Saturday, March 24, 2012

Welcome to Wonderland

I had a fascinating conversation yesterday with a lawyer who has set up a huge business just making short sales happen--where the bank OKs a sale for less than the amount they are owed on the note.  He says that Wells Fargo intends to count their losses on short sales against the amount they are supposed to take in reducing the principal on loans, pursuant to the $25 billion settlement the big banks made with the state attorney's general. That means that a program designed to keep people in their homes with new, affordable loans will be used to get them out.  Welcome to Wonderland, Alice.

Baum Firm Reaches Settlement With Attorney General

Baum Firm Reaches Settlement With Attorney General

Steven J. Baum, who led what was once New York's largest foreclosure firm before it closed its doors last year, has agreed not to handle foreclosure cases for lenders and servicers for two years under a settlement agreement with the New York Attorney General's Office.
Mr. Baum, his managing partner Brian Kumiega, the Baum firm and Pillar Processing will also pay $4 million under the deal.
According to the attorney general's office, between 2007 and 2010, the Baum Firm filed over 100,000 foreclosure proceedings and represented many of the largest servicers of residential mortgage loans. Pillar was formed by the firm to handle the bulk of the foreclosure processing.
The attorney general's office claimed that the Baum firm "repeatedly" filed legal papers in foreclosure and bankruptcy proceedings "without taking appropriate steps to verify the accuracy of" allegations, the lender's right to foreclose or to file a bankruptcy proof of claim.
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 It's interesting to see what happens when a foreclosure mill's actions fall under close scrutiny.  It would be nice to see more of this kind of investigation, and to see it spread to the HOA/condo collection agency law firms. Let's turn over some rocks.

Thursday, March 22, 2012

Condo and HOA Law: Trayvon Martin tragedy in Central Florida HOA highlights need to know what association volunteers are doing!

Condo and HOA Law: Trayvon Martin tragedy in Central Florida HOA highlights need to know what association volunteers are doing!
Donna Berger asks some good questions about the Trayvon Martin killing. It appears that the killer claimed to be some sort of Neighborhood Watch in his gated HOA-run neighborhood. What did the HOA  know about his activities? What did they authorize or try to stop, if anything? And what should they have done or said?  As Berger notes, "In the coming weeks and months, more attention might turn to this Central Florida HOA especially in any civil actions the Martin family may bring."
Thanks to Fred Pilot for the link.

The New Suburban Poverty - NYTimes.com

The New Suburban Poverty - NYTimes.com
" In many of America’s once pristine suburbs, harbingers of inner-city blight — overgrown lots, boarded up windows, abandoned residences — are the new eyesores. From the Midwestern rust-belt to the burst housing bubbles of Nevada, California and Florida, even in small pockets of still affluent regions like Du Page County, Ill., the nation’s soaring poverty rates are visibly reclaiming last century’s triumphal “crabgrass frontier.” In well-heeled Illinois towns like Glen Ellyn and Elgin, unkempt, weedy lawns blot the formerly manicured, uniform and tidy landscape...One recent study conducted by Sean Reardon and Kendra Bischoff of Stanford University documented the spatial sorting by income that is going on, with the wealthy flocking together in new exurbs as well as gentrifying pockets of urban centers. "
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This is a more nuanced statement of the case that David Rusk and Myron Orfield have been making for about 20 years:  inner ring suburbs are getting increasing population of poor people but have no systems in place for addressing their needs, and the affluent are moving out of inner ring suburbs to the new gated exurban subdivisions and fortified urban compounds. Then along came the recession, and now astronomical gas prices, and you have the makings for a political realignment of the suburbs...to the left.

Tuesday, March 20, 2012

U.S. Completes Sale of Mortgage-Backed Securities - NYTimes.com

U.S. Completes Sale of Mortgage-Backed Securities - NYTimes.com
 Treasury Department announced on Monday that it had finished selling the $225 billion in mortgage-backed securities it bought to help stabilize the markets during the worst of the financial crisis.
The government ended up making a $25 billion profit on the securities, which are guaranteed by Fannie Mae and Freddie Mac, the government-owned mortgage finance companies. The profit came from interest payments, principal and rising prices for the securities, the department said. 
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Monday, March 19, 2012

Fines pile up for Wilton Manors home damaged by Wilma - South Florida Sun-Sentinel.com

Fines pile up for Wilton Manors home damaged by Wilma - South Florida Sun-Sentinel.com
"City code violation fines have risen as fast as the water filling the buckets in Kenneth Dorsey's home, which is covered with disintegrating tarps for leaks that occurred even before a towering ficus crushed the roof during Hurricane Wilma.
The city has placed six liens totaling more than $1.3 million on the Northeast Second Avenue home, valued at $117,300, which Dorsey's parents bought brand new in 1951 and where he and his seven siblings were raised.
"The property is in deplorable condition," Mayor Gary Resnick said. "It's not an issue of money. It's an issue of safety."
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Yes, but Bigfoot has to live someplace. If you don't believe me, check it out for yourself.

George Zimmerman Neighbors Complained About Aggressive Tactics Before Trayvon Martin Killing

George Zimmerman Neighbors Complained About Aggressive Tactics Before Trayvon Martin Killing

A volunteer community watch captain who shot an unarmed Florida teenager to death last month had been the subject of complaints by neighbors in his gated community for aggressive tactics, a homeowner said.
George Zimmerman has not been charged in the Feb. 26 shooting of Trayvon Martin, 17, who was walking home from a convenience store in Sanford, Fla., near Orlando. Zimmerman, who patrolled the Retreat at Twin Lakes development in his own car, had been called aggressive in earlier complaints to the local police and the homeowner's association, according to a homeowner who spoke on the condition of anonymity.
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This shooting is being investigated, but so far Zimmerman hasn't been charged with anything. If the local prosecutors decide to let him off, I think the Department of Justice may take up the case.  Somehow this man decided he had the authority to "patrol" the streets of his private gated community and confront people he considered "suspicious."  He even freaked out his own neighbors to the point that they complained to the homeowners' association.  He made 46 calls to the police from 1/1/11 on. Read the list of bullet points of his behavior here:
 http://thinkprogress.org/justice/2012/03/18/446768/what-everyone-should-know-about-about-trayvon-martin-1995-2012/

So is this an example of a privatopian vigilante who decides he is the law in that gated community?  This case is desperately in need of a full investigation.

Sunday, March 18, 2012

The price of order: Pros and cons of homeowners associations

The price of order: Pros and cons of homeowners associations
 About 15 percent of housing developments in Berks have some form of homeowners association, said Glenn R. Knoblauch, executive director of the county planning commission. The biggest growth in planned communities with associations is in communities that will accept only residents age 55 and older.

In most cases the rules and regulations do preserve order, said Tom Campisi, executive director of the Community Association Institute of Pennsylvania, an industry group that advocates for such associations.

"You don't want your neighbors putting a junk car on blocks in their front yard," Campisi said. "An important thing to remember is that both sides, the association and the homeowner, have rights. They also have responsibilities."

Campisi said most disputes between homeowners and association boards involve a lack of communication and reasonableness. While not wanting to comment on the Yergers' case specifically, he said doing the reasonable thing and communicating your intentions before taking action often will prevent a dispute. 

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Fred Pilot sent me this piece from the Reading Eagle in Reading, PA.  It is ironic that I wrote Privatopia while I was living in Reading and teaching at Albright College.  Didn't change a thing in Reading, though, did it?  That was in 1993-94. And here in the Reading Eagle we have the sort of thing that provincial journalist used to write in the 1990s --a silly, ignorant, one-sided puff piece for CAI and the CID industry, published as if it were a real feature article.  Today, of course, the news media are much more educated on this subject, and even a quick Google search will produce some insight into the actual situation owners face with this industry, the huge volume of reform legislation, the tsunami of association insolvencies, etc.  But in a cultural backwater like Reading, which is still in a 1950s time warp in every way, somebody with a job on a newspaper can still produce claptrap like this and have an editor sign off on it.