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Investigation uncovers boarded up and abandoned Habitat for Humanity homes in west Louisville

LOUISVILLE, Ky. (WDRB) — Volunteers with Habitat for Humanity finished Eurana Horton’s home in the Portland neighborhood in 2001. The organization sold it to Horton for no profit and loaned her the money at zero interest.

“I had three small children,” Horton said. “The dad … had just walked out on us. I had to file for bankruptcy.”

But Habitat helped Horton nail down some stability. By March 1, 2020, she’s set to own the home in full. 

“The greatest feeling in the world,” she said, envisioning that day less than three years away.

There are 30 years of success stories like Horton’s in Louisville, but there’s also a tale not being told: Habitat homes are boarded up, abandoned, ransacked, foreclosed and demolished.  

Habitat for Humanity has built more than 400 homes across Louisville, most in the Portland and Russell neighborhoods. Of those properties, approximately 40 have active code enforcement cases, at least 13 homes are boarded up and there are about 50 habitual offenders, homes that are racking up dozens of violations and thousands in fines for trash-lined properties, weeds and blight, like black eyes on the neighborhoods they were built to restore. 

Kim Dial’s home at 20th and Magazine Streets, where the windows are shot out and boarded up, has $20,000 in city code violations and back taxes.

“Up until last year, I used to drive by just to look, wishing I’d done things differently,” she said.

Dial lived there from 1993 to 2004 until she married and moved to east Louisville. 

“We paid it off, or whatever you call it when you get a second mortgage,” she said. ”We paid off the loan with Habitat, and it became ours.”

But their attempts to rent the home failed, and then her husband passed away.

“I lost him to cancer in 2009, so I paid it up a year and decided in 2010 that I would deed it back to the mortgage company,” Dial said.

But the mortgage company died too in the housing crisis. Five years later, the home sits in property purgatory, locked between bankruptcy and foreclosure.

“They vandalized it twice, took copper out of the wall, the heater, the hot water tank, the washer and dryer…” Dial said.

Today, there’s clear evidence of squatters, like the truck that’s not hers parked in the back yard and the unexplained water hose running inside her home. Nothing stops a Habitat homeowner from re-selling or leveraging the land for other loans.

“Once the house goes out of the relationship where Habitat is the bank, we have almost no control,” said Rob Locke, CEO of Habitat for Humanity of Metro Louisville. “There are times when families make bad decisions.”

Locke said when Habitat homes fail, it’s most often due to one of the three Ds: divorce, debt or death.

“It’s very frustrating to see a house that we put all this energy into, all this time, gathered all this talent, for it not be used for what it is intended,” Locke said. ”But it’s extremely rare.”

The corner of 19th and Madison Streets in west Louisville, where a boarded up Habitat home and another already torn down face a third that’s been occupied for 20 years, shows signs of all of Locke’s frustration.

“I’m very familiar with that street corner,” Locke said. ”I built some of those houses, and I hate that there’s a house over there that’s boarded up.”

Habitat handpicks its homeowners, each required to take budgeting and responsibility classes and put in 400 hours of “sweat equity,” building Habitat homes, including their own.

When asked if there’s anything the non-profit can do differently, Locke said they’ve realized they must consider the conditions around the houses they build, which include low-job opportunities and high-crime rates. For example, there was dead body found this week on Horton’s street. 

“So you see this fork for the organization, saying, ‘Wow, you see these neighborhoods where we’ve done 300, 400 houses still struggling,’” Locke said. ”We’ve still got families saying, ‘Hey, I don’t feel safe, and why is that not better?’”

It all has Habitat for Humanity reevaluating where it builds, putting more stakes in the ground in east Louisville and Oldham County. The Park Spring subdivision off Lake Louisvilla Drive is expected to break ground on Nov. 30 with 99 mixed-income homes built over the next six years with the Habitat business model on donated land.

Locke said the non-profit won’t stop building in west Louisville, instead focusing more on community development and home repair. 

Dial knows her home is not doing justice to the hands that built it. She said it’s going up for foreclosure auction yet again. But this time, she hopes someone saves it and builds better memories before it’s torn down. 

Copyright 2017 WDRB Media. All rights reserved.

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2 Herald Square’s leasehold to hit auction block in February

Marc Holliday and 2 Herald Square

The troubled Midtown office building 2 Herald Square is heading to the foreclosure auction block in February, sources told The Real Deal.

A New York State Supreme Court judge granted summary judgment Monday in favor of lender SL Green over the leasehold’s $250 million first mortgage. The judgment thus orders a sale of the leasehold, which had been repeatedly delayed for much of this year.

The leasehold’s owners, Sitt Asset Management and more than 80 limited partners, cannot stop the auction from taking place. The next step would be the court’s appointing of a monitor to calculate the full liabilities owed on the 11-story, 354,000-square-foot property, sources said.

Around the time that SL Green bought the defaulted mortgage in May, Sitt Asset Management and partners made moves to sell the leasehold to interest bidders such as JEMB Realty and Jamestown Properties. Those deals fell through and Paramount Group, which has a preferred-equity position in the building, became a front-runner to take control of the leasehold after receiving court approval in July. But Paramount has since held off on those plans in recent months. The 70-year leasehold expires in 2077.

SL Green, which filed a motion for summary judgment in July, has been planning to move ahead with foreclosure. Now, in the wake of the court ruling, the real estate investment trust intends to bid in the auction early next year, sources said.

The New York Post reported Tuesday that the court authorized foreclosure.

SL Green declined to comment, and Sitt Asset Management could not be reached for comment.

Amazon recently signed a membership agreement at the building for all of the 122,000 square feet of WeWork’s space at the building, which also has the addresses of 950 Sixth Avenue and 1328 Broadway, TRD reported last week. The e-commerce giant has also been eyeing a portion of the retail component, at which Victoria’s Secret is the sole tenant.

The leasehold’s owners have struggled to fill 59,000 square feet of vacant retail space at the building, amid foreclosure proceedings and an ongoing legal dispute among the Sitt family members.

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Church sues Granville to stop eviction efforts, sale of property

MORGANTOWN — A church group is suing to stop Granville’s eviction efforts on a building it says is up-to-date in payments.

The Redeemed Christian Church of God and trustees Adeniyi Adebisi and Gabriel Olofinsawo filed suit against Granville, Granville Apostolic Church and Michael Solomon in his role as trustee for the apostolic church.

According to the filing: In August 2014, the redeemed church purchased the apostolic church building for $150,000 paid in monthly installments of $1,500.

As part of the agreement, the seller — the apostolic church — maintained responsibility for liability insurance for the property.

Over the next two years, the redeemed church failed to make some monthly payments and was delinquent, but was up-to-date as of November 2017.

In late October, the redeemed church was told that debt was being accelerated and the defendants would sell the property.

A week after the sale was announced, the redeemed group was told it needed to purchase its own liability insurance. The group did and currently has liability insurance for the site.

The property went through a foreclosure sale, and the town of Granville bought it for $128,000. On Nov. 27, the Granville town council voted to start eviction efforts against the redeemed group.

The redeemed church is asking a judge to issue a court order to stop eviction efforts and to set aside the sale of the property.

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Clients… Sometimes, You Can’t Live With Them

Craig W. Smalley, MST, EA, has been in practice for almost 23 years. He has been admitted to practice before the IRS as an enrolled agent and has a master’s in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.

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Time’s up on unpaid fees for Bentley Brook time-share owners: Auction will offer weeks at Jiminy Peak resort

HANCOCK — Real estate auctions in the Berkshires often bring bargain-hungry investors.

But those who buy and “flip” properties are likely to take a pass Tuesday, when 40 foreclosures come up for sale at a Pittsfield lawyer’s office.

Starting at 10 a.m., auctioneer Anthony Marcella will seek bids on a long list of time-share weeks at Bentley Brook, a resort at the Jiminy Peak ski area in Hancock.

Over the last several years, the Pittsfield law firm Martin Oliveira LLP has managed several sales of time-share properties for the resort. Tuesday’s auction will be held in a conference room at the firm’s fifth-floor office in the Clock Tower Business Park at 75 South Church St.

Attorney William E. Martin said people who’ve fallen behind on maintenance payments on time shares rarely respond to calls for them to catch up, despite notice both 90 and then 30 days before auctions.

“Frankly it’s not even as important to people as their car,” Martin said. “It’s one of the first things that they stop paying.”

On one hand, buyers at auctions like this have an advantage over typical sales. Because single weeks are for sale, there is good reason to believe the property involved is in good shape, since it may be occupied by different owners the other 51 weeks of the year. In other types of foreclosure auctions, prospective buyers are rarely able to inspect the insides of buildings.

But once purchased, “interval” ownership is hard to sell, Martin said.

“There is no obvious market. That’s one of the challenges,” he said. “There’s very little investor demand. It’s not something you can buy and flip.”

In advance of this sale, Martin’s firm sent default notices to nearly four dozen owners. Of that, roughly 10 percent paid past-due fees and penalties, “curing” their ownership issues and removing liens.

Because of that, weeks owned by five interval owners listed in a legal notice published Oct. 16 in The Eagle will not be sold.

But for the majority, the sales offer a chance to walk away from an investment that, for one reason or another, no longer makes sense.

The value of one week at the resort is roughly $5,000, Martin said. Maintenance fees come to about $500 a year.

“If they want it, they could pay,” Martin said.

Most owners are behind on at least three years’ worth of payments. It doesn’t take long for the cost of the “cure” to top the value of the investment.

“It’s not something you can easily sell. People will essentially abandon it,” Martin said.

By clearing out the defaults, the Bentley Brook Interval Owners’ Association helps owners in good standing who pay maintenance fees. Their assessments must rise to cover gaps left by unpaid fees, Martin said.

Most of the shares for sale are linked to specific weeks. But 10 are based on accrued “membership interest points” that can be exchanged for lodging.

While some bidders have turned up at past auctions, usually interested in specific weeks, the owners association is also poised to bid, usually paying the amount of the debt, Martin said.

Larry Parnass can be reached at, at @larryparnass on Twitter and 413-496-6214.

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AG Schneiderman Files Suit Against Syracuse Real Estate Company For Deed Theft And Mortgage Rescue Scam

Joseph Holman And Rebecca Ausby, Owners Of Joseph Funding Inc., Allegedly Deceived New Yorkers Into Giving Their Company Ownership Of Their Homes.

Photo by: geralt

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Why we need to save the Consumer Financial Protection Bureau

Republicans in Congress and the White House have been very blunt about their desire to gut the Consumer Financial Protection Bureau — and the threats to it are mounting.

The agency was launched in 2011 in the aftermath of the financial crisis as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The goal was to protect consumers from deceptive or misleading practices in the financial industry.

At the moment, Republicans seem focused on blocking CFPB rules they don’t like, such as one that would have prevented the use of arbitration clauses in financial contracts, making it easier for people to band together to sue banks for wrongdoing.

The Trump administration, which has been heavily critical of the CFPB, now has an opportunity to reshape it from the top because its founding director, Richard Cordray, plans to step down by the end of November.

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So what would you miss if the agency suddenly disappeared or was weakened?

In short, a lot. We base this conclusion on the work the three of us have done in recent decades. One of us (Sovern) has been writing about consumer law for more than 30 years, while the other two of us direct a legal clinic that represents elderly consumers. We’ve seen the worst of what financial companies can do, and we’ve also witnessed how the CFPB has begun to reverse the tide.


Life before CFPB

If you are one of the more than 29 million consumers who have collectively received nearly $12 billion back from misbehaving financial institutions because of the CFPB’s efforts, you already know its value. But even if you are not, you have probably benefited from the bureau’s existence.

Before Congress created the bureau, there was no federal agency that made consumer financial protection its sole mission. Rather, consumer protection was rolled into the missions of a bunch of different agencies. And, as we saw during the financial crisis, regulators often gave it a back seat.

Congress, for example, gave the Federal Reserve the power to bar unfair and deceptive mortgage lending in 1994. Yet the central bank considered consumer protection a backwater and didn’t use that power until 2008 — too late to prevent the Great Recession. Congress took it away two years later when it passed Dodd-Frank.

The Office of the Comptroller of the Currency regulates banks but was so preoccupied with ensuring lenders were safe that it failed to protect consumers from their predatory subprime mortgages — so much so that it prevented states from doing so too. And now President Trump has put a former bank lawyer in charge of it. The Federal Trade Commission, which is tasked with fighting deceptive business practices, lacked the power to prevent such dangerous lending.

This meant consumer protection on financial matters fell through the cracks.

Wells Fargo’s recent fraud scandal is a case in point. In the early 2000s, Wells Fargo employees began opening fake accounts in clients’ names without permission, leading in some cases to lower credit scores and a variety of fees. The bank ultimately opened millions of fraudulent bank and credit card accounts before the scheme came to an end last year.

But as early as 2010, before the CFPB was set up, regulators at the OCC were increasingly aware of what was happening at Wells Fargo thanks to hundreds of whistleblower complaints. The OCC even confronted the bank, yet failed to take any action despite many red flags, according to an internal audit.

It wasn’t until the Los Angeles city attorney and the CFPB became involved years later that Wells Fargo took forceful action to stop the fraud. The regulators fined Wells Fargo a total of $185 million and forced it to refund fees it had charged customers and hire an independent consultant to review its procedures.

More importantly, they sent a clear message to other financial institutions: Cheat consumers and you will face the consequences.


Protecting consumers

Since its inception, the bureau has acted repeatedly to stop financial institutions from harming consumers.

It blocked debt collector attorneys from suing consumers based on false information. It discovered systemic problems with consumer credit reports and forced companies to correct errors. It compelled credit card companies to refund illegal fees. It protected borrowers from unlawful student loan servicing practices. It made lenders repay consumers they discriminated against. It recovered money for veterans who complained of abusive financial practices.

When the bureau began publishing consumer complaints on its website, companies that might previously have ignored negative feedback paid attention. Financial institutions have responded to complaints to the CFPB more than 700,000 times, often by providing a remedy to the consumers.

Besides protecting consumers, however, Congress had a second motive in creating the bureau: to help prevent the kind of mortgage lending that helped cause the Great Recession.

To that end, the bureau has adopted rules that help consumers to understand their mortgages — something that often wasn’t possible under the previously misleading mortgage disclosures. It also issued regulations to prevent consumers from taking out mortgages that they couldn’t repay. And after borrowers take out a mortgage, CFPB servicing rules establish the procedures servicers must follow when communicating with borrowers, correcting errors, providing information and dealing with loan modification requests.

Two of us have personal experience with one of the bureau’s new mortgage rules, which powerfully illustrates the value of the CFPB.

In 2014, Alice, a client of our law school clinic, was struggling to pay the mortgage on her home — which she had refinanced a few years earlier — after a stroke forced her into retirement. Our clinic helped her apply for a modification of her loan.

But within weeks, instead of acknowledging Alice’s application, the loan servicer summoned her to court to begin foreclosure proceedings in violation of CFPB servicing rules. Fortunately, our clinic was able to rely on those rules in getting the foreclosure action dismissed. Alice got her loan modified and remains in her home.


Protecting the vulnerable

This reveals how the bureau is particularly important to protect vulnerable consumers, like the elderly, who are frequently targeted by fraudsters and predatory lenders because of their cognitive and other impairments and because they often have accumulated substantial assets. The CFPB is the only federal agency with an office specifically dedicated to protecting the financial well-being of older adults.

The bureau has brought cases against companies that attempted to take advantage of seniors by, for example, misrepresenting the interest rates on pension advance loans or deceptive advertising. In 2015 alone, consumer complaints to the CFPB brought relief to more than 600 older Americans just through debt collection problems.

The bureau has also worked to prevent financial abuse of the elderly, estimated to cost seniors as much as $36 billion annually. The CFPB has educated financial institutions, nursing facilities and others about recognizing and stopping elder financial abuse and exploitation.

Consumer protection in peril

Given Alice’s ill health, the consequences for her might have been disastrous if she had been thrown out of her home. But now she — and all of us — face the loss of the CFPB’s aid.

The CFPB is under attack from Republican members of Congress who believe more in lifting bank regulations than in protecting consumers. Some members have proposed eliminating the agency altogether.

The House of Representatives has passed a bill that would cripple the CFPB by, for example, taking away the power it used to fine Wells Fargo for opening illegal accounts and concealing its complaint database from public view. In other words, it would force the bureau to sit idly by as financial institutions lie to consumers.

Even if the bureau survives, it may be less protective of consumers when current director Richard Cordray leaves, which he said he plans to do by the end of the month. Then we might see a former banker or bank lawyer put in charge, just as has happened at the Treasury Department and comptroller’s office. Those officials opposed the CFPB’s arbitration rule and seem far less interested in protecting consumers than Cordray. It is even possible that Treasury Secretary Steve Mnuchin himself might become the interim leader of the CFPB.

Nearly every American has or will have a loan or bank account, a prepaid card, credit card, a credit report or some combination of those, and so has dealings with a financial institution policed by the CFPB. But few of us read the fine print governing these things or can understand it when we do. That gives the companies that write these agreements the ability to draft them to suit their own interests at the expense of consumers.

Similarly, we do not always know when a financial institution takes advantage of us, just as Wells Fargo customers did not always know that it had opened unauthorized accounts that lowered their credit scores.

Consumers need protection from misbehaving companies. If the bureau is eliminated, significantly weakened or starts protecting banks rather than consumers, all consumers will suffer.

This is an updated version of an article originally published on July 10, 2017.

Jeff Sovern is professor of Law at St. John’s University, Ann L. Goldweber is professor of Clinical Education at St. John’s University and Gina M. Calabrese is professor of Clinical Education at St. John’s University.

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Town charges forward in fight against zombie homes

In the fight against vacant and abandoned “zombie” homes, the Town of West Seneca is working to create another weapon.

An ordinance has been drafted and given to Town Attorney John Fenz that would require a point of sale inspection from the town if a house has been vacant within the last year.

Kate Lockhart, foreclosure data manager from the Western New York Law Center, said this would give the effort a forward-looking approach to anticipate any problems properties would pose to potential buyers.

“In talking to the inspections department, a lot of conversations came up about who is purchasing these houses that sat vacant for so long, and do they really know what they’re getting into,” she said.

The ordinance would also inform the town of issues with houses that at times sit vacant for upwards of six years.

Lockhart said the ordinance is meant to inform buyers, not make the sale process difficult to proceed.

“[This way] we can ensure that families are moving into safe structures and we’re not putting people in danger at all in reoccupying houses that may have sat vacant for quite a while,” she said.

Currently, the ordinance is with the town attorney for review, and a public hearing will be scheduled.

“West Seneca is very unique in that it has been very proactive with its zombie foreclosure crisis,” Lockhart said.

There have been 30 new foreclosures in the town this year, according to Lockhart.

“That’s not necessarily vacant and abandoned houses. Those are mortgage foreclosures, and our goal with those is to reach those people, let them know that there are free legal services to help them, let them know that there are housing counseling agencies to help them and hopefully keep them in their homes so we don’t have a situation where there are more vacant and abandoned foreclosures,” she said.

Lockhart said the Law Center has been working closely with the town’s inspections department to fight zombie homes.

“Under the new zombie law, banks are required to maintain these properties as long as it’s delinquent and vacant, and meets a couple of standards,” she said.

Letters with lists of code violations are being sent to bank attorneys and the court responsible for foreclosure cases, making it known that the town is aware of what’s going on with the property.

Under the new law, Lockhart said, municipalities can pursue a fine of $500 a day per property for as long as a code violation exists. This threat has moved a lot of servicers to be proactive on maintenance.

The Law Center is running a roundtable between municipalities and their respective code enforcement offices to allow officials dealing with this issue the opportunity to discuss how they are enforcing the new zombie laws.

“West Seneca has been a leader on this issue and continues to be,” Lockhart said.

“The Town of West Seneca has also implemented a housing court, which a lot of municipalities do not have in play,” said Supervisor Sheila Meegan. “Land banking is a huge opportunity, too, along with looking at Habitat for Humanity to take on one of those homes.”

Additionally, the Law Center is pushing to change the county tax act, which Lockhart said allows Erie County to foreclose because of back taxes.

“One of the things we’ve seen is there are some [instances] where, rather than comply with the maintenance standards that have been outlined in the new foreclosure law, it’s cheaper for [banks] to discharge their mortgage and walk away,” Lockhart said.

The bank will then stop paying taxes on the property, and if a former owner cannot be located, the house then has to sit for three years for back taxes to accrue before the county can foreclose.

“The only maintenance that’s really happening is what the inspections department can do externally,” Lockhart said.

Dealing with properties of this type earlier in the process will keep them from deteriorating to the point that they can’t be occupied or sold, she said.

The Law Center is advocating for an expedited tax foreclosure on properties that have been certified by the town as vacant and abandoned.

Lockhart said the legislation stalled in the Assembly during the previous session and will be presented again in June.

Last October, a $175,000 grant was awarded to West Seneca from Attorney General Eric Schneiderman to combat vacant and abandoned “zombie” homes.

Then, in February, the town entered into a contract with the Law Center to help West Seneca reach reporting benchmarks in the battle of tracking and completing foreclosures.

The money has been used on housing vacancy and blight by bolstering the town’s capacity for housing code enforcement, for tracking and monitoring vacant properties, and for legal enforcement capacity to ensure that banks and mortgage companies comply with local and state law.

The grant was awarded under the Zombie Remediation and Prevention Initiative.

Under the grant, the town is given conditions that it must meet to receive financing through the $175,000 initiative.

“The nice thing about the attorney general’s money is that it’s very flexible and it gives us the ability to be creative in our solutions to these zombie foreclosures,” Lockhart said.

Some of the success stories the town has experienced include a home on Bellwood Avenue, which has been processed and is in closing for an investor who plans to rehab the two-unit house; on Flohr Avenue, a homeowner was able to move back into his home after the bank walked away from his mortgage and the Law Center helped him to become current on his taxes.

Several homes in the town should go from vacant to occupied in the coming year, Lockhart said, and are currently in the process of title change.

In other cases, the Law Center is working with homeowners who have vacant and abandoned houses that banks haven’t walked away from.

“We’re dealing with the homeowners on those to try to find resolutions because, oftentimes if you wait for the banks to complete the foreclosure, it’s all on their timeframe and it takes forever,” Lockhart said.

“We did the research on 60 houses that the town had identified as possibly vacant. Some of them are no longer vacant; some of them were sold,” Lockhart said.

Finding out if the homes had mortgages allowed the center to mail outreach letters and postcards to anyone associated with the property and begin the remediation process.

Additionally, the Law Center has held two outreach events at the West Seneca Senior Citizens Center.

“The Town of West Seneca has really given us the opportunity to be very creative in our approaches to this issue, and I think that’s what this issue needs,” Lockhart said. “We’re going to continue to pursue these properties and hopefully get to a place where if a house does become vacant, it’s temporary.”


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Detroit and Wayne County to open one-stop financial counseling shop

Detroit among 12 cities nationally selected to receive grant to provide free financial counseling to low-income residents

Financial Empowerment Center made possible through funds from Bloomberg Philanthropies and the Cities for Financial Empowerment Fund

The City of Detroit has been selected as one of 12 cities nationally to receive a grant and technical support from Bloomberg Philanthropies and the Cities for Financial Empowerment Fund to help low- and moderate-income residents improve their financial condition.

The city of Detroit partnered with Wayne County on its application and plan to use the resources to open up a physical location in Detroit where residents can go to get free one-on-one counseling. The FEC Public program is supported by a $7,750,000 investment from Bloomberg Philanthropies as part of their American Cities initiative.

The grants will fund a Financial Empowerment Center (FEC) within the city where professionally trained FEC counselors will help individuals and families with low and moderate incomes to:

manage their finances
pay down debt
increase savings
establish and build credit
access safe and affordable mainstream banking products

The city and county will work together in the coming months to identify a location for the FEC. At the core of the FEC model is the integration of counseling into other social services, including housing and foreclosure prevention, workforce development, prisoner reentry, benefits access, domestic violence services, and more.

Mayor Mike Duggan said his Department of Neighborhoods will lead the city’s outreach effort to make sure these services reach the residents who need them.

“The most basic thing we can do to help our residents improve their economic situation is to help them to better manage their personal finances,” said Mayor Duggan. “I am grateful to the Bloomberg Philanthropies and Cities for Financial Empowerment Fund for helping to make these important services available to our residents.”

The national FEC Public platform promotes scale and sustainability for the growing movement of professional, one-on-one financial counseling as a free public service.

“Local leaders know first-hand the connection between family financial stability and community financial stability,” said Jonathan Mintz, President and CEO of the Cities for Financial Empowerment Fund. “Mayor Duggan and the City of Detroit are joining a national movement to bring free, high-quality financial counseling as a public service to their residents; we are proud to partner with Mayor Duggan and Bloomberg Philanthropies on this critical work.”

“Financial Empowerment Centers are exactly the kind of bold idea that should spread between cities. It is a proven model that helps low-income citizens and we are delighted to be doubling- down on our investment in this initiative,” said James Anderson, head of Government Innovation at Bloomberg Philanthropies.

The CFE Fund supports municipal efforts to improve the financial stability of households by leveraging opportunities unique to local government. By translating cutting edge experience with large scale programs, research, and policy in cities of all sizes, the CFE Fund assists mayors and other local leaders to identify, develop, fund, implement, and research pilots and programs that help families build assets and make the most of their financial resources. The CFE Fund works in partnership with Bloomberg Philanthropies and other generous sponsors to support our work. For more information, please visit or follow us on Twitter at @CFEFund.

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Is bankruptcy right for me? [Video] – Yahoo Finance

You don’t have to be a compulsive spender to end up deep in debt. One medical problem or unwise financial decision is all it can take. Regardless of how you got there, there is no easy way out, short of an unexpected cash windfall.

If you’ve fallen into what feels like insurmountable debt … and you have no way to pay for it, bankruptcy is one option. But it’s not always a good one—and never one to be taken lightly.

Here’s what you need to know before making any decisions about filing for personal bankruptcy:

Lasting effects

Nearly 800,000 people filed for bankruptcy last year, a move that will have an impact on their already-strained finances for years. “This is a decision that has long term ramifications,” says Greg McBride, chief financial analyst at Bankrate. “And it’s not a get out of jail free card.”

While filing for bankruptcy can help turn around money problems of the past, it can negatively affect your future. McBride points out that bankruptcies will stay on people’s records for up to 10 years, and it’s not something that can be done again for many years.

It can also hurt you if you’re looking for a new job. Many employers run a credit check on prospective employees, and a bankruptcy will always show up. The same thing could happen when you go to rent a home. And it could also have an impact on insurance premiums, says McBride.

Weighing your options

But for some people bankruptcy may be the only choice. So how do you know it’s the right one for you?

To start, it’s important to figure out what got you in the predicament you’re in. “If it’s a one-time medical event, it’s different from overspending for years and racking up credit card debt,” says McBride. If a one-time situation got you deep in debt, filing for bankruptcy and moving forward may not alter your life too significantly. But if you have trouble with handling money, you likely need more assistance than what the bankruptcy process will provide.

Before making any decision about filing for bankruptcy, McBride suggests talking to a non-profit credit counseling agency. If you are going through that pipeline, says McBride, the counselors will give you an idea if it is something you should consider and can give budgeting advice and other money tips if you decide to go a different route.

It’s more than another set of eyes. “The decision to file for bankruptcy is up to the individual not the counselor,” says Bruce McClary, spokesperson for the National Foundation for Credit Counseling, a nonprofit financial counseling organization. “It is up to the credit counselor to make sure people are as informed as possible so they understand how each option would impact their financial situations,” he says.

Starting the legal process

If you decide bankruptcy is your best path forward, the next step is to consult at least one bankruptcy attorney. “Interview them,” says McBride, “but also see what their recommendations are.” Yet another set of eyes.

If the attorneys suggest moving forward and you go through with the bankruptcy, you’ve got two options: Chapter 7, total liquidation, or Chapter 13, often referred to as the wage earners’ plan.

In 2016, 490,365 people filed for Chapter 7 bankruptcy, which involves the liquidation of your assets to pay your debts. Here’s how it works: You go to court, and if the bankruptcy is discharged, the court can release you from all or most of your obligations. But that comes at a steep price. A trustee is appointed and arranges the selling off of your non-exempt assets. The trustee will oversee the auction of property and money earned from it. There is no set list of what will be liquidated, and it varies from state to state.

A less severe option is Chapter 13. In 2016, 296,655 people filed for Chapter 13 bankruptcy. It’s essentially a structured repayment of the debt for less than the full balance. It is administered by a court-appointed trustee who manages the payments made to creditors, and you have no direct contact with him or her.

Chapter 13 allows those in debt to keep their property and pay back their debts over a period of time, which is usually three to five years. One of the benefits to filing Chapter 13 is that it allows homeowners the opportunity to save their homes from foreclosure. But while the filing can stop foreclosure proceedings, the homeowner must still make mortgage payments each month.

The bottom line is if you are in over your head financially, you do have options. But, says McClary, “Get a professional opinion on what the next course of action may be, and make a decision based on that feedback.”

The most important thing is talking to people who can explain your options fully to you based on your situation, he says, as well as the repercussions associated with them.

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