• Will Changes To HARP Change The Number Helped?

    As the Obama administration’s revamped Home Affordable Refinance Program (HARP) goes into effect this month, the latest version will offer some key changes that should make it more attractive to the lenders that are not required to offer these loans to their borrowers. Some of the differences include the removal of the 125 percent loan-to-value (LTV) ceiling, reduced risk-based fees or loan-level pricing adjustments, representation and warranty relief for the lenders committing loans to the program, and an extension through the end of 2013 for the program.

    However, as syndicated real estate and personal finance columnist Ilyce Glink noted in a column published on December 2, 2011, HARP “does not have a great track record up to this point” with fewer than 100,000 underwater borrowers able to refinance their properties. Saying that it is “hard to imagine these numbers will grow substantially,” Glink added that “the need is huge.”

    Glink wrote about a woman she spoke to on her radio show who has a 6.5 percent interest rate on her loan and originally put down 20 percent on the property, but now has a house that is worth only about $110,000 instead of the $175,000 she paid eight years ago. Now far underwater, the caller’s husband lost his job and the couple is struggling with their monthly debt obligations because his new job pays so much less.

    Glink said the biggest problem is that neither Fannie Mae nor Freddie Mac owns the couple’s mortgage, a conventional 30-year loan. Furthermore, the loan servicer refuses to disclose who owns the loan, only confirming that the company is not participating in “HARP 2.0.”

    “This is another family that might well end up in foreclosure, and not for lack of trying,” Glink said.

    Does this sound familiar? Have you tried to take advantage of HARP for foreclosure help only to find dead ends? Did you know filing for Chapter 7 or Chapter 13 bankruptcy could not only stop foreclosure and help keep you in your home, but could also reduce, reorganize or eliminate your debt and end creditor harassment?

    Benjamin Brand Services – Chicago bankruptcy attorney

  • Remembering the Contributions of Former Chief Judge John Schwartz

    John Schwartz, the former chief judge for the U.S. Bankruptcy Court for the Northern District of Illinois credited for the work he did to develop judges in his court as well as lasting contributions to bankruptcy judges across the country, died of natural causes on November 28, 2011.

    “He came in at a time when the Bankruptcy Court was not held in very high repute,” bankruptcy scholar Douglas Baird, a professor and former dean of the University of Chicago Law School, told the Chicago Tribune for a story published on December 4, 2011. “He came in and worked with a group of talented judges to change all that.”

    Judge Schwartz was appointed to the Bankruptcy Court in 1984 and was chief judge from 1987 to 1998. He retired as chief judge in 1998, but was called back to the court as a judge until he finally stepped down in 2008. The Tribune noted that Judge Schwartz put together a professional development program called the Schwartz Roundtable for judges attending annual meetings of the National Conference of Bankruptcy Judges. The program allows judges to share experiences and discuss legal ideas.

    “What he did was create an atmosphere of friendship, cooperation and good humor,” Eugene Wedoff, who became a judge of the court in 1987, told the Tribune. While Schwartz fostered a more informal atmosphere among colleagues, Wedoff also said he always took the work of his court seriously, having “a real compassion for the people appearing before him” and taking the time to “make sure people understood procedures well enough to make the right decisions.”

    His wife, Elizabeth, told the Tribune, “The fulfilling part, he felt, was you could help people who were in deep trouble.” While those entering the Bankruptcy Court for Chapter 13 or Chapter 7 filings will no longer stand before Judge Schwartz, the changes he ushered in will still be felt for years to come.

    Benjamin Brand Services – Chicago bankruptcy lawyer