Maybe it's just us, but we're not so sure about this recent ad featuring Las Vegas attorney Anthony Deluca. It seems to us that a bankruptcy attorney asking residents to contact their representatives and push for cram-down mortgages may be a little self-interested.
In reality, we are just jealous that we didn't choose bankruptcy as an area of practice. Well played, Tony.
UPDATE: Anthony Deluca responds in the comments.
(The Spot)
We've spent trillions of dollars and haven't saved a single home. About time someone spoke up.
ReplyDeleteA couple weeks ago I was driving behind a great looking Lamborghini Murcielago with a Nevada license plate "DELUCA1".
ReplyDeleteWe were on Industrial/Dean Martin heading north from Tropicana in the morning about 7:30am. I pulled up beside him at a light and sure enough it was Anthony Deluca.
I wonder what his clients, who are filing bankruptcy and unable to pay even their house payment or car payment, think of him driving such a car.
I know what I felt - jealous!
Wow. Cramdown mortgages are a really bad idea. Can you imagine how hard it will be to get a mortgage loan if banks have to worry about you going BK and having to eat lost equity. If this happens, I bet banks will cap loans at 50% of the appraised value just to cover their asses. Tell that to your congressmen.
ReplyDeleteWe are currently in the midst of the worst economy downturn in a century. I own the largest consumer bankruptcy firm in the state with the highest foreclosures, price declines, and a 9.2% unemployment rate. Rest assured, I do not need to lobby for more bankruptcy clients. Sadly, there are more than enough. Loan modifications are ineffective in a city with price declines exceeding 40% from the peak. Dropping interest rates from 6% to 3% means little to a client who has a home upside down by $200,000. The banks are selling these homes in the foreclosure auctions for less than the appraised value, so why not let the original owner remain? Without a solution that involves principal reduction, I would estimate you should brace yourself for another 10-20% price decline in Las Vegas as mass foreclosures accelerate. Responding to the third post, the cramdowns would only apply to mortgages prior to the bill's enactment. As such, no worries for the banks on newly issued loans. As for the Lamborghini, I work 70 hours per week and have served in excess of 10,000 clients. I make no apologies for hard work and a successful career. Best regards, Anthony DeLuca
ReplyDeleteLooks like all those nights of googling yourself finally paid off.
ReplyDelete@ Anthony DeLuca -
ReplyDeleteI think you are wrong in thinking that cramdowns would not have an effect on the willingness of banks to lend in the future.
Of course the potential legislation would only apply to mortgages prior to the law's enactment, but what's protecting these banks from another piece of legislation in the future that does the exact same thing? What is so special about this particular downturn that will keep it from happening again in the future (especially at the rate we are currently spending)? We are just propping up the next bubble.
I don't care whether you will profit from this legislation, in fact, if it passes, I hope you make billions and turn that Lambo into a Veyron. What I do care about is letting those who have been irresponsible about borrowing money off the hook, as this only encourages the type of risky behavior that got us into this mess in the first place. There are plenty of vacant apartments for these BK "homeowners" to rent. By enforcing the terms of mortgage loans you are not kicking "owners" out of their homes, because they never owned them in the first place. The entire reason we have a homestead exception is to protect people with an *actual* ownership interest in their homes. Why do we need further legislation for those running to discharge their debts through bankruptcy? I don't think even you can deny that passage of this legislation would likely double consumer bankruptcies. How can that possibly be good for the economy? (BK attorneys excluded)
Finally, what about those of us who are busting our asses to pay our mortgages in this upside-down market? How are we helped by mortgage cramdowns? We aren't. In fact, we will be footing the bill for this legislation for years to come, while those who run from their bills will be safe in their crammed-down homes, waiting for the next wave of government relief.
-Anon 4:58
I just want to know if the "L" in Deluca is supposed to be capitalized. It's not in the commercial.
ReplyDelete@Anon 4:58
ReplyDeleteLife is unfair. Deal with it. As much as it might piss you off to give a benefit to undeserving people, that just might be the price of turning the economy around. It's time we stopped worrying about fairness and started worrying about doing what works. I don't care about giving money to banks who loaned money irresponsibly, to investors who took insane risks, or to homeowners who bought mansions while making $24k a year. If you want life to be fair, take it up with God. In the meantime, let's get the economy fixed.
@ Anon 4:23
ReplyDeleteAh, the old "Life is unfair. Deal with it." argument. A favorite of Mr. Clarence Darrow, if I remember correctly.
I suppose I should have been more clear. My entire point is that the cramdown legislation is not going to fix the economy. Firing the starting gun in a race to the BK court will not be good for anyone.
Even if the legislation does stabilize housing, what about the creditors that are left in the dust by mass BK filings? I'm sure that will be great for the economy.
I'll be sure to ask God his opinion on cramdown mortgages ... right after I'm through asking why my call for a logical argument had to be derailed by some cliche-spouting moron.
- Anon 4:58
The point of the legislation is that it will help all Las Vegans by stabilizing the real estate market. What do you think happens to the value of your home when there are five foreclosures on your street? The banks do not maintain the properties. The grass is overgrown. The pools have fly infestations. In some situations, squatters move in, break-ins occur, and crime goes up. This is in your neighborhood! Moreover, the bank auctions get much less than market value and this further impacts your home values. The gravest concern right now is that a whole new class of bankruptcy filers has begun filing cases. These are people who CAN afford their mortgage. They just realize how ridiculous it is to pay $2500 per month on a house on which they owe $400,000 and has dropped in value to $200,000. These people are handing back the keys and just walking away. I believe this trend is going to rise sharply as more people realize it will take 10-15 years to break even on these homes. There is currently a 16% vacancy rate on rentals in Las Vegas. The rest of the country may possibly benefit from the housing efforts in the stimulus plan (I doubt it, but maybe). Las Vegas is a completely different element. This market could still drop considerably if a floor is not established soon.
ReplyDeleteAnthony D.
@ Anthony DeLuca
ReplyDeletePerhaps I'm not understanding something, but in order to take advantage of the proposed legislation, you would have to file for bankruptcy, correct?
So, assuming that is the case, how does this proposed legislation address your concern about the new wave of "middle class" bankruptcy filers? If people are filing bankruptcy and walking away from a $400,000 mortgage because their homes are worth $200,000, how does it help to cram down mortgages? The same people will still be filing for bankruptcy, just at a greater rate.
Also, how are these financial institutions going to absorb a 50% hit on all of their their upside-down mortgages? More importantly, WHY should they have to?
- Anon 4:58
The lenders are already going to be hit with those losses. Right now its a matter of whether they are going to take the loss when they go through an expensive foreclosure process, take possession of the home and then sell the home for a loss on the open market and write off the loss. A mortgage cramdown means that the bank takes the loss it was probably going to take anyway, but it avoids the foreclosure process and the debtor gets to keep the home. Banks can actually come out BETTER in this scenario because they will be getting the appraisal value for the house, whereas most houses being sold on the market today are actually going for below market value. Banks also get to save on the cost of the foreclosure. This is one of the reasons why many of the big banks have now embraced the idea of mortgage cramdowns.
ReplyDeleteWill this lead to an increase in bankruptcy filings? Maybe. But, until we get the housing market stabilized there is no real economic recovery in sight. Until the houses are in the hands of people who can afford to own them, there will be no stability. We can either make them affordable to the people who currently own them in a relatively short period of time, or we can drag this out for years, as new wave of people finally run out of the means to pay for their overpriced house. I for one prefer that we get this over with quickly, stabilize the market, and move on.
As to WHY the lenders should have to absorb this loss, a loan is an investment. Like any other investment a loan carries risk. You are NEVER guaranteed a return on an investment; housing is no different. These loans were made with the understanding that they were risky investments and this time the imprudent investors are going to get taken to the cleaners.
Thanks for sharing ..............
ReplyDelete___________________
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