Billy and Akaisha Kaderli retired two decades ago at the age of 38 and began traveling the world. As recognized retirement experts and internationally published authors on topics of finance and world travel, they have been interviewed about retirement issues by The Wall Street Journal, Kiplinger?s Personal Finance Magazine, The Motley Fool Rule Your Retirement newsletter, nationally syndicated radio talk shows and countless newspapers and TV shows nationally and worldwide. They wrote the popular books The Adventurer?s Guide to Early Retirement and Your Retirement Dream IS Possible.
Source: retireearlylifestyle.com
Video: Student Loan Forgiveness: Obama?s Debt Solutions
***Short Sale Act Ends December 31, 2012*** Have you Filed?
?If you owe a debt to someone and they cancel or forgive that debt, the canceled amount is usually taxable,? as income on your tax return. Following a foreclosure, short sale or loan modification, a lender forgiving a portion of your debt issues a 1099 in the amount of the forgiven debt. ?The Mortgage Debt Relief Act of 2007 allows taxpayers to exclude income from the forgiveness of debt on their principal residence.?
Source: trulia.com
Federal Housing Finance Agency Rejects Debt Forgiveness Program
In contrast, some economists have argued that debt forgiveness is an important method of stimulating the economy.?New York Times columnist and economist Paul Krugman even called for DeMarco to be fired in response to FHFA?s decision. He criticized the agency for not taking into account the possible stimulative effects of the program when conducting its analyses. Democratic lawmakers sounded frustration with the decision, and the U.S. Treasury Department has responded by urging FHFA to reconsider its decision.
Source: upenn.edu
Bankruptcy Law Clinic: The Mortgage Forgiveness Debt Relief Act and Debt Cancellation
In the world of public finance, Orange County, California, has long had an unfortunate distinction: In 1994, the county filed the largest municipal bankruptcy declaration in history, seeking court assistance to restructure $1.7 billion in debt. This month, however, Orange County finally lost its dubious claim to fame. On November 9, political leaders in Jefferson County, Alabama ? home of Birmingham, the state?s largest city ? asked a federal bankruptcy court to help the county restructure debt of more than $4 billion. The county?s debt burden stems from a disastrous investment in a local sewer system and amounts to nearly $7,000 for each of the 658,000 men, women and children who call the county home. That a bankruptcy declaration of such magnitude is possible has raised alarms nationally over whether more municipal crises may be on the way. In this explainer, Stateline examines what it means when a municipality files for Chapter 9 bankruptcy ? and why states should care. What is Chapter 9? It?s the portion of the federal bankruptcy code that applies to municipalities. Created by Congress in 1937, it allows municipalities to seek court protection in the event of fiscal crisis and is meant to ensure that basic government functions can continue while policy makers restructure their debt. Chapter 9 differs from other sections of the bankruptcy code, such as Chapter 11 and Chapter 13, which generally provide court relief to cash-strapped businesses and individuals, respectively. Who can file for Chapter 9? Only municipalities ? not states ? can file for Chapter 9. To be legally eligible, municipalities must be insolvent, have made a good-faith attempt to negotiate a settlement with their creditors and be willing to devise a plan to resolve their debts. They also need permission from their state government. Fifteen states have laws granting their municipalities the right to file for Chapter 9 protection on their own, according to James Spiotto, a bankruptcy specialist with the Chicago law firm of Chapman and Cutler. Those states are Alabama, Arizona, Arkansas, California, Idaho, Kentucky, Minnesota, Missouri, Montana, Nebraska, New York, Oklahoma, South Carolina, Texas and Washington. The remaining states all want a say in the process, in some cases requiring that municipalities receive state approval before they file. One of those states, Pennsylvania, is now in the process of challenging the bankruptcy declaration made by its own capital city, Harrisburg, in October. Georgia is the only state that does not allow its municipalities to file for bankruptcy under any circumstances. Georgia municipalities in severe fiscal trouble ?are left to work things out within the state political system,? says Paul Maco, a municipal bankruptcy expert and partner with the Vinson & Elkins law firm in Washington, D.C. That could include asking the legislature for emergency funds. States have plenty of serious fiscal problems, too. Why can?t they file for bankruptcy? States have not been granted that authority by Congress, nor have they sought it. The idea of allowing state bankruptcy was floated earlier this year by Newt Gingrich, the former U.S. House speaker and current presidential candidate, and Jeb Bush, the former Florida governor. In a Los Angeles Times op-ed, the two Republicans argued that bankruptcy would be a way for strapped states such as California and Illinois to tackle their enormous debts, particularly for public pensions and other retirement benefits. State leaders from both parties repudiated the idea. ?The mere existence of a law allowing states to declare bankruptcy only serves to increase interest rates, raise the costs of state government and create more volatility in financial markets,? Nebraska Governor Dave Heineman, a Republican, and Washington Governor Chris Gregoire, a Democrat, said in a joint statement. The last time any state came close to bankruptcy ? by defaulting on its loans? was during the Great Depression, when Arkansas racked up $160 million in debt on what was then a $14 million annual budget. How common are municipal bankruptcies? Very rare. Since 1937, when Congress added Chapter 9 to the federal bankruptcy code, about 620 municipalities have filed for bankruptcy. That?s fewer than 10 a year. In the last year alone, by comparison, there were nearly 12,000 bankruptcy filings under Chapter 11 and 418,000 under Chapter 13, according to the administrative office of the U.S. Courts. Most municipalities that do file for bankruptcy are special tax districts and small jurisdictions that do not issue public debt. Municipal utilities are a common example. What happens once a municipality files for Chapter 9? Municipal finances move into the jurisdiction of the courts, but not in the way that corporate or personal finances in Chapter 11 or Chapter 13 cases do. Under those sections, courts have broad leverage to control the finances of the company or individual to chart a path forward. In addition, creditors have more leverage, such as by foreclosing on the home of a bankrupt individual. In Chapter 9 bankruptcy, creditors cannot, for instance, foreclose on a municipal building to recoup the money they are owed. More importantly, the courts themselves have no authority to make spending or other policy decisions on behalf of the municipality. That power remains with the locality under the U.S. Constitution. Under Chapter 9, municipalities must come up with their own debt restructuring plans, and courts approve or reject it with input from other stakeholders. Source: stateline.org Source: filebankruptcyco.com Source: filebankruptcyco.com Source: businessbankruptcyco.com Source: bankruptcylawyersco.com Source: bankruptcycaliforniaco.com Source: debtreliefmag.com Source: debtreliefmag.com Source: debtreliefmag.com Source: foreclosureattorneyco.com Source: posterous.com
Source: debtreliefmag.com
Principal Reduction: Is Debt Forgiveness Fair?
Thomas has tried off-and-on for three years to acquire a loan modification. Recently, she said, Wells Fargo rejected her latest application. ?The little help I used to get, I don?t know how much longer I will get it,? Thomas said. ?But then, something else might turn up. I do a lot of praying.? The Specter of ?Moral Hazard? If she does stop paying her mortgage, she may then be eligible for principal reduction, which often requires that homeowners be in default to qualify. That raises the ?moral hazard? objection: If Thomas stops paying, then other homeowners might do likewise in order to receive the same aid, said Mark Calabria, director of Financial Regulation Studies at the conservative Cato Institute. FHFA acting director Edward DeMarco has said that this is one reason why he has resisted allowing Fannie Mae and Freddie Mac to use principal reduction. ?A key risk in principal forgiveness targeted at delinquent borrowers is the incentive created for some portion of these current borrowers to cease paying in search of a principal forgiveness modification,? DeMarco said at a speech at the Brookings Institution in April. All forms of mortgage modification, not just principal reduction, carry some of the same risk, but critics say that principal reduction offers more of an incentive for a homeowner to strategically default. Calabria points out that principal reduction, unlike a break on an interest rate, offers a lasting reward in the form of increased home equity. And, he added, debt forgiveness also puts a homeowner closer to having a home value that exceeds his or her loan, which makes it much easier for a borrower to sell. Whether or not you buy into the argument of moral hazard often depends on whom you hold responsible for the housing bust. Kathleen Day, a spokesperson for the Center for Responsible Lending, puts it on the lenders. ?It?s the banks that were bailed out,? she said. ?It is they who incurred the moral hazards?. They got to keep all their executive pay, so they privatized the gain, but when it came time to bail out, they socialized the risk.? Five years into the housing crisis, Day said, there is no evidence that principal reduction, which has been used by some lenders, has spurred many homeowners to default: ?It was a bogus argument, and it is a bogus argument.? The Blame Game Thomas Martin, president of America?s Watchdog, a consumer advocacy group, believes too-big-to-fail lenders acted on a moral hazard, knowing that the U.S. government would bail them out if the music stopped ? as, of course, it did. That rash approach to business, along with some lenders? tendency to lure borrowers into loans that they could not afford, justifies debt forgiveness in the minds of many ? regardless whether it costs lenders money. ?The ignition point was bank fraud on a scale never seen before,? Martin said. ?Should those guys pay? I mean, yeah!? But what about those homeowners who didn?t know when to stop in their drive to buy bigger or better, or who didn?t seriously weigh the risks of buying a home to begin with? Should You Pay for Your Neighbor to Stay? The question of whether lenders should reduce principal on some distressed mortgages grows even more fraught in the case of write-downs performed under government-sponsored programs like the Home Affordable Modification Program. Taxpayers fund HAMP, which subsidizes modifications on distressed mortgages. So when a lender performs a HAMP modification, taxpayers are footing some of the bill. ?It?s picking winners and losers,? Calabria said. ?It?s implicitly transferring income from one party to another.? Even in the case of principal reductions performed by lenders without HAMP subsidies, the cost may reach everyday Americans. Investors, such as pension funds, who own packaged loans (mortgage-backed securities) take a hit. ?It?s a wash,? Calabria said. ?You?re redistributing income instead of creating it.? Fannie and Freddie in a Fix Lawmakers, government officials and consumer advocates continue to pressure the FHFA ? which has controlled Fannie and Freddie since the government bailed them out in 2008 ? to approve principal reductions. Previous FHFA studies found that principal reduction would end up costing taxpayers billions of dollars. However, a recent analysis upended that conclusion. It found that, even after accounting for the cost of HAMP subsidies paid by taxpayers, a debt-forgiveness program would save the public $1 billion, The Wall Street Journal reported. Nonetheless, FHFA Acting Director DeMarco announced today that taxpayer-owned Fannie and Freddie, which back 60 percent of U.S. mortgages, still wouldn?t approve a principal-reduction program. He said that the potential costs of a debt-forgiveness program outweighed its potential benefits, mentioning specifically the possibility that such a program could create a moral hazard where homeowners would default just to qualify for principal forgiveness. In such a scenario, questions of fairness would surely come back into play. ?Somebody has got to pay the taxes for it,? Calabria said. ?It?s taking from a hand and giving to another.? An Ethical Dilemma, Even for Those Who Benefit Even some of those who have benefitted from principal reduction feel the conflict. Mark Ritter (pictured above with his wife) stopped paying his mortgage in early 2011, after he was forced to quit his job in order to care for his wife, who suffered from a form of Alzheimer?s that made her visually disabled. After sliding into delinquency, he struggled for almost a year to get his lender to lower the 10 percent interest rate on his mortgage. But his persistence paid off: After persevering through countless paperwork headaches, Ritter, with the help of free counseling services offered by NeighborWorks HomeOwnership Center, finally prevailed. He said that his lender reduced his rate to 2.0 percent, and promised that he would receive $18,000 in principal reduction if he keeps up on his payments. The end result, he said, has made him feel ?wonderful.? Nonetheless, even he isn?t sure if he fully agrees with the modification technique that has helped make it possible for him to hold onto his home. ?From one point of view, I don?t know,? Ritter said. ?I don?t know if it is justified because you agreed to pay a certain amount. ?On the other hand, the exorbitant interest ? the fact that I paid already going on $50,000 interest to the financial institutions ? maybe an $18,000 reduction isn?t a huge deal to them.? Thomas, despite her financial situation, doesn?t want others to help pay off something that she made a promise to pay herself. ?I don?t agree with it,? she said. ?Yes, [lenders] should help. But only through interest rate.? See also: Banks? Paperwork Foul-Up Cost Atlanta Woman Her Home ?This Is Crazy?: Company Snatches Condos from Owners 90% of Bank-Owned Homes Held Off Market, Estimates Suggest
Source: aol.com
Temecula and Murrieta Short Sale Agents: Extension of the Mortgage Forgiveness Debt Relief Act.
Need to know how to get your lender to approve your Temecula or Murrieta home for a Short Sale? A Short Sale allows you to sell your home for less than you owe and can save your home from foreclosure. Certified HAFA Short Sale Agents can now also negotiate $3,000 for you at the close of escrow.Call the Temecula Short Sale Specialist,Sidney Kutchuk broker at Realty Works Temecula.41720 Winchester Rd #I,Temecula Ca 92590 Temecula,Murrieta,Menifee,Wildomar, Temecula Short Sale Expert. 951-215-6745
Source: suort.com
Debt Forgiveness, But Never Forgotten
Taken from a micro-economic standpoint, it?s easier to understand the particulars. If you borrowed $100 from a friend a year ago, and then treated him to a movie yesterday, you couldn?t possibly expect him to pay you the 10 bucks for the flick today. He?s been gracious enough not to break your thumbs for taking this long to pay him back in the first place. You should never borrow money unless you know when and how you?ll pay it back.
Source: winningthemoneygame.net
Data Show Fannie, Freddie Savings From Debt Forgiveness
Disclaimer The information on this website is for informational purposes only and is not to be construed as legal advice. Read at your own risk. May be too intense for some viewers. Do not read this site if you have high blood pressure, heart disease, diabetes, thyroid disease, asthma, glaucoma, or difficulty in urination. Discontinue reading this website if any of the following occurs: itching, aching, vertigo, dizziness, ringing in your ears, vomiting, giddiness, aural or visual hallucinations, tingling in extremities, loss of balance or coordination, slurred speech, temporary blindness, drowsiness, insomnia, profuse sweating, shivering, or heart palpitations. Readers should not act upon this information without seeking professional counsel. ?
Source: 4closurefraud.org
Mortgage Debt Forgiveness Debated by Economists and Congress
The argument in favor of a comprehensive plan to write down balances owed on principal mortgages is that it will help homeowners avoid foreclosure. It is difficult to argue against the moral and social benefit of this logic, but the majority investors in the ailing American mortgage market are no longer privately-held entities. Fannie Mae and Freddie Mac are essentially owned by taxpayers; this was a measure undertaken by the federal government after the collapse of the credit markets in 2008. These two entities have already stated the inherent risk in forgiving massive amounts of mortgage debt: taxpayers will have to foot the bill.
Source: thenichereport.com
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Tags: Chapter, housing finance agency, personal finance magazine, Reduction, student loan forgiveness
Source: http://debtreliefmag.com/get-out-of-debt-using-loan-forgiveness-programs/
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