Write Your Congressman to Support the Helping Families Save Their Homes in Bankruptcy Act of 2009

UPDATE – MAY 8, 2009

BAD NEWS – THE LEGISLATION WAS DEFEATED IN THE SENATE … IT IS BACK TO THE DRAWING BOARD WHEN IT COMES TO PRINCIPAL REDUCTION RELIEF FOR HOMEOWNERS WHO ARE UNDERWATER ON THEIR HOMES.

YOU CAN STILL HELP – PLEASE SEND YOUR CONGRESSMEN AND SENATORS THE FOLLOWING EMAILS –


Please email your friends the link to this Website and encourage them to do the same. If they are outside the State of Michigan, they can find their U.S. Senators by going to the following link:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

If you’re from Michigan, write each of your Senators by clicking on the following links:

Senator Debbie Stabenow

MESSAGE TO THE PRESIDENT – WE NEED YOUR SUPPORT

Mr. President,

I respectfully wish to remind you of a campaign pledge and promise repeatedly made – to the millions of American’s who are underwater in their homes ..and have suffered elimination or severe decline in incomes. The current word is that the Democratic leadership is going to abandon the cram down legislation when Spring term returns. In states such as Michigan, the 80-105% program means nothing, because property values have declined too dramatically – leaving home values too low in ratio to mortgages to qualify.

You are a pragmatic individual – so you understand that the lenders will not negotiate in good faith to reduce principal balances unless there is a leverage point (i.e. a stick). Thus far, virtually no lender has agreed to reduce principal on any mortgage.

I’m an attorney in Metro Detroit. In November, we began a radio show, “The Financial Crisis Talk Center” on Saturday mornings (www.financialcrisistalkcenter.com). The show allows callers to call in and vent; we also include guests and our suggestions to tell people how to whether this storm. For the past 4 months, I have been telling listeners to wait – that the Homeowners Relief Act, which has your support, will pass – and then, and only then, will we be in a position to negotiate meaningful mortgage modifications outside (and if necessary, inside) the bankruptcy process.

What am I to tell them now? Yesterday, I informed them how the political process works. When it wants something – it talks about it and the media then dives into the issue for more buzz. When it wants something to go away – it stops talking about it – so the media has nothing to ask. This is precisely what you are doing with two critical issues that face Michigan and the Midwest. The first, is the Bankruptcy legislation – here you have stopped talking about it – which means you’re abandoning it – and now it is going away.

The second – on the auto front. Before you acknowledged that bankruptcy would decimate the country because – (1) people will not buy cars from a company in bankruptcy because of (a) warranty concerns, and (b) recognition that resale value will be nil; and (2) that 3 million jobs downline are at stake.

Now – the “floated” notion of a 361 Bankruptcy for GM is being talked about – and the solution to put all at ease is that the Government will back the car warranties.

What is silent – and therefore not challenged by the media – is that no one will buy a car due to the resale issue; as well as the 3 million lost jobs.

Bottom line – good people are suffering real hardship in the Midwest. Many of these people broke rank and voted for you – and believe in you. I respectfully submit, however, that you need to follow through on the support y you pledged to them – and keep in mind, from here, the support of the banks, insurance companies and credit card issuers is looking a lot like the trickle down … that doesn’t trickle.

Of course, you are welcome to call in and address these issues as a guest on our show, next Saturday at 9 AM. Our US Congressmen (Thad McCotter and Gary Peters) appear as guests on a regular basis.

Most important – please “talk about the Bankruptcy reform” and make it happen. I recognize the monumental tasks you face – but I, like most of Michigan, believe in you and believe you can make it happen if you remember the people.

PLEASE WRITE PRESIDENT OBAMA AND REQUEST THAT HE RENEW HIS PLEDGE AND SUPPORT FOR THE CRAM DOWN LEGISLATION THAT WILL HELP HOMEOWNERS UNDERWATER IN THEIR HOMES …. YOU CAN REACH HIM AT:

www.whitehouse.gov/CONTACT/

Update – Mortgage Modification Bankruptcy Bill

As of 4-9-09 – Cram Down Bill is in Trouble …

MORTGAGE MODIFICATION, EXECUTIVE COMPENSATION LIKELY TO BE DROPPED FROM SENATE AGENDA

Senate Democratic leaders appear likely to drop several high-profile legislative issues from their agenda, including efforts to tax bonuses paid to corporate executives and giving bankruptcy judges the ability reduce mortgage payments on the primary mortgages of chapter 13 debtors, according to a CongressDaily report today. Senate aides said that the legislative agenda this year might increasingly focus on revamping financial regulations — which could reach the Senate floor in late summer — and on health care reform. The chamber will reconvene April 20 by taking up a fraud-enforcement bill that authorizes increasing Justice Department funding and authority to crack down on mortgage fraud and other crimes related to federal assistance programs. Those efforts come as more high-profile legislation sits on the back burner in the face of opposition from Republicans and moderate Democrats. Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Chairman Max Baucus (D-Mont.) have said that they have not dropped efforts to craft a bill slapping heavy taxes on bonuses for firms such as American International Group that received bailout money, but Democrats have no immediate plans to move an AIG bill in the face of White House concerns and strong opposition from the banking industry. Also faltering is mortgage cramdown legislation that lobbyists and some senators say lacks the votes to pass. Reid has said previously that he is prepared to drop the cramdown language provision from a broader housing bill if the votes are not there.

As of now, the bill has passed the House, but is being delayed in the Senate. Timing as of now looks like it will come up after the Spring Recess in mid April.

As of 3-18-2009 (No Change as of March 31, 2009)

Senate Democrat Says 60 Votes Not Likely on Cramdown Provision

A key Senate Democrat said yesterday that it was unlikely the chamber would consider a bill to allow bankruptcy judges to modify terms of a primary mortgage until after the spring recess, CongressDaily reported today. Sen. Evan Bayh (D-Ind.) said there is not enough support to prevent a filibuster of the bill that would allow mortgages to be restructured through a chapter 13 filing. “I think this is going to be probably not taken up until after the upcoming recess. But right now I think there is going be some difficulty in getting to the 60 votes,” said Bayh. Senate Majority Leader Reid said that timeframe was about right. “I would expect very soon after we get back after April recess that we’ll be working on what they [Banking Committee] report out,” he said. He is working with Judiciary ranking member Arlen Specter to narrow the eligibility for borrowers who could cram down the principal of their mortgages. Senate staffers met yesterday afternoon in an effort to work on a compromise. The House-passed version allows bankruptcy judges to consider whether homeowners were offered a “qualified” loan workout similar to a plan the Obama administration has announced to help lower the interest rate for up to 9 million families. But the House measure did not mandate that the borrower had to take such an offer if he were eligible, in lieu of cramdown – a provision advocated by the lending industry. Senate moderates are pushing for such a requirement. Bayh said he is looking to impose a sunset period for the cramdown provisions

Auto task force should pump up sales, not concessions

Commentary

Auto task force should pump up sales, not concessions

Ken Gross

We’re back to Stage 1 with the auto bailout. GM has been told it must gain greater concessions from the bondholders and the UAW within in 60 days or else. Chrysler has been told it has 30 days to cut a deal with Fiat or else. We’re told the banks and AIG are too big to fail. Our country’s largest manufacturing industry, however, is not.

It is apparent that this double standard is not going away. Rather than dwell on the idiocy, maybe we need to point our government in a different direction.

The Obama administration’s auto task force may have no auto experience, but it appears that it lacks business sense as well. The key to getting beyond this crisis is not endless streamlining, plant closings and union concessions. All of the concessions in the world will not cause a turnaround in the industry if sales remain at 60 percent of normal levels. No business can sustain a loss in 40 percent of its sales volume, yet alone a capital-intensive industry such as the auto industry.

The fact is that the industry will burn through the money unless auto sales are stimulated.

To do that, all that is needed is to provide government guarantees to the banks on leases and loans to buy domestic-made vehicles. The interest rates should range from 1 percent on fuel-efficient cars to 4.99 percent on the SUVs.

The federal program has to say to the banks: If you want the guarantee, then you must approve loans for buyers/lessees with FICO scores above 600 (not the ridiculous new requirement of 700 that has killed the market). If the buyer/lessee defaults, then the bank is covered on 90 percent of the loss following repossession and sale of the vehicle.

Government-backed guarantees to the bank are the foundation of the manner in which the Small Business Administration has done business for years in financing new businesses. Implementation of such a program would not be difficult.

How do you get the banks to comply? First, if the government guarantee is in place, then the banks will recognize a good deal and extend the credit. As a backup, the Treasury needs to condition any further Toxic Assets Relief Program funds to the banks so all such extensions of funding constitute a demand loan, which means the Federal Reserve can call the loan at any time and demand repayment. This is precisely how these same banks lend money to businesses.

If the banks don’t start lending money and doing as the Fed sees is in the public interest, then the Fed calls the loan. Either the banks play ball or they are out of the game.

Congress, it is not that complicated. Please, grabbing the microphones to scream about AIG bonuses and complaining about the auto industry of the 1970s. Instead, do something smart for a change.

Ken Gross is managing shareholder at the Metro Detroit law firm of Thav, Gross, Steinway and Bennett and host of “The Financial Crisis Talk Center,” which airs at 9 a.m. Saturdays on WDFN Radio 1130 AM.

Free Press Editorial Comment

(Click on Link for Full Story and Comments)

Economic relief
Strenghten bankruptcy laws to protect mortgage consumers

KEN GROSS • March 9, 2009

In times past, Americans were told to tighten our belts and streamline expenses. This economic crisis, however, is much different. e are in a war for survival. But if this is war — who is the enemy?
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The banks and credit card issuers are the enemy. How can banks be allowed to charge people 32% interest? How can banks have the right to bump interest rates up to 32% when you are only one day late on a payment? In the current crisis, the banks have made matters even worse. Thousands of people who have never been late on a credit card payment have seen their credit ratings ruined in the last four months.

Here’s what has happened. Your credit score is a function of your payment history, the amount of debt that you have and your available credit. When the credit crunch occurred, banks slashed the available credit lines of thousands of their customers, reducing their customers’ credit limits down to the outstanding balance on the accounts.

This action ruins the individual’s credit score because the cardholder’s ratio of debt to available credit immediately sinks to zero. Is there any doubt that the banks are the enemy? Many of these banks have taken billions of federal TARP money. Rather than using this money to ease the credit market, they have the audacity to use these funds to pay billions in bonuses to their employees.

So what is the solution?

The banks and mortgage lenders are not going to help unless it is in their financial interest. Our government, which has failed us miserably over the last decade, is finally waking up. The proposed Helping Families Save Their Homes in Bankruptcy Act of 2009 is a positive step. This legislation, which has the Obama administration’s backing, will provide two opportunities to obtain relief.

The legislation changes Chapter 13 bankruptcy law so that a person who seeks relief will have the ability to reduce the outstanding balance of their home mortgage to the fair market value of the property. More importantly, and what few people realize, is that this legislation will create an opportunity to negotiate with the lender based upon the threat of filing for bankruptcy relief without having to actually file. Every homeowner who is in a negative equity position will have a new channel to negotiate with the mortgage lender.
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Presently, loan modification negotiations are very frustrating and one-sided. This law will improve the homeowner’s bargaining position. The bank will no longer be in a position to dictate the negotiations because the bank will not want to face the prospect of adverse consequences when the bankruptcy judge determines the reduced amount and terms of the renegotiated mortgage.
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In the year 2025, the textbooks will speak of two economic crises that our nation faced. The first will be the Economic Crisis of the 2000 Decade. The second will be the Great Depression. Now is the time is for each of us to marshal our resources to pursue a strategy so that when greener pastures arrive, we are not saddled with debt from the past era.

Ken Gross is a managing shareholder at Thav, Gross, Steinway and Bennett, P.C., a Metro Detroit law firm specializing in financial crisis management strategy development. Gross is also host of “Financial Crisis Talk Center,” which airs at 9 a.m. Saturdays on WDFN Radio 1130 AM. Write to him at kengross@thavgross.com

Local Law Firm Provides Low Cost Customized Plan Amidst Financial Crisis

National Press Release Back to Press Releases Index
Local Law Firm Provides Low Cost Customized Plan Amidst Financial Crisis

Michigan Law Firm Thav, Gross, Steinway & Bennett Offer Comprehensive Financial Crisis Management Program

BINGHAM FARM, Mich., Feb. 13 /PRNewswire/ — Northville based, contracting plumber Ray Case has been in business for nearly 31 years and has seen his fare share of financial ups and downs. Specializing in restaurants, Case has never seen such dire times, nor has it affected him so severely. While he has been able to stay in business by downsizing and taking projects out of state, more than 2 million Americans have become unemployed since 2008, with nearly 425,000 of them Michiganders.

While possible changes in legislature are likely, attorney’s experienced in financial crisis management at Thav, Gross, Steinway & Bennett P.C. are providing interim relief to Michigan residents and business owners. The firm’s Financial Crisis Management program is geared towards identifying the best strategies for individuals and businesses coping with financial crisis. Recognizing that the need for this type of service out ways the cost, the firm has restructured its program, setting fees based on the client’s ability to pay.

“We are in the midst of an economic meltdown, and Detroit is ground zero,” said Kenneth Gross, Managing Shareholder at Thav, Gross, Steinway & Bennett, P.C. “It is imperative that people consult someone who is an expert in the field, so that the proper mix of services is selected to address the specific needs of the person who has the problems.” “We are finding that people are being provided self serving and improper advice by firms that are single-service providers such as loan modification, debt settlement, tax relief and bankruptcy only firms.”

Noted Case:

“Our family became overwhelmed with debt, draining our finances just to stay afloat. We interviewed several other attorneys and the program at Thav, Gross, Steinway & Bennett, P.C. They were the only ones that understood how wide ranging our problem was. It wasn’t about only eliminating debt – it was about finding a way that we could stay in business and earn a living. They offered a comprehensive course of action, that best fit our financial crisis. Since working with the firm our debt is controlled.”

As the first to identify financial crisis management as a specific process, the firm has been providing this unique type of service to individuals and businesses in the Metro Detroit community for 26 years. The firm pools its resources in tax collection defense representation, bankruptcy, business transactions, mortgage modification and debt resolution in order to navigate its clients through the difficulties imposed by intransigent lenders, the taxing authorities, the credit industry and the current dismal economy. Ken Gross, recognizing the plight of Michiganders, started the “Financial Crisis Talk Center” which airs every Saturday mornings at 9 AM on WDFN 1130 AM. The show focuses on the Financial Crisis from the perspective of the plight of Michiganders and has included guests such as Congressman Thaddeus McCotter and State Democratic Chairman Mark Brewer.

For more information, please contact Thav, Gross, Steinway & Bennett, P.C. at 248.645.8200, or on the web at www.thavgross.com.

SOURCE Thav, Gross, Steinway & Bennett P.C.

Call Me Irresponsible? A message from the Unheard American

I guess I’m irresponsible. How did I get here? I worked my way through college, paying my own tuition, with the benefit of student loans and scholastic scholarships. I purchased a starter home and followed the advice of the real estate experts – which in the 70-90’s was to extend yourself as far as you can – because residential real estate is a great investment and a guaranteed return and hedge against inflation. A few years later, I sold that home, with a nice $60,000 gain, which I used as the down payment to build our dream home at the time – a nice 4 bedroom home in the suburbs. Twenty years later –yes, I refinanced a couple of times – pulling equity out along the way to pay for my children’s college educations, to help finance their schooling abroad, as well as the summer camp experience and all those “things” that we believed would help our children to be well rounded and ready for the techno advanced next millennium. Yes – along the way, I also obtained credit cards, and carried relatively high balances, with reasonably low interest because I always had a stellar credit history.

So here I am now. In 26 years, I’ve never been late on a payment. Every bank that has extended me credit has been paid – timely and in accordance with the terms set. So what happened? Well – now my house that I paid $290,000 for 20 years ago, that appreciated to $480,000 over that period – is now worth $278,000. My mortgage – well that’s a nice fat $400,000. The President calls this “underwater.” I call this “upside down.” Many in Congress, who oppose aid to homeowners – say, “we’re not going to help the irresponsible.” Worse yet, the banks whom I have never missed a payment – have cut my credit lines so that I no longer have available credit. This action alone has caused my credit score to go into free fall because I now fail the critical “available credit” test.

Am I irresponsible? I have met all of my obligations, each and every day. I paid for my college and repaid my college loans. I paid for my children’s education and I raised two great kids. Now I’m “upside down” “underwater’ and irresponsible? Well – I may be “underwater” and “upside down” based on the value of my home. But I’m not the one that ran my business to the point where I was one day away from causing a catastrophic financial meltdown that could sink the entire world economy. I’m not the one who came hat in hand and begged our government for billions of $$$$$ of aid to stay in business. Who did that? We all know – Wallstreet did. The Banks did. AIG did. These same people are the ones that pumped up the real estate bubble with air — and then let it burst. They are the reason why my home has lost $200,000 in value in 2.5 years, and they are the ones who have put our country into free fall such that no one has the credit or desire to purchase a car. Worse yet – they are the ones who our government must now help or we will all fall off the cliff and become broken humpty dumpties.

Call me irresponsible? I don’t think so. In fact, if you’re not going to provide me any help – then I’ll tell you only once – don’t you dare call me irresponsible.

Are the Bank hording the $$$$$

The latest bad news – the government approves 700 Billion for the banks – and the banks take the money and stash it – rather than lending it. Rather than gripe about it – there is a simple solution. Most of the money has not been given out as yet – so STOP IT – pass a new bill and change the deal. Here’s how it should change – any Bank that wants the bailout money – must accept it as a “demand” loan – which means the Fed can call the loan at any time and demand repayment. This is precisely how these same banks lend money to businesses. If its good for the goose – its good for the gander! If the Banks don’t start lending money and doing as the Fed sees is in the public interest – then the Fed calls the loan. Thus – either the bank plays ball – or they are out of the game. Congress — it is not that complicated if you’d stop and think for a second.

Auto Industry Bail Out – What is so Complicated?

I don’t understand the financial wizards. If the Detroit Automakers go down – you might as well extend Lake Michigan to Lake Huron. Congress needs to get real. The key, however, is not just to give the big three money – they will burn through it unless AUTO SALES ARE STIMULATED.

To do that – all that is needed is to provide government guarantees to the Banks on auto loans and leases for the purchase or lease of domestic manufactured vehicles. The interest rates should range from 1% on fuel efficient cars to 4.99% on the SUV gas guzzlers. The Federal Program has to say to the Bank – if you want the guarantee – then you must approve loans for Buyers/Lessees with FICO scores above 600 (not the current ridiculous new requirement of 700 that has killed the market). If the buyer/lessee defaults, then the Bank is covered on 90% of the loss following repossession and sale of the vehicle.

This, coupled with enough money to get the Big 3 through the crises – is a plan that will work. Once auto sales and leases get going – so will our economy and only then will a turnaround occur.

So What Do You Think?

Do you believe that it’s possible for consumers to band together to effectuate change? I don’t think its nearly as complicated as one would think. All that is needed is a commitment to stand together as one unit. If enough people sign on to the program – the magic lies in the numbers. If you read this — please let me know your thoughts!