Jobless Claims Dip, But Bankruptcy Remains Real

At this point, we’ll take any good economic news we can get. According to reports, the U.S. economy expanded just slightly over this last quarter and weekly jobless claims declined, with initial filings for benefits down to 391,000 from over the 400,000 mark just a few weeks ago. But this marks another year of millions of Americans, and thousands of Minnesotans, out of work or underemployed.

The impact of joblessness on households is unavoidable. Long-term unemployment leads to more household stress, poorer performance for children in school, and an overall increase in anxiety. Depression linked to job loss or the inability to find replacement work can only add to the burdens of trying to keep a household afloat.

But what the Minnesota bankruptcy attorneys at Lord & Faris tell our clients is that there is no shame in struggling, and that they are not alone. Literally thousands of other people understand the burden and the struggle, they can empathize with the grief and the despair, and they can appreciate the sacrifices made every day to maintain some semblance of a normal life during all this economic chaos.

If the burden is too great, the bills too much and the struggle just too hard there is another way. Nobody wants to declare bankruptcy, but sometimes it is your best chance at getting a fresh start. Declaring bankruptcy does not make you a failure, nor does it mean your dreams of retirement and college for your children are unattainable.

When faced with these kinds of challenges you need a strong, knowledgeable advocate in your corner, one who knows the bankruptcy laws and how best to navigate a system that can seem technical, cold and uncaring. Those are the attorneys at Lord & Faris. Their experience and hard work combine with a genuine understanding of the challenges surrounding a decision like filing for bankruptcy MN. Turn to them to help you back toward the life you imagined.

Another Big Wall Street Settlement

The Securities and Exchange Commission announced another massive settlement with Wall Street, showing that while the progress may be slow-moving, federal officials are in the process of holding big banks responsible for risky and at times even fraudulent behavior.

According to the Minneapolis Star Tribune, Citigroup has agreed to pay $285 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was beginning to collapse. According to the Securities and Exchange Commission, Citigroup bet against the investments in 2007, resulting in profits and fees in excess of $160 million. Meanwhile, investors lost millions.

The penalty is the biggest involving a Wall Street firm accused of misleading investors before the financial crisis since Goldman Sachs agreed to pay $550 million to settle similar charges last year. JPMorgan also settled with federal investigators, paying $153.6 to resolve those claims.

Citigroup’s payment includes the fees and profit it earned, plus $30 million in interest and $95 million in penalties. That money will be returned to investors, said the SEC.

In the civil suit, the SEC said Citigroup traders discussed in late 2006 the possibility of buying financial instruments to essentially bet on the failure of the mortgage assets assembled in the deal. Those instruments became known as collateralized debt obligations–securities backed by pools of other assets such as mortgages. At the height of the financial crisis in 2008 federal regulators gave Citigroup $45 billion in bailout dollars after concerns surfaced that the bank was on the brink of failure. In this last financial quarter Citigroup earned $3.8 billion and its CEO Vikram Pandit received a multi-year bonus package that could net him almost $25 million. The numbers are simply staggering, especially when placed in context of the millions of Americans who lost their homes due to the foreclosure crisis these actions spawned. We are glad to see the settlement and continue to hope for justice for those Americans most deeply affected.

New Help For Struggling Homeowners Proposed

Hundreds of thousands of Americans find themselves trapped in their homes, underwater in their mortgages through no fault of their own. Traditionally lenders have been unwilling to work with these homeowners for mortgage modifications and the result has been numerous unnecessary foreclosures and bankruptcies. Hopefully that is about to change.

The Obama administration announced a plan to open up mortgage relief to those kinds of homeowners. Under this new proposal, homeowners who are still current on their mortgages would be able to refinance no matter how much their home value has dropped below what they still owe. In the past, borrowers who owed only more than 25 percent more than their homes are worth could participate in this kind of refinancing programs. Only homeowners with mortgages backed by Fannie Mae and Freddie Mac will be eligible to participate.

The Federal Housing Finance Agency estimates that up to a million borrowers will use the program and the hope is the give families a much needed bit of financial relief in the form of a reduced monthly mortgage payment. That relief could not only prevent further foreclosures from entering the market, but it could free up consumer dollars for spending elsewhere in the economy.

So far the program is set to run through 2013.

Minnesota foreclosures continue to be a drag on the state economy though, as a whole, this state fared far better than others. After working with many families as they navigate through the foreclosure process, the attorneys at Lord & Faris applaud any effort to provide relief to those who have played by the rules and still find themselves struggling to hold on to their home. For them the housing crisis has literally been dumped on top of them, and they need help.

If your family is underwater and facing foreclosure, contact the attorneys at Lord & Faris. Let us help you navigate this process so you can move on with life.

Mortgage Fraud and Personal Bankruptcy Can Go Hand In Hand

The state of Minnesota is cracking down on unscrupulous lending practices as the housing market recover sputters along. In its most recent action, the Minnesota Department of Commerce fined Mortgage Connection Inc. $40,000 and revoked the company’s state license for illegally taking advance fees to modify mortgages. The Department of Commerce also barred the company’s owner, Augustus Odoom, from residential mortgage origination and servicing in the state.

According to the state, Mortgage Connection had charged 36 Minnesotans who who were looking to modify their mortgages more than $2000 in advance fees. In the state of Minnesota it is illegal to collect advance fees for those kinds of services.

The company can avoid the fine if it refunds those fees to consumers within 30 days.

The enforcement comes at a time when more than 14 million American homeowners are in foreclosure or delinquent on their mortgage payments, and when mortgage fraud perpetrated by lenders and other predatory businesses have forced record numbers of Americans into personal bankruptcy.

This is a good first step but both the state and the federal government are going to have to do more to address the fallout from the mortgage crisis. There can simply be no sustained and genuine economic recovery in most Americans continue to struggle to pay their bills and more and more find themselves with no other option than to file for personal bankruptcy.

If this story describes you or a loved on, contact the Minnesota personal bankruptcy attorneys of Lord & Faris for a free consultation. We can work through the process with you and help you take the necessary steps to get your finances back in order, including helping you pursue a legitimate mortgage modification of necessary. Without a strong advocate in your corner you could fall victim to a scam like the one stopped by the Department of Commerce. Let us be that advocate for you.

When Lawyers Become Part of The Problem

With the horrible stories that littered the past year of massive Ponzi schemes and related financial fraud, it is especially discouraging to hear that trusted professionals like accountants and lawyers may have not only known about some of these activities, but in some cases, benefited financially from them. But that is exactly what is happening in Florida.

Disbarred attorney Scott Rothstein was convicted of running a $1.2 billion Ponzi scheme while in charge of the Rothstein Rosenfeldt Adler law firm. Rothstein was sentenced to 50 years in prison in connection with the charges, but in a deposition for related civil charges, Rothstein said that his partners not only knew about the scheme, they benefited financially from it as well. His law partners have previously denied any knowledge of any illegal activities and have accused Rothstein of pointing fingers at them to try and decrease his prison sentence.

Rothstein’s scheme involved selling purported investments in fake legal settlements to wealthy individuals. Rothstein estimated during his deposition that he personally spent about $200 million in money fleeced from this fraud.

While there is no way to ensure that people in positions of power like Rothstein will never abuse that power, it is good to see the justice system at work, both criminally and civilly, taking care of individuals that can tarnish the reputation of an entire profession. It is these kinds of lawyers that give the rest of us a bad name.

Thankfully most lawyers don’t fall prey to these kinds of impulses, but when they do someone needs to be there to help pick up the pieces from the devastation left behind. If you or a loved one thinks you have been defrauded by a trusted individual like an accountant or attorney, contact the experienced trial attorneys at Lord & Faris for a free consultation.

Holidays Offer Little Minnesota Bankruptcy Relief

Despite the upbeat nature of the holiday season, Minnesotans can’t escape the news that home prices in the state continue to drop. Between September and October prices in Minneapolis dropped 2.8 percent after showing some strong gains during the summer buying season. Overall prices in Minneapolis are down 8.4 percent for the year.

According to the Minneapolis Star Tribune, some of the decline can be attributed to a typical seasonal slowdown in the sale of homes, but that overall the housing market remains anemic at best. Sales of previously occupied homes are barely ahead of 2008, the worst year for sales in 13 years.

Prices are also expected to continue to decline once the banks resume foreclosures which have stalled for the year while the industry faces investigations related to lending practices. Meanwhile, high unemployment and weak job growth have deterred many potential home buyers and others simply can not meet the newer restrictive lending requirements.

The struggle facing Minnesotans in this economy and in this housing market is the same struggle facing millions of Americans. So if you and your family realize you just simply keep up with your bills now may be the time to ask for some help from professionals who know the law and know how to help struggling families get back on their feet again.

The experienced bankruptcy attorneys at Lord & Faris are just those kinds of professionals. Our team will sit down with you and help you decide whether filing for bankruptcy is a necessary step forward. If it is, then we will advocate on your behalf with the court and your creditors for a resolution that is fair and straightforward.

These are tough economic times for this country and the court system may not always seem like a system designed to help the average Minnesotan. Let us help.