November 23, 2009

Unemployment Rate Tops 10%

Last month, the unemployment rate rose to 10.2%. The total number of unemployed individuals in the U.S. now exceeds 15.7 million. Some economists predict that the the current unemployment rate will stay above 10% through at least Spring 2010.

This is only the second time in American history that the unemployment rate topped 10%. The last time the unemployment rate topped 10% was in 1982. The rate stayed above 10% for ten months. The unemployment rate peaked at 10.8% in November 1982.

November 20, 2009

Senate Bill 94 Deters Attorneys From Assisting Homeowners

California State Senate Bill 94 was passed to protect homeowners from loan modification scams. It may also have an unintended consequence - eliminating a homeowner's ability to retain an attorney to help them save the homeowner's home.

Senate Bill 94 prevents attorneys from receiving fees until after the contracted services have been rendered. While the actual language of the bill is vague, the bill could be interpreted to mean that attorneys will only get paid for services after the many months of negotiation with the lenders, and only if successful.

Recent studies have shown that only about 9% of qualified mortgages have been modified by lenders. Bank of America only modified about 4% of eligible mortgages. The loan modification process can take up to around 6 months. It is not economically feasible for an attorney to work for a homeowner for 6 months for only a 4-9% chance of getting paid. This will basically leave homeowners without representation, and alone to fight their lenders. That was not the purpose of Senate Bill 94. Unfortunately, that is the likely result.