Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida.

Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.

 

Author: Chip Parker, Esq.

15 May Florida: Chapter 7 bankruptcy trustees tactics rebuked by courts

Now more than ever, Florida bankruptcy debtors need court protection from some money-grubbing Chapter 7 trustees. As previously reported on Bankruptcy Law Network, the Florida legislature approved a $4,000 wildcard exemption for those debtors not claiming the benefit of a homestead exemption. At the time it was passed in 2007, bankruptcy experts believed it would be a narrowly used exemption by non-homeowners, but with the collapse of Florida’s real estate market, debtors abandoning their homes in bankruptcy use the Wildcard exemption to protect more of their personal property. Since bankruptcy trustees get to keep 25% of whatever they collect for the estate as their fee, the law change has meant that they miss out on $1,000 in fees for an individual filer and $2,000 in fees for joint filers whenever the wildcard is used. Predictably, most bankruptcy trustees have accepted this new exemption without much complaint, but some of them can’t let go of the gravy train. They have developed cockamamie legal theories in an effort to circumvent the wildcard exemption. The favorite tactic of a rogue bankruptcy trustee is to demand that the debtor immediately vacate his abandoned home or pays him rent for its use. Fortunately, federal and state court judges aren’t having any part of the shakedown.
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15 Apr Three strikes and You’re Out: Lender Processing Services is Zero for April

[caption id="" align="alignleft" width="248" caption="Lender Processing Services strikes out in April!"][/caption]

For some time, I have been exposing the fraud that is the Lender Processing Services (and mortgage servicers in general) business model. I have discussed how it is so revered by the mortgage servicing community because it will do anything, legal or illegal, to help a mortgage servicer foreclose your home.

It’s one thing when a small-time litigator from Jacksonville, Florida makes accusations (that’s me), and then it is another thing when 60 Minutes does it. It’s something even more when the federal regulators recognize LPS’s shenanigans, but when a federal judge confirms everything I (and many other lawyers) have been saying for years about LPS, you know LPS is in trouble.

Who is LPS? LPS (formerly known as Fidelity National Default Solutions) is a default servicer for one out of every two mortgages in this country. It lurks in the shadows of the mortgage industry like a hit-man for the mob, and when LPS whacks you, you never see it coming.

Needless to say, LPS has had a BAAAAAD April, and the month’s only half over.

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15 Mar Supreme Court says Florida Homeowners Can Claim Wildcard Exemption

In July, 2007, Florida’s legislature created a $4,000 wildcard personal property exemption for people who do not receive benefits of a homestead exemption that has become a prime example of the Law of Unintended Consequences.

During the real estate heyday on Florida (Circa 2005), there was a great disparity between homeowners and home renters when it came to protecting assets. Florida’s homestead exemption is unlimited, and homeowners were protecting hundreds of thousands of equity from bankruptcy creditors while renters got only a $1,000 personal property exemption.

The $1,000 personal property exemption has been in place since the late 1800s, and given the time value of money, it is only worth about $70 today. Another way to look at it is that, in today’s economy, a Floridian would need $20,000 to buy the assets that could be purchased for $1,000 back when the original exemption was written into law.

Therefore, it was high time to update Florida exemptions, especially for non-homeowners. The wildcard exemption states that, if a person does not “claim or receive the benefit of” Florida’s homestead exemption, that individual can claim an additional $4000 personal property exemption, meaning married couples can claim a total of $8,000 of asset protection.

As we all know, in the summer of 2008, the stock market crashed, largely due to the housing bubble, and Florida’s real estate market has been in free fall ever since. All those equity-rich Florida homeowners disappeared overnight, making the homestead exemption about as worthless as a parenting book penned by Charlie Sheen.

So, much to the dismay of bankruptcy trustees, debtors filing bankruptcy stopped “claiming the benefit of” the homestead exemption, even though they still lived in their home. Well, this has really upset those Chapter 7 trustees who make money as glorified debt collectors. More specifically, a Chapter 7 trustee keeps 25% of whatever he or she collects from the debtor in “non-exempt assets.” The remaining 75% is paid out to creditors in the bankruptcy case.

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17 Feb Bankruptcy debtors may benefit from short selling their home

As a bankruptcy lawyer, I have often advised clients not to bother with a short sale if they’re filing bankruptcy. They are such a headache, and what is the point anyway? The bankruptcy discharge will wipe out the debtor’s obligation on the house. However, Jacksonville real estate lawyer David J. Heekin, Esquire sat down with me to explain the advantages of a short sale even if a bankruptcy has been filed.

Most homeowners who may need to get out of their current home for economic reasons want to buy another home in the future. According to Heekin,Fannie Mae and Freddie Mac, the two government-sponsored entities that dominate the secondary mortgage market, have a variety of waiting periods for borrowers who have experienced “derogatory credit events” such as short sale, foreclosure, and bankruptcy. Under their current guidelines (as of January 2011), the waiting period for a borrower to purchase another house after a short sale is only 2 years.

However, if someone needs to file a Chapter 7 or Chapter 13 bankruptcy anyway, he won’t owe his mortgage company anymore. So, there appears to be no incentive to short sell his home or investment property.

No so, says Heekin. "I assume your client wants to buy another house in the future, and a short sale will reduce that waiting period. The waiting period to buy again after a Chapter 7 or 11 bankruptcy is usually 2 years after the discharge, and the wait after a Chapter 13 bankruptcy is 2 years from the date of discharge. The Fannie Mae waiting period to buy again after a foreclosure can be up to 7 years. So, a borrower can purchase a home again in as little as 2 years with a combination of bankruptcy and short sale on their credit vs. a wait of 3-7 years with bankruptcy and foreclosure."

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