang violence.

"He's my hero," said Learning Works Executive Director Mikala Rahn. "I remember someone asking him [during a forum at Pasadena's All Saints Church], 'So when do you give up on someone?' His answer was you never give up. They may decide to check out or check in, but it's not for us to give up.

"The kids are worth it."

Contributing Editor Joe Piasecki is currently pursuing a master's degree as an Annenberg Fellow with USC's Annenberg School for Communication and Journalism. Email piasecki@usc.edu.

Thursday, October 29, 2009

Fwd: Check out Mortgage debt waived after bank can't find paperwork

Mortgage debt waived after bank can't find paperwork

Martha C. White

Oct 27th 2009 at 4:30PM

Text SizeAAA

Filed under: Banks, Real Estate, Refinancing

Score: Little guy, 1; bank, 0. It's a nice change.

Two weeks ago, a bankruptcy court in suburban New York did the formerly unthinkable: It waived a homeowner's mortgage debt after the bank trying to foreclose on the home couldn't submit any proof that it actually had a claim on the property.

According to the New York Times, when lender PHH Mortgage was asked to provide proof that it actually held the deed for the $461,263 mortgage, it couldn't give the judge any records.

Operating on the entirely reasonable principal that someone who claims to possess a piece of paper that gives them ownership to a nearly half-million dollar house should actually have that piece of paper, the judge slapped a stiff and possibly game-changing punishment on the disorganized lender.

Real estate experts say this is a more common occurrence than many people realize, and the potential implications are huge.

During the go-go mortgage boom years, millions of loans were bundled into financial instruments called securities and sold to investors. They, in turn, often turned around and sold those securities to other investors. Making money hand over fist was the priority; keeping good records of who actually owned which mortgage wasn't.

The shambles that many banks' mortgage records are in today could cost them big -- and keep potentially thousands upon thousands of people from losing their homes.

The idea that banks should have to prove that they actually own the mortgage that gives them the right to foreclose if the homeowner falls behind on their payments isn't new. A group called Consumer Warning Network has been advocating for homeowners who feel railroaded into foreclosure by the lending industry by advising them to ask the lender to "produce the note" in court during foreclosure proceedings.

Good Morning America covered this tactic last spring. At the time, though, the advice was just intended to help beleageured homeowners buy some time to get their mortgage modified or find another way to come up with the money they owed. It was assumed that the banks had the proof of their claim buried in a filing cabinet somewhere.

Now, though, it's clear that some lenders don't have proof that they have the right to foreclose on a home, and at least one judge has put his foot down and refused to let the lender take the home without that proof.

It's a small step so far, but it's one that could have far-reaching implications because of the large number of mortgages that were repackaged and resold many times over earlier this decade.

Of course, if a homeowner is in foreclosure, he or she will still lose the house if the bank has all the proper documentation. But if the bank can't produce the documentation, it's comforting to think that a judge won't let them put a family on the street just on that lender's say-so that they have the proof... somewhere.

http://www.nytimes.com/2009/10/25/business/economy/25gret.html?_r=1&pagewanted=all

October 25, 2009

Fair Game

If Lenders Say 'The Dog Ate Your Mortgage'

By GRETCHEN MORGENSON

FOR decades, when troubled homeowners and banks battled over delinquent mortgages, it wasn't a contest. Homes went into foreclosure, and lenders took control of the property.

On top of that, courts rubber-stamped the array of foreclosure charges that lenders heaped onto borrowers and took banks at their word when the lenders said they owned the mortgage notes underlying troubled properties.

In other words, with lenders in the driver's seat, borrowers were run over, more often than not. Of course, errant borrowers hardly deserve sympathy from bankers or anyone else, and banks are well within their rights to try to protect their financial interests.

But if our current financial crisis has taught us anything, it is that many borrowers entered into mortgage agreements without a clear understanding of the debt they were incurring. And banks often lacked a clear understanding of whether all those borrowers could really repay their loans.

Even so, banks and borrowers still do battle over foreclosures on an unlevel playing field that exists in far too many courtrooms. But some judges are starting to scrutinize the rules-don't-matter methods used by lenders and their lawyers in the recent foreclosure wave. On occasion, lenders are even getting slapped around a bit.

One surprising smackdown occurred on Oct. 9 in federal bankruptcy court in the Southern District of New York. Ruling that a lender, PHH Mortgage, hadn't proved its claim to a delinquent borrower's home in White Plains, Judge Robert D. Drain wiped out a $461,263 mortgage debt on the property. That's right: the mortgage debt disappeared, via a court order.

So the ruling may put a new dynamic in play in the foreclosure mess: If the lender can't come forward with proof of ownership, and judges don't look kindly on that, then borrowers may have a stronger hand to play in court and, apparently, may even be able to stay in their homes mortgage-free.

The reason that notes have gone missing is the huge mass of mortgage securitizations that occurred during the housing boom. Securitizations allowed for large pools of bank loans to be bundled and sold to legions of investors, but some of the nuts and bolts of the mortgage game — notes, for example — were never adequately tracked or recorded during the boom. In some cases, that means nobody truly knows who owns what.

To be sure, many legal hurdles mean that the initial outcome of the White Plains case may not be repeated elsewhere. Nevertheless, the ruling — by a federal judge, no less — is bound to bring a smile to anyone who has been subjected to rough treatment by a lender. Methinks a few of those people still exist.

More important, the case is an alert to lenders that dubious proof-of-ownership tactics may no longer be accepted practice. They may even be viewed as a fraud on the court.

The United States Trustee, a division of the Justice Department charged with monitoring the nation's bankruptcy courts, has also taken an interest in the White Plains case. Its representative has attended hearings in the matter, and it has registered with the court as an interested party.

THE case involves a borrower, who declined to be named, living in a home with her daughter and son-in-law. According to court documents, the borrower bought the house in 2001 with a mortgage from Wells Fargo; four and a half years later she refinanced with Mortgage World Bankers Inc.

She fell behind in her payments, and David B. Shaev, a consumer bankruptcy lawyer in Manhattan, filed a Chapter 13 bankruptcy plan on her behalf in late February in an effort to save her home from foreclosure.

A proof of claim to the debt was filed in March by PHH, a company based in Mount Laurel, N.J. The $461,263 that PHH said was owed included $33,545 in arrears.

Mr. Shaev said that when he filed the case, he had simply hoped to persuade PHH to modify his client's loan. But after months of what he described as foot-dragging by PHH and its lawyers, he asked for proof of PHH's standing in the case.

"If you want to take someone's house away, you'd better make sure you have the right to do it," Mr. Shaev said in an interview last week.

In answer, Mr. Shaev received a letter stating that PHH was the servicer of the loan but that the holder of the note was U.S. Bank, as trustee of a securitization pool. But U.S. Bank was not a party to the action.

Mr. Shaev then asked for proof that U.S. Bank was indeed the holder of the note. All that was provided, however, was an affidavit from Tracy Johnson, a vice president at PHH Mortgage, saying that PHH was the servicer and U.S. Bank the holder.

Among the filings supplied to support Ms. Johnson's assertion was a copy of the assignment of the mortgage. But this, too, was signed by Ms. Johnson, only this time she was identified as an assistant vice president of MERS, the Mortgage Electronic Registration System. This bank-owned registry eliminates the need to record changes in property ownership in local land records.

Another problem was that the document showed the note was assigned on March 26, 2009, well after the bankruptcy had been filed.

Mr. Shaev's questions about ownership also led to an admission by PHH that, along the way, it had levied an improper $450 foreclosure fee on the borrower and had overcharged interest by an unstated amount.

John DiCaro, a lawyer representing PHH at the hearing, was in the uncomfortable position of having to explain why there was no documentation of an assignment to U.S. Bank. He did not return a phone call seeking comment last week. Ms. Johnson, who couldn't be reached for comment, did not attend the hearing.

According to a transcript of the Sept. 29 hearing, Mr. DiCaro said: "In the secondary market, there are many cases where assignment of mortgages, assignment of notes, don't happen at the time they should. It was standard operating procedure for many years."

Judge Drain rejected that argument, concluding that what had been presented to the court just did not add up. "I think that I have a more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person," he said. "That's the problem. And that's because the claimant has not shown an assignment of a mortgage."

Mr. Shaev said he was shocked when the judge expunged the mortgage debt.

"We are in uncharted territory," he said. "Right now I am in bankruptcy court with a house that has no discernible debt on it, yet I have a client with a signed mortgage. We cannot in theory just go out and sell this house because the title company won't give a clear title on it."

Among the next steps Mr. Shaev said he would take is to file an amended plan or sue to try to get clear title to the property.

Late last week, PHH appealed the judge's ruling. But Mr. DiCaro and PHH are in something of a bind. Either they will return to court with a clear claim on the property — including all the transfers and sales that are necessary in the securitization process — or they won't be able to produce that documentation. If they do produce it, they will then have to explain why they didn't produce it before.

Oh, what a tangled web these mortgage lenders weave.

---------- Forwarded message ----------
From: <MABELG1@aol.com>
Date: Thu, Oct 29, 2009 at 8:54 AM
Subject: Check out Mortgage debt waived after bank can't find paperwork
To: pkoebel@gmail.com

Produce The Note website...

http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/

Thursday, October 22, 2009

LATimes.com Pace of foreclosures slows in California

latimes.com/business/la-fi-foreclose21-2009oct21,0,7383725.story

latimes.com

Pace of foreclosures slows in California

Third-quarter declines in defaults and repossessions are probably due to an increase in loan modifications and lenders' reluctance to put more distressed properties on the market, data firm says.

By Peter Y. Hong

5:11 PM PDT, October 20, 2009

Fewer Californians entered the foreclosure process and fewer homes were repossessed by lenders during the third quarter, a real estate information firm reported today.

FOR THE RECORD: An earlier version of this article incorrectly stated that notices of default in California fell 19% from July through September compared with the prior three months. In fact, notices of default fell 10% from July through September compared with the prior three months but were up 19% from the same period in 2008.

Notices of default, which are issued when a borrower misses several mortgage payments, fell 10% from July through September compared with the prior three months, and were up 19% from the same period in 2008. But home repossessions were down 37%, according to MDA DataQuick, a San Diego-based research firm.

DataQuick said the declines were probably due to efforts by lenders to modify loan payments or postpone foreclosures as the possibility of further government intervention looms.

"It may well be that lenders have intentionally slowed down the pace of formal foreclosure proceedings. If so, it's not out of the goodness of their hearts. It's because they've concluded that flooding the market with cheap foreclosures in this economic environment may not be in their best financial interest," said John Walsh, DataQuick president. "Trying to keep motivated, employed homeowners in their homes might be the most cost-efficient way to stem losses."

Notices of default totaled 111,689 in the third quarter; home repossessions numbered 50,013. There are 8.5 million homes in California, DataQuick said.

peter.hong@latimes.com

On Thu, Oct 22, 2009 at 2:06 PM, <alfonso.lawofpek@gmail.com> wrote:

This story was sent to you by: Alfonso

Here is the story you wanted from the Times.

--------------------
Pace of foreclosures slows in California
--------------------

Third-quarter declines in defaults and repossessions are probably due to an increase in loan modifications and lenders' reluctance to put more distressed properties on the market, data firm says.

By Peter Y. Hong

October 20 2009, 5:11 PM PDT

Fewer Californians entered the foreclosure process and fewer homes were repossessed by lenders during the third quarter, a real estate information firm reported today.

The complete article can be viewed at:
http://www.latimes.com/business/la-fi-foreclose21-2009oct21,0,7383725.story

Visit latimes.com at http://www.latimes.com

LAWofPEK