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Idahoans displaced by foreclosure have ‘til June 30 to apply for aid

Time is running out for Idahoans displaced by foreclosure to apply for assistance, Idaho Attorney General Lawrence Wasden and Community Action Partnership Association of Idaho Executive Director Christina Zamora said today. Wasden said Idaho's legal settlement last year with the five largest mortgage servicers covered a grant to CAPAI to assist Idahoans with expenses like moving costs, first and last month's rent, security deposits and more to move from a foreclosed home into safe and affordable housing. “I encourage eligible Idahoans to contact CAPAI immediately to take advantage of this limited opportunity,” Wasden said.

Said Zamora, “We still have nearly $94,000 available to assist Idahoans who are in transition due to foreclosure, but that funding expires on June 30.” Click below for more information.

Hart offers to pay just $3,816 to settle more than $626,000 in tax debts

Tax-protesting former Idaho Rep. Phil Hart, R-Athol, is now proposing in bankruptcy court to pay just $106 a month for three years to satisfy more than $626,000 in debts, a total of $3,816 - less than a third of the amount he proposed paying in his earlier, dismissed bankruptcy filing. The debts include more than $564,000 in back federal income taxes, penalties and interest, and more than $62,000 in back state income taxes, penalties, interest and court-ordered attorney fees and costs for the state. Hart appeared before a bankruptcy trustee Friday and refused to answer a barrage of questions.

Federal authorities have filed a foreclosure lawsuit seeking to take Hart's log home in Athol to satisfy his federal tax debts; that case was put on hold when Hart filed for bankruptcy in May, then started back up when his first bankruptcy filing was dismissed in August. Then, in October, Hart filed for bankruptcy again. Last week, a bankruptcy judge refused to postpone the foreclosure, finding that Hart had filed the second bankruptcy in bad faith. You can read a full report here from S-R reporter Scott Maben in Coeur d'Alene.
  

Hart files for bankuptcy - again

State lawmaker and tax protester Rep. Phil Hart has filed for bankruptcy — again — prompting a federal tax foreclosure case against him to be put on hold. Click below for a full report from AP reporter Rebecca Boone. Hart's new bankruptcy filing comes almost two months after he voluntarily dropped his previous one, acknowledging it was improperly filed under Chapter 13 of federal bankruptcy laws. His new filing is under the same chapter with largely the same circumstances.

Rep. Hart ordered to pay state $10K for attorney fees, costs in his state income tax appeal

The Idaho Supreme Court has ordered tax-protesting Rep. Phil Hart, R-Athol, to pay the state $10,128 in attorney fees and costs for his unsuccessful state income tax appeal to the court, finalizing a decision it first issued in June. At that time, the court dismissed Hart's request to reconsider his appeal; ordered that its earlier April 2012 decision rejecting the appeal be complied with “forthwith;” and ordered Hart to pay the state's attorney fees and costs. That order was issued “subject to the automatic stay in Appellant's bankruptcy proceeding.” Hart had filed for bankruptcy, but has since voluntarily withdrawn that petition; his bankruptcy filing had prompted an automatic stay on other court cases involving his finances, including a federal foreclosure lawsuit seeking to foreclose on his Athol home for more than $500,000 in back federal income taxes, penalties and interest. That stay has now been lifted.

Hart repeatedly appealed an order to pay more than $53,000 in back state income taxes, penalties and interest; he has maintained that both state and federal income taxes are unconstitutional. In his appeal to the Idaho Supreme Court, he argued that his status as a state lawmaker should have entitled him through legislative privilege to more time to file his appeal after a 91-day appeal period had expired, because a legislative session followed the appeal period. The court disagreed, writing, “In this instance, Hart is just a taxpayer, with no greater privilege than his constituents.”

Hart lost his re-election bid in the May GOP primary, so he leaves office at the end of his current House term, his fourth. Bill von Tagen, deputy attorney general for the state Tax Commission, said Hart owes the state both for the attorney fees and the underlying tax liability, and the state will be “seeking to collect it if we can.” He added, “There's a lot of people in line ahead of us, unfortunately.”

Thousands of Idahoans who lost homes to foreclosure eligible for payments under settlement

More than 12,000 Idahoans who lost their homes to foreclosure between 2008 and 2011 are eligible for payments under a national settlement over loan servicing errors that may have led to foreclosures, Idaho Attorney General Lawrence Wasden announced today. The eligible Idahoans will be receiving application packets in the mail to apply for the payments, which will start at $840.

“This payment is not intended to compensate Idahoans for the loss of their homes,” Wasden said. “Rather, it is a step toward accountability for unfair business practices that harmed Idaho homeowners. I remain committed to improving the mortgage servicing industry for the benefit of Idaho’s current and future homeowners.” Wasden joined in the $25 billion nationwide settlement with five national banks in February: Ally/GMAC, Citi, JPMorgan Chase and Wells Fargo. They're the largest servicers of mortgage loans in the nation. Click below for Wasden's full announcement, including information for affected borrowers.

Feds gear back up foreclosure case against tax-protesting Idaho lawmaker

Federal authorities are gearing back up their foreclosure lawsuit against tax-protesting Idaho Rep. Phil Hart, now that Hart's voluntarily dismissed his bankruptcy filing - which had placed an automatic stay on the foreclosure case. U.S. District Judge Edward Lodge has lifted the stay in the case that goes after Hart's log home in Athol, but at Hart's request, agreed to a delay until mid-November for the first discovery deadlines in the case, due to the unexpected illness of Hart's Kentucky attorney. U.S. Justice Department lawyers had asked for a deadline a month earlier.

In legal documents filed in federal court in Boise, Hart's lawyers wrote, “Hart has no objection to the lifting of the stay,” as long as the deadlines are pushed back. The lawyer's malady is described variously in the filing as “a sever staph infection” and as a “staff infection.” Hart filed his bankruptcy case in May, just 48 hours before he was scheduled to be deposed in the home-foreclosure case, which seeks to take his house to settle more than $500,000 in back federal income taxes, penalties and interest. You can read my full story here at spokesman.com.

Feds: Rep. Hart’s bankruptcy plan ‘not feasible’

Federal prosecutors are calling for Idaho Rep. Phil Hart's proposed bankruptcy plan to be dismissed, saying it's improper, it wouldn't appropriately satisfy his half-million-dollar federal income tax debt, and it relies on an income source that will disappear at the end of this year: His legislative salary. Hart, a tax protester and fourth-term state lawmaker, was defeated in the May GOP primary, so his legislative salary will end in December.

“Hart's plan is not feasible,” wrote U.S. Department of Justice attorney Adam Strait in legal arguments filed in federal Bankruptcy Court. Hart had proposed paying $200 a month for five years - a total of $12,000 - to get his entire debt of more than $600,000 discharged. Most of that debt is to the IRS; it also includes more than $50,000 in back state income taxes, penalties and interest, and $22,000 in credit card debt. The plan, Strait wrote, “fails to make adequate provision for paying the United States' priority income tax debts.”

Prosecutors also noted Hart's refusal to answer numerous questions about his assets during a bankruptcy proceeding last month, from the home where he lives to the car he drives - neither of which he acknowledges owning. You can read my full story here at spokesman.com.

Hart stonewalls creditors at bankruptcy hearing, move could imperil his case

State Rep. Phil Hart, R-Athol, refused to answer numerous questions about his finances in a meeting Friday with creditors in his bankruptcy case, a move attorneys called unprecedented and likely to imperil his case in court. An attorney with the U.S. Department of Justice and another representing the Idaho State Tax Commission grilled Hart about his business interests, income, assets and debts during a meeting conducted by the trustee in Hart’s Chapter 13 bankruptcy filing; Hart was questioned under oath in the session at the Coeur d'Alene federal courthouse.

Hart, a longtime tax protester who owes the IRS more than $550,000 and the state more than $50,000, said he thought many of the questions – including ones about corporations he helped set up and about the Athol house he lives in – were inappropriate or irrelevant to his bankruptcy filing. He repeatedly responded, “I decline to answer.”

Refusing to answer such questions is highly unusual in such a meeting, said Ford Elsaesser, a Sandpoint lawyer representing the trustee in the case. Elsaesser said he has conducted around 30,000 debtor-creditor meetings. “I’ve never had a debtor decline to answer the routine questions that were asked,” he said. “Refusals to answer are not likely to be looked upon favorably by the bankruptcy court.” You can read our full story here from S-R reporter Scott Maben at spokesman.com.
  

Rep. Hart tells court he’d pay $200 a month for 5 years to settle $600,000-plus debt

Outgoing Idaho state Rep. Phil Hart has filed a Chapter 13 bankruptcy plan in federal court that proposes that he pay $200 a month for five years - a total of $12,000 - to get his entire debt of more than $600,000 discharged. The vast majority of that debt is back federal income taxes, penalties and interest owed to the Internal Revenue Service; it also includes more than $50,000 in back state income taxes, penalties and interest owed to the Idaho State Tax Commission, along with $22,000 in credit card debt.

“Debtor will pay to the trustee for a term, not exceeding 60 months, the sum of $200 monthly,” the plan says. No other payments are proposed, though Hart does report that he anticipates income tax refunds over the next five years, and agrees to turn those over as well.

A Spokane bankruptcy attorney with expertise in Chapter 13 cases said it's “unlikely” that such a plan would be approved. “Generally, you don't get to discharge your tax debts,” said David Gardner, an attorney with Winston and Cashatt. Gardner said the plan likely will draw objections from both the bankruptcy trustee and the creditors - including the IRS - when it comes up for a hearing in August. “For that amount of cash, I would expect the IRS to be very involved,” he said. You can read my full story here at spokesman.com.

Hart bankruptcy filing shows IRS has been garnishing entire legislative salary

When the state of Idaho made out its paychecks for tax-protesting state Rep. Phil Hart twice a month for the past seven years, the money didn't go to Hart - it went straight to the IRS. That's what Hart reported in documents filed this week in his bankruptcy case, in which he lists more than $600,000 in debt, most of it to the IRS and the Idaho State Tax Commission. In his supporting documents seeking a Chapter 13 bankruptcy reorganization, Hart reported, “100 percent of Legislative pay garnished since 2005, $16,000 annually.”

Bruce Newcomb, who was Idaho's longest-serving House speaker, said he was troubled by the revelation. “Let's put it this way: I find it very odd,” he said. “A person has a right to protest their taxes. But this has been one of the more extreme endeavors I've ever seen in my life's experience.” Newcomb said he worries about the impact of the case on the institution of the House. “The general public is suspicious of politicians in general, and when something like this comes along, it only serves to confirm what some people think,” he said. You can read my full story here at spokesman.com.
  

Hart wants Idaho Supreme Court to reconsider his legislative immunity claim

Tax-protesting Idaho state Rep. Phil Hart is asking the Idaho Supreme Court to reconsider its dismissal of his state income tax appeal, saying the court should have given more consideration to his legislative privilege argument. Hart appealed an order to pay more than $53,000 in back state income taxes, penalties and interest, but filed his appeal months after the 91-day appeal period had expired. He argued that because an Idaho legislative session fell just after the appeal period, his status as a lawmaker should entitle him to more time to file.

The Idaho Supreme Court strongly disagreed, writing in its unanimous decision in April, “In this instance, Hart is just a taxpayer, with no greater privilege than his constituents.” Hart's bid for reconsideration argues that the framers of Idaho's Constitution “were intimately aware that their full attention, without any distraction of any nature, was required in order for them, and future legislators, to accomplish their work on behalf of the people.” You can read my full story here at spokesman.com.
  

Tax-protesting Rep. Hart files for bankruptcy

Tax-protesting Idaho state Rep. Phil Hart, who lost his bid for a fifth term in the GOP primary two weeks ago, has filed for bankruptcy. In Hart's petition for Chapter 13 bankruptcy, he lists just three creditors: The IRS, the Idaho State Tax Commission, and Anderson & Krieger, a construction defect law firm in Sacramento, Calif.

Hart also is facing a foreclosure lawsuit from the U.S. Justice Department seeking to foreclose on his Athol home for more than $500,000 in back federal income taxes, penalties and interest, and a state order to pay more than $53,000 in back state income taxes, penalties and interest. Michael McFarland, Hart's Coeur d'Alene attorney in the bankruptcy proceeding, said, “I'm really not in a position to discuss details.”

Hart's filing doesn't list any debt amount, but that must be detailed in subsequent filings that the court has ordered him to make within 14 days; you can read our full story here at spokesman.com.
  

Fire-Razed Home Faced Foreclosure

Arson investigators are combing through the debris of a million-dollar riverfront estate that was engulfed by fire Thursday morning as lenders prepared to hold a foreclosure on the home. Flames were visible to daybreak commuters along Interstate 90. Parts of the 10,000-square-foot brick and wood mansion – assessed at about $1.5 million – continued to smolder at nightfall. No one was home and no one was injured in the fire, said Ron Sampert, Kootenai County fire chief. The fire capped months of financial and legal tumult for the homeowners, said Leonard Wallace, who bought the home in 2002 with his wife, Pamela Wallace. Lender Deutsche Bank filed a foreclosure action against the Wallaces last year, and the family has turned to Bankruptcy Court to try to shield their assets at least twice/John Stucke, SR. More here. (SR photo: Jesse Tinsley)

Thoughts?

Hart cites legislative privilege to fight home foreclosure by IRS

Tax-protesting Idaho state Rep. Phil Hart has cited his status as a state legislator numerous times in seeking delays in his court fights over paying back state and federal income taxes, pointing to the state constitution’s clause protecting lawmakers from civil actions during sessions. Now he’s using it as an argument for dismissing a federal lawsuit to foreclose on his Athol home for back federal taxes. In Hart’s reply to the federal lawsuit, in which the Department of Justice is seeking to foreclose on the home to pay off more than a half-million dollars in back taxes, interest and penalties, his attorney charged that the IRS claim is “barred” because a “notice of deficiency” was sent to Hart while the Legislature was in session. The IRS wants to sell Hart's log home in Athol and use the proceeds to offset more than half a million dollars in back taxes, penalties and interest; you can read my full Sunday column here.
  

Hart gets delay in tax case, hires Kentucky attorney

Tax-protesting Idaho state Rep. Phil Hart has asked for and received a 30-day delay in the deadline to file his legal response to federal authorities' move to foreclose on his Athol, Idaho home for years of unpaid federal income taxes, interest and penalties. Hart, acting as his own attorney, asked for a delay until Jan. 5, which is four days before the start of this year's legislative session, to allow him time to bring on and qualify an out-of-state attorney and get him up to speed to file the response.

“Defendant Hart states that the purpose of the continuance is not for delay, but it is needed for him to obtain counsel and allow said counsel to be admitted … and review the case in preparation for filing an Answer,” Hart wrote in his motion to the federal court. Justice Department attorneys raised no objection, and U.S. District Judge Edward Lodge granted Hart a delay to Jan. 5.

Now, Hart has filed to have Kentucky attorney Charles E. McFarland represent him in the case. McFarland represented excavation business owner and tax protester Fred Allnutt Sr. of Ellicott City, Maryland, in an unsuccessful appeal to the 4th Circuit U.S. Court of Appeals in 2008, charging that a statute of limitations should bar an IRS notice of deficiency ordering Allnut to pay $2 million; the appellate court rejected the appeal.

The U.S. Department of Justice says Hart owes $549,703.48 to the IRS as of Oct. 31, for back income taxes, interest and penalties. It's filed in federal court to foreclose on his Athol home to satisfy the debt. The log home, ironically, was built partly from timber Hart illegally logged from state school endowment land in 1996, for which he never fully satisfied a court judgment. Hart, a Republican, is in his fourth term in the House.

Feds Sue Phil Hart Over Unpaid $550K

You can read my full story here at spokesman.com on the U.S. Justice Department's lawsuit against Idaho Rep. Phil Hart, which seeks to foreclose on his log home in Athol for more than half a million in back federal income taxes, penalties and interest. Through Oct. 31, 2011, the complaint says, Hart owes the IRS $549,703.48, for back taxes from 1996 to 2008. Hart wasn't immediately available for comment. He's also fighting the Idaho State Tax Commission over more than $53,000 unpaid state income taxes, penalties and interest; though he's lost repeatedly, his appeal to the Idaho Supreme Court likely will come up for a hearing in April. The federal complaint also asks the court to set aside the “fraudulent transfer” of the home to various parties including the trust, determine that the trust is a “sham entity”/Betsy Russell, Eye On Boise. Complaint here, courtesy of Brad Iverson-Long/Idaho Business Review. (SR file photo, of Phil Hart's Rathdrum home)

Question: Does this make state Rep. Phil Hart a greater hero in Tea Party circles? Or are fair-minded Tea Partiers beginning to see through this guy?

More Americans at risk of foreclosure in 2nd quarter

The number of Americans at risk of foreclosure is rising, reflecting the U.S. economy’s continued struggles, the Associated Press reports.

The Mortgage Bankers Association says 8.44 percent of homeowners missed at least one mortgage payment in the April-June quarter. That figure, which is adjusted for seasonal factors, rose 0.12 percentage point from the January-March period.

In a normal market, the percentage of delinquent borrowers is about 1.1 percent, according to the trade group.

Delinquent mortgages have plummeted from a record high of more than 10 percent of residential mortgages a year ago. But the decline is due partly to delays in foreclosure filings that are backlogged in several state courts.

The end of a state and federal investigation into faulty foreclosure paperwork will likely lead to increased foreclosures later this year.

Foreclosing On A Bunch Of Snakes

They say there are snake pits on Wall Street. Chase has learned there are snake pits on Main Street too. Last year, the J.P. Morgan Chase banking unit foreclosed on a home near Rexburg, Idaho, that is infested with garter snakes. They slide through the yard, the crawl space, the walls, the ceilings, even across the floors. Sure, they're harmless, but there are perhaps thousands of them. They give off malodorous secretions when alarmed, and can even leave the well water tasting a bit like the way they smell/Al Lewis, Yahoo! MarketWatch. More here. (Wikipedia photo of common garter snake)

Question: If the price was right, could you live in a house full of garter snakes?

Boisean Faces Nightmare Foreclosure

The American dream has turned into a nightmare for Donna Lee of West Boise. She pays her mortgage each month but is facing foreclosure anyway. When she bought her home from a developer, there was a clerical error on the deed of trust that shows she should be living in a different unit. The developer has filed for bankruptcy and the bank wants the property. “I'm just mentally and physically exhausted over all this, financially too. I'm in limbo right now and I just don't know”, Lee said/Brian Morrin, KBOI. More here. H/T: Sammy

Question: Really?

Mortgage Down the Drain?

This is a switch in topics for Community Comment.  Let’s talk mortgage.  Remember when your Dad told you that having a mortgage was better than renting.  Remember how it used to be that if you rented, you were essentially just throwing your money down the drain.  A mortgage would build your credit and your equity.  Today, not so much.

arliacne put me onto an article about this very subject.

Although it talks about ordinary home owners with ordinary mortgages that they are keeping up to date, it is true that foreclosures are on the upswing and the recession is still a wild animal out of control.

I have a friend who can barely make her mortgage payment, something that she has faithfully kept up for over 20 years.  But now, when she is squeezing a turnip to try to make ends meet, the mortgage company is unsympathetic and doesn’t want to wait until the 5th of the month, when her husband gets paid, to accept her payment which is due on the 1st of the month.  You can hardly envy her position - she’s damned from the start.  Here she is, trying to pay a mortgage that would build equity and she also can’t give up and start renting because renting has become almost prohibitive.

My son and his wife have put their house up for sale to move to where her job is in Moscow, Idaho.  They have been paying for the house for about 24 months.  The majority of each payment has been in interest - so there is very little equity in the house.  Where’s the value?

Anyway, I thought this was of interest.

Do you feel you are getting the true value for your home and not throwing your money away each month?

~Jeanie~ (Thanks to arliacne for this subject)