Straight Talking on The Law

Distressed Property Consultations Now On Line Strategic Default? Foreclosure? Short Sale?

By: Robert Harris, Oregon Real Estate Attorney

If your home is underwater you can find plenty of information about Oregon foreclosure laws and strategic default options online. Some good, some not so good. But even if you figure out the law you still have to apply that to your specific situation.  

Because of the growing demand for consultations and document review from people considering alternatives to paying for a home that is underwater, we've set up an expedited flat fee process for distressed property owners so they can  get straight answers from an experienced Oregon Real Estate Attorney.

By using our law firm's advantages of excellent technology and experienced attorneys, Harris Law Firm is leading the way in assisting clients throughout the state of Oregon efficiently and effectively.

Here's how our distressed property review works:

Mortgage Relief Scams

By: Robert Harris,

Attorney Harris Law Firm

For people who are upside down in their homes, and are desparately looking for a way out, rest assured that scammers are more than willling to take yor money. A Huffington Post article about mortgage relief scams explains one type of common scam. 

Before you ever, ever, ever agree to hand your money over to any mortgage relief, or debt workout, or distressed loan "specialist" (who may actually be nothing more than a boiler room operator somewhere in Florida), talk to a local reputable attorney about your legal options. For a relatively small fee, an experienced attorney can assess your situation and spell out your options.

One thing to be aware of. There are a very few number of attorneys who, usually unkowningly, work with these worthless loan modification companies. These companies persuaded some naive attorneys to act as their "fronts". So the attorney is convinced that all they had to do was attract and sign the distressed clients,  collect the fee, and the loan modifaction staff will take care of the client. So if you do retain an attorney, just make sure they are handling all of the work within their own office.

Ford F-150 Recall - Gas Tank Defect

 

 
By: Robert Harris

The Ford F-150 is one of the best selling trucks on the road today. The F series has been the best selling vehicle in the US for three decades. Regulators are now reporting that they are investigating 2.7 million F-150's, built from 1997 through 2001, for a potential gas tank design flaw.

The National Highway Traffic Safety Administration reported that the steel straps holding up the truck's gas tank can rust and break, possibly causing a fuel spill and fire. So far, there have been no injuries reported due to the defect.

If you own a 1997-2oo1 Ford F-150, you may be receiving a notice in the mail from Ford regarding a recall of your vehicle. If you have any questions or concerned about the safety of your vehicle, you may want to contact your local Ford dealer to see if they can perform an inspection of the potentially defective parts.

If you're not the original owner, keep your eyes open in the paper for any reported recalls. Even if you're not the original owner, if the vehicle is recalled, you will be able to get it fixed at no cost.

 

 

New Estate Tax Laws

By: Robert Harris

 Recently there has been congressional movement on the issue of the estate tax. The "Responsible Estate Tax Act, Senate Bill 3533." Has been introduced to the Senate.  In the United States House of Representatives, the "Responsible Estate Tax Act, House Bill 5764.", identical to the Senate bill, was introduced. The bills, in their present form, would provide a $3.5 million exemption per individual, with a progressive rate structure. The top rate would be 55 percent, and there would be a 10 percent surtax on billionaires. Here’s the bullet point press release from the sponsors. They say these bills would

•Exempt the first $3.5 million of an estate from federal taxation ($7 million for couples). This represents the same exemption that existed in 2009. This would mean that 99.75 percent of all estates would be exempted from the federal estate tax in 2011 alone.

What's Happening With the Federal Estate Tax?

  By: Robert Harris

You know that the federal estate tax law passed in 2001 provided that in 2010, there is no federal estate tax, but in 2011 it will  be reimposed at a 55 % tax rate on all estate assets exceeding 1 million dollars.

Congress has been debating what to do about this, and the Republicans and conservative Democrats in the Senate thought they had a deal to reset the federal estate tax credit at 5 million dollars with a tax rate of 35% above the exempt amount.

But the deal broke down, with more liberal Democrats demanding the credit be reset at 1 million dollars with a 55% tax above that amount.

I have taken several calls from clients who have appreciating assets in trust, asking what they should do. Do you terminate the trust now, forego the step up in tax basis so that your appreciating assets will be taxed at a capital gains rate? Or do you keep the assets in trust to take advantage of the step up in basis, and hopeing for the higher unified estate tax credit.

And what happens if Congress raises capital gains rates to 20%, or even gets rid of the capital gains rates all together and folds gains into earned income, as some Democrats advocate?

There's simply too many variables for anyone to know the best answer. And there's certainly no boilerplate answer. But if you have a trust, or a net worth over 1 million dollars, spending a few bucks on professional advice right about now would be a very good investment.

Rob Harris is the founder and President of Harris Law Firm, P.C. a firm focusing on the needs of families and their small businesses.

[email protected]

www.harrislawsite.com

Strategic Mortgage Default

   By: Robert Harris

With the local housing market still in a downward mode, more homeowners are calling me about strategic defaults on their home loan. A strategic default is where the borrower has the ability to pay the loan but decides not to because the home is worth less than the amount of the loan.

Businesses have engaged in strategic defaults forever. If a business can't pay its debts. It closes its doors, or tells its bank that it must reduce the loan, or they will walk.

For homeowners however, strategic default is a new option. Since home prices seemed to have historically either risen consistently, or at least stayed constant, there was little need for considering the a strategic default. However, with home prices having dived by 20% - 35%, there are a lot of homes that are worth much less than is owed on them. 

It's been estimated that as many as 20% of the current defaults on home loans are strategic defaults. And, studies show that when the home value sinks to 75% of the amount owed, people are more likely than not willing to consider a strategic default.

The federal government has very recently enacted a new program that appears to be directed right at people who are considering a strategic default. This program is as much, or more, to benefit creditors as it is homeowners, since the last thing a lender wants is a foreclosed home. Because if an owner does quit making payments, they can continue to live in the home until the foreclosure is complete, which can be as long as one year, and make no payments.

Before you consider a strategic default, you need to consider the benefits and the detriments. Yes, you can live "payment free" in your home during the foreclosure. Yes you can substantially reduce your overall debt. But a foreclosure will harm your credit score.

However, for someone who is $100,000 underwater in their home, it could be a good business decision to consider a strategic default. Many people would be willing to take a hit on their credit score if they could save $100,000.

Justice: United States of America vs. William Reuhle

By: Robert Harris

For anyone who doesn't worry about the danger of handing too much power to prosecutors, or who wonders about the need for independent and effective judges or the separation of powers, the transcript of the ruling by the Federal District Court Judge in the case of United States of America vs. William J. Ruehle is a must read. Download Ruehle opinion

The judge in this case, Judge Cormac J. Carney, is no soft on crime liberal. He was nominated by George Bush to the Federal Bench in 2003. Enough said, the transcript speaks for itself.

Cashing out Retirement to Pay Debts? - Good Idea?

  By: Ryan Hackett

Bankruptcy is a last resort for most people. As a bankruptcy attorney I have met several debtors who have tried almost everything to pay off their debts before they realize they need help.  One of the most unfortunate circumstances that I come across is people who have cashed-out or borrowed large sums against their retirement accounts in an attempt to pay off their creditors. Many times, they aren’t able to get enough funds to pay off everyone and still end up in bankruptcy. Even if you have enough in your retirement accounts to pay off your creditors, it could be disastrous to cash-out retirement funds to do so.  Nearly all retirement funds are protected from creditors. The most common forms of retirement funds that I see are held in 401(k)’s, IRA’s, PERS and 403(b) accounts.  All of these accounts are safe from creditors if you file bankruptcy. 

Short Sales Information

By: Robert Harris

I Had coffee with an experienced realtor last week. (At my favorite coffee bar Insomnia Coffee in Hillsboro Oregon) We talked about the housing market (pretty good for homes under $275,000, but not so good for those more luxurious homes), foreclosures and short sales.

After our meeting he gave me what I think is some concise, valuable literature on short sales and foreclosures. If you're a homeowner, and in a situation where a short sale or foreclosure appears to be an option, you'll want to read these.

And, if you're looking to buy a short sale property, this information will educate you to the process and the hurdles that you may face.

Who is filing for Bankrutpcy?

 

By: Ryan Hacket,

      Attorney at Hackett and Harris, LLC.

What types of people file for Bankruptcy?

In 2008 over 1 Million Americans filed for bankruptcy protection.  I recently came across this interesting and colorful chart that broke down the demographics of these filers.

As you can see from the chart there is a broad spectrum of people who file bankruptcy.  When I tell my friends and family members that I am a bankruptcy attorney they always seem to assume that I help people who have nothing and are unemployed.  I always tell them that quite the opposite is true. Nearly all of my clients have jobs and many have assets, such as cars, homes, or other valuable items.  As the chart shows, only 13% of people who filed bankruptcy in 2008 were unemployed.