There were nearly 10,000 foreclosures across the state in the first four months of 2009. This trend is expected to continue for many months if not years. Maryland lawyers and the state judiciary of doing what they can to assist homeowners in dealing with imminent foreclosure of their homes. In so doing, more than 700 attorneys have volunteered their time under a statewide program known as the Foreclosure Prevention Pro Bono Project.

The Maryland Department of Housing & Community Development has an excellent website that links the user to valuable information about foreclosure assistance programs. It not only provides information to homeowners, but also to renters whose rental properties are in foreclosure.

Maryland laws regarding foreclosure proceedings have been amended over the past year to afford more procedural safeguards to homeowners whose homes may unknowingly be in foreclosure. Previously, notice of the foreclosure could be sent via certified mail. Under the new law, the notice of commencement of foreclosure must now be personally served upon the homeowner. On May 1, 2009, the Standing Committee on Rules and Procedures proposed various amendments to the rules related to foreclosures. Among other things, the amendments afford homeowners "a fair opportunity" to raise objections and defenses to foreclosure actions. Although homeowners have always had the right to challenge a foreclosure, the new rule clarifies the timing of such challenges and is written is easier-to-understand language. A complete version of the amendments to Title 14 of the Maryland Rules dealing with foreclosure procedures can be viewed at the Maryland Judiciary Website.

Belsky, Weinberg and Horowitz is a "debt relief agency" assisting individuals with the filing of Chapter 7 and 13 cases.  We can stop a foreclosure before it occurs and help to reorganize the missed mortgage payments and other debts.  Please visit our website for more information about the firm's consumer bankruptcy practice.

In Bankruptcy proceedings, all of your personal information is disclosed in schedules ranging from Schedule A through Schedule J. We will look at these schedules one at a time and explain the type of information that must be listed in these schedules in order to successfully complete your bankruptcy case.

What is a Schedule A?

Schedule A discloses real property that you own. Real property is considered to be items such as homes, condominiums, land, buildings, time shares, and so on. In any bankruptcy case, all of your real property must be disclosed in Schedule A, regardless of whether or not the real property is your place of residence, an investment property, or belongs to someone else but you are just listed on the deed for inheritance purposes. So long as your name is listed on the deed or on title to the real property, you have a legal ownership interest in the real property and are required to disclose it. Schedule A generally includes a column for a description of the real property such as, its address, whether it is a single family home, town home, or duplex, a separate column regarding the real property's estimated fair market value, and a column disclosing the total amount of any secured claims or mortgage balances secured against the real property. All real property you have an interest in must be listed on Schedule A regardless of your intentions of keeping the property or not. Even if your name is not on title to the real property, but you have an equitable interest in the real property, you are required to disclose that asset. An equitable interest may arise in real property, if for example, a person has passed and has left you their home, even though you are not listed on the deed,. Another example would be during the course of divorce proceeding and you are awarded your spouse's home and your name has still not been listed on the deed to the home. There are other events that could create an equitable interest in real property requiring you to disclose that asset. To learn more, contact the attorneys at Belsky Weinberg, & Horowitz, LLC

Anyone who has filed for consumer bankruptcy protection knows there is a great many pages of paperwork that must be completed before the filing.  There are several categories of papers:  the Statement of Financial Affairs, which is a list of questions that must be answered, the Schedules (A-J) that require disclosure of all assets and liabilities of various types, a Notice of Intention regarding the debtor's intention to retain or surrender secured property, the Disclosure of Compensation Form, which requires identification of any person accepting money to prepare the papers and the amount they charged, and the Matrix of Creditors, which serves as the main mailing list for the case.

In the series of discussions that will follow, we will discuss each form in greater detail and examine the intricacies of some of the issues presented when determining the appropriate answer to the questions being asked in the Statement of Financial Affairs, and the property and liability issues requiring disclosure in the Schedules.

In the end, we hope you will gain a better understanding of the complexities of a bankruptcy filing and contact a qualified lawyer for assistance if you are considering a bankruptcy.  The attorneys at Belsky, Weinberg and Horowitz, are always available to speak with you with your questions.  Call us toll free at (800) 895-5333. 

You may have heard the folks in D.C. mention that the worse in the economy seems to be over. You may also know that a great number of the mortgage loans that went into default that caused the current crisis have now traveled through the system. Foreclosures remain high, but the government bail out of big banks such as Bank of America, Citigroup and JP Morgan Chase, and insurer AIG have stemmed further significant negative economic impact caused by the first wave of mortgage defaults that began in late 2007.

You may ask yourself, "Did he just say first wave of mortgage defaults?" That's right!

No one in D.C. has said it yet but the worse for the economy may still be ahead of us in what is being called the second wave of mortgage defaults set to hit the economy beginning in the fall of 2009. Approximately $750 Billion worth of 4 & 5 year option arm mortgages are set to reset or recast themselves in the next 4 years. About three quarters of those loans will adjust next year and in 2011, with the peak coming in August 2011 when about 54,000 loans recast, the data shows.

An option arm mortgage is an exotic loan product with typically very confusing terms that usually end with a significant increase in monthly mortgage payments to the borrower. Many of these loans do not reset for several years, but once they reset there is usually no telling how high one's mortgage payment can become. For example, Shirley Breitmaier took out a $315,000 option ARM to refinance a previous loan on her house. Her payments started at 3/8 of 1 percent, or less than $100 a month, according to Cameron Pannabecker, the owner of Cal-Pro Mortgage and the Mortgage Modification Center in Stockton, California, who is working with Breitmaier. The loan allowed her to forgo higher payments by adding the unpaid balance to the principal. She'll be required to start paying principal and interest to amortize the debt when the loan reaches 145 percent of the original amount borrowed. Once this loan resets, her monthly mortgage payment will skyrocket to $3,500.00 per month! The next wave of mortgage defaults is littered with just these types of loans!!

"Option ARM borrowers hit with unaffordable monthly payments are another threat to the housing recovery and the economy", said Susan Wachter, a professor of real estate finance at the University of Pennsylvania's Wharton School in Philadelphia. Owners who surrender properties to the bank or are foreclosed upon for failing to maintain higher mortgage payments will further increase the supply of housing which in turn will further depress real estate prices and continue to de-stabilize the housing market. This will be part of the reason why the economic recovery will be long and slow as the next wave of defaults will act to continue to drag down the American economy as a whole.

There seems to be no end in sight, but come the spring of 2013, almost all of these exotic option arm mortgages will have been through the system. Do not look for a rebound in housing prices until at least 2012. To learn more, contact us at Belsky, Weinberg, & Horowitz, LLC.

On June 12, 2009, for the first time in two hundred years in Maryland, all three branches of Government came together with practitioners at the annual Maryland State Bar Association Law Conference in Ocean City, Maryland for a unique and historic gathering to report on what their branch of government has been doing in response to the foreclosure crisis and to share ideas of how we all can participate during this difficult economic condition. Sponsored by the Consumer Bankruptcy Section of the Maryland State Bar, speakers from all branches presented materials, opinions, procedures and predictions regarding the current crisis. The speakers were: Hon. Robert M. Bell, Chief Judge, Court of Appeals of Maryland; Hon. Duncan W. Keir, Chief Judge, U.S. Bankruptcy Court for the District of Maryland; Hon. Doyle Nieman, Maryland House of Delegates (House Environmental Affairs Committee); Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute; Phillip Robinson, Esq., Civil Justice, Inc.; Gerard R. Vetter, Esq., Chapter 13 Trustee (Baltimore Div.), Legal and Legislative Committee of the National Association of Chapter 13 Trustees; Anne C. Ogletree, Esq., Rules Committee; Secretary Thomas Perez; and Hon. Alan Wilner, Associate Judge (Retired), Court of Appeals of Maryland.

The message was clear that, although much work has been done thus far to extent assistance to those in danger or foreclosure, there is much more left to do and volunteers are needed.  Many state and federal rescue programs have been created, although those programs are falling short in assisting the vast number of homeowners in need of assistance. Many people either don't know or understand what loan modification programs are and who qualifies. 

The biggest warning came from the President of the American Bankruptcy Institute, Samuel Gerdano. He warns of a pending tidal wave of potential foreclosures set to hit the economy starting in the fall of 2009. Mr. Gerdano advised that starting this September and hitting its peak in 2011, the United States will see an additional $750 billion worth of 4 and 5 year option arm mortgages once again resetting. The amount of mortgage defaults will be greater than the first round already through the system. This means another collapse of the big institutions requiring yet another bailout. He communicated that the worse is not over, but instead, is just in front of us.

The program was a great success in part due to the outstanding efforts of the MSBA Consumer Bankruptcy Section Council member, Alexander Gordon, IV. It will be made available online in the future for rebroadcast.