California Bankruptcy Attorney Blog

In an effort to better protect consumers, lawmakers may soon require lenders to simplify the information they provide. Bloomberg News reported Feb. 23 that Democratic Sen. Charles Schumer of New York said in a recent Senate Banking Committee hearing that he no longer believes disclosure alone is enough to protect consumers from unfair or deceptive practices by credit card companies. Schumer, the force behind a 1998 law requiring the companies to put their banking information in a separate box, decried fine print and rate hikes caused by minor infractions written into credit card agreements.

The comment came on the heels of legislation introduced by Sen. Christopher Dodd, D-Conn. and head of the Banking Committee, that would change how credit card companies are allowed to change interest rates. Among other things, it would prohibit interest rate hikes unrelated to the cardholder's behavior and require that interest rate increases apply only to future purchases. And Rep. Carolyn Maloney, D-NY, has reintroduced her 2008 proposed amendment to the Truth in Lending Act.

In fact, Bloomberg wrote, two federal agencies have already issued rules intended to simplify the information provided to lenders. In December, the Federal Reserve found that the information on interest rates provided by credit card companies was so complicated that an ordinary person couldn't understand it, putting the credit card companies in violation of federal law. And more recently, the Department of Housing and Urban Development issued a three-page form intended to help mortgage borrowers understand the fees they will be expected to pay at their closings.

As Orange Count debt settlement attorneys, we believe these rules are (or would be) a step toward fewer loan defaults and more empowered consumers. As the Bloomberg article said, even Bush Administration officials believed that credit card fees and interest rate hikes are so confusing that an ordinary person truly can't understand them. Under those circumstances, the mandatory disclosure laws we already have are insufficient to truly protect consumers. The same goes for mortgage loan documents, which even the mortgage bankers in the article agree are too complex to allow buyers to compare offers.

Credit card companies don't seem to agree, but our Orange debt settlement lawyers believe that consumers and lenders both win when consumers have information that allows them to make smart choices. As things currently stand, we see too many clients who get into debt without realizing what they've agreed to -- and stay in debt without realizing that they have options. Our Placentia debt settlement attorneys can help clients negotiate with lenders to end their debt in exchange for a payment they can afford, set up a payment plan or explore whether bankruptcy is appropriate for them. We can also help stop violations of the federal Fair Debt Collection Practices Act by harassing, aggressive debt collectors.

If you're feeling overwhelmed by your debt and you know you need help, Howard | Nassiri can help. For a free, confidential consultation, please contact us online as soon as possible or call us toll-free at 1-800-872-5925.

If you are one of the millions of Americans having trouble modifying a securitized mortgage, you may be interested in this article from the Feb. 23 issue of BusinessWeek magazine. Entitled "What's Holding Back Mortgage Modification?", it takes a look at one aspect of the foreclosure crisis you may have missed -- unless you own a mortgage that's been bundled into a security and sold as an investment. These securitized mortgages are difficult for homeowners to modify after the fact, which is one of the factors driving the foreclosure crisis: Borrowers who run into financial trouble frequently can't renegotiate the terms of securitized mortgage loans.

The conventional wisdom says this is because mortgage servicers, who administer home loans, can't do much to change the terms of loans without breaking their contracts or provoking lawsuits from investors who have a stake in those loans. This article suggests otherwise. Experts quoted in the article say mortgage servicers have plenty of leeway to take action, but have dragged their feet because they earn more from a foreclosure than they would from a loan modification, which requires extra staff and resources. The fear of litigation is real, the article said, but the contract problems may be exaggerated to mask that fear.

Market pressure and the federal government may soon be ending that, BusinessWeek reported. Congress is considering a law shielding mortgage services from investor lawsuits -- and as we've blogged here before, it is seriously considering "cramdown" legislation that would motivate lenders to work out loan modifications before homeowners are forced to file for bankruptcy. This is good news for the homeowners at the end of the chain, who are the ones suffering most from lenders' and servicers' refusal to negotiate loan modifications. There are no guarantees, but a law that gives lenders an incentive to take loan modifications seriously could keep thousands of homes in Southern California alone out of foreclosure -- and their homeowners out of bankuptcy.

Howard | Nassiri represents homeowners who need legal help negotiating with lenders and mortgage servicers for a loan modification. Our Anaheim loan modification attorneys help clients convert balloon or adjustable-rate mortgages to conventional loans; negotiate for a change in interest rate or other payment terms; and, if necessary, challenge unfair or predatory lending practices. We also help clients who are considering a California bankruptcy as a way to solve serious debt problems. If you need legal help to save your home and you'd like to learn more, we offer free, confidential consultations to potential clients. To speak to our experienced Buena Park loan modification lawyers, you can call us toll-free at 1-800-872-5925 or contact us online as soon as possible.

As part of the federal stimulus bill, the federal government on Feb. 23 raised the limit at which an Orange County home loan is considered a "jumbo loan" rather than a "conforming loan." According to the Orange County Register's Mortgage Insider blog, Orange County is one of a handful of high-cost areas of the country that qualify for the higher threshold. The higher limit matters because the federal loan-purchasing agencies Fannie Mae and Freddie Mac may not purchase "jumbo" loans, which in turn means those loans carry higher interest rates and are more difficult to get.

Until 2008, the threshold was just $417,000, a policy that disproportionately affected homeowners in high-cost areas like Southern California. Now, the limit is $729,750, allowing homeowners to borrow up to that amount to buy a new home or refinance an existing one.

At first blush, this may sound like great news for Southern Californians. Unfortunately, as Cypress mortgage loan modification lawyers, we know it's too little, too late for many homeowners. Most importantly, the policy change can't do much to help people who are already homeowners and have gone "underwater" -- meaning their home is worth less than their debt -- thanks to a sharp drop in home values. Those people might like to refinance their homes to take advantage of the better rate, but generally can't because the drop in their homes' values means they don't have at least 20% equity in their homes. And 20% equity is the threshold for most lenders to consider refinancing, although the Obama foreclosure prevention plan expands that slightly to include homeowners who are underwater by 5%.

Furthermore, homeowners still must qualify for a large loan in order to take advantage of the new policy. That cuts out people with lower incomes -- the people who may need refinancing the most. Because a lower income makes it harder to qualify for a conventional mortgage loan, many people with moderate incomes were offered "subprime" or non-traditional loans, some of which have become unrealistic as their interest rates reset and their home equity drops. It may be appropriate that people with low incomes can't qualify for a large loan, but the policy change won't help them get the refinancing they need.

However, these and other homeowners who are trapped in bad mortgages may still be able to get help through mortgage loan modifications. Refinancing replaces one debt with another, generally more favorable debt; a mortgage loan modification changes the terms of your existing debt without any new loan. At Howard | Nassiri LLP, a large part of our practice is representing homeowners who need to modify their mortgages to better reflect their financial situation. Our Anaheim mortgage loan modification attorneys can help you negotiate with the bank for a lower interest rate, a longer repayment period or changes to the terms of "toxic" mortgages. We can also help clients who are victims of predatory lending.

If this sounds like your situation and you're ready to explore your options, Howard | Nassiri's Buena Park mortgage loan modification lawyers offer free, confidential consultations. To set one up, please contact us online as soon as possible or call 1-800-872-5925.

If you bought a home in California between 2003 and 2008, you may have gotten some good news on Feb. 20. That was the day when Gov. Arnold Schwarzenegger signed a bill putting a 90-day moratorium on some, but not all, foreclosures of California homes purchased between Jan. 1, 2003 and Jan. 1, 2008. It goes into effect in late May.

The bill is already under fire from consumer groups for being too weak, according to the San Francisco Chronicle. They criticize its exceptions for loan servicers who have a mortgage loan modification program in place that meets certain standards. Among other things, the program must allow deferral of at least some principal, lower interest rates for five years or extend the terms of the loan. Furthermore, the bill requires borrowers to adjust payments to about 38% of the borrower's income, which is higher than the 31% put forth in President Obama's foreclosure prevention plan unveiled Feb. 18. And as a consumer advocate told the newspaper, merely having a program does not guarantee that homeowners will successfully renegotiate their loans.

As Stanton mortgage loan modification attorneys, we think they're right to be skeptical. Because we specialize in helping homeowners deal with overwhelming debts, we have seen firsthand that banks are not willing to renegotiate many mortgages, sometimes even when it's in their own best financial interests to do so. That's why the president's foreclosure program tries to reward banks for serious attempts to renegotiate loans (the carrot) -- and why Congress is considering giving bankruptcy judges the power to "cram down," or change the principal on, loans (the stick). As the article describes it, the state bill allows lenders an exception for merely having loan modification procedures in place, with no requirement that they actually use it.

Nonetheless, the housing market's downturn means homeowners are in a better position than ever to negotiate for home loan modifications. Howard | Nassiri LLP has an active practice representing homeowners who need legal and negotiation expertise to change the terms of their loans to something more livable. Our Southern California mortgage loan modification lawyers have helped many homeowners change the length of their mortgages, their interest rates, the forms of their loans and sometimes even the principal owed. If you know you need this kind of help and you'd like to learn more at a free, confidential consultation, contact us online today or call us toll-free at 1-800-872-5925.

As Anaheim bankruptcy attorneys, we were pleased to see in the Baltimore Sun that Congress is considering legislation that would set national standards for nonprofit hospitals' "charity care" -- free or reduced-cost care for people with low incomes. Before Medicare and Medicaid were created, hospitals had to meet specific charity care standards to qualify as nonprofits; afterward, they only had to prove that they provided a benefit to the community. After an IRS report was published showing that a fraction of nonprofit hospitals provide the bulk of the nation's "charity care," Sen. Chuck Grassley, R-Iowa, told the newspaper that he would write legislation to bring back the IRS requirement, if the IRS itself would not.

Many nonprofit hospitals do provide charity care, but there is no federal requirement that they do so and no national standard to make it consistent. Hospitals may set eligibility at a certain percentage of the federal poverty guidelines or take into account assets as well as household income, with no requirement to adjust for the high cost of living in urban areas or other circumstances. They are free to set any standard they like, and they are not required to verbally tell patients about their programs. All of this conspires to keep the rate of charity care low. Grassley's proposal could change that by requiring nonprofit hospitals to provide charity care equaling at least 5% of their annual revenue.

This issue matters to our Santa Ana bankruptcy lawyers because medical debt is responsible for more than half of all consumer bankruptcy filings, according to a 2005 study at Harvard. That's true even for people who have some amount of health insurance, but not enough to fully cover their medical problems. Hospital bills, which can quickly reach five or six figures, are a big part of that problem. If nonprofit hospitals are failing to provide a significant amount of charity care, as the IRS report suggests, we like the idea that they should choose between increasing that care or accepting for-profit status and taxation.

At Howard | Nassiri LLP, we specialize in helping consumers who feel overwhelmed by debt problems, including problems with medical debt as well as credit cards, mortgage loans and others. Our Cypress bankruptcy attorneys can help clients decide if bankruptcy is the best way to deal with the debt, help with debt settlement or fight unfair, harassing practices by debt collectors. If this sounds like you and you know you need help, you can contact us online for a free, confidential consultation or call 1-800-872-5925.

The Department of Justice's office in the Eastern District of California announced Feb. 20 (PDF) that it has indicted five people in a mortgage fraud scheme causing an estimated $1 million in losses. According to the U.S. Attorney's office, the scheme started with home buyer Dennis Moore, who bought several properties in and around Lake Tahoe. Moore insisted on very large commissions for his real estate agent, alleged co-conspirator Haiying Fan, and agreed to pay substantially above market price to achieve this. He then had alleged co-conspirators Veronika Wright, a mortgage broker, Gary George, a tax professional, and Mitchell Wright help falsify his income. Fan then kicked back the majority of the commission to Moore.

In the popular imagination, mortgage fraud is most often the work of an individual home buyer who lies about his or her income in order to afford a home. That most certainly does happen, but as Southern California predatory lending lawyers, we are also interested in mortgage fraud by brokers and other financial professionals. This conspiracy involved professionals in nearly every part of the real-estate-buying chain: a buyer, a real estate agent, a mortgage broker and even a tax professional. Most of these people would understand the home-buying process much better than the average home buyer, which puts them in a good position to exploit buyers (and sellers) who don't understand the process or their rights.

As the DoJ press release notes, the harm that stems from mortgage fraud goes beyond losses to the bank. For one thing, mortgage fraud can directly harm buyers who are taken in by misleading statements or outright lies by brokers or lenders. For another, mortgage fraud usually means a quick foreclosure, which hurts nearly everyone involved in some indirect way -- investors who lose money, other home buyers who can't get a loan, even neighbors who watch their property values decline. As we are currently seeing, too many foreclosures can have a negative effect on the national or even global economy.

Mortgage fraud, when committed by a broker or a lender, is a form of predatory mortgage lending -- and predatory lending is illegal under multiple state and federal laws. If you believe you were lied to when you refinanced or originally purchased a home, you may be a victim. Howard | Nassiri LLP's Cerritos predatory lending attorneys can help clients sue to recover all of the payments they made on an illegal, unfair loan, as well as attorney fees and other costs of the lawsuit itself. If this situation sounds all too familiar to you, please contact us online or call us at 1-800-872-5925 for a free, confidential consultation.

In an effort to combat fraud by mortgage brokers, a state senator introduced legislation Feb. 24 to increase penalties faced by corrupt brokers. The Santa Monica Daily Press reported that Sen. Fran Pavley, D-Santa Monica, introduced a bill moving mortgage fraud from a misdemeanor crime in California to a felony punishable by two to four years in prison for a single crime. Those accused of engaging in a pattern of fraudulent behavior could face up to five years in prison. The bill would also allow police and prosecutors to get real estate records through a court order, which is intended to expedite the process. It's backed by the California District Attorneys Association.

Pavley told the newspaper that the current misdemeanor law doesn't do enough to deter mortgage fraud, which rose by an astounding 1,400% between 2000 and 2008. The Los Angeles region is the FBI service area with the most mortgage fraud complaints in the nation, and California ranks fourth in suspected mortgage fraud per capita. And, Pavley pointed out, many victims of mortgage fraud by brokers are elderly, low-income or people with limited English skills who are easier to mislead into taking out "subprime" mortgages they can't afford. Georgia was once the state with the most per-capita mortgage fraud, the article said, but similar bill passed in 2005 has substantially decreased mortgage fraud.

Mortgage brokers, who act as a conduit between buyers and lenders, commit mortgage fraud when they intentionally submit false information to lenders, buyers or both. Examples of mortgage fraud against lenders include lying about the borrower's income and inflating the appraised value of a home. Examples of fraud against buyers includes misleading them about the terms of a loan, waiting until after closing to disclose important information about the loan or inserting hidden clauses into a contract. These are all examples of abusive and unfair predatory lending, some of which might violate California state law and the federal Truth in Lending Act. And as Pavley said, dishonest brokers are most likely to target immigrants, the elderly and other groups that are not likely to be sophisticated about the complex mortgage process.

At Howard | Nassiri LLP, our Orange County predatory mortgage lending lawyers aggressively protect our clients from deceptive and unfair lending practices. We help clients who believe they were lied to or substantially misled when they bought or refinanced their homes. In a Fullerton predatory lending lawsuit, we can help you recover all of the payments and closing costs you made on the illegal, predatory loan, as well as attorney costs and other fees related to the case itself. Even better, establishing that a loan was predatory allows you to save your home from foreclosure in many cases. And our Westminster predatory mortgage lending attorneys offer free consultations to all potential clients. To set one up, please contact us as soon as possible through our Web site or call us toll-free at 1-800-872-5925.

The Department of Justice announced Feb. 23 (PDF) that it had successfully prosecuted a woman who participated in a mortgage fraud scheme. Manpreet Singh of Stockton was sentenced to six months of home detention, five years of probation and payment of $163,500 in restitution for acting as the "straw buyer" for a larger mortgage fraud enterprise. Singh played the role of a home buyer in two different home purchases, claiming income four to seven times higher than her actual income from working at a pizza restaurant. The true buyer, co-defendant Ifthikar Ahmad, paid Singh $15,000 for signing the fraudulent documents. The homes were eventually foreclosed at a loss of $163,500 to the banks.

It's clear how this scheme hurt the banks involved, which lost more than $150,000, but if you're not familiar with the interconnected mortgage financial system, it may be difficult to see how it harms individual consumers. However, for Buena Park bankruptcy and mortgage loan modification attorneys like us, the relationship is quite clear. The press release doesn't go into details about the scheme, but frequently, a home purchased through fraud is immediately rented out to an innocent renter. When the bank forecloses, which it inevitably will when the buyer doesn't make payments, that renter will be evicted -- often with no warning. And of course, the straw buyer's credit is destroyed by the foreclosure.

But the indirect effects of the scheme are more widespread, as students of the ongoing foreclosure crisis are finding out. Because foreclosure is inevitable, the scheme drives up foreclosures and raises the chance that the home will sit vacant, both of which drive down property values for honest homeowners. The rise in foreclosures makes banks less likely to lend, because they have less money and see a greater chance of default. And if the mortgage was securitized -- bundled into an investment -- that mortgage-backed security also loses value, harming the stock market as well. As we have seen, there are substantial further effects when this happens too often, resulting in a dramatic drop in the stock market, plunging home values and severe difficulties getting a loan.

At Howard | Nassiri, we have an active practice in helping clients negotiate for a mortgage loan modification that accurately reflects their ability to pay and the values of their homes. Mortgage fraud schemes like this one make it harder for our Hawaiian Gardens mortgage loan modification lawyers to help our clients by robbing them of home equity and making it harder to get a refinancing loan. In some cases, a transaction that homeowners could once have handled on their own now require intervention, pressure and negotiating skills from an experienced Orange County loan modification attorney.

If you're trapped in a bad loan by the foreclosure crisis, Howard | Nassiri can help. To set up a free, confidential consultation, please contact us online or call us at 1-800-872-5925.

It's extremely important to know which of your debts are actually dischargeable -- that is, eligible to be erased -- before you file for bankruptcy. All too often, Californians who file for bankruptcy without help from Southern California bankruptcy attorneys find that their debts aren't covered by their filing. If it can't be fixed, this could substantially damage their credit for the next decade without much actual benefit.

To some extent, which debts are dischargeable depends on your circumstances, but some debts are never or almost never dischargeable. Even then, this still depends on which type of bankruptcy you choose. Remember, most consumers will file for either Chapter 7 bankruptcy, which is liquidation, or Chapter 13, reorganization. Chapter 13 is best for people with an income and/or substantial property to protect, while Chapter 7 is best for non-homeowners with a large amount of debt not tied to any collateral.

Under Chapter 7, you can never or almost never convince a court to forgive these kinds of debt:

• Court-ordered payments, which includes child support, spousal support and any judgment from a lawsuit against you.
• Federal and state income taxes due for the past three years.
• Criminal fines (including DUI cases) and court-ordered repayments.
• Any debt created by fraud on your part. For example, if you lied on a loan application, that debt isn't dischargeable. This also covers debts you ran up right before you filed for bankruptcy.
• Federal student loans that have been in repayment status for less than seven years.
• Any dischargeable debt that you used to pay off non-dischargeable debt.

It's also very important to realize that any debt you didn't list on your bankruptcy petition is non-dischargeable. Even if you made an honest mistake, that debt is excluded from your bankruptcy case.

Things are a little different in Chapter 13, which takes longer than Chapter 7 but allows many more debts to be discharged. Chapter 13 debtors still may not discharge debts from:

• Child support, jury verdicts and other legal judgments
• Fines related to criminal cases
• Federal student loans
• Taxes for which no return was filed

However, they can discharge at least part of their tax debt, as well as debt for things like employee wages, which wouldn't be dischargeable under Chapter 7. More importantly, a Chapter 13 filing allows filers to hang on to property that they might have to give up under Chapter 7, such as heirloom jewelry.

This is just the beginning of the story. For a more complete understanding of your situation, experts recommend that you talk to an experienced Orange County bankruptcy lawyer. At Howard | Nassiri, we specialize in helping individuals and families that need help understanding all of their debt relief options, including bankruptcy. We offer free consultations to potential clients, so there's no risk in speaking to us about your case. To set up a free consultation, please contact us today or call toll-free at 1-800-872-5925.

As Southern California loan modification lawyers, we were interested to see a Feb. 22 article in the Chicago Tribune about an unusual tactic homeowners are using to stave off foreclosure: lawsuits. The lawsuits generally claim that the homeowners are victims of predatory lending, but according to the article, they are not exclusively intended to correct injustices caused by predatory lending. In addition, it says, the lawsuits intend to delay foreclosure in time for the homeowners to save for additional payments or give them added bargaining power.

Frequently, the newspaper said, these lawsuits ask the lender to produce documents proving the debt is owed. Without those documents, a judge is free to cancel the foreclosure. That can be a problem for lenders because documentation can be lost when four or five financial companies are involved. Once, homeowners rarely challenged lenders to prove the debt -- but with foreclosures at record levels, more may be trying it.

As Orange County predatory lending attorneys, we know predatory lending lawsuits are nothing new, because we file them whenever necessary to protect our clients' legal rights. However, it looks like many of the lawsuits described in the article are less about predatory lending than exploiting a technicality in the law. Judges dislike it when any party shows a lack of respect for the legal process, and some are willing to punish lenders for failing to meet basic requirements to prove the debt, even when it's clear they own that debt. However, we wonder if this isn't just delaying the inevitable for homeowners who know they legitimately owe the debt.

Howard | Nassiri LLP's Buena Park predatory lending attorneys vigorously defend victims of unfair or misleading tactics and violations of the federal Truth in Lending Act. But even if you're not a victim of predatory lending, our Garden Grove mortgage loan modification lawyers may be able to help you come to a more workable agreement with your lender without litigation. Sometimes, merely the knowledge that they could be sued gives lenders an extra incentive to discuss changing the interest rate, repayment period or other features of your loan.

Howard | Nassiri offers free, confidential consultations to potential clients, so you have nothing to lose from speaking to us about your rights and your situation. To set up a free consultation, please contact us online today or call toll-free at 1-800-872-5925.

If you're considering bankruptcy, you probably didn't get too far into your research before you found references to secured or unsecured debt. Most people don't know the difference, but as Orange County bankruptcy attorneys, we can tell you that which type of debt you have is very important. Whether your debt is secured or unsecured can dictate whether you file at all, and if you file, which kind of bankruptcy you choose, which determines how long the bankruptcy will be part of your life.

Secured debt is any debt tied to collateral -- an object of value. If you fail to pay back a secured debt, the creditor has the legal right to take the collateral and sell it to recover its costs. A home mortgage and a car loan are two very common types of secured debt, but not the only types. Another type of secured debt is a lien, which is a legal claim to a property specifically intended to secure a debt. The IRS may put a tax lien on the property of someone who has unpaid taxes; a construction company may put a mechanic's lien on the client's property to ensure that it gets paid.

Unsecured debt is basically every other kind of debt -- anything without collateral. If you fail to pay this kind of debt back, the lender can't touch your property, so it generally must go after your credit rating. Credit card debt and medical debt -- both very common reasons to declare bankruptcy -- are both unsecured debt.

Which type of debt you have determines which type of bankruptcy is best for you. Chapter 7 bankruptcy is best for individuals and married couples who have a lot of unsecured debt. Chapter 7 is called liquidation because you essentially collect all of your assets that are not protected -- sometimes including home equity -- then sell them and pay your creditors with the proceeds. This is a relatively short process. However, it's not available to everyone -- there's a "means test" that you must pass. Essentially, Californians pass the means test for Chapter 7 if their income over the past six months was below California's median income, which was $60,032 for a two-person household in 2006.

If your income is above the median for your family's size, you'll have to do more complicated tests, but you will probably end up in Chapter 13 bankruptcy. Chapter 13 is a "reorganization," in which you pay off your debts over three to five years under court supervision. It's considered better for people who have problems with secured debt, especially mortgage debt, because it allows them to keep the equity they've already built in their homes. If you're behind in your mortgage and you're determined not to let the home go into foreclosure, you may want to consider Chapter 13 bankruptcy. The big drawback, of course, is that Chapter 13 filers spend three to five years tied to a repayment plan.

Much more goes into deciding which type of bankruptcy is right for you. Because bankruptcy law is complicated and declaring bankruptcy harms your credit for seven years, experts strongly suggest that you speak with a bankruptcy lawyer before you file. The Southern California bankruptcy attorneys at Howard | Nassiri offer free consultations -- meetings at which we learn about potential clients' situations and help them understand their options. To set one up for your family, you can call us at 1-800-872-5925 or contact us online.

Good Morning America ran a piece recently on a strategy that more and more homeowners are using to prevent foreclosure: Asking banks to produce the note (legal document) that proves they own the debt. This won't stop foreclosure permanently, but it does buy time, since most lenders have to scramble to figure out where in the chain of banks, mortgage servicers and investors the note has landed. For some people, that's enough time to get the money together to save the home.

If you're facing foreclosure or know you will soon, and you believe you could save your home with changes to the terms of your loan, Howard | Nassiri LLP can help. Our Anaheim loan modification lawyers negotiate with banks for changes to the principal of the loan, interest rates or the length of the repayment period. To speak to us today at a free, confidential consultation, please contact us online or call 1-800-872-5925.

President Obama unveiled the basics of his administration's foreclosure prevention plan on Feb. 18. The $75 billion Homeowner Affordability and Stability Plan was widely anticipated because it was expected to solve one of the biggest problems underlying the "mortgage meltdown" -- lenders' unwillingness to renegotiate mortgage loans with homeowners who are not yet behind in payments, or whose loans have been securitized. Details will be announced March 4, but CNN Money ran an article the next day seeking to help homeowners decide whether they'll benefit from the plan.

In short, the plan allows refinancing and mortgage loan modifications for a greater number of homeowners -- but only if they qualify. For starters, refinancing help is only available for people who have loans owned or guaranteed by Fannie Mae or Freddie Mac. And there are two other conditions that disqualify many Orange County homeowners. One is that "jumbo" loans are not eligible for refi. A loan made in 2007 or before is considered "jumbo" if it's $417,000 or more; that ceiling was raised in 2008 and again this year, but applies only to loans made during those years. And if the value of your home has fallen so low that your debt exceeds the home's value by more than 5% -- that is, if you're "underwater" by more than 5% -- you also would not be eligible for refinancing help.

However, you my still be eligible for help negotiating a modification of the terms of your loan. Qualifying homeowners include anyone who is in default or at risk of default (but still current), including people who are underwater and those with high mortgage debt compared to their income. These homeowners can have their payments lowered to 31% of their before-tax income for five years, through a reduction in their interest rates or principal owed. If they make all of their payments on time, they're also eligible for $1,000 a year in incentive payments for each of the five years. However, the program is not available to real estate investors who don't live in the home, people who were dishonest in their loan applications or people for whom foreclosure would still be cheaper.

Unfortunately, this plan is unable to help many homeowners here in Southern California get refinancing, even those whose loans are held by Fannie Mae or Freddie Mac. Because median home values were above $700,000 in Orange County just a few years ago -- and have dropped so much since -- literally thousands of OC homeowners have jumbo loans or are underwater by amounts that exceed the 5% threshold. Homeowners may still be able to get a loan modification, but that plan explicitly excludes people who would be cheaper to foreclose on than help. And it doesn't help people who are unable to afford any payment at the moment because of a catastrophic financial change like a layoff.

Nonetheless, for qualifying homeowners, the plan could be a badly needed lifeline, especially for those frustrated by banks' unwillingness to negotiate before they were in default. At Howard | Nassiri LLP, we have an active mortgage loan renegotiation practice, serving people not covered by the Obama foreclosure plan as well as those who may qualify. Our Anaheim mortgage loan modification attorneys have successfully renegotiated the terms of mortgages to levels our clients can afford, including non-traditional or "subprime" mortgages. If you know you need the help of an experienced negotiator to modify your home loan, you can contact Howard | Nassiri online today or call 1-800-872-5925 to set up a free, confidential consultation.

People who are considering bankruptcy are understandably concerned about what property they would be allowed by the bankruptcy court to keep -- and what they'd have to give up. Of course, this is different for everyone because it depends heavily on the circumstances, but bankruptcy law allows states to define lists of property that is protected from being sold in the bankruptcy and used to pay off debts. These lists are called exemptions, and they may partly or fully protect property. For example, retirement benefits are generally fully exempted, but only a set amount of equity in a home is exempted.

California has the dubious distinction of being the only state with two different lists of exemptions. (However, our state does not allow bankruptcy filers to choose federal exemptions, as some states do.) People filing for bankruptcy must choose one or the other. Married couples can double some exemptions, but they must choose the same list of exemptions. Again, which one you should choose depends on your circumstances, and you should get help from a Southern California bankruptcy lawyer to decide which is best for you. But generally, one list of exemptions is shorter and less complex, while the other exempts more property.

We find that clients are most concerned about the homestead exemption, which shields a certain amount of equity they have built in the homes they actually live in -- that is, investment properties and second homes don't count. Under one exemption list, there is no residency requirement; all filers can exempt up to $17,425 in equity in a home they occupy, including condos, co-ops, mobile homes and houseboats. Under the other exemption list, you can only take the homestead exemption if you have lived in California for at least 40 months (three years and four months), but the exemption amount is higher and depends on your age, income and marital status. The exemption protects:

• $50,000 for single people
• $75,000 for families where no member has another homestead
• $150,000 for people 55 or older if they're single and make less than $15,000; or married and make less than $20,000
• $150,000 for people 65 or older, or disabled people

Other available California exemptions include:

• Personal and household property such as furniture, appliances, clothing and food.
• Health aids (such as a prosthetic limb).
• Burial plots.
• A motor vehicle worth up to $1,900 or $2,775, depending on the exemption list.
• Jewelry up to $5,000 or $1,150.
• Under one exemption list, 75% of wages paid within 30 days of filing for bankruptcy.
• Disability benefits and most forms of life insurance.
• Alimony and child support.
• Many types of public benefits (such as unemployment) and certain pensions.

As you can see, figuring out how California bankruptcy exemptions will affect your case is usually not accomplished quickly. If you're considering bankruptcy and you want to know more about which property you can protect, you should consider talking to the experienced Anaheim bankruptcy attorneys at Howard | Nassiri. Our law firm specializes in helping clients with bankruptcy and debt problems, including mortgage problems. And we offer free consultations to all potential clients. To set up a free, confidential meeting with us, send us an email today or call 1-800-872-5925.