BeinhakerMiller Law Blog

Do You Own Your Home and Can You Sell It? Huh?

2011-08-23T22:54:00.002-04:00

Most homeowners, with todays’ mortgage crisis, have felt the ramifications of a declining economy, whether through a pending foreclosure, a cut in credit lines, etc. What is less understood are the tremendous title issues that have been created by all this foreclosure activity throughout the country. Its actual ramifications may take years to truly access.

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the foreclosing party must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. As recently as July, MERS announced that it would no longer foreclose in its own name on behalf of noteholders. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

That means hordes of victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword.

The Massachusetts Supreme Judicial Court issued a court decision , which made it clear that the banks' foreclosure practices -- and indeed, the standard securitization deal -- violated longstanding basic Massachusetts real estate law, and thus, many completed Massachusetts foreclosures were invalid (US Bank National v. Ibanez) . The foreclosing banks, which had either since sold the properties or still "owned" them, had no right to foreclose, and therefore had never owned those properties. So who owns them now? Well, the fact that it's a question is the very definition of "clouded title."

Many title insurance agents and companies have declared these properties as uninsurable, meaning the owner could not deliver clear, insurable title to a property buyer. This could make the property unsalable. The problem is worst for properties improperly foreclosed on that were still bank-owned. Those properties were truly uninsurable. That's because the bank couldn't make a claim on the title insurance policy it had purchased when making the original loan, since it was the entity that clouded the title. Indeed, honoring that policy would be like letting an arsonist collect on fire insurance. Thus much of the current bank-owned inventory in Massachusetts is largely uninsurable and thus unsellable.

When it comes to the clouded title problem, one group is wholly innocent: the borrowers -- "deadbeat" or not. The title issues have been created by the banks themselves. And since the mortgage industry's robo-signing scandal first broke, people have been aware that banks have been illegally foreclosing on homes.

Here’s the problem, simply: Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them.

Even though it's impossible to know how many properties are affected, estimates range between 60 and 70 million. And now that many foreclosures are being carefully scrutinized, flawed processes and paperwork seems to be the normal, not the exception.

You can't sell real estate when you can't establish that you own it -- banks won't loan money for purchasers to buy the property. That's because the bank wants to be sure that if it forecloses, it will get good title to the property. That, of course, kind of got lost in the frenzy and drive to make as much money as possible. That's why banks won't approve a mortgage for a property if a title insurance company won't insure its title. And title insurance companies won't do that if they know the title is clouded.

While there is plenty of blame to go around include our government regulators and elected officials, the largest share of the blame still must go to banks and their lawyers. Because without them, the clouded title mess wouldn't exist. Here's how all of them created the crisis.

First, banks across the nation have used fraudulent documents to "prove" they have the right to foreclose. This is the classic robo-signing situation.

While the issue is clearest in judicial foreclosure states like New Jersey -- where the documents are getting more scrutiny -- the problem exists everywhere. In nonjudicial foreclosure states, the problem frequently surfaces first in federal bankruptcy courts when banks ask for permission to foreclose on debtors in bankruptcy. The problem also shows up in state courts as homeowners try to fight the foreclosures.

For this title clouding problem, blame should be placed on the mortgage servicers, who generally are the big banks.

Second, as both the Ibanez case and Kemp v. Countrywide Home Loans out of New Jersey illustrate, banks' standard securitization procedures may have failed to properly assign the promised mortgages to the pooled trusts, which means those securities aren't really mortgage-backed after all. It also means that the ownership of those mortgages (and in some states, title to the properties) remains with different banks that were part of the securitization processes -- banks that may or may not still exist today.

For this problem, blame the securitizers, who include the big banks, Wall Street, and their big law firm attorneys.

Third, foreclosure attorneys have processed their filings in illegal ways. For example, in Pennsylvania, the attorneys have done foreclosures with papers no lawyer reviewed, bearing signatures forged with the firms' named partners' permission. Those foreclosures, which were done via the illegal practice of law, appear to be void -- and there are many. Or consider that several Maryland firms have also had underlings forge lawyers' names on foreclosure documents, including on more than 1,000 deeds.

Considering that speed over substance has replaced good lawyering and following of state-mandated procedures, it's impossible to believe that these problems are limited to only a handful of states.

For this problem, blame both the foreclosing banks and their foreclosure lawyers. Blame the banks, because it was their relentless cost cutting that got us the current foreclosure business model. Blame the lawyers, because they knew what they were doing was illegal and let their greed get the better of them.

Fourth, and perhaps most problematic, is the MERS debacle.

MERS mortgages have questionable validity. Whether or not the MERS model is legal seems now to depend on which judge is making the decision. Cases in different states, and even within the same state, are coming out differently. Where the MERS model is illegal, foreclosures done by MERS or by the people it assigns the mortgage to have clouded titles. Even where the MERS model is legal, the system's incredibly sloppy record keeping could leave multiple banks believing they have the right to foreclose on a given property.

For the MERS problem, blame the following, in no particular order: Fannie Mae and Freddy Mac, who were instrumental in creating it; Covington and Burling, the law firm that blessed it; Moody's, for blessing it as well; and the big banks who ran with the flawed system and made it what it is today.

If you are facing mortgage problems and difficulty with your lender, please contact our office for a free consultation. If you would like to learn more about clouded titles, visit www.cloudedtitles.com.

This article was compiled from research and opinions of Mitchell C. Beinhaker, Esq. For comments or more information, email mcb@beinlaw.com.

ERISA (The Employee Retirement Income Security Act) - A Trap for the Unwary

2011-05-20T13:17:00.001-04:00

ERISA, the Employee Retirement Income Security Act, is an oxymoron, at least with respect to employer-funded health insurance plans. By looking at the title of the Act, one would think that it was enacted to protect employees. In practice, however, with respect to health insurance benefits, it protects only insurance companies and employers.

In theory, the insured employees are supposed to select a doctor of their choice whereby they pay their co-pay plus a deductible (if any). The employee and the doctor both expect that the balance, or at least a specified portion of the balance (typically 80%), will be paid by the health insurance company. The insurance company has pre-contracted individual doctors or “participating providers” (providers) in their network who have agreed to accept a predetermined rate for specific services provided. In the case of such “in-network” providers, the system usually works just as intended.

The situation where ERISA hurts the unsuspecting employee and the doctor is when the employee chooses a “non-participating” or “out-of-network” provider for services. In practice, the employee typically does not have, and has not been given, a fully copy of his or her health insurance plan. The law only requires that the employer deliver a “summary of benefits.” The out-of-network doctor also has no access to the plan document.

Before treatment begins, the nonparticipating doctor’s office secures preauthorization from (or at a minimum confirms coverage with) the health insurance company for the required procedure. However, preauthorization does not assure the nonparticipant doctor that he or she will be paid for their work. In an effort to protect itself, the nonparticipating doctor will typically have the patient sign an “assignment of benefits.” This authorizes (i) the insurance company to pay the nonparticipating provider directly, (ii) the nonparticipating doctor, on behalf of the employee, to appeal any payment decisions of the insurance company, and (iii) the release of confidential medical records of the patient needed to appeal the case. The assignment of benefits form usually obligates the patient personally for any monies that the provider cannot collect from the patient’s health insurance company.

After the services are performed, the nonparticipating provider then bills the insurance company the usual and customary fee for any such procedures for the geographic area in which such services or procedures were performed. Standard operating procedure on the part of many health insurance companies is to pay an out-of-network provider a small percentage of the usual and customary fee. The provider, relying on the assignment of benefits, then institutes a “provider appeal.” After putting the appeal on the shelf for many months (or losing it once or twice), the insurance company may tell the provider that it has no appeal rights and all appeals must be instituted by the patient. Or, in the alternate, the insurance company may write to the patient (who no longer has contact with the provider) denying the appeal and sending him or her one or two pages from the plan which sets forth the patient’s appeal rights.

The patient may not communicate with the provider in time for a first level appeal to be instituted, or the plan may require a series of appeals (typically two in-house and another by an independent authority) before any legal action may be taken: the filing of a lawsuit in federal court under ERISA to enforce the health insurer’s payment obligations.

It is only after such a lawsuit is filed by the provider, that the provider is informed (for the first time) that the insured’s plan prohibits the assigning of benefits to a provider, and, thus, the provider does not have standing to bring the suit. Even if the provider enlists the patient as an additional plaintiff, curing the standing issue, the insurance company then claims that the patient did not exhaust his or her administrative remedies (2 timely internal and 1 external appeal) before filing a lawsuit. Very few patients or providers have the time or energy (or even can cooperate and coordinate with each other) to jump through these hoops. Unfortunately, case in and case out, the complaint can be dismissed on summary judgment on this basis. When faced with such a motion, the plaintiff (provider and patient) must allege and provide proofs that even had they appealed through all levels, their appeal would have been futile. This is not an easy burden to overcome. And only after a plaintiff survives this motion practice, can the case be heard on its merits. Unfortunately, few patients or providers can afford extensive and expensive litigation in federal court even if they can get past the “procedural” hurdles of nonassignment and nonexhaustion. Most of these cases die on the vine, a victim of attrition.

The State of New Jersey, Department of Insurance and Banking (“DOBI”) has recognized this inequity and has set up an arbitration procedure for providers against in-state insurance companies which gives the provider its own rights and the ability to dispute allowed fees. Unfortunately, DOBI does not make this program available against out-of-state insurance companies. This leaves the provider and the patient with the ERISA system in which the cards are stacked against them. The end result is that the out-of-network provider is usually left to accept ridiculously low reimbursement amounts and/or having to sue their patients for unpaid balances.
Neither option is attractive or particularly good for business. If the provider sues their patient, the patient may be saddled with a huge judgment (for 20 years or more) that he or she cannot afford to pay or, if they have assets, their assets may be attached and can deplete their life savings.

New patients and providers dealing with out-of-state insurance companies would be wise to learn the pitfalls in the system which can potentially expose each to great, sometimes catastrophic, loss.

If you are a medical professional (especially a specialist) who does not participate in many (or any) networks, have your office manager or billing professional contact our office for a free, in-house consultation. We’d be happy to review your files and help you better navigate these treacherous waters. If you are a patient facing a legal battle from a provider trying to collect, also give us a call for a free consultation.

Mark D. Miller, Esq. is a partner in The BeinhakerMIller Law Firm. He specializes in commercial litigation, consumer fraud, and estate litigation. Specifically for medical practices, the firm provides ERISA litigation, PIP arbitrations and handles other related medical collection issues. Questions can be emailed to Mark at mdm@beinlaw.com.

New Jersey Consumer Fraud - Even When You Win, You Lose

2010-04-30T12:03:00.002-04:00

This is an article written by Mark Miller as a guest author for a colleague of ours. You can access it at http://www.stopcollector.com/blog/2010/04/new-jersey-consumer-fraud-even-when-you-win-you-lose/

Consumer Fraud, Justice and JetBlue Airlines

2010-04-20T21:45:00.012-04:00

I recently had the fortune to get away from the office for a few days and take my wife and kids to Florida. We missed a huge storm up here and had beautiful weather down there.

But our story starts some time before our trip... We first attempted to book our airline tickets on JetBlue. Everyone knows they have the bigger seats, video monitors and the like. And when traveling with three kids, we need all the help we can get. They also were advertising a very low fare.

My wife and I logged on to their website and booked tickets for the five of us. We went through the entire process: picking the outbound flight, seats, food choice, etc; picking the inbound flight, seats, food choice, etc. We then got to the point where you agree to all their terms and click "book it". So we agreed and clicked. We were then provided with a message that bascially said, "the fare we had chosen was no longer available. Perhaps someone else booked the fare before we did. Our credit card would not be charged."

Frustrated, we ran a new search on the JetBlue site and found that the available fares had in fact increased. I never really understood the pricing with airlines - the price should be "the" price. You don't call Amtrak for a fare quote and find that if you don't book it quick enough the price increases! Can you imagine if an electronics store raised the price on a particular TV as it sold out? People wouldn't go there anymore. Anyway, I am digressing...

We found a similar fare on Continental (actually $3 whole dollars less, but later discovered that they have a bag checking fee of $25 per bag) and given our budget constraints, price won over comfort and gadgets.

Two weeks after booking, my wife was balancing our checkbooks. She discovered that JetBlue had, contrary to what we were told from their website, in fact charged us for the five tickets. We had not received any confirmation or receipt and had no confirmation number.

We called JetBlue. After holding for 30-45 minutes, the answering representative informed us that she could not find any reservation in our name in their systems. I told her that we had been charged and would like a refund (which we needed for spending money for our trip). She did some more searches in their system and finally found a reservation in our name. Apparently, and according to her, JetBlue had been changing over their computer systems and the changeover may have caused an error in their system giving us a "not available" message, but charging us anyway because (perhaps) the person who "grabbed" our fare might have changed his or her mind. I told her I understood, but their "not available" message caused me to book other tickets on another airline. Kindly arrange for a refund, I told her.

I was soon to discover that there is nothing "kind" about seeking a refund from an airline. Getting a credit is fairly easy - but then they have my money and I have to plan another trip to benefit from the credit. And I am not interested in depositing money with JetBlue (albeit at "no interest") in anticipation of my next trip which may or may not happen within the next 12 months.

The customer service representative (ironic name) told me she was not authorized to issue a refund (I guess she needs a promotion to have this authority). I would have to speak with a supervisor. She asked me to hold and transferred me where I proceeded to wait another 45 minutes to an hour. When I finally reached the next "level", this higher up (who apparently was some kind of supervisor - not so sure what she supervisors, but anyway...) who at first couldn't find our mysterious reservation either. She finally found it, but then also informed me that she was only authorized to issue a credit (seems I was transferred to a colleague, not a supervisor). The day was moving on and I also needed to bill some clients for some work in order to make up for the time I was losing trying to reconcile their "system glitch".

The next day I got back on the phone and basically got the same run around as the day before. Finally, and very frustrated, I contacted my bank to contest the charge from my account (I had used our debit Mastercard for payment). The bank had me fill out a formal inquiry form, credited the withdrawal back to our account and began their investigation. About a week later, the bank contacted me and informed me that JetBlue wouldn't refund my money without proof of what we said was posted on their website - the fare was nonrefundable and only a credit would be provided. The bank took the money back out of our account.

I got back on the phone. Waited and got through. Explained the story and was transferred. Waited, waited, and waited. Finally, I got a supervisor on the phone but this guy could only credit me back the fare less $100 per ticket (apparently there are different "types" of supervisors at JetBlue and they all have different "powers" to do certain things). Well $100 per ticket was more than half the total fare so I said "no." He said he understood, but he was not authorized (what a shock) to refund all of our money. I could wait for a higher level supervisor (not sure where this beanstalk ends), but the wait time was at least 45 minutes. I had already gone through more than 2 hours of my time and had to pick my son up from religious school. So I said I couldn't hold any longer, but could I have a direct number to call back on so I wouldn't have to be on hold so long. He informed me that they did not have any direct numbers (another shock) and that my only option was to call back on their toll-free number and start the hold process all over again. Which I did the next day.

I held for about 20 minutes and reached a CSR. I explained the story and asked for a supervisor (the right supervisor). The message on hold said I had 60 minutes to wait. About 55 minutes in, the message suddenly changed and my wait time jumped back up to 60 minutes.

I was frustrated and spent. I had wasted more than $1,500 of my own billing time and was at the end of my rope. I shared my frustration with my partner, the litigator in our firm and we decided to file suit. We'd sue for consumer fraud, unjust enrichment, and breach of contract. The consumer fraud claim carried treble damages, attorney's fees and court costs.

My partner drafted the complaint and we faxed to JetBlue's corporate headquarters in Brooklyn. Now the wheels of justice were in motion. A few days later, a paralegal from JetBlue (apparently this was not a large enough matter to concern their attorneys) called me and my partner and said they would refund my money. She admitted that it had been a computer glitch and she apologized. She said it was only a mistake and begged me to take the refund. Now let's take a moment to think about what I had gone through to get to this point. Hours of waiting, a declined inquiry through my bank and an offer to refund about half of the fare. It had taken the preparation and filing of a civil complaint (actually, we hadn't filed the complaint at this point so we hadn't gone out of pocket for the $22 filing fee). But my partner did prepare the complaint which would have cost any client of ours $1,800 to $2,000.

So, I said "no". They had to do better than that. Pay me some extra money (on top of the refund) and pay my partner $1500 for legal fees. The paralegal (after more begging) told us she was only a paralegal who settles small claims matters and she was not authorized (another shock) to settle for more than a refund. I told her you'd better get an attorney on the phone.

Too make a long story shorter, we never connected with the attorney and had to file the complaint. It was served on JetBlue and we got a court date - today. I am sure you are not surprised to hear that.

Now consumer fraud carries with it (normally) treble damages, attorneys fees and court costs. But going to court "is like a box of chocolates. You never know what you're gonna get." We basically got a grumpy older judge who pretty much admonished me and my partner for spending so much time on this matter and told us basically if we wouldn't accept a refund and settle this he'd make us wait all day in court and wouldn't hear our case until 4:30. (And I thought attorneys get more understanding, not less, from the courts). It was about 9:30 at that time. The attorneys for JetBlue were from a large firm in NYC and were apparently sent there on their very first case - how exciting. The judge also said to my partner, "c'mon - they're just children" (referring to our esteemed adversaries). Like I said, you never know what you're gonna get. So, reluctantly, we agreed to take a refund. The good thing is they handed us a check right then and there. My partner and I have wondered if they had a whole series of checks in their briefcase, depending on how things went. But we'll never know.

We also learned something from this newbie attorney (who my partner complimented on doing a great job and wished him well). The newbie submitted a brief claiming that federal aviation legislation pre-empts state consumer fraud statutes. And he found a supreme court case where, in a 5-3-1 vote, the Supremes found in favor of American Airlines that the federal legislation does, in fact, supercede the state statutes (actually my partner read the case law, but I got the basic gist). The court was divided on the issue, but for now, it appears that you cannot win on a consumer fraud claim against a common carrier airline. This was, therefore, just a breach of contract case and a refund is pretty much what we are entitled to (We could have gotten reimbursed for the additional Continental baggage fees, but I forgot about that at the time - oh, well.) In a funny twist, however, the law firm emailed over the stipulation of dismissal as well as a release between the parties. The release included a non-disclosure agreement which we are unwilling to agree to (plus he had already given us the check). Maybe we'll end up getting something for our troubles afterall (free tickets?) if they want a non-disclosure that bad. But I hope that doesn't make it too hard for the young attorney - he seemed like a nice guy and my partner said he graduated from my law school. Looks like a learning experience for all of us.

The thing that upsets me the most is that the average joe would not take things to the level that I did. I know the system and have a partner who was willing to help. Most people would have to spend more than they were trying to get in a refund and would just have to settle for a credit. So the airlines gets the use of the money and you have to incur the expense of a trip to "use" the credit.

Hopefully we all learned something from this. 1) Consumer fraud, although a great statute for consumers, does not apply to the airlines; 2) next time, we'll just fax over the complaint and settle for the refund (no filing necessary); 3) if your a lay person, go down to small claims court, get the forms, fill them out and fax them to the airlines (no filing necessary either) and you'll get a refund; 4) hopefully JetBlue will learn that they should give their CSRs some way to "elevate" problem situations that need a supervisors attention (but I doubt it).

Three Steps to Stop Debt Collector Harassment

2010-03-23T22:13:00.002-04:00

(This is a "guest" blog from my colleague Sergei Lemberg. You can email Sergei with any questions or comments at slemberg@lemberglaw.com)

In today’s economy, an increasing number of people are finding themselves on the receiving end of debt collector harassment. Consumers are being inundated with phone calls, letters, and other forms of harassment by debt collection agencies that are willing to stoop to any level to collect on a debt.

If you’ve been the victim of debt collector harassment, there are three primary steps you should take.

First, it’s important that you understand the law. After all, knowledge is power, and there’s a powerful federal law on the books that outlines the differences between legal and illegal debt collection practices. It’s called the Fair Debt Collection Practices Act. You should become familiar with those practices that cross the line, and document every interaction you have with a debt collection agency. If you keep a logbook of your conversations and correspondence, it will be tremendously helpful if you should sue them under the FDCPA.

Second, you should write what’s called a cease and desist letter. According to the Fair Debt Collection Practices Act, a debt collection agency must stop contacting you once they receive a cease and desist letter. While this doesn’t erase a legitimate debt that you owe, it does prevent them from harassing you. If they continue to contact you after you’ve sent a cease and desist letter, they’re in violation of the FDCPA.

Third, you should contact an attorney. The Fair Debt Collection Practices Act says that, if you have an attorney, the debt collection agency may no longer contact you directly. All correspondence and calls must go through your attorney. When you select an attorney who specializes in fair debt law, he or she will most likely represent you free of charge. This is because the FDCPA specifies that, if a debt collection agency violates the law, it is responsible for paying your attorney fees. In addition, a fair debt attorney may also be able to collect damages on your behalf in an amount up to $1,000. Alternately, if you have a solid case against a collection agency, the chances are good that they’ll back down and settle your outstanding debt for pennies on the dollar.

Doctors & Their Personal Affairs

2009-03-17T12:27:00.004-04:00

I work with a lot of doctors. Most of them are just too busy to pay close attention to their personal affairs. So wills, estate planning, insurance and other personal matters, as well as their business agreements, employee issues, etc... often get overlooked. Issues are addressed on a reactive, rather than a proactive basis. There is little planning and protection, but rather reaction to situations that have already arisen.

Here's a few things you should know:

1. ASSET PROTECTION DOESN'T WORK. Well, actually it does, but you cannot create an asset protection plan once litigation has begun or is on the horizon. It will be deemed a fraudulent transfer and you can be subject to both civil and criminal penalties. No legitimate attorney should even do it for you. By asset protection, I don't mean moving your assets offshore to Nevis or the Cayman Islands. Offshore asset planning may bring more scrutiny from various government agencies than you'd like to welcome.

2. YOU CAN WRITE A WILL ONCE YOUR DEAD. Of course you can't! Tax and estate planning is voluntary and should be done, and revisited on a regular basis, as soon as possible. Dying intestate (without a will) leaves a serious mess for your loved ones to clean up. Even a poorly written will leaves a big mess. Look at Anna Nicole Smith.

3. MONEY MAKES PROBLEMS GO AWAY. To the contrary, I've found that successful professionals often attract problems. Everyone and their grandmother brings "opportunities" your way and, suprisingly (I say that with jest), every deal looks good. That's called salesmanship. Don't substitute good due diligence for things that look good and good feelings you have for people (even if friends or relatives). Look at Bernie Madoff - blind trust was his key to the castle.

Best advice is to work with someone who advocates for your success and protection. Someone who has experience in negotiating deals, analyzing opportunities, protecting assets, and protecting your family.

We offer free, no obligation consultations, to any medical professionals who'd like to visit our office. We would also be happy to answer basic questions by email.

Accredited Investing

2008-11-19T22:22:00.003-05:00

With the collapse of our financial system and a tightening of the credit markets for most business owners, the accredited investor will find opportunities abound.

In addition to a few other categories, an accredited investor is defined to include:

(a) any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of investment in the common stock of the company, exceeds one million dollars ($1,000,000);

(b) any natural person who had an individual income in excess of two hundred thousand dollars ($200,000.00) in each of the two most recent years or joint income with that person's spouse in excess of three hundred thousand dollars ($300,000.00) in each of those years and has a reasonable expectation of reaching that same income level in the current year; or

(c) any trust with total assets in excess of five million dollars ($5,000.000.00), not formed for the specific purpose of acquiring common stock, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D.

There are an abundance of "private" equity opportunities for those investors that qualify as stated above. I have reviewed deals with investor relations firms, private hedge funds, real estate funds, and even a company in the high-end wholesale garden products business. Proper due diligence must be employed when reviewing any of these types of deals and "partnering" with a skill business attorney may help you make more rational decisions. Be prepared that all these deals will look good when presented by the owner who is seeking the capital investment. Here's a few basic rules (you will develop some of your own from experience): (1) always meet the owner - never invest where the owner is too busy or unavailable to meet with you; (2) do some background research on both the company and the owner - with the internet this should be somewhat easy; and (3) research the industry paying attention to particular trends which might help or hurt the company/opportunity.

My firm is in the process of publishing an accredited investor newsletter designed to highlight available opportunities and bring companies & investors together. If you'd like to be added to our mailing list, please email us.

How Do Credit Cards REALLY work?

2008-10-01T14:27:00.001-04:00

Guest Author: Julie Ann Hepburn
For more info, visit http://www.nationalprivate.com/resources.php
All rights reserved for reproduction or use strictly prohibited without express written consent.

I often find myself answering this question. I recently found myself embroiled in a debate and conversation with my own credit card company regarding an interest charge. It was only $13.00 but I wanted to get to the bottom of this great misunderstanding and regular debate as a public service to my clients.

The following is the explanation and example, courtesy of my Citibank card services representative.

When you agree to accept a credit card, you are agreeing that you will pay the amount they are loaning you for that month [or “billing cycle”] back in full or you will pay interest on the entire amount regardless of how much you have paid [down or off]. You will continue to pay that interest until that amount is paid off. If you use the card in the meantime, say the next month [billing cycle] that will also be added on and usually to the end. So you will not be able to pay on that amount until you pay off the prior amount.

Example: January you have a credit card with a $2000 limit & 22% interest rate. You charge up $2,000 on that card during January. The bill comes at the end of the month and you pay $1,000 of that bill. February you will pay 22% on the total $2,000 because you said you would. You also agreed that you would pay 22% until that original amount is paid off. If you didn’t use the card and you paid the final $1,000 off when your February statement came, you would be paying the $1,000 plus 22% interest on the $2,000. If during March if you still have not charged more on the card you would potentially have the interest for the $1,000 at 22% interest and be done.

What About Balance Transfers?

Tragically most people don’t know this, nor do they understand that by charging more on this card the problem just continues to compound and snowball. Hence, the statement often comes up, “I should be ok because I rolled mine over to a “0%” card for 1 year [or some other specific term]. That is fine, however, there are two additional pitfalls which can [and do] significantly change this ideal temporary recovery window. First, you potentially will have to pay a fee, typically this is a percentage of the balance transferred. If it is a large balance, this will equate to a large amount. Second, if you use this [new 0%] card after you have rolled over debt from another card, you will have to pay off the transferred balance prior to beginning to pay on the new charges you have added which are accruing at whatever the assessed rate of the card will be following the “one year zero interest period” ends.

The following example is courtesy of one of my clients.

Example: The client transferred $20,000 from a high interest credit card to a zero interest credit card for 12 months. He was short on cash one evening and strictly and out of convenience, he used this [new card] for the dinner bill of $70.00 bucks. After speaking with the card services rep. he was informed of the following. In the agreement he signed for this [new] card, he agreed that the balance transfer amount would be assessed at 0% interest. However, if he uses this card the charges would “hunt to the end” or come behind the $20,000 to pay off, if you will. Meaning, the $20,000 is at 0% interest but the $70 which he could not pay off until the $20,000 is paid off, is accruing at 29% and would continue to do so until the initial $20,000 is completely paid off. Only after this initial transfer was paid off, would the client be able to pay off the $70 plus interest at that point.

New Jersey Used Car Lemon Law Tips

2008-10-01T13:52:00.002-04:00

Sergei Lemberg, an attorney specializing in lemon laws is sitting in the guest blogger’s chair today. He’s outlining some of the ways that consumers with used car lemons can get justice.

I don’t know anyone who doesn’t feel at least a little bit of trepidation when they buy a used car. Always lurking in the back of your mind is the thought that you might just be buying someone else’s troubles. Unfortunately, although every state in the nation has a new car lemon law, few states have lemon laws covering defective used cars. Luckily, New Jersey is one of them.

New Jersey's Used Car lemon law requires dealers to provide express warranties to consumers who buy used passenger cars for personal use costing $3,000 or more, are less than seven years old, and have odometer readings of less than 100,001 miles. The law prohibits you from waiving your rights to a warranty if the odometer reading is greater than 60,000 miles and the waiver is in writing.

The length of the required warranty is based on the vehicle's odometer reading. The warranty must last 90 days or 3,000 miles (whichever comes first) if a vehicle has 24,000 miles or less on the odometer. The warranty must last 60 days or 2,000 miles (whichever comes first) if a vehicle has between 24,001 and 59,999 miles. The warranty must last 30 days or 1,000 miles (whichever comes first) if a vehicle has between 60,000 and 100,000 miles.

Vehicles aren’t covered if they’re sold for less than $3,000, are seven or more years old, have been declared a total loss by an insurance company, have odometer readings of more than 100,000 miles, or weren’t purchased from dealers.

According to the law, the dealer has to fix problems associated with the engine, transmission, and front- or rear-wheel drive (although you’re required to pay $50 for each repair attempt). The car’s considered a lemon if the dealer doesn’t fix the problem after three attempts, or if the vehicle has been out of service for a total of 20 days while the dealer is trying to fix it.

If you think you have a lemon, it’s best to consult with a lemon law attorney who can explain all of your options, as well as the settlement you might receive.

Protecting Your Assets from Creditors & Predators

2008-09-08T22:28:00.003-04:00

I recently submitted this article to a dozen or so medical journals for publications. Although it is directed toward medical professionals, its concepts are appropriate for any person concerned about protecting their assets.

"Medical professionals alike, especially the high-income earners, are constantly concerned over being sued. In a world of constant litigation, the all look for strategies and methods to protect the assets they accumulate through their work: their home, investments, real estate, etc…

The topic of asset protection is always being written about. Some practitioners swear by methods of “bullet-proofing” your assets. Others claim that asset protection doesn’t really work. This article has been written to explore both extremes of this industry and to find a common ground of reasonable security for the medical professional who would like to take adequate steps to protect their assets without injecting too much complication into the way they manage their affairs.

First of all, can you “bullet-proof” your assets? If you perform a Google search for “asset protection” or “bullet proofing your assets”, you will uncover may sites which profess that with the right structure in place, and having done so with no potential law suits on the horizon, you can successfully protect your assets. The Asset Protection Consulting Group, http://www.apcg.com/, writes about asset protection and uses the O.J. Simpson case as an example:

“Essentially asset protection is a legal way to put your assets beyond the reach of those who would like to take them from you by filing a lawsuit. Here is an example you are likely familiar with that demonstrates its effectiveness and legality.

Remember the O.J. Simpson case? O.J. went to trial in 1995 and was acquitted of murder charges. His story is a perfect example of how and why asset protection works. Now there’s a whole criminal side to O.J.’s case. So let’s put aside the moral issues surrounding O.J. We’re just talking about asset protection here. The point here is that the nation was able to see for the first time how an alleged murderer was able to have a judgment entered against him and no one was able to collect any money. So let’s outline what happened here. By the way, do you know how O.J.’s doing now? Do you have any doubts he’s living all right?

What happened after he was acquitted from the criminal charges? The Goldmans sued him on a wrongful death case in civil court and obtained a judgment for $33.5 million. Yet have they collected anything? All they got was his Heisman trophy. The piano he said belonged to his mother. But what happened to his money? Well he was lucky. O.J. had pensions, or retirement plans through the NFL and the Screen Actor’s Guild (SAG), and both pensions were exempt from judgments by law in California.

What about his house? He had a nice home near Beverly Hills. What happened there? The house was worth $3.5 million. He had a first mortgage for $1.5 million. The question everyone asked was what happened to the rest of the equity? Why didn’t they take it? Well, he had what are called equity stripping mortgage liens placed on it. By the time they got to the house all the equity was encumbered in favor of his attorneys. His home was leveraged to the hilt so by the time the Goldmans got to it there was nothing left for them to take.

Other groups ward against these techniques and quote various court cases and legal decisions that demonstrate their point. Almost all reported cases are those whereby the debtors had transferred or attempted to transfer their assets into an asset protection structure once litigation or potential litigation is on the horizon. Of course, the logical course of events are such that with arrangements that work, litigants will settle and often for pennies on the dollar.

This article is about creating structures that add “layers” to your assets, making it more difficult and costly for litigants and creditors to attach them with a judgment from a court of competent jurisdiction. By creating entities such as corporations and limited liability companies in different states and even foreign jurisdictions, it becomes difficult for a judgment creditor to attach assets since judgments cannot be obtained and enforced within statute of limitation time limits. Also, suing and enforcing judgments in multiple jurisdictions becomes very costly to do so. Remember however, your “structure” must have a legitimate business purpose beyond just that of avoiding creditors.

Here’s an example:

Dr. J establishes a Delaware “Series” Limited Liability Company. This type of entity allows you to segregate assets, for liability purposes, from each other within the same entity. The sole member of the LLC is a Nevada Corporation which is filed blindly as allowed under Nevada law using a nominee appointed for such purpose. Therefore, Dr. J’s information remains out of the public record. All stock in the Nevada Corporation (which can be issued as “bearer” certificates) is owned by another limited liability company created in the jurisdiction of Nevis, in the British Virgin Islands. Created in 1995, Nevis past legislation that allows for the creation of an LLC without public filings and a statute of limitations on judgments of only six months. The Nevis LLC could be owned by an asset protection trust in the Cook Islands located in the Pacific Ocean enroute to Australia.

Now, this is an extreme example and probably includes more “layers” than would be necessary in most situations. Probably a Delaware Series LLC would suffice or a Nevada entity could be used if the professional wishes to file blindly. As an alternate, off-shore jurisdictions could be used where it is suspect as to whether a foreign court would even enforce a US-obtained judgment.

The point in these examples are this: given a complex and costly structure, most litigants will think twice about instituting suit. Generally, a good litigation attorney would first conduct an asset search to determine if the prospective defendant had anything worth pursuing and the suit might end there or insurance settlement offers may be accepted.

There is one important key to creating an effective structure: putting it in place well before any problems arise. So called “rainy day” planning should be completed as soon as possible. Whenever working with new clients, we seek to create an asset protection strategy, as part of the doctor’s estate plan, that contemplates the accumulation of assets over time. In almost all cases where defendants have lost and forfeited assets that they were trying to protect, the persons had transferred assets at a time when the potential litigation had already reared its ugly head. Fraud and fraudulent transfers never work, no matter how complex the structure.

Also, remember this: never use a structure, especially off-shore arrangements, to avoid the payment of federal income taxes. The IRS can always access assets and you can be liable for criminal charges as well."

Your New Car - Buy or Lease? How Do You Decide?

2008-08-10T21:21:00.005-04:00

As an attorney, I often find myself advising clients on many things: real estate, borrowing money, business issues, wills, and even advice about buying a new car. I have a background in economics and finance and clients ask me to help them analyze their car lease and direct them towards making a more informed decision. Since both leases on our cars are coming due, I thought it a good time to share how I do these analyses.

First of all, you should know that the automotive industry uses their own math when it comes to money. This seems somewhat obvious since we all know that the car companies make more money financing cars than they do selling them. Here is a very simple example: when calculating interest on a car loan, dealerships use a method called "add-on interest." Simply put, they add on the interest to the price of the car and divide by the term of the loan. So, if you are buying a $35,000 car and taking a 60-month loan from the dealership at 4% interest, they simply calculated the annual interest (35,000 x .04 = 1,400). Then they multiply the annual interest payment by 5 years (1,400 x 5 = 7,000) and add it to the price of the car (35,000 + 7,000 = 42,000). To determine the monthly payment, the final figure is then divided by the term of the loan (42,000 / 60 = 700.00). Now you know why leasing became so popular! So, why is this "add-on interest" method incorrect? Because you are paying interest on the loan as if the entire balance was outstanding for the entire duration of the loan. If you obtained a loan from your local bank, the loan would be "amortized" meaning you would only pay interest on the then outstanding balance. That is the case with an amortized mortgage loan and if you make extra payments, you will save interest as the loan balance decreases.

This "add-on" method is not just loan calculation for dummies so the dealership can easily calculate your payment (we know all those dealership finance guys are a lot smarter than that!!). It allows the car companies and dealerships to quote a lower rate of interest. Let's take the 4% example from above. If we use a loan amortizing calculator, we can determine the actual interest rate on a $35,000 loan repaid over a 60 month period. It's 6.2% which is probably closer to a local bank rate and is 55% higher than the rate quoted!

Another "game" the car companies have been playing is "zero interest" financing. When this first came out, I had to ask myself: how can the manufacturers sell these cars for 0% especially given the fact that we know they make more money financing cars then selling them? Then I started to notice a common thread. Almost all offers I have seen give you an alternative: zero percent financing or cash back on the purchase. In other words, if you choose to buy the car for cash (or finance through another independent source), the manufacturer is willing to forego a certain amount of cash. Therefore, the cash back incentive is really just added on interest! To illustrate, let's assume for our $35,000 new car, our choice is zero percent financing for 60 months or $3,000 cash back. Calculating the monthly payment is easy (even easier than add on interest!). You just divide the purchase price by the term of the loan (35,000 / 60 = 583.33). To calculate the "true" interest rate, you use your amortizing calculator with a present value sum of $32,000 (35,000 purchase price less the cash back amount of 3,000). The true interest rate is 3%. Still not bad, but not zero percent. (Note: there are some "true" zero deals out there, but they are very hard to come by).

So now you know a little bit about buying which hopefully will help you with your next purchase. Now, what about leasing? Leasing is actually the process of "renting" the car from a third party purchaser. Even if you lease through the manufacturer, their leasing division is actually buying the car from the dealership and then rents or leases it back to you. Calculating lease payments are complicated and you need a few factors to make your own analysis: total capital cost, residual value (or percentage) and money rate. If you'd like to figure it out for yourself, there are plenty of lease calculators floating around the net. But that won't help you much because you are using their math, not your own. Let me show you how I calculate payments and analyze lease deals using my math.

First, one rule I try to follow: avoid putting money down on a lease. If possible, roll taxes, inception fees, dmv charges, etc. . . into the payment. And NEVER put additional money down to reduce your monthly payment. What you are doing is giving money upfront to the leasing company to reduce your rental payment. If you drive off the lot and a tractor trailer totals your vehicle (assuming you are completely unharmed - always a good starting point when using accident examples!), you will not get your down payment refunded, nor taxes returned, etc... You'd be much better off taking the down payment, putting it in a bank account and using it to offset your monthly payment. For downpayments, rule of thumb is that the payment will decrease by about $25 per month for every $1,000 you put down to reduce the cost of the car.

So, how to analyze the lease payment. Look at it this way: you are actually renting part of the car (the residual amount) and purchasing the balance. Meaning you are (in the leasing company's eyes) using up a certain amount of the car. This is their biggest gamble. If they charge you for using up 45% of the car and it turns out that the fair market value of the residual is actually much lower than 55% at the end of the lease, they lose money on the deal. That is why you might have heard that many of the American manufacturers are leaving the leasing business when it comes to the large SUVs. Due to the economy and gas prices, they just are not holding their value as the leasing companies had expected.

Back to payment analysis...

So you need to make two payment calcs and add them together. First, take the residual value and calculate an interest-only payment. Using our above residual factor of 55%, the residual value is determined by multiplying the total capital cost of the vehicle by the residual factor ($35,000 x .55 = 19,250). Here's where you can get a little creative. You choose the interest rate - yes you heard me - you choose the rate. Meaning, you decide at a given interest rate what you are willing to pay and can play around with the formula from there. Let's use 4%, so the interest-only portion of the monthly payment is calculated by multiplying the residual value by the chosen interest rate then dividing by twelve to obtaining a monthly figure (19,205 x .04 = 770 / 12 = 64.17). The theory behind this is you only need to pay interest because this "portion" of the car you are actually giving back to the leasing company at the end of the lease. Therefore, they should only be looking for interest on their money. Second, you need to calculate an amortized payment on the amount of the car you are "using up." This figure is determined by subtracting the residual value from the total capital cost of the car including all fees, charges, taxes, etc... (35,000 - 19,250 = 15,750). Using your amortizing calculator, you can amortize the payments of a loan for 15,750 at 4% over a 60-month period. The resulting figure is 262.77. Add your two monthly figures together to determine the monthly lease payment (64.17 + 262.77 = 326.94). You can also use this logic to analyze whether a proposed lease payment is reasonable. Just ask the dealer for the total capital cost of the car and the residual value or percentage. You should be able to back into the rest.

I welcome comments and questions.

Difficult Economic Times

2008-06-24T22:12:00.003-04:00

We are living in very difficult times. Real estate values have dropped, many people have lost their jobs or are making less than before and the cost of living just keeps going up. I see it a lot through my real estate practice since I do a lot of loan works and short sales for clients.

With the pending election and the unprecedented things we have been seeing: gas prices in excess of $4 per gallon, a very weak overseas dollar, a black man and a woman running for President, it got me thinking about where we are as a country and where we might or might not be going.

Recently, I visited a recycling center with my son's cub scout troup. I was fascinated and impressed with what this little town in my area was doing as a community to recycle. I was embrassed that, as an afluent community, my town was doing very little besides having us leave paper and bottles on the curb every two weeks. The recyclers were not only recycling 80 to 90 percent of their garbage, but they were doing it in a manner that raised upwards of $200,000 for a series of 25 charitable organizations and groups.

I think when it comes to recycling and conservation, we are mostly in the clouds and doing community imposed things that we accept on face value. I learned something (or realized something I guess I already new) that day. Our dependence on oil (more particularly foreign oil) goes way beyond automobiles and other gas powered machinery. It goes to the production of plastic, plasma tvs, etc... The gentleman who was giving the kids their tour was a vet - former military man. And he was more than vocal with his thoughts about how we give away jobs and other things to other countries. He grew up in a pro-American, anti-foreign era. But things are different today. In the words of syndicated columnist Thomas Friedman, we live in a flat world, one where we participate globally rather than compete. The sooner we realize this, the easier it will be for all of us and the easier we will be able to help our children prepare for a different world ahead. Our military tour guide was trapped by a belief in xenophobia that has less applicability in today's world.

We must, along with future generations to come, change our use and dependence on oil. Period. It's not a political issue, it's a survival issue. We need to start treating capital resources as precious - you preserve capital; and put income resources that are replenishable to better use. I don't know if plastic is going anywhere, so we have to learn to better recycle it.

I am rambling and getting a little tired as I write and think. I highly recommend you read Thomas Friedman's book, The World is Flat and others like it. It will change the way you see things. Next time: Geocaching!

Why You Need A Will (and When)

2008-04-16T21:53:00.005-04:00

Many people are confused as to when and why they should put a will together. I am writing this blog to hopefully give some people more direction toward making the right decision (at least before all their kids are grown!).

When Do You Need a Will?

First of all, let's address the obvious. If you are married and have minor children, you definitely need a will. You should also have living wills and powers of attorney (discussed further below).

Second, if you are single, have very few assets, have no dependents and do not care what happens to your property when you die, you don't need a will. You should however, consider a living will.

If you are married without kids, you probably should have a will especially if you intend to have kids in the not so distant future. Also, include living wills and powers of attorney. Even if you don't have a lot of assets yet, dying without a will makes things real difficult on survivors you leave behind.

If you have a large estate, as well as loved ones (or charities) you care about, you need a complex will with advanced tax provisions drafted by a competent and experienced estate planning attorney. This plan might include revocable and/or irrevocable trusts, living wills, powers of attorney, and other complex documents such as GRATs, CRATs, QPRTs, QDOTs, amongst others. (If you have been through this process already, you may recognize a lot of these acronyms even though you may not be completely clear as to what purpose they serve).

So, Why Do You Need a Will and Other Documents?

When you die without a will (called dying "intestate"), your property and minor children get subjected to the rules created in the particular state in which resided at your death. Although courts are always concerned about the best interests of your surviving minor children, the disposition of your property is often another story. The intestate rules which apply to property distribution generally favor the state and the general public, not the individual and their family. Tax rules are written as such to take the largest amount of tax unless some prior planning has been done. In addition, many states have a costly probate process - the process of submitting your will to court and disposing of your assets. Planning can be done to minimize the costs of probate. In addition, regarding minor children it is important that you and your spouse choose guardians for them - do not leave surviving family members to battle it out and argue over what they think your wishes are.

Also, between surviving spouses and surviving children, every state has different rules as to how much of the estate your spouse is entitled to. Dying without a will can make financial survival very difficult for your survivor.

With situations of divorced parents, second marriages, same-sex couples, having a written document is a must. In most situations, your property will not pass as you intend.

You should have a living will if you wish to avoid being kept alive by artificial means. Take the Terry Schiavo case out of Florida. She did not have a living will or advanced healthcare directive (sometimes called a medical power of attorney). Her husband applied to the court for permission to remove her from life support. Her parents opposed the position of her husband and it became a national and political issue.

Powers of attorney are often valuable between spouses and business partners to act on each others behalf in situations of abscence and disability. They are various types of powers of attorneys including durable powers, nondurable powers, and springing powers.

Life is a random walk. There is no better time than the present to get just the basics of your affairs in order. I often find people shy away from completing wills because of the price (I charge from $1,800 and up for wills, living wills and powers for both spouses in New Jersey - obviously price will vary from firm to firm and from area to area). People can often be penny-wise and pound-foolish. Don't put such a small price on your family's safety and financial security.

Beyond the appropriate documents, take the time to organize your affairs to make the process after your death easier on survivors. We are publishing a book - "For My Heirs: A Journal of Guidance and Last Instructions" just for this purpose. If you'd like more info, please contact our office.

I welcome comments and questions, so feel free to post them.

Organizing Your Estate & Personal Affairs

2008-03-30T21:49:00.003-04:00

When it comes to designing an estate plan, we draft your documents: wills, trusts, powers of attorney, living wills/medical powers of attorney, and any other appropriate documents. These documents are drafted in such a way as to meet the client’s objectives and to take maximum advantage of all tax credits and exemptions available to the client and his or her family. For most attorneys, that is where the work ends. For me, it is just the beginning.

When someone dies, their documents don’t do the work themselves. It takes a family member and/or an attorney, hired for that purpose (this process is called “probate”) to file to the appropriate paperwork and execute the directives of the will. Sometimes this takes an amount of interpretation, but it always involves the process of going through the deceased’s personal belongings, locating life insurance policies, accessing safe deposit boxes, and retitling of assets. Almost all my clients (as with most other attorney’s clients) virtually ignore the process of organizing their affairs in such a way as to make things as easy as possible on their survivors. I am yet to deal with an estate, whether small or large, where things aren’t at least somewhat of a mess. Many clients have asked me whether I had some information that described the probate process and gave them some tools to organize their affairs for their loved ones.

I am, therefore, in the process (about 2/3rds of the way) of creating a publication that will be entitled “For My Heirs: A Journal of Guidance & Instructions”. This booklet will include sections to leave letters of love and guidance for surviving heirs, places to list assets, personal belongings, funeral directives, obituary statements, insurance policies, sample letters for benefit requests, as well as general information about the local probate process. From my research, there does not appear to be any type of publication of its kind, at least nothing this comprehensive.

The booklet will be offered to existing and future clients for approximately $30 to $50 if they want to prepare it themselves; probably $300 to $500 if they would like to firm to prepare a customized version for them. Perhaps we will offer it at a different price to the general public.

I am still accepting suggestions based upon personal experience from anyone wishing to contribute. If we use your ideas, I will give you a set for you and your spouse to complete – free of charge. Also, if you’d like to get on the advance purchase list, please email us. We will send you information as soon as it becomes available.

If you have a personal story regarding a difficult situation you’ve faced with a deceased loved one, I ask you to share it. It will help those in the future avoid such unintended circumstances.

So remember that when some one asks you if you have organized your personal affairs, having an up-to-date will is not enough. That only starts the process. I look forward to my next entry when I address “why you need a will.”

So You Want to be a Public Speaker. . .

2008-03-25T21:38:00.000-04:00

I do a lot of public speaking. Its good for my business and good for my confidence. I regularly speak on tax topics, estate planning, real estate, foreclosures, short sales, etc... I also cover topics such as "how to network and grow your centers of influence," and "how to motivate yourself to success." I speak to financial associations, insurance agencies, planning groups and professional organizations. I also volunteer to speak to lay groups such as retirees, business owners, and young parents.

I have always found it difficult to market my speaking services and continue to grow my business. It is always an up and down cycle. I would market until I was busy, and then stop marketing until such time as things calmed down enough to focus on it. But this never gave me continually growing success -- it was too up and down.

Then I was introduced to a group of people who were forming a speaker's bureau. Usually, speakers' bureaus seek out individuals who have already launched their speaking careers; in other words, speakers they can make money on. Each of these individuals had the same problem as me in that they were unable to focus on growing their speaking careers, but they were all too small and relatively unknown to peak the interest of a speakers bureau. So, together we formed our own. The Professional Speaker's Group is a bureau of about 13 (and growing) individuals who come from many different professions and have varying levels of speaking skills. Some of us having been speaking publicly since high school (like myself) and others are relatively new to the career.

Public speaking is one of my favorite activities. It gives me a charge and it allows me to effect people in a certain way. If you know of any groups, organizations or associations that are looking for an excellent speaker, please send them my way or send them to the bureau. I'll take on any topic, or at least consider it. I love to give motivational speeches and speak to groups about how they can network themselves and their businesses.

To learn more about our speakers and the bureau, visit http://www.professionalspeakersgroup.com/ or click here to link to my speakers bio. Or if you do some public speaking and would like to do more, please visit the site and contact us. For a relatively small investment and assuming you have the right credentials, you could grow your career in speaking.

The Fall of Bear Stearns - The Little Guy Gets Slaughtered

2008-03-18T21:23:00.000-04:00

With the failure of Bear Stearns, one of this country's oldest financial institutions, things really seem to be going to hell in a hand basket. Ace Greenberg has got to be sick. And, although a lot of analysts believe that BS was the big bubble that came up, I am not sure if we've seen the worst.

It is also getting worse for the homeowners who are in trouble with their loans. I've noticed that banks stay right on schedule with the foreclosure process by sending the file out to their respective law firms, but they are unwilling to put the proper resources toward servicing and answering their borrowers' requests for help. And I am just sick of it. The lenders created a lot of this mess by making all these loans in the first place. And then they just walk away and leave all of us to clean things up. I know of one lender who sold out to a very large wire house. They wire house cut all their retail operations and left 50 employees to service the entire country. Over the past few years, this lender issued billions of dollars of loans. Some people will lose their homes simply because the lender does not have the resources to get back to them quick enough. That is simply unfair.

I ask you to write to your Senators and Congressmen and ask them to investigate this issue. It is a nationwide problem and it's making the crisis much worse. Lenders should be held responsible to service the loans they've put on the books. Not just close up shop and leave the general public in trouble. And all this is not just financially devastating. It is emotionally devastating, destroys marriages, effects people's ability to work and their ability to sleep on night. If a borrower submits a hardship package, along with all requested information, the lender should be barred from taking any foreclosure actions until they've taken steps to address these issues with their borrower. It should be malpractice for an attorney to initiate a foreclosure action until they verify that the lender has responded to the hardship request.

Best way to contact Congress is to visit the congressional website at www.congress.org and enter your home zip code. Tell them a story of someone who can't pay their mortgage, has requested help from their lender and the lender has told them that they can't get back to them for 3 months (if you don't have a story, email me and I'll send you some!). Tell them that these people are facing foreclosure and can't even make partial payments since the lender won't accept their checks. It should be illegal; it certainly is unethical and immoral.

And as we watch our economy falter and possibly head toward some of the most difficult economic times since World War II, it occurs to me: how did we get in this mess in the first place? It is, of course, partially the public's fault. They are not without any blame. But with Wall Street so hungry to purchase loans, thus giving lenders the opportunity to create loans which they could sell almost immediately, you have to place a lot of blame on the system. Most home buyers are unaware of how the system works - they only know one thing: they want to buy and the lender is willing to lend. And their willingness drove prices up. Its all supply and demand. More money available will drive up prices. Now money is less available and prices sink. Simple economics and, as usual, the little guy gets slaughtered. The big lenders are being bailed out, i.e. Bear Stearns. A significant portion of the deal is being guaranteed by the Federal Reserve since they are afraid BS is so large that their ultimate failure will have a terrible impact on the economy. But now the Fed has to divert funds from other uses. The little guy gets slaughtered. Wall Street backs off on buying lenders' paper, waits and then goes back in to buy at pennies on the dollar. The little guy gets slaughtered again.

If you have your own stories, please email me. I'd be happy to pass them along to Congress and the media.

Recession Time?

2008-03-14T22:14:00.000-04:00

The economy is rocky. We are clearly heading into a recession. I get more and more files coming across my desk from clients in trouble with their mortgages. Many do not know their options or understand the process.

I thought it would be beneficial to share some insight into this process and alay some fears and misunderstandings. First of all, recognize that banks are businesses and make business decisions everyday. They also do not want to be in the real estate business. In a time when many lenders are cash poor and suffering from bad decision-making, you would be suprised what your lender is willing to do to help you pay them or sell your property. I have clients who've had to sell their properties for less than they owe and we've been able to negotiate with the lender to not only agree not to pursue them personally for the shortage, but to even report the loan as paid in full to the credit bureaus. We have also been successful, through some consulting relationships, to help clients clean up their credit reports after they have gotten past these problems to more easily move on with their lives.

So if you feel that your back is against the wall and you don't have any options, think again, calm down and call us. You'd be surprised at how we can help.

If you are going to negotiate on your own, remember that communication is the key. And so is persistance. Contact the lender every week or so to check in and give them an update, even if they've told you that it will be weeks before they are able to review your file. Most lenders have loss mitigation departments which offer hardship packages that they can send you to state your case and put together the proper financial information to help them make a decision and be flexible to work with you. Remember that the lender is trying to determine whether you are really in trouble or just trying to take advantage of the situation. For smaller lenders, it might take them 6 weeks or more to get back to you. Always follow up on faxes and emails to be sure they were received and have been logged in their system. It is my experience that somehow the lender seems to lose your materials a few times before things get started and you are in the system. Be persistant and don't get frustrated. Expect set backs and keep trying.

Good luck and I hope you fair well during these difficult economic times.

Starting at the Beginning

2008-02-28T22:39:00.000-05:00

This blog has been created to share my thoughts, ideas, strategies and opinions about various topics, legal or otherwise. In addition, it is intended to share the unique services I provide to clients and to better inform those looking for a new attorney relationship.

This is my first posting.

My practice is a transactional one, focusing on wills, trusts & estates, corporate/business planning, asset protection planning, and real estate. The practice has been and is being built around clients who require our full-time support on a retainer basis. I call this our Legal Retainer Program and I will discuss it in more detail in later blogs (if you'd like information, please email me). I find that many of these types of clients (Professionals, Executives and Business Owners) use a multitude of legal advisors for different purposes. Nothing is coordinated or integrated and many parts, unbeknownst to the client, are missing. One of their attorneys might have ideas that would better help the client or protect them, but they fail to bring them to light either because they do not have intimate knowledge of the client's entire situation or because they believe the client does not want to spend the money. Many professionals, Attorneys, CPAs, and the like, take the "let's not rock the boat" attitude and fail to make effective and continuous recommendations. I've seen it time and time again: there is some action the client should take or a decision he or she should make, but the advisor won't push them to make the decision out of fear of damaging the relationship. In reality, their failure to do what's right for the client ultimately causes more damage many more times than not.

Instead, I have chosen to develop the firm on a flat-fee retainer basis (costs and the use of outside professionals is additional). The client pays a regular, manageable cost and we can change, update, negotiate, and recommend all that is in the client's interest. We track our time and may adjust the retainer for the following year. The client gets integrated, holistic advice and has an advisor who always acts in the clients interest.

I welcome free consultations in our office. If you think our service would better serve your needs, give us a call.

Enough of the commercial!

In later blogs, "why you need a will", "how to buy distressed real estate", and "asset protection secrets".