Biggest Defaulters on Mortgages are the Rich

The NY Times is reporting that wealthy homeowners are quickly becoming the most common homeowners to go into default and foreclosure.  The article stated that homeowners with mortgages over $1 million are much more likely to stop paying, with 1 in 7 of these wealthy homeowners currently seriously delinquent, compared to 1 in 12 for homeowners with mortgages below the million dollar level who are currently seriously delinquent.

The article stated:

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

This is consistent with what I have seen throughout San Francisco and the Bay Area.  In my experience advising clients on various real estate and land use issues, I have seen numerous wealthy homeowners with properties and mortgages far north of $1 million who have fallen upon hard times.  For many of these homeowners, their own option is to stop paying their mortgages.  Sometimes homeowners are fortunate to have many years of ownership and equity built up, so they have options such as selling the property.

When they don’t have equity, then they need to consider attempting a short sale or a loan modification.  Unfortunately, due to the passage of SB 94 this past fall, homeowners attempting a loan modification are very unlikely to be able to hire an attorney to advise them on how to accomplish a modification.  That leaves a short sale or simply walking away as the most likely option.

Read the full article here.

John Corcoran is an Associate with Plastiras & Terrizzi law firm in San Rafael, California (Marin County).  He advises clients on real estate matters, small business issues, estate planning, and general civil litigation.  He may be reached at jcorcoran@ptlegal.com or (415) 472-8100 x211.

S.F. Chronicle publishes John Corcoran op/ed: “Feds should reject California’s loan modification rule”

The San Francisco Chronicle today published Plastiras & Terrizzi attorney John Corcoran‘s op/ed, “Feds should reject California’s loan modification rule”:

Shortly before April 15, California lawmakers passed a bill that will provide relief to Californians who have lost their home to foreclosure, sold their home in a short sale or obtained a loan modification by conforming state tax policy to federal rules that do not tax homeowners for forgiven mortgage debt. That bill is a step in the right direction, but earlier legislation, SB94, which prevents anyone from taking up-front fees to negotiate a loan modification, definitely is not.

And now the Federal Trade Commission wants to take that bad law nationwide.

SB94 by Sen. Ron Calderon, D-Montebello (Los Angeles County) was designed to crack down on greedy loan modification companies that took thousands of dollars from desperate homeowners but produced few or no results for them.

Those consumers need protections. That’s why the measure passed by an overwhelming margin.

But the bill contained major flaws that have resulted in unintended consequences….

You can read more by clicking here.

The Chronicle published another article on the front page today which discusses the increasing frequency with which banks are pursuing second mortgage debt for individuals whose homes have already been foreclosed on:

California is a nonrecourse state, meaning lenders cannot pursue borrowers for unpaid balances on home-purchase loans. However, home loans not used for the purchase – home equity lines of credit and second loans taken out after purchase – are recourse loans, which means lenders are legally entitled to collect the unpaid balance. Depending on the type of loan, they have four to six years to pursue borrowers.

You can read the full article here.

John Corcoran is an Associate with Plastiras & Terrizzi law firm in San Rafael, California (Marin County).  He advises clients on real estate matters, small business issues, estate planning, and general civil litigation.  He may be reached at jcorcoran@ptlegal.com or (415) 472-8100 x211.

Debut of Plastiras & Terrizzi e-Newsletter

Today, Plastiras & Terrizzi debuted its first e-newsletter, which will provide legal news and analysis on a range of subjects, including real estate, civil litigation, community association law, legal malpractice, and debt restructuring/bankruptcy, among other areas.  Check it out here.

Former NBA Star Chris Webber Sued by Landlord for Unpaid Rent on Sacramento Restaurant

Former five-time NBA All-Star Chris Webber, who played for the Golden State Warriors and Sacramento Kings, has become the latest victim of the economic downturn with the closing of his Sacramento-area restaurant.

Webber was sued Feb. 23 by his former landlord, the Promenade at Sacramento Gateway Shopping Center, for $1.8 million under the terms of the 20-year lease signed by Webber and his business partners.

Plastiras & Terrizzi featured in North Bay Business Journal

The North Bay Business Journal featured this article today which mentions Plastiras & Terrizzi:

Four agents, broker join Parkway Properties

Eisberg, Perlmutter, Angel and Walwyn more over from Orion

SAN RAFAEL – Parkway Properties Investment Corp., which has been handling commercial real estate transactions and property management for a pool of Bay Area investors, made a significant move further into property brokerage with the addition of a broker and four well-known North Bay agents.

Brian Eisberg, Jerry Angel, Martin Perlmutter and David Walwyn left commercial real estate brokerage Orion Partners Ltd. in late January to join Parkway.

Mr. Eisberg …. was attracted to Parkway for reasons including its investment advisory and virtually in-house real estate law counsel with Plastiras & Terrizzi.

Read more here

Mike Terrizzi, John Corcoran Oped appears in S.F. Chronicle

The below oped appeared in the S.F. Chronicle today, November 30, 2009

NFL stadium bills cut to the front of the line

by Mike Terrizzi and John Corcoran

Football fans in both Southern and Northern California were given something to cheer about when Gov. Arnold Schwarzenegger signed two bills to make it easier for developers to build a pair of NFL stadiums. Fans of the game who are also concerned about preventing potential abuse of environmental and competitive bidding law should be careful what they wish for.

The first bill, ABX381 by Assemblyman Isadore Hall, D-Compton, exempts developers of an NFL stadium project in the City of Industry (Los Angeles County) from the legal requirements of a thorough environmental impact report.

Click here to read more at SFgate.com…

It’s a Great Time to Buy a Home, And Also the Worst Time

It seems like it’s a lot easier to buy a house today than it was just a few years ago.  Home prices have plummeted, more homes are on the market, and fewer people are looking to buy a home due to the sluggish economy.  Washington D.C. has made buying a home easier by extending through 2010 the maximum dollar amount for “conforming loans,” which should increase availability of loans for buyers in expensive real estate markets such as New York, Chicago, and the San Francisco Bay Area.  Pres. Obama also just signed an extension and expansion of the first time homebuyer tax credit, which now applies to anyone who hasn’t owned a primary residence in the past three years and includes a new $6,500 tax credit for buyers who have lived in their home for five years or more.

Forrest Thomas, son Tyson, 14 months, and wife Samantha, potential buyers of a home in a short sale (Photo credit: The Santa Rosa Press Democrat)

Unfortunately, for each barrier that comes down, it seems another is quickly erected.

Gov. Schwarzenegger Signs SB 94 into law

Gov. Arnold Schwarzenegger has signed SB 94 by Sen. Ron Calderon into law.

SB 94 prohibits anyone, including loan modification agencies or attorneys, from collecting up front fees for mortgage loan modification services for residential properties.  The bill also prevents anyone from collecting any security to guarantee future payment (such as a lien) or collecting a “Power of Attorney” for the purpose of negotiating with lenders to perform a residential loan modification.  The bill sunsets in 2013.

SB 94 has received both praise from consumer groups who argue it will crack down on fly-by-night loan modification outfits which take money from desperate homeowners, and criticism from attorneys who argue that the bill will make it more difficult for homeowners to find an attorney who will represent them.

Although it is not clear yet what the long term affect of SB 94 will be, the bill will likely help by immediately inhibiting unscrupulous loan modification companies that have cropped up offering “loan modification” services for a fee without ever following through on their promises.

It will be interesting to see what happens to the many law firms (see here and here) which have become a cottage industry during the mortgage crisis of the past year, offering services such as loan modifications and foreclosure litigation.  Other law firms have already been shut down.

Plastiras & Terrizzi in the Marin Independent-Journal and Contra Costa Times

The Marin Independent Journal and the Contra Costa Times both mentioned Plastiras & Terrizzi’s new addition of associates Thane Schultz and John Corcoran.

As the Marin IJ reported:

Marin attorneys Thane Schultz and John Corcoran have joined the San Rafael law firm of Plastiras & Terrizi.

Schultz, a longtime

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Marin resident, will focus on family law and general civil litigation. His previous work experience included stints with a civil litigation firm and two years running a family real estate development business in Australia.

Corcoran, a Tiburon planning commissioner, previously worked for a Silicon Valley law firm focusing on estate planning, employment law and small business representation.

Marin attorneys Thane Schultz and John Corcoran have joined the San Rafael law firm of Plastiras & Terrizi.

Schultz, a longtime Marin resident, will focus on family law and general civil litigation. His previous work experience included stints with a civil litigation firm and two years running a family real estate development business in Australia.

Corcoran, a Tiburon planning commissioner, previously worked for a Silicon Valley law firm focusing on estate planning, employment law and small business representation.