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New Residential Construction in December 2011

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For information about distinguished Southern California luxury real estate in Los Angeles County, as well as coastal Orange County homes and San Diego homes, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties serves discriminating buyers and sellers of California exclusive real estate in Newport Beach, Laguna Beach, and Marina Del Rey homes; Manhattan Beach, Hermosa Beach, and Pacific Palisades homes; Mission Viejo, Redondo Beach, Santa Monica, Malibu, along with exclusive Los Angeles homes in Beverly Hills and Beverly Glen California.

U.S. Census Bureau News

Joint Release
U.S. Department of Housing and Urban Development

NEW RESIDENTIAL CONSTRUCTION IN DECEMBER 2011

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for December 2011:

BUILDING PERMITS

Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 679,000. This is 0.1 percent (±1.2%)* below the revised November rate of 680,000, but is 7.8 percent (±2.2%) above the December 2010 estimate of 630,000.

Single-family authorizations in December were at a rate of 444,000; this is 1.8 percent (±1.2%) above the revised November figure of 436,000. Authorizations of units in buildings with five units or more were at a rate of 209,000 in December.

An estimated 611,900 housing units were authorized by building permits in 2011. This is 1.2 percent (±1.3%)* above the 2010 figure of 604,600.

HOUSING STARTS

Privately-owned housing starts in December were at a seasonally adjusted annual rate of 657,000. This is 4.1 percent (±11.6%)* below the revised November estimate of 685,000, but is 24.9 percent (±18.3%) above the December 2010 rate of 526,000.

Single-family housing starts in December were at a rate of 470,000; this is 4.4 percent (±11.3%)* above the revised November figure of
450,000. The December rate for units in buildings with five units or more was 164,000.

An estimated 606,900 housing units were started in 2011. This is 3.4 percent (±2.4%) above the 2010 figure of 586,900.

HOUSING COMPLETIONS

Privately-owned housing completions in December were at a seasonally adjusted annual rate of 605,000. This is 9.2 percent (±15.1%)  above the revised November estimate of 554,000 and is 7.1 percent (±10.9%)* above the December 2010 rate of 565,000.

Single-family housing completions in December were at a rate of 448,000; this is 0.9 percent (±11.7%)* below the revised November rate of 452,000. The December rate for units in buildings with five units or more was 147,000.

An estimated 583,900 housing units were completed in 2011. This is 10.4 percent (±2.8%) below the 2010 figure of 651,700.

U.S. Department of Commerce Washington, D.C. 20233

  • Privately-owned housing starts in December were at a seasonally adjusted annual rate of 657,000. This is 4.1 percent (±11.6%)* below the revised November estimate of 685,000, but is 24.9 percent (±18.3%) above the December 2010 rate of 526,000.
  • Single-family housing starts in December were at a rate of 470,000; this is 4.4 percent (±11.3%)* above the revised November figure
  • The December rate for units in buildings with five units or more was 164,000.
  • An estimated 606,900 housing units were started in 2011. This is 3.4 percent (±2.4%) above the 2010 figure of 586,900.

HOUSING COMPLETIONS

  • Privately-owned housing completions in December were at a seasonally adjusted annual rate of 605,000. This is 9.2 percent (±15.1%)*above the revised November estimate of 554,000 and is 7.1 percent (±10.9%)* above the December 2010 rate of 565,000.
  • Single-family housing completions in December were at a rate of 448,000; this is 0.9 percent (±11.7%)* below the revised November rate of 452,000. The December rate for units in buildings with five units or more was 147,000.
  • An estimated 583,900 housing units were completed in 2011. This is 10.4 percent (±2.8%) below the 2010 figure of 651,700.

New Residential Construction data for January 2012 will be released on Thursday, February 16, 2012, at 8:30 A.M. EST.
://www.census.gov/new resconst

EXPLANATORY NOTES

In interpreting changes in the statistics in this release, note that month-to-month changes in seasonally adjusted statistics often show movements which may be irregular. It may take 2 months to establish an underlying trend for building permit authorizations, 4 months for total starts, and 5 months for total completions.

The statistics in this release are estimated from sample surveys and are subject to sampling variability as well as non-sampling error including bias and variance from response, non-reporting, and under coverage. Estimated relative standard errors of the most recent data are shown in the tables. Whenever a statement such as “2.5percent (±3.2%) above” appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred.

All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease. The same policies apply to the confidence intervals for percent changes shown in the tables. On average, the preliminary seasonally adjusted estimates of total building permits, housing starts and
housing completions are revised about three percent or less. Explanations of confidence intervals and sampling variability can be found on our web site listed above.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.census.gov/new resconst

Table 1. New Privately-Owned Housing Units Authorized in Permit-Issuing Places
[Thousands of units. Detail may not add to total because of rounding]

2 to 4 5 units

Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit

2010: December 630 445 25 160 114 70 97 66 257 211 162 98

2011:

January 568 419 20 129 77 49 94 65 286 216 111 89
February 534 382 15 137 63 39 86 59 288 209 97 75
March 574 392 16 166 60 37 94 64 296 215 124 76
April 563 395 21 147 59 38 94 64 284 210 126 83
May 609 406 20 183 80 36 97 67 293 218 139 85
June 617 402 21 194 71 35 99 68 306 217 141 82
July 601 403 21 177 60 37 96 68 312 214 133 84
August 625 418 25 182 61 34 107 74 313 224 144 86
September 589 413 20 156 64 36 107 74 288 221 130 82
October 644 428 23 193 61 39 107 71 345 232 131 86
November (r) 680 436 21 223 77 41 104 70 339 236 160 89
December (p) 679 444 26 209 72 37 110 73 337 239 160 95

Average RSE (%)1 1 1 9 1 3 3 2 2 1 1 2 2

Percent Change:

December 2011 from November 2011 -0.1% 1.8% 23.8% -6.3% -6.5% -9.8% 5.8% 4.3% -0.6% 1.3% 0.0% 6.7%

90% Confidence Interval 3 ± 1.2 ± 1.2 ± 6.2 ± 2.0 ± 4.6 ± 6.6 ± 3.9 ± 5.3 ± 1.9 ± 2.4 ± 1.9 ± 2.6

December 2011 from December 2010 7.8% -0.2% 4.0% 30.6% -36.8% -47.1% 13.4% 10.6% 31.1% 13.3% -1.2% -3.1%

90% Confidence Interval 3 ± 2.2 ± 1.9 ± 9.2 ± 3.1 ± 7.3 ± 10.5 ± 3.7 ± 5.0 ± 2.4 ± 3.0 ± 4.7 ± 6.5

2010: 604.6 447.3 22.0 135.3 73.8 49.1 103.5 75.4 299.1 232.3 128.2 90.6

2011: (p) 611.9 413.7 21.0 177.2 67.5 38.4 101.4 69.7 310.1 221.6 132.8 84.0

RSE (%) 1 1 5 (Z) 3 3 1 1 1 1 2 2

Year to Year Percent Change 4 1.2% -7.5% -4.5% 31.0% -8.5% -21.8% -2.0% -7.5% 3.7% -4.6% 3.6% -7.2%
90% Confidence Interval 3 ± 1.3 ± 1.1 ± 6.5 ± 2.3 ± 5.1 ± 6.8 ± 1.7 ± 2.1 ± 0.8 ± 0.9 ± 2.7 ± 3.4

2010: December 47.6 30.6 2.0 15.0 8.9 5.3 6.3 3.6 19.9 14.8 12.5 6.9

2011:

January 36.0 26.3 1.2 8.5 4.6 2.9 4.4 2.7 19.9 15.1 7.2 5.5
February 37.2 26.5 1.0 9.7 3.6 2.0 4.5 3.3 22.0 15.9 7.1 5.2
March 53.7 37.6 1.4 14.7 4.7 3.0 8.0 6.0 29.4 21.3 11.6 7.3
April 49.9 36.9 1.8 11.2 4.9 3.3 9.0 6.8 24.8 19.2 11.2 7.7
May 56.3 39.2 1.8 15.3 7.2 3.5 9.6 7.1 26.6 20.4 12.8 8.2
June 62.4 40.9 2.0 19.6 8.2 3.6 9.9 7.3 29.9 21.3 14.4 8.8
July 51.2 35.3 1.8 14.2 5.0 3.3 8.9 6.3 26.5 18.3 10.9 7.4
August 60.9 40.8 2.5 17.6 5.8 3.3 11.1 7.6 30.1 21.6 13.9 8.3
September 51.8 35.6 1.8 14.5 5.8 3.5 10.3 6.8 24.3 18.3 11.4 7.0
October 50.5 33.6 1.9 15.0 5.6 3.4 9.9 6.4 24.9 17.2 10.1 6.6
November (r) 50.3 30.9 1.7 17.7 6.3 3.4 8.3 5.2 24.4 16.3 11.3 6.1
December (p) 50.7 29.3 2.0 19.3 5.6 2.7 7.3 4.0 25.7 16.3 12.1 6.4

Average RSE (%)1 1 1 9 1 3 3 2 2 1 1 2 2

(p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards.
X Not applicable. Z Relative standard error is less than 0.5 percent.

  1. Average RSE for the latest 6-month period.
  2. Reflects revisions not distributed to months.
  3. See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals. 4 Computed using unrounded data.

Table 2. New Privately-Owned Housing Units Authorized, but Not Started, at End of Period
[Thousands of units. Detail may not add to total because of rounding]

2 to 4 5 units

Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit

2010: December 84.8 47.2 2.3 35.2 11.9 7.0 7.6 5.3 42.2 24.5 23.1 10.5

2011:

January 79.4 46.3 2.3 30.7 11.5 7.6 6.2 4.5 39.5 24.1 22.2 10.2
February 79.3 46.3 2.0 30.9 11.0 7.6 6.9 4.8 38.8 23.7 22.6 10.3
March 81.9 48.6 1.8 31.5 10.1 7.3 8.3 6.0 38.8 24.6 24.6 10.7
April 81.8 48.2 2.1 31.5 9.7 6.8 8.8 6.9 38.5 23.9 24.8 10.6
May 82.6 47.6 1.8 33.2 11.1 6.5 7.9 6.0 39.4 24.3 24.2 10.8
June 84.7 45.5 1.7 37.5 11.7 6.2 5.7 4.5 42.4 23.5 24.9 11.2
July 80.7 43.4 1.9 35.5 8.3 5.8 6.2 4.2 43.2 23.6 23.1 9.8
August 87.4 45.5 2.5 39.4 8.7 5.9 7.8 5.9 46.2 23.6 24.8 10.1
September 79.9 45.0 3.5 31.4 8.9 5.8 7.9 5.9 41.6 23.8 21.5 9.5
October (r) 75.3 42.8 3.0 29.5 8.0 5.6 7.0 4.9 39.9 22.8 20.3 9.4
November (r) 73.2 41.8 3.2 28.2 6.7 4.8 7.9 5.0 40.2 22.4 18.4 9.6
December (p) 78.8 42.3 3.0 33.5 8.1 4.7 6.3 4.0 43.1 23.2 21.2 10.4

Average RSE (%)1 5 7 19 9 15 18 15 15 7 10 12 17

Percent Change: 2

December 2011 from November 2011 7.6% 1.3% -6.6% 18.6% 21.6% -1.5% -20.4% -19.7% 7.2% 3.7% 15.6% 8.0%
90% Confidence Interval 3 ± 5.2 ± 4.4 ± 9.7 ± 12.6 ± 14.0 ± 12.0 ± 14.4 ± 8.3 ± 7.3 ± 6.9 ± 9.7 ± 8.3
December 2011 from December 2010 -7.1% -10.4% 28.0% -4.9% -32.0% -32.7% -16.3% -24.2% 2.1% -5.1% -8.0% -0.8%
90% Confidence Interval 3 ± 7.8 ± 8.1 ± 52.8 ± 14.8 ± 16.4 ± 15.1 ± 17.4 ± 20.6 ± 10.1 ± 11.5 ± 18.5 ± 16.6

(p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards.

  1. Average RSE for the latest 6-month period.
  2. Computed using unrounded data.
  3. See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals.

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Mortgage Crimes are Focus of New Task Force

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For information about distinguished Southern California luxury real estate in Los Angeles County, as well as coastal Orange County homes and San Diego homes, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties serves discriminating buyers and sellers of California exclusive real estate in Newport Beach, Dana Point, Laguna Beach, Laguna Niguel, Coto de Caza; and Marina Del Rey, Manhattan Beach, Hermosa Beach, Dove Canyon, Ladera Ranch, and San Juan Capistrano;and Palos Verdes, Pacific Palisades, Mission Viejo, Rancho Margarita, San Clemente, Redondo Beach, Santa Monica, Venice, Malibu, and Irvine, along with exclusive Los Angeles homes in Bel Air, Beverly Hills, and Beverly Glen California.

Mortgage crimes are focus of new task force

WASHINGTON (CNNMoney) — A new special task force to investigate and prosecute those responsible for bad mortgages during the housing boom will be part of President Obama’s 2012 agenda.

Obama announced Tuesday that he’s asked the Justice Department to create a special unit of prosecutors and state attorneys general to investigate abusive lending and packaging of risky mortgages that led to the housing crisis. And he’s tapped an avowed Wall Street enemy, New York Attorney General Eric Schneiderman, to help run the crime unit, according to a White House official.

“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” Obama said in his State of the Union speech.

The new unit’s goal will be to investigate banks, financial firms and mortgage originators that broke the law, and to compensate victims and provide relief for homeowners, the White House official said.

Although the housing bust is more than four years old, this is the first time the Obama administration has indicated it will go after mortgage originators and Wall Street banks that got homeowners into loans they couldn’t afford — actions seen as a key culprit of the financial crisis.

The mortgage industry has often been blamed for its role helping homeowners get lines or credit and bigger mortgages during the housing boom. The industry saw little downside, unloading the risk that the loans would go bad on to the financial markets.

With Schneiderman, who has been working on his own investigations into big banks, Obama is signaling he’s ready to go after financial crimes. And left-leaning progressive groups cheered the news.

“Schneiderman has shown himself to be a courageous hero in his defense of the struggling underwater homeowners in his state and across the country,” according to a statement released by a coalition of left-leaning advocates such as MoveOn and New Bottom Line.

The news came as a surprise to the financial industry, which had been predicting Obama would tout a proposed settlement under discussion among federal regulators, state attorneys general and the largest bank mortgage servicers under investigation for improperly foreclosing on homeowners.

“We believe the industry is worried that this new task force will go after the banks for the origination of many of the mortgages that have defaulted or are now underwater,” said Jaret Seiberg, a senior policy analyst for the Washington Research Group.

The state attorneys general, the Justice Department and the Department of Housing and Urban Development have been in talks for nearly a year with big bank servicers that stand accused of using robo-signers to service home loans. The five largest mortgage servicers involved in the talks are: Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500) and Ally Financial (GJM).

According to people familiar with the talks, a draft settlement would result in those banks paying $20 billion to $25 billion toward housing relief. About 1 million underwater homeowners would be eligible for an average $20,000 off the principal owed.

In return, state attorneys general would not be able to file future lawsuits against the bank mortgage servicers that agree to the deal. The amount of relief available for homeowners depends on how many state attorneys general agree to the deal.

Obama didn’t mention the talks in his State of the Union speech. A White House official said Wednesday that the new task force would not prevent progress that has been made on that deal.

California exclusive real estate in Newport Beach

Real Estate Recovery Expects to be Slow

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For information about coastal and luxury Los Angeles real estate, Orange County CA homes, and San Diego homes in La Jolla and Mission Beach, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties services buyers and sellers of Southern California coastal luxury homes from Malibu and Santa Monica to Newport Beach and San Juan Capistrano real estate and distinctive Beverly Hills, Beveral Glen, and Bel Air homes.

Real Estate Recovery Expects to be Slow

Fair warning to U.S. real estate players: Resign yourselves to “a slowing grind-it-out recovery” in 2012, as “enduring economic doldrums” continue to weigh heavily on the market.

Your best bets: a small handful of “property-wealth islands,” including San Francisco and San Jose/Silicon Valley, both seen as “primary 24-hour gateways located along global pathways,” according to a report being released today at the Urban Land Institute conference in San Francisco.

San Francisco ranks third out of 51 cities as a place to invest in and develop commercial and multifamily apartment properties and fourth in for-sale home building, with San Jose two or three rungs lower in each category, according to the survey compiled by the institute and Pricewaterhouse Coopers.

Washington, Austin and New York are the other top-rated cities.

“We come out very well as top investment places, although even here it’s still a bit of a chug,” said Kate White, executive director of ULI San Francisco.

Put the “chug” down to the enduring doldrums in the housing market, which continues to weigh on San Francisco and San Jose, if not as badly as in other parts of the Bay Area and nation. Even though both rank high in the home-building category, according to the report, their prospects for investment and development are described only as “fair.”

“There’s still an understandable reluctance by potential homeowners to get into the market,” said White.

Not so, however, when it comes to renting or leasing commercial space in high-tech areas like San Francisco’s Mid-Market and South of Market, a trend driven largely by the influx of a younger, more mobile and urban-oriented workforce.

“Gen Y is driving up the demand for apartments and driving up rents, which makes investing in apartments a safer bet,” said White.

Depending on how long it lasts, such a trend could be a game-changer for real estate.

“Living smaller, closer to work, and preferably near mass transit holds increasing appeal as more people look to manage expenses wisely,” notes the report. “More companies concentrate in urban districts where sought-after generation-Y talent wants to locate in 24-hour environments.”

A separate Urban Land Institute report, examining land use changes in California, takes the point further.

Projecting out to 2035, the report says demand for traditional single- family homes will decline, by as much as 10 percent, while “changing demographics” and other factors shift the real estate focus to smaller lots and “multiple or intergenerational households” within walking distance of “transit station areas.”

“California’s future is a lot more urban and transit-oriented than it has been historically. There’ll be an increasing demand for the 24-hour, livable city model,” said White. “The next generation is ushering it in, and local agencies need to plan accordingly.”

Survey Indicates Mood Improves on Home Prices

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For information about luxury Los Angeles real estate, Orange County CA homes, and coastal San Diego homes in Southern California, call Bob Cumming of Keystone Group Properties at 310-496-8122.  Keystone Group Properties services buyers and sellers of Southern California real estate.  Ask us about coastal Southern CA homes for sale in Los Angeles, Orange, and San Diego counties.

Survey Indicates Mood Improves on Home Prices

Consumer expectations for U.S. home prices perked up in December, matching a modest fourth-quarter improvement in the U.S. economy, according to a monthly survey from mortgage market firm Fannie Mae.

For its December reading, Fannie Mae said survey respondents now expect home prices to rise by 0.8% over the next year, up from the 0.2% gain predicted in November.

Views on the direction of the U.S. economy also improved: 22% of respondents indicated a belief that the U.S. economy is on the right track, marking a 6-percentage-point jump from November’s survey.

On personal finances, 40% of respondents said they anticipate their personal financial situation to strengthen over the next year. Fannie Mae noted the response marks the first time since February that a larger share of respondents indicated they expect improved personal finances rather than finances that will remain the same over the next year.

Despite the marked improvement in consumer sentiment, Fannie Mae Chief Economist Doug Duncan cautioned that consumer attitudes remain at depressed levels, with over two-thirds over respondents in December’s survey still indicating a belief that the U.S. economy is headed in the wrong direction.

The survey is based upon a monthly poll of roughly 1,000 adults and has a margin of error of plus or minus 3.1%

Freddie Mac Permits Up To 12 Mos Forbearance to Unemployed Borrowers

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Call Bob Cumming of Keystone Group Properties at 310-496-8122 for information about Southern California luxury homes in Los Angeles County, Orange County and San Diego County.  Keystone Group Properties services coastal Southern California real estate.

Freddie Mac Permits Up To 12 Mos Forbearance to Unemployed Borrowers

Freddie Mac (OTC: FMCC) today announced it is giving mortgage servicers expanded authority to provide six months of forbearance to unemployed borrowers without Freddie Mac’s prior approval and up to an additional six months with prior approval. This means unemployed borrowers may be eligible for up to 12 months of forbearance. Freddie Mac’s forbearance options are being expanded at the direction of the Federal Housing Finance Agency and will take effect on February 1, 2012.

News Facts:

  • Mortgage servicers can now approve unemployed borrowers with Freddie Mac owned- or guaranteed-loans for six months of forbearance without prior approval from Freddie Mac.
  • Servicers can extend the forbearance period up to an additional six months with prior Freddie Mac approval, giving eligible unemployed borrowers with Freddie Mac owned- or guaranteed-mortgages up to one year of forbearance.
  • The expanded forbearance options will take effect on February 1, 2012.
  • Delinquent borrowers in an existing short term forbearance plan can be evaluated for an extended forbearance under the new policy.
  • Previously Freddie Mac allowed servicers to grant up to three months of forbearance with no payment and without prior approval, or six months at a reduced payment with prior approval. Longer forbearance required prior approval and was generally restricted to events such as natural disasters, permanent disability or long-term medical emergencies.
  • According to the latest statistics, nearly 10 percent of delinquencies on Freddie Mac mortgages were tied to unemployment.

Quote:

Attribute to Tracy Mooney, Senior Vice President, Single-Family Servicing and REO, Freddie Mac:

“These expanded forbearance periods will provide families facing prolonged periods of unemployment with a greater measure of security by giving them more time to find new employment and resolve their delinquencies. We believe this will put more families back on track to successful long-term homeownership.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets.

Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. For more information, visit FreddieMac.com.

California Ranks #1 for Mortgage Fraud

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Call Bob Cumming of Keystone Group Properties at 310-496-8122 for information about Southern California luxury homes in Los Angeles County, Orange County and San Diego County.  Keystone Group Properties services all coastal Southern California real estate.

California Ranks #1 for Mortgage Fraud

Mortgage fraud activity slowed overall in the third quarter, but California ranks first in home loan fraud, with the state seeing as much as $204.2 million in losses on deceptive mortgage activity.

That’s according to a new report from MortgageDaily, which found that lenders victimized by fraud faced inflated appraisals and fraudulent documentation.

California was followed by New York, which experienced $199.6 million in losses from nefarious activities in mortgage finance.

New York was followed by Florida, South Carolina and Minnesota in terms of fraudulent activity.

The total loss value of all mortgage activity in the third quarter hit $1.3 billion.

In the third quarter, the Mortgage Fraud Index maintained by MortgageDaily noted that the index score hit 1,173 in the third quarter.

General Bankruptcy Information for So Cal Homeowners

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For information on properties in Southern California— San Diego County coastal real estate  and Marina Del Rey beach homes , call Bob Cumming of Keystone Group Properties at 310-496-8122.

If you are thinking about filing bankruptcy, this page will provide general information about a Chapter 7, Chapter 11, and Chapter 13 Bankruptcy. It will help you understand what the law allows. We would be happy to refer a bankruptcy attorney to you for further consultation.

WHAT IS CHAPTER 7 BANKRUPTCY?

One of the main purposes of Chapter 7 Bankruptcy is to give a person who is hopelessly burdened with debt a fresh start by wiping out most debts. A Chapter 7 Bankruptcy is a liquidation proceeding. The debtor receives a discharge (elimination) of all dischargeable debts usually within four months. Note that some debts, listed below, are not dischargeable. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to creditors. In the vast majority of cases the debtor’s assets fall within the exemption provisions,  and he has no assets that he would lose, so Chapter 7 will give that person a fairly quick “fresh start.”  To qualify for Chapter 7 Bankruptcy a person must meet the Means Test. He or she must gather information about his/her assets and liabilities, and apply the Means Test formula to them. Please Google “Chapter 7 Bankruptcy Means Test” for more information.

WHAT IS CHAPTER 11 BANKRUPTCY?

Chapter 11 Bankruptcy is known as a reorganization bankruptcy. Through a court approved Plan, a debtor may restructure obligations to creditors and pay them over time, or may liquidate assets to pay creditors. The debtor remains in control and does not turn over assets to the trustee.

WHAT IS CHAPTER 13 BANKRUPTCY?

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter 13 Bankruptcy is filed by individuals who want to pay off their debts over a period of 3 to 5 years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also an option for individuals who have predictable income that  is sufficient to pay reasonable expenses with some amount left over to pay off debts.  To qualify for Chapter 13 Bankruptcy a person must: Reside, have a domicile, a place of business, or property in the United States, or a
municipality;  Have a source of regular income; and on the date the petition is filed owe less than $360,475 in unsecured debts and less than $1,081,400 in secured debts. Note: The amounts are regularly adjusted to keep up with the cost of living. Google “Chapter 13 Bankruptcy Means Test” for current information.  Corporations and partnerships may not file a Chapter 13 Bankruptcy. If you filed a prior Chapter 13 Bankruptcy and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition and should check 11 U.S.C. sec. 109(g).

WHAT CHAPTER BANKRUPTCY — 7 or 11 or 13 — IS BEST FOR ME?

Chapter 7, Chapter 11 and Chapter 13 Bankruptcy Qualifications Compared:
Chapter 7 Bankruptcy: For individual debtors. There is an upper limit as to income (see Chapter 7 Bankruptcy Means Test), but no limit as to amount of debt. Chapter 11 Bankruptcy: For individual, corporate and partnership debtors. There is no limit as to income, and no limit as to debt. A debtor may “stretch out” payments to creditors with their consent beyond the 3 to 5 year time limit of a Chapter 13 Bankruptcy. Chapter 13 Bankruptcy: For individual debtors. There is an upper limit as to amount of unsecured and secured debt.  Debtor is required to have a source of regular income, but there is no limit as to income. Debtor must pay creditors under the court approved Plan in 3 to 5 years. Debtors who qualify for both Chapter 11 and 13 may prefer to file under Chapter 13 because a debtor in a Chapter 13 is entitled to various procedural and substantive advantages, including a broader scope of discharge, than in a Chapter 11. Please consult a bankruptcy attorney about your particular situation to determine what is best for you. Keystone Group Properties dba Southern California Home Source would be happy to refer a bankruptcy attorney to you.

BEFORE FILING BANKRUPTCY, A CREDIT COUNSELING COURSE IS REQUIRED.   HOW DO I FIND ONE?

At least five days before filing a Bankruptcy Petition (with exception for emergencies), you are required to take an approved Credit Counseling Course. It can be taken in person or over the phone.  A list of approved credit counseling agencies may be found at the California Bankruptcy Court Central District’s (includes Los Angeles and Orange Counties) website:  www.cacb.uscourts.gov click information, click Self Service Center, click Credit Counseling Courses.  A list of approved credit counseling agencies also may be found at the United States Bankruptcy Court’s website: ww.uscourts.gov/federalcourts/bankruptcy click Bankruptcy Resources, click Approved Credit Counseling Agencies and Debtor Education Providers.

WILL FILING BANKRUPTCY HELP ME KEEP MY HOME?

Filing Chapter 7,11 or 13 Bankruptcy will delay foreclosure but will not stop it.

Chapter 7 Bankruptcy:

Filing a Chapter 7 Bankruptcy Petition will freeze foreclosure proceedings for a short time. The lender usually files for Relief from Automatic Stay and asks the Bankruptcy Judge to be able to proceed with the foreclosure. The Judge usually grants this request. Chapter 11 and Chapter 13 Bankruptcy and Loans on Debtor’s Principal Residence:

In a Chapter 11 and Chapter 13 Bankruptcy, a person obtains court approval of a Plan to pay creditors. The home loan or mortgage creditors on debtor’s principal residence would be a part of that Plan. If a debtor is not able to make payments, then there may be foreclosure, short sale, or deed-in-lieu.

“Lien stripping” in a Chapter 11 or Chapter 13 Bankruptcy:

“Lien stripping” may reduce the over-encumbered value of real property to current market value. It is only available for an individual debtor, not a corporate or partnership debtor. It is not available on a 1st trust deed on debtor’s principal residence. It possibly may be used on a 2nd trust deed, or on real property that is not debtor’s principal residence (2nd homes, investment properties, commercial property). “Lien stripping” described generally: the real property’s over-encumbered value is reduced to current market value; the amount that exceeds current market value is treated in the Plan like unsecured debt and may be reduced; debtor pays the current market value, the secured debt.   In a Chapter 13, a debtor must pay creditors, including the secured debt, in 3 to 5 years. In a Chapter 11 Bankruptcy, a debtor has a longer time to pay creditors. Please consult a bankruptcy attorney for further information.

WHAT ARE THE MOST COMMON REASONS FOR A CHAPTER 7 BANKRUPTCY?

The most common reasons for a Chapter 7 Bankruptcy are: unemployment; large medical expenses; seriously overextended credit; marital
problems, and other large unexpected expenses.  A Harvard Study reported that half of US bankruptcies were caused by medical bills
(MSNBC). The study was published online in February of 2005 by Health Affairs. The Harvard study concluded that illness and medical bills caused half (50.4 percent) of the 1,458,000 personal bankruptcies in 2001. The study estimates that medical bankruptcies affect about 2 million Americans annually – counting debtors and their dependents, including about 700,000 children.

WHAT DEBTS ARE ERASED BY A BANKRUPTCY?

Most unsecured debt is erased in a Chapter 7 Bankruptcy, or reduced in Chapter 11 and 13 Bankruptcies, except for: Child support and alimony; Debts for personal injury or death caused by debtor’s drunk driving; Government guaranteed student loans; Tax debt and money owed to government agencies.

Note on Private Student Loans: On June 7 2007, a US Senate Bill was introduced to make private student loans dischargeable in bankruptcy, as they were before 2005, so that again they would be fully dischargeable in bankruptcy. Please consult a bankruptcy attorney for the most recent state of the law.

More information about debt that may not be dischargeable and may survive bankruptcy:

The following debts are not erased in both Chapter 7 and Chapter 13. If you file Chapter 7, these will remain when your case is over. If you file Chapter 13, these debts must be paid in full during your Plan. If they are not, the balance will remain at the end of your case.  Debts you forget to list in your bankruptcy papers, unless the creditor learns of your bankruptcy case.

Child support and alimony; debts for personal injury or death caused by your intoxicated driving; student loans from government organizations, unless it would be an undue hardship for you to repay; fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution.Whether recent income tax debts and all other tax debts are dischargeable is a complicated area. Usually they are not dischargeable.

Please consult a bankruptcy attorney for more information. In addition, the following debts may be declared non-dischargeable by a
bankruptcy judge in Chapter 7 if the creditor challenges your request to discharge them. These debts may be discharged in Chapter 13. You can include them in your Plan, and at the end of your case, the balance may be wiped out.

Debts you incurred on the basis of fraud, such as lying on a credit application; credit purchases of $500 or more for luxury goods or services made within 90 days of filing; loans or cash advances of $750 or more taken within 70 days of filing; debts from willful or malicious injury to another person or another person’s property; debts from embezzlement, larceny or breach of trust, and debts owed under a divorce decree or settlement unless after bankruptcy you would still not be able to afford to pay them, or the benefit you’d receive by the discharge outweighs any detriment to your ex-spouse (who would have to pay them if you discharge them in bankruptcy).

WILL MY CREDITORS STOP HARASSING ME?

Yes, they will!  By law, all actions against a debtor must cease once the Petition is filed. Creditors cannot initiate or continue any lawsuits, wage garnishes, or even telephone calls demanding payments. Secured creditors such as banks holding, for example, a lien on a car or a home loan, will get the stay lifted if you cannot make payments, and act to repossess or foreclose.

WILL MY SPOUSE BE AFFECTED?

Your wife or husband will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. If they have a supplemental credit card, they are probably responsible for that debt. However, in community property states like California, either spouse can contract for a debt without the other spouse’s signature on anything, and still obligate the marital community. There are a few exceptions to that rule, such as the purchase or sale of real estate; those few exceptions do require both spouse’s signatures on contracts. But the day to day debts, such as credit cards, do NOT require both spouses to have signed. Please consult a bankruptcy attorney for more information. The following are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

WHO WILL KNOW?

Bankruptcy filings are public records. However, under normal circumstances, no one will know you went bankrupt. The Credit Bureaus will record your bankruptcy and it will remain on your credit record for 10 years.

WILL I LOSE MY JOB BECAUSE I FILED BANKRUPTCY?

No. U.S.C. Sec. 525, prohibits any employer from discriminating against you because you filed bankruptcy.

WHAT DON’T I KEEP?  HOW MUCH AM I ALLOWED TO KEEP?

In a Chapter 7 Bankruptcy, assets in excess of the allowed exemptions, or non exempt assets such as real estate and boats, will be liquidated by the trustee. Please Google “Chapter 7 Bankruptcy Exemptions” for more information. In a Chapter 7 Bankruptcy, you are allowed to keep certain assets, depending on the state in which you reside. Please Google “Chapter 7 Bankruptcy Exemptions” for more information.

MAY I KEEP ANY CREDIT CARDS?

Whether a debtor keeps credit cards after filing bankruptcy is up to the credit card company. If you are discharging a credit card, they will cancel the card unless you reaffirm the debt. Even if you have a zero balance, the credit card company might cancel the card.

WILL I EVER GET CREDIT AGAIN?

Yes! A number of banks now offer “secured” credit cards where a debtor puts up a certain amount of money (as little as $200) in an account at the bank to guarantee payment. Usually the credit limit is equal to the security given and is increased as the debtor proves his or her ability to pay the debt. Two years after a bankruptcy discharge, debtors are eligible for mortgage loans on terms as good as those of others, with the same financial profile, who have not filed bankruptcy. The size of your down payment and the stability of your income will be much more important than the fact you filed bankruptcy in the past. The fact you filed bankruptcy stays on your credit report for 10 years. It becomes less significant the further in the past the bankruptcy is. The truth is, that you are probably a better credit risk after bankruptcy than before. Please Google “build credit after bankruptcy” for more information.

WHEN WILL I BE DISCHARGED FROM BANKRUPTCY?

One of the major purposes of a Chapter 7 Bankruptcy is to erase debt and to give a person a fresh financial start. The debt is erased when he or she is discharged. This happens 3 – 5 months after the Chapter 7 Bankruptcy is filed. At that time all debts (with some exceptions) are written off.

I FILED CHAPTER 7 BANKRUPTCY BEFORE.  WHEN MAY I FILE AGAIN?

A person may file Chapter 7 Bankruptcy again if it has been more than 8 years since he or she filed the previous Chapter 7 Bankruptcy.

IF I USE A CREDIT COUNSELOR, WON’T I GET A BETTER CREDIT RATING THAN IF I FILE BANKRUPTCY?

No, you will not. It will cost you less money and you will rebuild your credit rating faster if you file Chapter 7 or Chapter 13. Be cautious if you are considering using a credit counselor. Also read about the problems of unscrupulous companies in the credit counseling industry, and the action the IRS has taken against “non-profit” credit counseling groups following widespread abuse.

WHAT DOES IT COST?

It costs about $300 to file a Chapter 7 Bankruptcy. A bankruptcy attorney’s fees vary but should be in the range of $1,000 to $3,000. Many bankruptcy attorneys will give you a free initial consultation. You can keep the fees down by being well organized and well prepared. You may also be able to keep the fees down by not requiring your attorney to attend the Section 341 (a) Meeting of Creditors with you. The fees for a Chapter 11 or 13 Bankruptcy are higher.  Please consult with a bankruptcy attorney about fees.

Financial Assistance for Southern California Homebuyers through Conveyance by Trust

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HOME  BUYERS – BUYER FINANCING ASSISTANCE

Homebuyers in Southern California may benefit by Buying through Seller Assisted Financing.  Through Conveyance by Trust, homebuyers of real estate in Los Angeles County and Orange County as well as of La Jolla CA real estate are able to take over the Seller’s home loan payments.  Click here for more information about buying So CA real estate with Conveyance by Trust Financial Assistance.

For information on coastal and luxury properties from Santa Monica to Beverly Hills homes to San Juan Capistrano and La Jolla real estate, call Bob Cumming of Keystone Group Properties at 310-496-8122.

Conveyance by Trust – Seller Assisted Financing for Southern California Real Estate

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There are many benefits of selling Southern California real estate in Los Angeles and homes in Orange and San Diego counties through Seller Assisted Financing.  Conveyance by Trust offers homebuyers the opportunity to take over the Seller’s loan payments.  Buyers are easier to find and the closing is quick.  Click here for a comprehensive list of the reasons why this method of Seller Assisted Financing may offer the best solution to selling California coastal properties.

Please contact Bob Cumming of Keystone Group Properties at 310-496-8122.  Our area of expertise includes Southern California Properties for sale in the coastal areas and luxury Beverly Hills homes.

Keystone team Los Angeles real estate and Orange County CA home testimonials

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Cindy and Brad T., Pacific Palisades, CA

We wish to thank you and the Keystone team for everything you have done for our family. Our house had been listed for more than eighteen months with three different realtors. Your firm was able to provide a qualified buyer that made a fair offer and enabled us to close on the transaction in approximately sixty days.

Harry and Betty J., New York, New York

We feel you saved us from the potential of financial ruin! As you recall, my husband’s company transferred him from Southern California to the East Coast. We moved to the East Coast and purchased a house with my husband’s company paying the monthly mortgage and costs for our Laguna Beach home while we were trying to sell it.

My husband’s company was sold shortly after we were back each and the acquiring company refused to continue to pay the monthly mortgage and upkeep costs for our house in Southern California. We were desperate. Nothing we tried worked as our  bank account balances diminished during this trying time. We were introduced to you by a friend and your organization was able to complete a transaction in a relatively short time and help get us back on our feet.

Thank you, Thank you, Thank you.

John and Mary T., Calabasas, CA

Our family wants to thank you for being able to consummate a short sale of our property. It minimized the effect on our credit and gave all of us a piece of mind. My husband and I lost both of our good paying jobs due to the economy and were unable to find other jobs immediately. The downturn in real estate at the same time made our home worth a lot less than the mortgage.

We were both successful at finding new jobs but at salary levels that were much less than what we had been making. We could no longer afford the mortgage. Our efforts and those of other professional service firms went nowhere with the financial institutions. We fell behind many months on our loan payments.  Your firm’s professional, no nonsense approach working with the finance institutions allowed us to sell the property as a short sale in a few short months.

Our credit is being repaired and we look forward to having your organization help us buy another property in a few years.