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Mortgage Delinquency Rate Continues to Plunge

2013 November 14 by

Report: Delinquency Rate Continues to Plunge

BY: ASHLEY R. HARRIS 11/13/2013

Homeowners are working harder to make timely mortgage payments, according recent data from TransUnion . The mortgage delinquency rate dropped 23.3 percent in the past year, ending Q3 2013 at 4.09 percent. Last year it stood at 5.33 percent. The mortgage delinquency rate also dropped on a quarterly basis, down 5.3 percent from 4.32 percent in Q2 2013, the seventh straight quarterly decline.

Around the United States, most states experienced a decline in their mortgage delinquency rate between Q3 2012 and Q3 2013. California, Arizona, Nevada, Colorado, and Utah experienced more than 30 percent declines in their mortgage delinquency rate. Three states—California, Florida, and Nevada—had double-digit percentage drops in the last quarter.

TransUnion cultivated the data from anonymized credit data from virtually every credit-active consumer in the United States. TransUnion’s forecast is based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates, real personal income, and real estate values. The forecast would change if there are unanticipated shocks to the economy affecting recovery in the housing market or if home prices begin to depreciate once again.

“This isn’t a sample data set,” said Tim Martin, group VP of U.S. Housing for TransUnion’s financial services business unit.

“We looked at all 52 million installment-based mortgages in the U.S. and the trend is clear—the percentage of borrowers willing and able to make their mortgage payments continues to improve,” Martin continued. “The overall delinquency rate is still high relative to ‘normal,’ but a 23 percent year over year improvement is great news for homeowners and their lenders.”

The credit agency recorded 52.31 million mortgage accounts as of Q3 2013, down from 54.23 million in Q3 2012. This variable was as high as 63.14 million in Q3 2008 prior to the housing crisis.

Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 2.34 million in Q2 2013, up from 2.09 million in Q2 2012. This is a major increase from just two years ago when there were 1.32 million new account originations in Q2 2010.

“New mortgage originations showed good growth through the second quarter of this year, largely the result of increased refinance transactions driven by low rates and increasing home prices,” Martin said. “However, mortgage rates started to increase right around Memorial Day, and when the data come out next quarter, we expect it to show that new originations are decreasing as a result.”

TransUnion’s latest mortgage report also found that the non-prime population (those consumers with a VantageScore credit score lower than 700) continues to represent a smaller portion of all mortgage loans, more than 50 percent lower than was observed in 2007. Non-prime borrowers constituted 5.82 percent of all new mortgage originations in Q2 2013. In Q2 2008, non-prime borrowers represented 12.69 percent of the total.

TransUnion is forecasting that the downward consumer delinquency trend will continue in the final three months of 2013. The delinquency rate will likely be just under 4 percent at the end of the year.

“New originations will be down and non-prime borrowers will start to re-emerge,” Martin said. “At this point we believe delinquency rates will continue to decline.”

©2013 DS News. All Rights Reserved.

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Scary Bogus Collection Calls From Someone Claiming To Be With the Government.

2013 November 8 by

A client of mine has been receiving calls at home and work from a “collection agency” saying they are going to haul him off to jail and press charges against him if he does not pay the money he owes.

When I called the number provided., 1-904-410-2217, I spoke with a man who put me on hold to transfer me to their attorney.   When the attorney picked up the line he sounded just like the gentleman who answered the phone.   Nevertheless, he claimed to be a lawyer with the Financial Crimes Enforcement Network  (see for the official government site).   He said his name was “George Schneider.”   He said he was being paid very well by the FinCen and didn’t need to speak with me.

Mr. Scneider, who sounded more like an Ahmed, refused to provide me with any information about the alleged case or crimes and told me he would only speak with a criminal lawyer.

I asked him for his attorney bar number.   He refused.

I asked him for the case or file number.  He refused.

I asked him for his address.   He refused.

I asked to speak with his supervisor.  He refused and got angry.

He demanded my client call him back personally or he was going to jail.

That’s NOT how an attorney reacts to another’s call in the real world.

This is a bogus off-shore collection call!

This is not the first one my clients have experienced.   I was fortunate to even speak with a real person.  Typically, when I call the “collection agency’s” phone number they will disconnect the call once they know I am an attorney.  When I call back, the number is mysteriously disconnected.

I googled the phone number and collectors like this one and found a Consumer Alert at

Here is what the web site says:

“FinCEN Warns of Ongoing Financial Scams (03.25.11)

FinCen (Financial Crimes Enforcement Network) recently sent out a reminder to the public to be on alert to ongoing financial scams that attempt to solicit funds from unsuspecting victims. They have received calls and reports of financial scams attempts conducted via the telephone. The caller represents themselves as an employee of FinCEN and ask for the victim by name, usually at the victim’s home telephone number. The caller will identify an outstanding debt; this debt may be actual or bogus. The call will provide the victim with account, Social Security or other similar number and demand that immediate payment be made. The caller’s knowledge of the victim’s name, telephone number, account description and personal information serves to legitimize the caller.

FinCen has become aware of another financial scam conducted via email and telephone in which a person claiming to be a representative of the U.S. Department of Treasury of FinCEN informs them that they have received a large Treasury Department grant. To obtain the grant, the victim is instructed to provide bank account information and make some type of initial payment or donation.

Recipients of these calls, letters, or emails should not respond to such messages, and should not send money or provide any personal or confidential information. Those who believe that they are or have been a victim of the financial scam, should report this information to local, State, or Federal law enforcement authorities.

FinCEN does not send unsolicited request and does not seek personal or financial information from members of the public. FinCEN does not have authority to freeze assets or block funds transfers. In addition, correspondence may purport to be from an overseas office of FinCEN. FinCEN does not have any offices outside of the US.”

Don’t tolerate this kind of abuse and criminal behavior.   Call your state and local authorities and report the call.  It’s a scam.


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HAMP’s Redefault Rate at 27% and Likely to Rise

2013 November 1 by


Click here for the original source:

Over the life of the government’s Home Affordable Modification Program ( HAMP ), 1.25 million homeowners have received permanent HAMP modifications, and 27 percent of those have later redefaulted on their loans, according to a quarterly report to Congress from the Office of the Special Inspector General for the Troubled Asset Relief Program ( SIGTARP ).

In its report released to lawmakers this week, SIGTARP berated Treasury for not heeding the office’s previous recommendations regarding HAMP , stressing that the inspector general expressed concern in April that “the number of homeowners who have redefaulted on HAMP permanent mortgage modifications is increasing at an alarming rate.”

About 184,000 homeowners (29 percent) who received HAMP modifications through TARP rather than through the GSEs have redefaulted, costing taxpayers $972 million in incentives paid to servicers and investors for those workouts, according to SIGTARP . Among borrowers participating in the GSEs’ HAMP programs, just under 154,000 (26 percent) have redefaulted ( HAMP incentives on GSE loans are paid by the GSEs themselves). Additionally, about 10 percent of all active permanent HAMP modifications were one or two months delinquent as of the end of August.

“The longer a homeowner remains in HAMP , the more likely he or she is to redefault out of the program,” SIGTARP stated. The redefault rate among the oldest HAMP modifications is 48.3 percent, according to SIGTARP’s report.

Homeowners who fall three months behind on their modified payments redefault out of the program and fall “often into a less advantageous private sector modification or even worse, into foreclosure,” SIGTARP said.

About 32 percent receive another modification, often a proprietary one, and about 13 percent work out a short sale or deed-in-lieu of foreclosure with their servicer. About 22 percent of HAMP redefaulters enter foreclosure.

SIGTARP also reported the breakdown of redefaults by servicer, finding that three servicers account for almost 60 percent of HAMP redefaults: Ocwen Loan Servicing, JPMorgan Chase, and Wells Fargo. While these three servicers contributed the greatest number of HAMP defaults, none of the three ranked highest in terms of the percentage of HAMP redefaults.

Among the eight largest servicers participating in the government program, Select Portfolio Servicing had the highest percentage of redefaults with 43 percent of its HAMP-modified loans falling behind on payments. Ocwen and Bank of America followed with 31 percent of their HAMP loans defaulting again. Twenty-five percent of Nationstar’s HAMP loans have redefaulted.

SIGTARP said in April that “Treasury still does not understand … the reason the permanent modifications in HAMP actually failed.”

The inspector general stated in the latest report to Congress, it was “a positive sign that following SIGTARP’s April 2013 recommendations that Treasury initially expressed its commitment to assessing and reducing redefault rates. . . . Following that, however, on July 22, 2013, Treasury posted a blog” defending the HAMP program and stating in the post, “mortgage modification programs include an inherent risk of homeowner default, given the difficult situations homeowners face when they seek assistance (like job loss).” In the same defensive posture, Treasury stressed “that not all will succeed” in the HAMP program.

For its part, SIGTARP said “ HAMP is a program that has been plagued with servicer misconduct” and recommended Treasury “research and analyze whether and to what extent the conduct of HAMP mortgage servicers may contribute to homeowners redefaulting” in order to ensure homeowners in HAMP are getting sustainable relief from foreclosure. SIGTARP charges Treasury with establishing a benchmark for redefaults, measuring the program against that benchmark, and revealing the results to the public.

Treasury has responded that “it cannot establish a benchmark without SIGTARP’s guidance,” to which SIGTARP responded, “it is up to Treasury to set performance standards for its own program and measure the participants’ performance.”

In its report to lawmakers, SIGTARP also revealed basic characteristics of HAMP modifications. The vast majority—95.9 percent—include an interest rate reduction. About 63.2 percent include a loan term extension, and 15.3 percent include principal forgiveness.

Treasury has extended the HAMP application period for two years until December 31, 2015.

©2013 DS News. All Rights Reserved.

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New Means Testing Income Information Released Today

2013 October 31 by

The U.S. Trustee’s office released new median income figures for means testing today.  The following table provides median family income data for Colorado.   These median income figures will apply to all bankruptcy cases filed in Colorado after November 15, 2013.

Family Size
State 1 2 3 4
Colorado $50,242 $65,701 $71,138 $83,330
Add $8,100 for each individual in excess of 4.

To see information for all 50 states you can visit the US Trustee’s web site:

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Number of U.S. Mortgages Going Unpaid = 4,594,000

2013 October 25 by

Lender Processing Services provided the media with a “first look” at the company’s mortgage performance statistics for the month of September.

The industry’s foreclosure inventory continued its downward trend, and while delinquencies were up slightly from the previous month, they were down when comparing the numbers year-over-year.

LPS counts a total of 3,266,000 mortgages nationwide that are 30 or more days past due but not yet in foreclosure. That tally represents 6.46 percent of all outstanding mortgages.

September’s delinquency rate is 4.23 percent higher than the rate reported for August, but remains 12.63 percent

below September 2012’s rate. Of the more than 3 million delinquent loans, LPS says 1,331,000 have missed at least three payments but haven’t started the foreclosure process.

Another 1,328,000 mortgages are currently winding their way through foreclosure pipelines, according to LPS’ data. That total puts the nation’s pre-sale foreclosure inventory at 2.63 percent in September, down 1.29 percent from the month prior and down 32.18 percent from last year.

All-in-all, there are 4,594,000 mortgages going unpaid in the United States. Comparatively speaking, the nation’s non-current total stood at 5,640,000 in September 2012.

LPS reports the states with the highest percentage of non-current loans (non-current combines foreclosures and delinquencies as a percentage of all active loans in the state) include: Florida, Mississippi, New Jersey, New York, and Maine.

North Dakota has the lowest percentage of non-current loans among states, followed by South Dakota, Alaska, Montana, and Wyoming.

LPS’ findings are derived from its loan-level database representing approximately 70 percent of the overall mortgage market. The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which is scheduled for release in early November.

By: Carrie Bay

©2013 DS News. All Rights Reserved.


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Questions you will be asked at a Chapter 13 Meeting of Creditors in Colorado

2013 August 30 by

I have attended hundreds of meetings with the bankruptcy trustee with my clients in both chapter 7 and chapter 13.   Clients are often very nervous and unsure about the meeting of creditors.    No one wants to appear in a public place to be questioned about their bankruptcy and finances.

The Meeting of Creditors is less like going to Court, and more like going to the DMV to register your case (in most cases).   However, the unknown is usually scary.

So … In order to serve my clients better and prepare them for the meeting I complied a list of general questions the Trustee will most likely you.  Hopefully they will be a help to you.

  1. The Trustee will swear you in.
  2. Please state your name, address.  (If there are 2 of you, the second person can just say “same address” if you live at the same address).
  3. Have you ever filed bankruptcy before?  If so, when and where?
  4. Are you still employed at XYZ and making the same you were when you filed bankruptcy?  (Please let the attorney know if you have changed jobs or received an increase/decrease in income since your bankruptcy was filed).
  5. Is there any other source of income besides your employment?
  6. How many people are in your household?
  7. Do you own any real estate?
  8. If so, how did you determine its value?  When did you purchase it?  How much did you purchase it for?  What do you think it would sell for today?
  9. If no, then: Have you ever owned any real estate in the last 4 years?  (Please let the attorney know if you have).
  10. Your Plan calls for X number of payments of $______ per month.  Have you made your first payment?  Will you be able to make your Plan payments on a regular and timely basis?
  11. Over what period of time were the bulk of your debts incurred?
  12. Have you listed all your debts?
  13. Have you listed all your assets?

After the attorney asks you the above questions, s/he will then ask if there are any creditors who wish to ask questions.  The only creditors who appear with any degree of regularity are the IRS, the Colorado Department of Revenue, ex-spouses who want a pound of flesh, and ex-business partners who have a bone to pick.  Most creditors never appear at these meetings.

In addition to these questions, the Trustee’s Attorney may ask some questions specifically relating to your bankruptcy.

ONLY ANSWER THE QUESTIONS THAT ARE ASKED.  Do not offer more information than what is requested.  If you are unsure what to answer you can ask your attorney, who will be sitting right next to you.

After you have been examined by the Trustee’s Attorney you are free to leave.

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FHA Trims Waiting Period for Borrowers Who Experienced Bankruptcy

2013 August 20 by

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

For borrowers who went through recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond their control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.

According to the letter, recovery from an economic event involves reestablishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.

The new guidance is for case numbers assigned on or after August 15, 2013, and is effective through September 30, 2016.



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Stop Harassing Collection Calls – Know Your Rights.

2013 May 22 by

As a Colorado bankruptcy lawyer Many of my clients suffer from numerous and seemingly unending calls from creditors about their unpaid bills. There are limits to when, where, and who the collectors can call you about your debt. However, you must assert your rights. The collectors are not going to do that for you. Collectors only want one thing – your money. They will bully you until they get what they want!

Depending on the client’s unique situation it can take a few days to several months to file a bankruptcy case. Until the bankruptcy case is filed the client is typically harassed by his creditors for money. That’s unfortunate. Those stressful irritating calls can be stopped.

Both Colorado and the US Federal Government have laws that protect consumers from unfair debt collection practices. The law is called the Fair Debt Collection Practices Act.

Both the Colorado law (CRS 12-14-105) and the Federal law (15 USC § 1692c) give you the following rights:

  • Collectors can’t contact you at any unusual time, place, or manner known or which should be known to be inconvenient to the consumer.
  • Collectors can call you between 8:00 a.m. and 9:00 p.m. local time unless you tell them it’s inconvenient
  • Collectors can call you at work, unless you tell them your employer prohibits you from taking such calls at work.
  • Collectors cannot call your family, your neighbors or your spouse or anyone else but you about your debt without your express consent or a court order.
  • Collectors cannot call you if they know you are represented by an attorney.

If you get a collection call or letter I strongly suggest you send a letter to the creditor asserting your legal rights under both the Colorado and Federal Fair Debt Collection Practices Acts.

Please contact me, Jesse Aschenberg, if you creditors are harassing you or you have bankruptcy questions.

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Defalcation? (Yes that’s a real word)

2013 May 16 by

A debt may not be discharged in bankruptcy if it was the result of “defalcation.” What in the world is that? Is that even a word?

Well … the terms is not defined in the bankruptcy code. (Way to go congress!) And there has been enough confusion over the term for our United States Supreme Court to issue a ruling on its definition.

In 13 years of bankruptcy practice this word has come up once. It was in a recent case against a client of ours who had allegedly mishandled funds while handling his parent’s estate after they died. The Colorado Bankruptcy Court, in that case, found that our client’s behavior fell within the term “defalcation.” We appealed, in part, because we knew the Supremes had take up the same issue and would have a ruling on it this year.

Robin Miller with Consumer Bankruptcy Abstracts & Research has published a summary/excepts of the Supreme Court’s decision issued earlier this week. (By the way, you may need a dictionary to read this too. It’s good lawyerly writing).

Supreme Court holds that “defalcation” in Code § 523(a)(4) requires culpable state of mind:

Observing that “[t]he lower courts have long disagreed about whether ‘defalcation’ includes a scienter requirement and, if so, what kind of scienter it requires,” the Supreme Court, in a unanimous decision by Justice Breyer, held that “defalcation,” for the purpose of the discharge exception found at Code § 523(a)(4), includes a culpable state of mind requirement involving knowledge of, or gross recklessness in respect to, the improper nature of the relevant fiduciary behavior. Noting that, in Neal v. Clark, 95 U.S. 704, 24 L.Ed. 586 (1878), the Court had construed “fraud” as meaning “positive fraud, or fraud in fact, involving moral turpitude or intentional wrong, … and not implied fraud, or fraud in law, which may exist without the imputation of bad faith or immorality,” the Court concluded that the statutory term “defalcation” should be treated similarly.

This interpretation does not make the word identical to its statutory neighbors, the Court said. As commonly used, “embezzlement” requires conversion, and “larceny” requires taking and carrying away another’s property. “Fraud” typically requires a false statement or omission. “Defalcation,” as commonly used (hence as Congress might have understood it), can encompass a breach of fiduciary obligation that involves neither conversion, nor taking and carrying away another’s property, nor falsity. Nor are embezzlement, larceny, and fiduciary fraud simply special cases of defalcation as so defined. Code § 523(a)(4) makes clear that embezzlement and larceny apply outside of the fiduciary context, while “defalcation,” unlike “fraud,” may be used to refer to nonfraudulent breaches of fiduciary duty.

Bullock v. BankChampaign, N.A., 2013 WL 1942393 (May 13, 2013)

Any Questions? Clear as Mud?

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Financial Stress Is Horrible!!!

2013 May 14 by

Can’t think straight.

Can’t enjoy life.

Loose sleep.






…. maybe bankruptcy is the answer for you. Let’s talk.

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