Archive for: ‘November 2010’

Debt Relief Services: Helpful or Harmful?

November 15, 2010 Posted by kingcade

Although filing for bankruptcy can provide considerable relief to those who are facing insurmountable debt, bankruptcy is not always the correct choice for everyone. While some may not qualify for bankruptcy, others may wish to use an alternative to solve their debt problems. This is where debt relief programs step in, claiming to help consumers negotiate with their creditors and provide a solution to settle the debt.

However, is it safe to use a national debt relief organization to resolve your debts? While some report positive experiences with these companies, others have negative experiences that result in them spending more money in the long run. Also, many consumers have been taken advantage of by debt relief companies that ended up collecting fees without actually providing any debt relief services.

Still, new rules enacted by the Federal Trade Commission (FTC) will provide more protection to consumers using debt relief organizations to settle their debts. The organizations are no longer able to charge any upfront fees. While this is a major step forward, it is important to remember there is still no cap on how much the organizations can charge for their services. Therefore, while using debt relief services have become much safer, there is still risk involved.

The FTC encourages consumers to research any debt relief companies they are thinking about hiring. Some consumers choose to deal directly with their creditors in order to settle their debts. Consulting legal counsel will allow you to understand all of the options available to you considering your unique financial situation. While suing debt relief services are not always in consumers’ best interests, some may seek some relief through this method.


November 3, 2010 Posted by kingcade

To financially distressed homeowners, the federal government’s Home Affordable Modification Plan – HAMP – can sound like a dream come true. The promise of a significantly reduced mortgage, accompanied by considerably lower monthly mortgage payments, raises homeowner hopes. However, recent reports show the program delivering on its promise for only a third of participating homeowners.

An analysis from Amherst Securities reveals HAMP’s success rate: just 32 percent of trial mortgage modifications begun will be converted to permanent modifications without defaults.

In other words, two-thirds of homeowners who enter the program either don’t get a permanent modification or they default on their modified loan.

Problems With the Program:
The Financial Times reports that one problem with HAMP is that it doesn’t reduce debt-to-income (DTI) ratios enough. Of the permanent HAMP modifications, the borrower’s DTI (including factors such as mortgages, credit card payments, taxes, insurance, car loans, etc.) dropped from 80 percent to 65 percent. Generally, anything above a 50 percent DTI level is considered unsustainable. (The government requires anyone applying for HAMP with a DTI at 55 percent or above to get credit counseling.)

Another HAMP problem: the principal reduction portion of the plan is voluntary and few lenders are willing to voluntarily reduce principals on houses. The Financial Times speculates that unless this portion of the program is at some point made mandatory – at least for especially distressed homeowners and mortgages – it appears unlikely to do much to stave off a second dip in the housing market and perhaps a second recession as well.

Mortgage Modification can Hurt Credit
The Minneapolis Star Tribune reports that mortgage modifications link to the complex credit reporting system, causing long-term financial damage to homeowners. The credit code used when the three-month HAMP trial modification begins signifies to the credit industry that a borrower is making reduced payments, even if the homeowner isn’t delinquent when beginning the HAMP process.

Many financial professionals tell clients that bankruptcy can be a safer route to fiscal stability than a mortgage modification; The Wall Street Journal points out that some consumers will even see a rise in their credit scores after declaring bankruptcy.

Protecting Assets in Bankruptcy
Consumers saddled with large credit card debts or medical debt often find that Chapter 7 bankruptcy or Chapter 13 bankruptcy provides a way out from under the debt. Florida bankruptcy law provides exemptions for a number of assets, enabling many borrowers deeply in debt to protect the following:

Their home
401k savings
Pension plans
Social Security benefits
Workers’ compensation
Supplemental Security Income
Prepaid school tuition

To learn more about whether a mortgage modification is right for you or if bankruptcy might be the better solution, contact a Miami bankruptcy attorney for an assessment of your bankruptcy eligibility.

Renters Threatened as a Result of the Foreclosure Crisis

November 2, 2010 Posted by kingcade

Not even renters are safe when it comes to the recent foreclosure crisis. At the start of the recession, reports of tenants being blindsided by foreclosure notices were not unusual. The problem prompted President Obama to sign the federal “Protecting Tenants at Foreclosure Act” in 2009, which requires tenants receive a 90-day notice if they are being evicted due to foreclosure, and that most existing leases for renters be honored up to the end of their term.

However, experts say even with this law in place, “Individual landlords- people who own one, two, or three properties is where there lies more risk for renters.” This problem is made even worse when foreclosure is coupled with Chapter 7 bankruptcy protection for the landlord. This gives a property owner pretty much a get-out-of-jail-free card, which can impact a tenant’s lease term and agreement. The “shadow market” which are houses, which would be on the market if their owners felt they could sell the properties, leave some renters wondering if they’ll ever get back their security deposits, advanced rent payments and other out-of-pocket expenses.

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If you have any questions on this topic, please feel free to contact foreclosure defense attorney, Timothy Kingcade at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at

New Trend in Foreclosure Filings

November 2, 2010 Posted by kingcade

Florida, California, Nevada and Arizona remain the states with the highest rates of foreclosure, accounting for 19 of the top 20 metropolitan areas, according to RealtyTrac Inc. But the latest data show that many of the metro areas in those states saw a decline in the number of households receiving foreclosure-related filings, while many cities in other states saw a substantial increase in foreclosure filings.

This trend is the latest sign that the nation’s foreclosure crisis is worsening as homeowners facing high unemployment, slow job growth and uncertainty about home prices continue to fall behind on their mortgage payments. Eleven out of the nation’s 20 largest metropolitan areas saw foreclosure activity increase in the third quarter compared to the same period last year.

The Seattle-Tacoma-Bellevue metro area registered the sharpest annual increase – 71 percent. One in every 129 households received a foreclosure filing. The Chicago-Naperville-Joliet metropolitan area posted the second-highest annual jump, a 35 percent increase. One in every 84 households received a foreclosure notice.
Rounding out the rest of the top 10 metro areas with the highest foreclosure rate were Cape Coral-Fort Myers, Fla.; Modesto, Calif.; Stockton, Calif.; Merced, Calif.; Riverside-San Bernardino-Ontario, Calif.; Miami-Fort Lauderdale-Pompano Beach, Fla.; Phoenix-Mesa-Scottsdale, Ariz.; Bakersfield, Calif.; and Vallejo-Fairfield, Calif.

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Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at