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Foreclosure Sales Reach 35,000 in 2012. The Highest Since the Real Estate Collapse.

The Chicago Tribune is reporting today that foreclosure sales topped 35,000 in 2012. The Highest since the Real Estate Collapse. See (http://www.chicagotribune.com/business/ct-biz-0206-foreclosure-auctions-20130206,0,4902617.story)  What does this mean to you as a first time homebuyer or someone looking to move up to a bigger home:

1)  Good Values – Most of the homes sold at foreclosure were taken back by the bank.  Oftentimes, these homes will sell for less than 50% of the appraised price to move them quickly.

2)  If you are selling your home to purchase another, short sales are being approved much more quickly and rental rates have been improving.  This will allow more turnover of our housing stock in 2013.

3)  FHA loans continue to be a great value with interest rates less than 4.5% and approvals usually fairly easy for workers with stable incomes.

The downside:

1)  Housing values overall will continue to remain depressed.

2)  Many homeowners will continue to be “trapped” in their house where it is impossible to sell either at a profit or break even transaction.

The conclusion:

It is 2013 nearly 5 years since the official beginning of the “Great Recession” and our economy has not improved.  The Great Depression is a good lesson – nothing really improved until War Order for Munitions started in 1939.  Clearly that wasn’t the greatest way to end an economic slow period.

Chicago Maritime Festival – February 23, 2013!

Don’t Miss this year’s Chicago Maritime Festival on February 23, 2013.

See the link below for more information:

www.chicagomaritimefestival.org

Chicago Maritime Festival Calendar

Date and Event: for more information or contact person, click on italics

Year Round Information

Outreach performances and Speakers Bureau requests – Chris Kastle

Sponsorships and donations –  Chris Kastle

Volunteer applications – Ellen Reeve

Presenter and performer applications – Chris Kastle

Important Festival Dates to Remember

Feb. 24, 2013 – Shanty Sing for Festival attendees and participants

Feb. 23, 2013 – Chicago Mariitme Festival at the Chicago History Museum

Feb. 22, 2013 – Reception for festival sponsors, performers, volunteers, and staff

Feb. 20-23, 2013 – Outreach performances

Peregrine’s Wasendorf Sentenced to 50 Years in Prison

The Wall Street Journal is reporting today that :
Peregrine’s Wasendorf Sentenced to 50 Years in Prison. Russell Wasendorf Sr. was sentenced to the maximum 50 years in jail after admitting to orchestrating a fraud at the futures brokerage he founded and misleading regulators for almost 20 years. Mr. Wasendorf pleaded guilty last September to the fraud at Peregrine Financial Group that federal prosecutors said cost his investors around $215 million and masked a business that was never profitable.

Here are some pictures from the auction of his personal and corporate owned assets:

wasendorfbrochureFinal1115a

Peregrine Charities still has their website up.  The phone number does not work.  I assume that it has been dissolved.   I captured it in adobe as I can’t tell how long it will still be up.

(not posted – it is copyrights and permission cannot be obtained)

It is unfortunate that another financial brokerage that appeared to do much for the community is now gone and investors are out lots of money.  Certainly this is a loss for the Town of Cedar Falls, Iowa which no longer has the My Verona  Restaurant 419 Main Street; Cedar Falls, Iowa or for the beneficiaries of the Peregrine Charities.

For more information about the bankruptcy, please see bankruptcy schedules summary provided below.

peregrinestatus

peregrine.petition

Chicago Area Foreclosures are Up 30% in 2013

IMG_0988rChicago Area Foreclosures are Up 30% in 2013.  In a recent article by the Chicago Tribune (Chicago Tribune, January 31, 2013), foreclosures were listed as being up 30% in 2012.  This is consistent with prediction for foreclosure activity way back 2009 when I attended and October, 2009 ABI Seminar at the Standard Club.  Clearly, we were shocked in 2009 that foreclosures were predicted to get worse, but it makes sense.  A large portion of our mortgaged housing stock was underwater in 2009 and more of it was underwater in 2012 as housing pricing had not really rebounded but instead fallen.  One of the reasons for the “real” housing price decline is that our housing stock as become “illiquid” as a home may be appraised for $400,000 but no one who would purchase the home can get a loan to purchase it.  Therefore causing a “gap” between the demand and supply curves.

Why is foreclosure so attractive to lenders – quite simply recovering of money NOW.  On average a bank recovers more than 1/3 of the loan principal in a foreclosure.  Then the bank applies to either the private mortgage insurer or the Federal Government to cover the rests – have you ever heard of Fannie Mae – that’s what they do – pay out on losses.

Chicago Area Foreclosures are Up 30% in 2013.  Home Loan Modifications are Pure Profit for Lenders and Foreclosures are a nearly 70% recovery for lenders.   When a bank offers you a home loan modification they are not doing so to “help” you.  Instead it is a nifty way to make more money off of you.  Keep in mind that a bank that offers you a home loan mortgage at 6% is currently paying only 0.5% or less for the money they borrow from Federal Funds to cover this loan.  Therefore, if a bank offers a 5 years interest rate break to 2% – they still make 1.5% off of you and they increase their chances for full repayment by giving you five years to have the value of your home rise and also have you either keep your employment, get better employment or get a job (if you are unemployed).

In conclusion, Congress and the Senate should get together and allow borrowers to restructure their loans through Chapter 13 Bankruptcy which is a comprehensive reorganization where everyone is paid fairly, comprehensively and people are not uprooted out of their homes and communities.

Atari U.S. operation files for bankruptcy

Atari U.S. operation files for bankruptcy.

A former colleague of mine mentioned this article to me today.  It is surprising to see Atari file Chapter 11 when it seemed recently that there had been a resurgence in interest in playing the classic Atari games such as Asteroids.  Recently I saw someone wearing a re-issued Atari t-shirt with the classic early 1980’s logo.   As a kid growing up in Sheboygan, I remember the afternoon after Christmas morning probably around 1983.  There had to be at least 4 thrown out Atari Game System boxes sitting out on the street for the trash.  A lot changes, many of you out there will remember the ill-fated Radio Shack TRS-80 computer system or the Commodore 64 all early competitors to Atari who always kept their focus on games.  They tried a computer system, but quickly learned that consolidation in the industry doomed them to the scrap yard.

Although I am not intimately aware of the details and facts surrounding Atari’s bankruptcy, it is a Chapter 11 filing which is usually filed where a corporation wishes to survive after a “reorganization” which is a friendly way of saying reducing debt balances, interest rates and eliminating some types of debt.  In this case, Atari (of the United States) is trying to separate from its from its French owner to save its “classic” assets which include classic games such as Asteroids.

When considering debt relief, please consider NLO Nelson Law Office, our firm is a full service personal bankruptcy firm concentrating its practice in the areas of Chapter 13 and Chapter 7 Bankruptcies.  At this time, our firm provides referrals for bankruptcy work that requires either a personal or business Chapter 11 bankruptcy.

If you have ever wondered why a person would file a Chapter 11, think of it simply as a large Chapter 13.  Chapter 13 only allows about $340,000 in unsecured (credit card style) debt and about $1,000,000 in secured debt.  Clients with multiple investment properties and large lines of credit often look to a personal Chapter 11 to handle problems too large for Chapter 13.

Adoption Tax Credit is Exempt

Adoption Tax Credit is Exempt

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Today, Judge Janet Baer issued a ruling in Case No. 2011-B-45378 which held that the Adoption tax credit provided by Section 36C of the Internal Revenue Code is exempt as a “public assistance benefit” under the Illinois Exemption Statute.

In this case, the debtor was able to exemption nearly $24,000 of income tax refund in her Chapter 7 Case.

Trail Ridge Road Rocky Mountain National Park Colorado

Trail Ridge Road Rocky Mountain National Park Colorado

Click the above-listed link to read the case.

For more information about bankruptcy call NLO Today at 877-GO-GO-NLO.

 

Quinn signs so-called Facebook bill into law – chicagotribune.com

Quinn signs so-called Facebook bill into law – chicagotribune.com.

Employer can no longer demand your facebook password.  They never should have been able to “extort” this from job candidates, but now its law.  Here’s the bottom line, if you are grousing around about your employer make sure its protected speech or you are going to be unemployed regardless of this new law.

A few months ago, I wrote about a seminar I attended that talk about the speech which is protected on facebook.  To keep it simple – think of it like a lunchroom at the factory – if it’s something you would complain about at the lunchroom table or a union meeting, then say it.  Otherwise, keep it off of facebook and instead keep it as private protected speech instead.

Unions have lost and gained influence over the years, but their purpose is as important as the day they were allowed by law – simply to give workers and labor a voice.  Facebook can be a good place for your voice but make sure you keep what you publish smart, tight and focused on topics that are protected.  That way you can keep you job and complain about it to….in public.

principal reduction loan modification Fannie Mae and Freddie Mac Disallow

Buttercups!

Buttercups!

principal reduction loan modification Fannie Mae and Freddie Mac Disallow

 
News Alert
from The Wall Street Journal
The federal regulator for Fannie Mae and Freddie Mac will not permit the taxpayer-supported mortgage giants to participate in an Obama administration program that reduces mortgage balances for certain troubled homeowners.
The Treasury Department, which had put heavy political pressure on the Federal Housing Finance Agency to permit the companies to participate in a limited program of debt forgiveness, immediately responded by questioning the regulator’s assumptions and asking the agency to reconsider.
 

Today, the Wall Street Journal announced that Fannie Mae and Freddie Mac will not allow mortgage lenders to reduce mortgage loan balances on their loans.  This is a shock to some people, but not shocking or surprising to me.  A lender simply has no benefit in reducing the balance of a mortgage loan.  If they do this, then they subject all mortgage loans to being subject to the same modification for the same reasons.  This means that practically no mortgages would ever be foreclosed, instead mortgages would be reduced to what “people can afford”.  While this seems like a good thing – think again.  If a bank cannot count on the legal and financial stability of absolute security in their loan balances, they will have to build this uncertainty into loan pricing – i.e. higher interest rates.

Right now – nobody seems to care about loan pricing because “life is good” with interest rates less than 4%.  Guess What – the last time we had this type of rate – it was 1934 and the height of the great depression.  Just think about 1980 when interest rates were 21% on mortgages.  Trust me….at that time, people will be happy that the sanctity of loan agreements has been preserved.

Conclusion:  Every underwater mortgage in this country that no longer seems justifiable or payable by the borrower will be foreclosed.  Only those homeowners who treat their homes as tools will remain.  I would estimate that by the end of this second great depression we will see at least 50% of all underwater mortgages go into foreclosure if not more.  However, for those who value their home as a tool, I would estimate that none will go into foreclosure except those cases where borrowers become ill, disabled or unemployed.

Recommendation:  I strongly recommend that Congress Amend the Bankruptcy Act to allow mortgage loan balances to be modified in adverserial proceedings within a Chapter 13 and Chapter 11 Proceeding.  This will allow court supervision of loan balances and allow for the integrity of loan agreements to be preserved.

Write your congressman today and ask them to support amendments to the Bankruptcy Code that give real debt relief to homeowners.  For more information, visit the National Association of Consumer Bankruptcy Attorneys at:  www.nacba.org for this ongoing effort.

Social Media & Employee Misconduct

Today, I attended a Continuing Legal Education Program at the Chicago Bar Association presented by the Young Lawyer’s Section.  The topic of this course was the issue of employee misconduct as it relates to Social Media.  Here is the one takeaway from the course:  Employees who would have once had a discussion about employer treatment of its employees amongst themselves can now do in public via Facebook.  Even if the comments are disparaging about the employer, such as “my supervisor is an asshole”, the speech is protected and so are the employees jobs.

Bottom line, union employees getting ready to strike for wages, file a complaint against supervisor or just to “bitch about work” can do so now in public with no repercussions.

Now obviously there are alot of exceptions to this, but bottom line, as your company size grows, so does the need to have a good employee manual covering social media disclosures by employees.

For more information about setting up a top flight employee handbook or updating yourself, consider calling these two fine attorneys who put on this excellent CBA CLE Presentation today.

Adam Wit, Attorney, Littler Law Firm of Chicago

Kathryn Siegel, Attorney, Littler Law Firm of Chicago

 

Casimir Pulaski Day 2014

Casimir Pulaski Day 2014

March 3, 2014

It’s a tradition in Chicago to eat Paczkis (delicious pastries)  on Pulaski Day.  For Northsiders, click here For Southsiders click here

For anyone who lives in Chicago, Casimir Pulaski day is a special holiday for a number of reasons:

  1. Daley Center/Cook County Courts Closed.
  2. Federal Courts are Open – It is NOT a Federal Holiday.
  3. US Mail will be delivered today because Pulaski Day is not a Federal Holiday.  The City of Chicago and Cook County won’t be able to enjoy this mail service because Pulaski Day is a Holiday for them.
  4. Chicago Public Libraries are closed.
  5. Northeastern Illinois University is OPEN
  6. Most Private Schools are Open including Saint Luke Academy .
  7. Public Schools are Open – All Chicago Public Schools are Open.  To see the 2014 School Calendar click here.
  8. Some Charter Schools are closed
  9. The State of Wisconsin also recognizes Pulaski Day.  Apparently Pulaski was a major figure in the development of Illinois and Wisconsin as relates to his war hero activities in the Revolutionary War.
  10. There isn’t much more to say about Pulaski day except to say that most holidays after January 1st and before Memorial Day are difficult to keep track of, understand and most of all to make sense of them.
  11. Check your local listings for more information.

History of Casimir Pulaski and Pulaski Day is available on Wikipedia here

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