August 2018 - Page 2 of 2 - FREE CONSULTATION

Mortgage Delinquency Rates Decline Nationally, But Florida Shows Increase Due to Irma

Posted on August 7, 2018by Admin

Mortgage delinquency rates have declined on a national level, as reported by the monthly Loan Performance Insights Report published by CoreLogic. However, despite the national decrease, Florida residents have seen an increase, which is attributed mostly to Hurricane Irma and the 2017 hurricane season.

According to CoreLogic’s report, as of April 2018, 4.2 percent of mortgages nationwide are in some stage of delinquency. A delinquency means that the mortgage is 30 days or more past due and includes those mortgages that are already in foreclosure. This number shows a 0.6 percentage point decrease in the overall delinquency rate as compared in April 2017. At that time, the percentage was at 4.8 percent.

The report also provided information on the foreclosure inventory rate, which measures the share of mortgages that are in some stage of the process of foreclosure. The rate as of April 2018 was at 0.6 percent, which is down 0.1 percentage points from where it was in April 2017. The foreclosure inventory rate has been steady at the rate of 0.6 percent, which is the lowest rate that has been reported since June 2007, when the rate was last reported at 0.6 percent. The April 2018 rate is the lowest that it has been in the past 11 years.

The purpose of measuring delinquency rates during the early stage of the process helps in analyzing the health of the mortgage market. CoreLogic’s report looks at all stages of mortgage delinquency and transition rates, including the percentage of mortgages that are reported as moving from one stage of delinquency to the next step in the process.

Early stage delinquency occurs when a mortgage payment is 30 days to 59 days past due. This early-stage delinquency was reported at being at 2.2 percent in April 2017 and was reported at 1.8 percent in April 2018. The figures in the early-stage delinquency category can be volatile, so it is for this reason that CoreLogic looks at the transition rates, meaning the number of mortgages that transition to the next stage. The transition rates for mortgages reported in the early-stage to later stage went down from 1.2 percent in April 2017 to 0.8 percent in April 2018. To provide some perspective, at the start of the financial crisis the early-stage delinquency transition rate was at 1.2 percent in January 2007 and 2 percent in November 2008.

The percentage of mortgages at the 60 to 89 days past due remained the same during this time. The mortgages that were reported in the serious delinquency stage at more than 90 days past due were down from 2.0 percent in April 2017 to 1.9 percent in April 2018. It should be noted that this is the lowest the serious delinquency rate has been since 2007 when it was reported at 1.6 percent.

However, despite these decreasing numbers, two states were reported as showing significant gains in the serious delinquency stage. These two states, Florida and Texas, were showing serious negative effects from the 2017 hurricane season. Of the two states, Florida has the most densely populated areas and the longest coastal area. This long coast leads to more exposure to storm surge flooding, putting almost 2.7 million homes at risk during hurricane season. After Florida, Louisiana is second to Florida with 817,000 homes in the “at-risk” area. Texas is right behind in third with 543,000 at-risk homes. Of these three states, Florida and Texas are the ones currently still struggling following Hurricanes Irma and Harvey which hit in 2017. Both states are finding themselves with higher mortgage default rates due to the natural disasters that have hit those states. The percent of mortgages that are in the serious delinquency category with loans that are 90 days past due are doubled than what they were reported in the previous year. In Puerto Rico, another area hit by hurricanes in 2017, the foreclosure rate or 90-day delinquency rate has quadrupled.

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Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami 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 McMaken website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

More Older Americans Filing for Bankruptcy

Posted on August 6, 2018by Admin

A greater number of Americans who are 65 years of age and older are filing for bankruptcy. The reasons for this increase in bankruptcy filings are numerous, including the loss of pensions, high medical expenses, and lack of savings. Regardless of the reasons, research is consistently showing that individuals at retirement age of 65 years old or older are three times more likely to file for bankruptcy than this age group in previous years.

One reason for this trend is the instability behind the government safety net that was once there for retirees as they left the work force. Social security was always considered a given, something that would support the retiree throughout their remaining years. Retirees are now having to wait longer to receive their full social security benefits, causing them to struggle to make ends meet until that time.

The pension plans they always considered were a given are now replaced with 401(k) plans, which require self-contribution for them to be successful. Many of these individuals are paying out-of-pocket for medical expenses, and many are being forced into early retirement before they are financially ready to live without a reliable, steady income.

According to Consumer Reports, from February 2013 to November 2016, bankruptcy statistics showed that there were 3.6 bankruptcy filings for every 1,000 individuals between the ages of 65 to 74 years old. This number shows a significant increase from the 1.2 bankruptcy filings for every 1,000 individuals in the same age category in 1991.

Looking at all bankruptcy filings made currently, 12.2 percent of those who filed are older than 65 years old. In 1991, only 2.1 percent of all filings were from individuals older than 65. The problem is the generation following this age group is also filing for bankruptcy in greater numbers. The best explanation for why this is occurring are structural shifts for these generations.

Of the reasons given for why they are filing for personal bankruptcy, these filers are reporting medical debt as a leading cause. The recession of 2008 has also been a leading cause for why these aging filers are facing such difficult financial circumstances. The recession wiped out a great deal of their investments, leaving everyone, including this demographic, leaving them with little money to retire with and a small amount of liquid assets with which to pay medical bills. Lastly, many wives in this generation are outliving their husbands, those in the family who were the main breadwinners and the individuals handling the family finances. Once the husband dies, the surviving spouses may not know how to handle the finances, resulting in decisions that could later lead to bankruptcy court. The notion may seem dated, but in this generation, it is an all-too-common occurrence.

For many, bankruptcy offers a fresh start providing the relief needed from collection proceedings and harassment from debt collectors. But what are the signs that it’s time to file for bankruptcy? Debt collectors can be anything but subtle in their efforts to receive payment on a debt, and this added stress can be too much for an older individual. Filing for bankruptcy puts these efforts to a halt and at the very least gives the individual a chance to breathe and to receive relief from this type of communication. If you are filing for Chapter 7 bankruptcy in Florida, you can use Florida bankruptcy exemptions to protect your property, social security and retirement savings. In addition, residents are provided unlimited exemptions for homestead, annuities, and the cash surrender value of a life insurance policy.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Tax Debt will Affect Passport Renewals and Applications for Thousands of Americans

Posted on August 3, 2018by Admin

Americans who have overdue tax debts will soon find it difficult to receive a new or renewed passport, according to the Internal Revenue Service (IRS). It is estimated that approximately 362,000 Americans have overdue tax debts, and soon, Congress will be increasing efforts to enforce a law passed back in 2015.

The 2015 law requires that the IRS and State Department deny applications for new or renewed passports for taxpayers who have overdue tax debt in the amount of $51,000 or more.

Increased efforts to enforce this law began in February 2018, according to a recent Wall Street Journal report. Currently, the IRS is in the process of sending the names of these 362,000 individuals to the State Department.

According to the IRS Division Commissioner, Mary Beth Murphy, authorities are currently only denying passports rather than revoking them for people who hold excessive IRS debts. In fact, the State Department has stated that the agency has already denied passports for individuals who hold tax debts. For the time being, Americans with over $51,000 in tax debt will be able to continue traveling abroad if they hold current passports.

The IRS has accounted for inflation and other assessed penalties, taxes and interest when calculating the amounts owed. These amounts do not include debts that were collected by the IRS, such as FBAR penalties due to the person’s failure to report foreign financial accounts or child support owed. If the taxpayer has entered into an agreement for installment payments, is in the middle of a bankruptcy proceeding, is a victim of identity theft or is in a federally declared disaster area is not subject to revocation of their passports.

The State Department is within its rights to issue a passport for emergencies or other humanitarian reasons should a U.S. citizen who is subject to this law need to return to the U.S. from overseas. Individuals affected by the law will be notified in writing by the IRS.

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Bankruptcy Law, Credit, Credit Card Debt, Debt Relief

The Dangers of Subprime Credit Cards

Posted on August 1, 2018by Admin

When someone has less than perfect credit and is looking to improve his or her credit score, it can be tempting to look to a subprime credit card. In fact, many consumers looking to start from scratch in rebuilding a low FICO score choose subprime credit cards as their preferred method of rebuilding credit. These credit cards, while they work for some, come with their own set of hidden dangers that should be understood before signing on the dotted line.

A subprime credit card is a credit card issued to individuals who carry a lower, substandard credit score or who have a very limited credit history. Normally, these cards have a higher interest rate than other types of credit cards granted to prime borrowers. In addition to the higher rates, these cards also come with extra fees, as well as lower credit limits.

It is estimated that approximately 40 percent of millennials have what is known as subprime credit, according to credit reporting agency, TransUnion. Of the over 16 million Americans who have credit scores lower than 600 have at least one credit card. Many of them have more than one card, each card holding a significant balance.

Many people are under the misconception that to rebuild credit, an individual needs to get a card and maintain a balance, while paying the minimum payments. When the advertisements pop up on these individual’s computer screens, promising a way to build credit through a subprime credit card, it can be very tempting to click on the ad and sign up right then. However, many of these individuals do not understand what the cons are to sign up for a subprime credit card, and they do not do their homework in researching the negative aspects before signing up for the card.

Hidden credit card fees are oftentimes where people get hit the hardest. Fees can even get as high as being 25 percent of what the available credit balance is on the very first day the card is used. At that rate, it can be nearly impossible for the consumer to catch up.

Subprime credit cards also tend to carry nonrefundable yearly costs. Of the unsecured subprime credit cards surveyed, all nine of them had some type of nonrefundable annual cost. On average, this cost is just a little over $150 on the first year the card is used. The annual percentage rate (APR) for these cards can range as high as 30 percent, which keeps the balance high, no matter how hard the cardholder tries at paying down the balance.

TransUnion reported that the average American who has a low credit score carries 2.5 credit cards. Of these individuals who were surveyed, approximately $300 of their income annually goes towards paying the high credit card fees that went along with those cards, not including the monthly interest that they pay on the balance held on each card.

Occasionally, a subprime credit card will have an annual fee that must be paid from the start. These credit card annual fees will appear on the card statements and can take up 25 percent of the cardholder’s credit line. Ideally, the credit utilization ration will be 10 percent, but for individuals with subprime credit, this number is impracticable.

It is for this reason that many credit advisors recommend that a secured credit card be used by someone just coming out of a bankruptcy or in a bad financial situation to rebuild credit. Unlike a subprime card, a secured card holds lower fees and less risk. Many secured cards offer a graduation program, meaning if the cardholder can establish a good payment history, eventually that person will move up to an unsecured credit card with a good rate. Examples of secured credit card programs include the Capital One Secured Mastercard and the Discover it Secured Card. Secured cards often require the cardholder pay an initial deposit through a connected bank account, or, if someone does not have a bank account, programs exist that allow for a secured card to be issued through an approval process and low annual fee.

It is important that the credit card not carry too high of a balance, and that the cardholder pay the minimum balance every month on time. Only use the card for small, manageable purchases, and keep an eye on the cardholder’s FICO score to monitor any changes in a positive or negative direction.

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