Mortgage delinquencies hit record-high in 3Q

From USA Today, Friday November 20, 2009

WASHINGTON (AP) — More than 14% of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September, a record-high for the ninth straight quarter and a problem that could threaten the U.S. economic recovery.

The Mortgage Bankers Association's report Thursday adds to fears that the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages.

After three years of plunging prices, the housing market started to rebound this summer. While optimists hope the worst is over, pessimists say there are simply too many foreclosed properties that have yet to be dumped on the market and expect further price declines.

RELATED: Another wave of foreclosures looms

INTERACTIVE MAP: Foreclosure rates for all 50 states

About 4 million U.S. homeowners were either in foreclosure or at least three months behind on their mortgage payments as of September, according to the mortgage bankers group. Even if a quarter of those borrowers are able to stay in their homes, "there's a lot of potential inventory coming into the market next year," said Jay Brinkmann, chief economist with the Mortgage Bankers Association.

Those foreclosures will push home prices downward, especially in the hardest-hit California and Florida cities, places that are also coping with soaring unemployment, he said.

The record-high foreclosure numbers are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis.

Fixed-rate loans made to so-called prime borrowers with good credit histories caused nearly 33% of new foreclosures in the July-September quarter, compared with 21% a year ago.

Subprime loans with adjustable rates have fallen to 16% of new foreclosures from 35% a year earlier.

Loans backed by the Federal Housing Administration also show increasing signs of trouble. More than 18% of FHA borrowers are at least one payment behind or in foreclosure.

Among states, the worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44% of new foreclosures in the country. Nearly 13% of all loans in Florida were in foreclosure, the highest in the U.S., followed by Nevada at more than 9%.

CNN.com Article: How to Prevent Medical Bill Disaster

Good article on strategies and tactics...

By Meryl Davids Landau

It's a fact of life: Everyone gets sick at times. The scary thing is that illness or medical bills cause nearly two-thirds of all bankruptcies, according to a study from Harvard Medical School. And in 78 percent of cases, the person goes bankrupt despite having health insurance.

Experts warn to never let your health insurance policy lapse and to take advantage of COBRA.

"Typically, it was a relatively brief illness that led to bankruptcy," says study co-author Dr. David U. Himmelstein, associate professor of medicine at Harvard Medical School. Here's how to protect yourself.

While you're well ...

Never let your policy lapse. It's tempting to forgo insurance premium payments if you're jobless. But "not having insurance is as risky as not wearing your seat belt," warns Atlanta, Georgia financial planner Mary Claire Allvine, co-author of The 7 Most Important Money Decisions You'll Ever Make. "It takes only one accident or illness to financially ruin you."

Thankfully, the federal government will, in most cases, pay 65 percent of your COBRA bill for nine months if you're laid off this year. Go to the United States Department of Labor Web site for details.

Budget for health care like you do for gas. Factor your annual deductible, doctor-visit fees, and drug co-pays into your budget, Allvine says. Divide what you pay in a typical year by 12 to see what to save monthly. And use your employer's flexible-spending benefit, so you can pay for uncovered medical expenses with pretax dollars.

Get to know your policy. You're more likely to get claims covered when you strictly follow your insurer's requirements, says Erin Moaratty, chief special-projects officer at the nonprofit Patient Advocate Foundation in Newport News, Virginia. Read your policy thoroughly to see what the rules are for seeing out-of-network doctors, getting preapproval for procedures, etc.

Check your disability coverage. Find out if you have this important insurance from your employer (most offer it). Even if you do, many companies pay only 60 percent of your salary should you become unable to go back to work, so consider getting a supplemental policy that makes up the other 40 percent. Compare quotes from different companies at eInsurance.com.

View healthy living as a money matter. See a doctor even for small issues to avoid bigger, costly problems down the line. Eating right, exercising, and quitting smoking are also smart ways to save.

If you're already in health-related financial trouble ...

Don't take "no" from your insurer. "Appeal every claim that is denied," Moaratty advises. "In our experience, a majority of denials are eventually overturned."

In some cases, fixing a simple coding error (via a quick call from your doctor) will do it. If that doesn't work, craft a written appeal with care, working with your MD and following the timetable spelled out in your policy. This is important not only because it can help you win, but also because, if you don't appeal and later want to sue in court, you'll be limited to arguments you raised in your appeals.

Enlist an ally. Consider hiring a medical advocate who knows the ropes, so you don't have to battle your insurance company's or hospital's billing office alone. Fees vary, but start your research at the Medical Billings Advocate of America's Web site. For free guidance, go to the Patient Advocate Foundation's site.

Negotiate with your doctor and hospital. If you get a huge bill, ask for the billing or finance department (not your doc) and tell them what you can afford. Most will slash fees for the promise of a speedy payment or set up a payment plan. "The best time to do this is early in the process, " Moaratty explains. "Once it goes to a collection agency, you'll have fewer options."

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Copyright Health Magazine 2009

Bankruptcy Filings Reach New High

OCTOBER CONSUMER BANKRUPTCY FILINGS UP 28 PERCENT OVER LAST YEAR

The American Bankruptcy Institute reported the 135,913 consumer bankruptcy filings in October represented a 27.9 percent increase over last October's monthly total of 106,266. Relying on data from the National Bankruptcy Research Center (NBKRC). The October 2009 consumer filings represented an 8.9 percent increase from the September 2009 total of 124,790. Chapter 13 filings constituted 28.5 percent of all consumer cases in October, a slight increase from the September rate.

"The nearly 9 percent increase in consumer bankruptcy filings in October, together with a 7 percent jump reported in business cases, demonstrates the sustained stress on the U.S. economy," said ABI Executive Director Samuel J. Gerdano. ABI forecasts that total bankruptcies this year will exceed 1.4 million, the highest number since 2005.

My Breast Cancer Story

Welcome to Bankruptcy + Rescue Blog!


In honor of Breast Cancer Awareness Month, we have announced a pro bono project:"My Breast Cancer Story". The idea is to help one local family touched by breast cancer and facing financial crisis receive free Chapter 7 bankruptcy filing services.

The growing rate of bankruptcies caused by medical bills prompted us to participate in the American Bar Association Pro Bono Celebration Week, October 24-31. By awarding bankruptcy filing services to a person in need we hope to raise awareness of health-related financial problems and inform people about the benefits of contacting an attorney.


President Obama's stirring healthcare speech highlighted one woman's battle with breast cancer and the loss of her medical insurance. His statements clearly link the national health insurance debate and the personal finance crisis driving more Americans and Michigan residents to declare bankruptcy due to soaring medical bills.


"Americans are one injury or illness away from bankruptcy," Obama stated. "The crushing cost of healthcare causes a bankruptcy in America every 30 seconds," he added. In fact, cancer is reported to be the leading medical cause of all bankruptcy filings.


Every three minutes someone new in this country is diagnosed with breast cancer ... 7,100 Michigan residents hear that grim news each year. 41,110 people in Southeast Michigan filed for personal bankruptcy in 2008. Many of these faces are the same as those who struggle with breast cancer. The effects of cancer treatment coupled with the emotional strife from mounting medical bills create fear, unhealthy stress and a sense of deep hopelessness.


For more information call 248.539.7426 or visit www.mybankruptcyrescue.com.


Best regards,


Barton W. Morris, Jr.