Click here to listen to the Legal Hour on KDWN AM720 from January 25th, 2012 in which Managing Partner, Tisha Black Chernine, Esq., discusses the impact of walking away from a mortgage vs. negotiating with the banks (4:26), how banks committed fraud during the housing bubble (6:10), how to spot title issues when buying real estate (9:52) (33:36), trouble foreigners have qualifying for lending (14:00) (30:40), laws that protect renters (21:20) and how to speed up the foreclosure process (28:15).

Please tune in to AM720 KDWN’s “Legal Hour,” everyday, from 9 AM to 10 AM.  Listen live on the radio or online.   Feel free to call in with your comments or questions at 702-257-5396.

To listen to past shows, visit our Media page.

Related posts:

1. Black & LoBello on AM720 KDWN
2. Black & LoBello on AM720 KDWN
3. Black & LoBello on AM720 KDWN

So where does the Multi-State Settlement (“MSS”) leave Nevadans? Essentially, in a slightly better position IF, and only IF, we manage our expectations, pay attention and do our homework. If we do these things we may be able to collect all the money allocated to us, pursue the “banksters” criminally and pursue our individual remedies under state and Federal laws.  To begin you must do the following:

Determine who owned/owns the Note.

It is expected to take somewhere between 60 and 90 days to set up the MSS infrastructure and to commence delivery of the forms associated with the “opt-in” portion of the program. During that time, borrowers who were foreclosed upon, still making payments or are still in default should take measures to determine who owned, claims to own or currently owns their note. They can do this by searching the Fannie Mae and Freddie Mac websites, sending out a Truth-in-Lending letter and contacting the servicer related to their loan. There is generally a service number located on all mortgage invoices. Nevada is not a “show me the note” state. We do require that claimant lenders can produce proof of the right to collect on the Note. However, they are NOT required to produce the actual note. A certified copy thereof will do. Accordingly, you will want to look at who is making those certifications. Check the endorsements on the note, to whom the note is endorsed (this is a technical bearer/order distinction that may be important to a lawyer) and the manner in which the note was endorsed – on the note itself or by a separate paper. All of these things matter and may be changed or altered by the Bank or other party at a later date. Gathering them NOW is important and prudent.

Determine who owned/owns the Deed of Trust.

In addition to researching the note the borrower should determine who is or has foreclosed upon (all that apply) their Deed of Trust. In a series of opinions regarding mediation and transfer of beneficial interest in Notes and Deeds of Trust the Nevada Supreme Court has given very clear instructions on how and what constitutes a proper transfer of the Deed of Trust. Therefore, Borrowers should endeavor to ensure that any claimed creditor pursuing them under a Deed of Trust has the proper documentation to support its claims. Borrowers can research this information by sending a TILA letter, researching their MERS MIN number or looking through public notices and recorded documents. Deeds of Trust should be transferred by assignment. The date of the transfer in relation to other occurrences such as the commencement of the foreclosure process and filings by trustees can have a big impact on whether or not the foreclosure was done properly and by the proper party.

Review the County Recorder’s page and your title chain.

Nevadans should also review the Recorder’s page on their past, present and future properties. Oftentimes, you can collect information regarding transfers, find robo-signers, false dates, false names and botched documents in the public record. Singularly and in the aggregate, these types of facts can add up to leverage in a short sale, decrease in a deficiency or a lawsuit under various Federal and state laws. Moreover, look at the trustee’s deeds to determine if the property has been foreclosed upon. Make sure the listed beneficiary matches those in the chain.   Notably, a recent Massachusetts Supreme Court denied a quiet title claim of a purchaser at a botched foreclosure. Examining these records closely when seeking to purchase a property may avoid title issues in the future.

Review your mortgage statements, credit reports and other records.

There are many Federal and state protections for borrowers who have been subjected to misapplied mortgage payments, false credit reports, force placed insurance, doubled fees (such as BPO charges or “site inspections”) and bogus charges. Look at your statements as suspect. Even small accounting errors can garner decent statutory fines in your favor. You can order an accounting of these things by sending a Qualified Written Request to your lender or servicer. You are also required to have received notice ANYTIME your mortgage was transferred. This notice is to have been provided within 30 days of the transfer.  You may have a fine waiting for you to collect if you did NOT get it, like many other little known statutes.

Read, read, read!

The big secret is that people, including banks, do not read their documents. Before you sign, look for waivers and releases in EVERYTHING and understand what they mean even if you have to see an attorney. Read the small print, large print, things in boxes and regular paragraphs. Determine who the parties are and the obligations of each. Think of the worst case scenario and make sure the document addresses what would happen in that event. Look for the small charges that will be taken from you such as processing charges, documentation charges, copy costs, interest for no reason, penalties that are not penalties, pencil sharpening, etc. and know when they will be allocated. You are your own watch dog. If it looks strange, sounds funny or gives you a “gut-check,” look into it. If you are not certain, find COMPETENT people to assist you based on sound in-person referrals, not a suggestion from a stranger, the internet or a flashing advertisement.

Be diligent.

Pay attention regardless of whether you paid your mortgage. Research the MSS, opt-in if you qualify, know who your lender is and the programs they offer. Investigate your property, examine your title and know your rights. If someone or some company owes you a deadline, make sure you remind them the DAY it is late. Be timely yourself. Follow the directions and keep copies of everything, including whom you talked to, when and if they called you or you called them. This is, in large part, a game of attrition. Know what to expect and ensure that the people you rely on professionally and politically act and vote appropriately.

Finally, manage your expectations.

Steel yourself to the fact that you must make an effort. There are no silver bullets. This is not an era where one can rely on others for good advice, clear direction or protection. Above all else, hold on because this ride is nowhere near over and the rules to this game seem to change every day.

Tisha Black Chernine, Esq.

Related posts:

1. The Multi-State Settlement Part 2 of 3: What it Really Means to Nevadans
2. The Multi-State Settlement Part 1 of 3: What Has Happened
3. Report Indicates Nevadans are “Walking Away” From Distressed Properties

The big “winners” in the Multi-State Settlement (“MSS”) are Florida and California who have exacted approximately half of all MSS monies between them. Regardless of these two goliath states, Nevada captured a decent amount. On any given day, Nevada ranks number one for bankruptcy filings and percentage of unemployed individuals.  Furthermore, for the last five years Nevada, prior to passing AB284, has ranked number one for foreclosures.

Nevada is the clear devastation front-runner considering 1 in every 17 homeowners are at some stage of delinquency. Moreover, a full one-half of all residential housing stock is considered underwater and one-third of that is at or above 175% LTV. Nevada is said to have conservatively lost more than $10 Billion in real estate value. In this regard, Nevada is clearly the dubious winner. Perhaps, in a perverted sense, we have “won” again with this settlement.

$25 Billion, to be sure, is a large sum. However, it represents approximately one QUARTER of annual profit for the five major lenders (“Banks”). In exchange, not only do the Banks move forward on a far sturdier footing in terms of looming and expensive litigation, they have also seen to it to give themselves, their affiliates and relations a tax credit for the “good deeds” of refinance, principal write downs, cash for keys, etc. Moreover, they are getting these credits for writing down loans which they don’t own any interest in at all. Therefore, the actual stake-holders in those investments will probably be as kindly victimized by the Banks as the main street borrowers.

Why are we not only bailing Banks out but giving them tax breaks to run their business the way THEY SHOULD BE RUN? Why are we giving Banks and their servicers credit for potentially ruining the investments of others? Why do we continue to repeat the same mistakes and hope for different outcomes? These are questions only a silver-tongued politician or banker can answer. Certainly, they will manage to craft an answer, call a photo-shoot and make a speech while the rest of us continue to work, dutifully pay taxes and lose faith in our system.

Thankfully, the private sector has filed a number of law suits on behalf of and against some marquis real estate and finance players such as AIG, Black Rock and the SEC who sued untouchables such as Goldman Sachs, Bank of America and Wells Fargo. Nevada too has had enough and was one of only a handful of states that filed suits against the Banks and the ONLY state that has filed criminal charges until just recently with the state of Missouri filing a criminal action against a foreclosure document processing company in February of 2012.

Of the many issues that dog the litigation process (besides expense, time, and complexity) is the fact that states are dealing with moving targets. The speed with which the Banks buy, sell, merge, re-brand, dissolve entities, hire employees, change management and terminate employees is matched only by the speed with which banks bought, sold, manufactured and manipulated documentation in the last decade. These amoeba-like companies and their guerilla litigation tactics are no recipe for a swift resolution to Nevada’s immediate needs.

In contemplation of this slow bleed, Nevada settled its lawsuit with Bank of America and chose immediate funds and a promise to refinance or reduce borrowers’ principal. As a result, Nevada added more than $200 Million dollars to its settlement coffers. Again, this money is in addition to the $1.3 Billion marked as the amount headed to, or to be granted to, the citizens of the state of Nevada for criminal activities of the Banks.

In exchange for the MSS, Nevada and other participant states have agreed NOT to pursue the released parties from any CIVIL state action. However, that is not and should not be considered the end of the battle. Keep in mind that the states now armed with funds are still able to proceed criminally against the Banks and culpable parties. There is no reason to assume that Nevada will continue in this vein since we already have foreclosure-related civil and criminal suits pending. More important still is the fact that individual borrowers can collect their distribution AND pursue their state and federal claims unfettered by the MSS.

While I do agree that the MSS is working in the right direction it is not THE answer and it is so remarkably unbalanced that it is hard to digest. In reality, the Banks are not paying the touted $26 Billion but $5 Billion. The credits they will receive add up to nearly $20 Billion for principal reductions and refinancing. When this amount is divided amongst those foreclosed upon between September 2008 and December 2011, that leaves approximately $900 to $1,900 per loan depending on the number of persons opting in. There you have it folks! The price of high finance and crime in America is less than $2,000 per loan.

The $5 Billion in hard money that is said to be distributed amongst the states may be used as, when and how each state directs. Ironically, I am placing bets that these funds will be deposited into Bank of America accounts by the majority of recipient states leaving the Banks to gain still more benefit from  the MSS.

As to the remaining $25 Billion, much of this allocation is to be used toward write-downs, refinancing, deficiency releases, cash for keys and other credit oriented “contributions” which will be distributed by the Banks and the MSS on a first come, first serve basis so it will be important for Nevadans to get in quickly lest other states take the loot.

The breakdown of Nevada’s take is as follows:

1. From the MSS:

• Nevada will receive $60 Million in funds from the MSS. The state may do what it likes with these funds. I would expect that the state will either set up programs to assist Nevadans with participation in the MSS, direct funds towards legal aid, and, hopefully, use a good portion of the money to fund the criminal pursuit of individuals involved in bad acts concerning real estate finance, servicing, and foreclosures.
• Nevadans will be allocated $40 Million in payout to those borrowers who are deemed to be proper recipients. In order to be a “proper recipient,” your loan must have been in the portfolio of one of the participating banks. That is to say, it should not have been merely serviced by one of those banks or their affiliates. Borrowers whose loans were foreclosed upon and were owned by a GES, private trusts, or publicly traded securitized trust DO NOT QUALIFY for this payment. Moreover, the payment will only be delivered after the participant opts in. The payment will be based on a sliding scale from $900-$2,000 per wrongfully foreclosed upon borrower. Regardless of the participation, or the amount of the payment, the INDIVIDUAL BORROWER MAY STILL PURSUE ANY PRIVATE CLAIM HE OR SHE HAS RELATING THE LOAN OR FORELCOSURE.
• Although $1.2 Billion dollars has been allocated to Nevada, depending on the rush from other states, Nevada may not get that much money. Moreover, there is no right accounting that will ensure what amount we will receive at the end of the MSS distribution.  These monies will be used toward principal reductions, refinancing, deficiency releases and cash for keys. Determining who is a qualified participant in this “menu of services,” is difficult. While one can assume that the participating banks have the authority to write down and forgive deficiencies in their own portfolios, it is hard to determine what, if any, authority a bank, or its servicer arm has to do this for a loan which the bank does not own. Indeed, the claim that banks do not have such authority (along with the moral hazard issue – as if the whole system is not rife with it) has been the main excuse for the banks not doing so to date.

1. From the Bank of America Settlement:

• Included in the MSS, Nevada will get a guaranteed $750 Million in principal reductions and deficiency releases from Bank of America. This money too is relegated to the bank’s control.
• Nevada will also receive another $30 Million to use as it wishes (much like the MSS $60 Million mentioned above).
• Finally, there were modest amounts directed towards remuneration for odds and ends associated with the Bank of America lawsuit that Nevada will receive.
• Nevada Attorney General Catherine Cortez Masto shall receive a seat on the enforcement committee of the MSS.

Tisha Black Chernine, Esq.

Related posts:

1. The Multi-State Settlement Part 1 of 3: What Has Happened
2. Tisha Black Chernine talks about Nevada’s Big Bank Settlement
3. Report Indicates Nevadans are “Walking Away” From Distressed Properties

Wall Street knew all of the mortgages were bad when they created or bought and sold them. Furthermore, they knew the warranties of quality they made regarding the caliber of the loans, whether to the certificate purchasers of the Residential Mortgage Backed Securities (“RMBS”) pools or the Government Sponsored Entities (“GSE”), were meaningless when they made them. It did not take hindsight to determine that those pools should not have been rated “AAA.”

Fannie Mae and Freddie Mac knew that the related documentation and the serving records were problematic for over a decade.  The Federal Government has also known of the problems as evidenced by consent orders signed over a year ago by 14 of the major servicers. They promised then to do what should have been done all along: abide by laws and sound business practices.

Congress knows. The Senators know. The Attorneys General are aware. Countless committees, reports, investigations and press releases cite the blasphemous practices and unconscionable conduct of the industries related to real estate and its financing. Each have blustered “something must be done,” “what an outrage,” “vote for me, I will change all of this.”

Borrowers also knew it was too good to be true.  Even if they did not have to produce documents to support stated income on mortgage applications, they knew that the applications were often falsified by originators who would never have any “skin in the game” of the debt roulette they were playing.

Is there anyone left who can claim ignorance that our mortgage market from start to foreclosure is rife with fraud, felons, misfits and idiots? Ironically, everyone claims it is someone else’s fault and that some other party should suffer the finger-pointing and scaffold. Poppykosh!

This dreadlock of mortgage morass, main street malaise and political uselessness has been twisting up for decades. The notion that it can be undone with the stroke of a pen is just that, a notion. You cannot be fit without discipline. You cannot cure lethargy without energy and you cannot fix systemic corruption and the real estate market with the Multi-State Settlement.

The Multi-State Settlement (“MSS”) involves every state, save and except Oklahoma.  The MSS was entered into by the participating states and the following five major lenders (“Banks”):

1. Bank of America $11.82 Billion (who holds the Countrywide loans that were not sold);
2. Wells Fargo $5.35 Billion;
3. Ally Financial $310 Million (formerly GMAC);
4. JP Morgan Chase $5.29 Billion; and
5. CitiCorp $2.2 Billion.

However, the Banks are not the only beneficiaries of the MSS for there is a release that includes their subsidiaries, affiliates and related entities, regardless of whether the subsidiaries to these companies are past, present or (presumably) acquired in the future.  The net is cast quite far and wide in terms of Bank releases. The activities covered are similarly endless. However, they are listed as the acts or failures that relate to origination, servicing and foreclosure; the entire mortgage process.

Who, besides Banks and offending entities, were eager to see the settlement executed? None other than the Department of Justice (whom we pay to peruse and convict criminals, not settle with them); the Federal Reserve Board; the Conference of State Bank Supervisors; the Federal Housing Finance Authority (Freddie and Fannie Regulator); and the HUD. Many of these players have filed, pursued or exacted their own settlements with the Banks.

It is also interesting to note which states’ Attorneys General and federal actors were involved in the committee that put the proposed settlement together. It shall be interesting as well to watch these individuals get federal or other coveted appointments in the future.

1. Pam Bondi, Florida Attorney General
2. Tom Miller, Iowa Attorney General
3. Eric Holder, U.S. Attorney General
4. Sean Donovan, U.S. Secretary of Housing & Urban Development
5. Lisa Madigan, Illinois Attorney General

It will also be these “civic-minded” individuals that lead the MSS complaint/compliance committee. You should be asking yourself now whether these individuals are the best suited for the continued oversight and enforcement of this program as they were the very soft-heeled ones to come up with it.

Despite being cash-strapped and eager to receive an infusion of capital to cover budget shortfalls (like many other states in the Union) the following states were hold-out states, true hold-out states. They actually worked out a more advantageous deal for their constituents.

1. Arizona
2. California
3. Delaware
4. Massachusetts
5. New York
6. Nevada
7. Oklahoma (never signed on to MSS, but took the hard money and not the opportunity for write-downs).

The states’ Attorneys General were forced to choke down the MSS much like a goose making pate for bankers. Thankfully, Nevada managed to secure a better settlement than most, and so we should have, as we are the hardest hit state.

Tisha Black Chernine, Esq.

Related posts:

1. Nationwide joint investigation could make banks subject to fines
2. Tisha Black Chernine talks about Nevada’s Big Bank Settlement
3. Some Foreclosures and Evictions postponed for the holidays

Tisha Black Chernine, Esq., was interviewed by Jon Ralston on “Face to Face” and discussed the problems with the new Multi-State Settlement with the big banks.  Click here to watch the episode.

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Click here to listen to the Legal Hour on KDWN AM720 from January 18th, 2012 in which Managing Partner, Tisha Black Chernine, Esq., discusses some of the different fraud schemes related to the real estate crisis (2:00)(14:20), whether AB 284 can help during a short sale (10:35), steps to take when setting up a small business (17:28), rent-to-own properties (30:50) and strategy for renting properties (34:48).

Please tune in to AM720 KDWN’s “Legal Hour,” everyday, from 9 AM to 10 AM.  Listen live on the radio or online.   Feel free to call in with your comments or questions at 702-257-5396.

To listen to past shows, visit our Media page.

Related posts:

1. Black & LoBello on AM720 KDWN
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Click here to listen to the  KNPR State of Nevada show in which Tisha Black Chernine, Esq., is asked about how the settlement agreement between Nevada and five of the biggest banks could help or hurt homeowners fighting foreclosure (19:50) and whether homeowners can realistically expect principal reductions on their mortgage loans (24:55).

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In these tough economic times people’s relationships and wallets have become casualties of this recession. As such, many couples contemplate bankruptcy and divorce. Before making a decision regarding either you should know how a bankruptcy and divorce impact each other.

Impact of Bankruptcy on Divorce

Upon the filing of bankruptcy by one or both spouses all community property becomes property of the bankruptcy estate. Generally speaking, community property is any property accumulated during the marriage. Any property that is property of the bankruptcy estate cannot be sold or transferred without prior court approval with some very limited exceptions. Thus, if one or both spouses filed bankruptcy prior to or during a divorce proceeding, a family court cannot award any property settlement pursuant to a divorce without first receiving bankruptcy court approval.

Further, once a bankruptcy is filed an automatic stay immediately protects the debtor from various activities including any action by a creditor to collect on their debt. In this regard, the automatic stay prevents a family court from awarding any property distribution in a divorce proceeding. However, the automatic stay does not prevent a spouse from seeking and obtaining a divorce or a court granting the award of child support or alimony.

If a spouse files for bankruptcy during the impendency of a divorce proceeding, the non-filing spouse can ask the bankruptcy court for relief from the automa tic stay. The relief sought will be simple, allowing the divorce proceeding to continue and the family court to adjudicate property distributions.

Impact of Divorce on Bankruptcy

As a result of a divorce proceeding one spouse may be awarded alimony, child support and a property settlement. First, alimony and child support debts are not dischargeable in bankruptcy. In other words, these debts will survive bankruptcy. Further, any separation agreement whereby a spouse agrees to be obligated to certain debt, or agrees to pay a certain amount to keep an asset, is also not dischargeable.

For example, in a separation agreement, the ex-husband agrees to pay $15,000 for equity in the house and he keeps the house. However, after paying only $7,500, the ex-husband files for bankruptcy. The remaining debt of $7,500 is not dischargeable. Also, if the property settlement is actually meant to be or acts like alimony or child support, it’s unlikely the obligation would be discharged in a post-divorce bankruptcy. To determine whether a property settlement is alimony or child support, a bankruptcy court will look at the following criteria:

• do payments end or decrease after certain events happen such as remarriage or a child turning 18;
• whether the obligation must be paid in installments or a lump sum;
• if there are minor children involved;
• the relative health and education of the parties; and
• whether a need for support exists at the time of the divorce.

Lastly, a hold harmless or indemnity clause written into the divorce decree can also protect you. It requires your spouse to pay certain debts or repay you if a creditor makes you pay the debt. If your ex-spouse later files bankruptcy you can ask the bankruptcy court to enforce the indemnity agreement.

Therefore, without proper counsel, going through divorce and bankruptcy at the same time can be both confusing and highly damaging.

Randy M. Creighton, Esq.

Related posts:

1. Bankruptcy and Divorce Seminar
2. Divorce – Do I Have To Go To Court?
3. How To Keep Emotion Out of Divorce

Yesterday’s announcement that Nevada joined 48 other states in a $25 billion settlement with the nation’s five largest residential mortgage services is certain to impact Nevadans but it could take as long as three years to find out just how many homeowners will be helped.

via Nevada Agrees to Take Foreclosure Deal.

Related posts:

1. Distinct Nevada Laws Concerning Deeds of Trust & Foreclosure
2. Nevada Still Highest Foreclosure Rate in Nation
3. B&L on Channel 8 Desert Underwater: Foreclosure Bomb Hits Nevada

Tisha Black Chernine, Tiffany Ballenger and Randy Creighton presented at the NBI Seminar entitled “Foreclosure Mediation Practice in Nevada” on February 9, 2012.  Mrs. Black Chernine talked about how recent legislation has affected the foreclosure crisis.  Mr. Creighton talked about how bankruptcy affects the foreclosure process and Ms. Ballenger discussed how she advises clients regarding asset protection.   Carlos McDade, Esq., the current general counsel for the Clark County School District, presented on the mediation process and the different government programs involved.

Click here to be notified about the next Black & LoBello event.

[Show as slideshow]

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