Here’s One Government Program Worth HARPing On

If you are one of the hundreds of thousands of Americans permanently traumatized by the government’s highly lauded, but horribly executed, loan modification program, take heart.  I’m here to tell you that there’s another government mortgage program that actually works.

No, really.

It’s called the Home Affordable Refinance Program, or HARP for short, and it has the potential to help millions of Americans refinance into mortgages with significantly lower interest rates, even if the homeowner has little or no equity left in their homes.  In fact, even those homeowners who are “underwater” and owe more than their homes are worth can qualify and finally refinance.

Introduced in 2009, this was always a smart program.  But it was recently improved by the removal of any loan-to-value (LTV) ceilings, at least for those borrowers looking to refinance into a new fixed rate mortgage. So for example, a home owner with a $300,000 outstanding mortgage balance on a home worth only $200,000 could still qualify even though their LTV is 150%.

According to the official HARP website the eligibility requirements for the program are as follows:

  1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  3. The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

Confirming whether Fannie Mae or Freddie Mac owns your mortgage is relatively easy thanks to web tools created by each company (Fannie Web Tool; Freddie Web Tool). It is important to note that payments are almost never made directly to Fannie Mae or Freddie Mac, even though they own millions of mortgages.  So even if a borrower makes their payments to a lender like Citimortgage, Bank of America, Chase, etc., there’s still a very good chance that their mortgage is owned by Fannie Mae or Freddie Mac.

Once you’ve confirmed that your mortgage is owned by Fannie or Freddie, or if you want some help figuring that out, then the next step would be to speak to a mortgage lender.  While the traditional LTV requirements are being waived under the HARP program, homeowners still need to have the income and credit scores needed to refinance – and figuring that out is the job of the mortgage lender.

If you want to read more about the HARP program check out the following articles:

Wall Street Journal HARP Article

CBS News HARP Article

Daily Herald HARP Article


The Lincoln Lawyer

Before Abraham Lincoln became our greatest president, he was a great corporate lawyer.  And before he was a corporate lawyer, he was a brilliant trial lawyer.

In the 1840s, Lincoln represented a Revolutionary War widow who had been bilked out of most of her pension.  The widow had retained a claim agent to help her collect the $500 pension.  The agent then kept half the pension for himself, claiming it was part of the contract. 

Here are Lincoln’s notes for his closing argument:

“No contract.  Not professional services.  Unreasonable charge.  Money retained by defendant – not given by plaintiff.  Revolutionary War.  Describe Valley Forge privation.  Ice.  Soldiers’ bleeding feet.  Plaintiffs’ husband.  Soldier leaving home for army.  SKIN DEFENDANT.  Close”
From the notes, it appears Lincoln made scrambled eggs of the traditional closing points set out in Aristotle’s Rhetoric. 
Aristotle wrote that a great speech should begin with ethos, which means basically establishing a rapport with the audience, assure them that you have something worthwhile to say.
Next, the speech should move to logos, appealing to reason and logic to explain why your argument is fair.
Finally, the speech moves to pathos, appealing to emotion to sway the audience toward your argument.
Lincoln appears to have left ethos out altgother, but maybe that was because he was Lincoln.  Instead, Lincoln started out with a cold reading of the law.  It is not a contract, and not a valid payment, he pointed out.
Only then did Lincoln pour on the pathos, pointing out the sacrifice the war veteran had made for his country and the outrageous conduct of the agent.  It is interesting to note that Lincoln held back on the scorn until the end of the argument, so that the audience is more likely to remember this injustice, rather than the moral debt owed to the widow.
Lincoln shows us that rules are merely guideposts, and we should trust our own judgment before we blindly follow two thousand year old outlines.

Healthcare Fraud and Abuse

Healthcare fraud and abuse is skyrocketing, and much of it is slipping by undetected.  Timothy Cornell and William Hurlock, of Seiger, Gfeller and Laurie in New York, published the attached article on the problem, and how third party payors can deal with it.  Detecting Waste and Abuse

Free expert advice

I’ll be an expert at Mass Innovation Night tonight.  We’ll be talking about Percussion CM1 Content Management, which helps users manage their social media content directly, Arch Angels Children’s Comfort Insoles, which offers easy inserts for children’s feet, Terametric Optimizer for Twitter, which offers a device that advises users on when, what and to whom to tweet, and Grafpad, which is a web app which is basically a “smart napkin,” allowing users to get their idea quickly down electronically so that it can be shared.

If you are going, please stop by and say hello.

Order in the Court

E-discovery has been called the bane of modern litigation.  Document requests can easily dig out terabytes of information, and the review requirements for both sides can be backbreaking.  Patent cases are particularly prone to enormous discovery.

To winnow the demands of discovery down, the Advisory Council of the Federal Circuit released a model e-discovery Order in patent cases.  The Order limits the number of record custodians to five, and also limits the number of search terms to five.  It also reduced the risk of privileged documents being used by the other side.  Despite the Model, both sides are free to negotiate for larger searches.

The Model Order is available here.  Chief Judge Randall R. Rader’s speech explaining the Model Order is available here.

Whistleblowing in the Wind

When the Dodd-Frank Act’s whistleblower provision was enacted earlier this year, many corporations complained that the law created a fat incentive for insiders to run to the SEC first instead of reporting problem to the company so it could solve the problem.

Now a federal court has ruled that to enjoy the shelter of Dodd-Frank’s retaliation umbrella, a whistleblower has to report information to the SEC first.

In Egan v. Tradingscreen, Inc. et al, (No. 10 Civ. 8202, (S.D.N.Y., May 4, 2011 and September 12, 2011)) an employee, Patrick Egan, learned that the chief executive officer at his company was secretly funneling company assets off to another company the CEO owned.   Instead of going to the SEC, Egan reported the information to TradingScreen’s president.  The president then informed the board of directors and independent counsel.  An investigation was conducted and showed that the information was correct.  But the CEO quickly gained control of the board of directors and had Egan fired.

Egan sued for retaliation as a whistleblower under the Dodd-Frank whistleblower provision, 15 U.S.C.  78u-6. But Judge Leonard Sand concluded to be protected from retaliation,  a whistleblower must  report the violation to the SEC, or at least tell someone who will report it to the SEC.  Since that did not happen here, Egan did not get the retaliation protection.

The decision is only legal precedent in the Southern District of New York, but it will certainly be persuasive to courts around the country.

Heavy Medal

If someone poses as a medalled hero, does the First Amendment protect them from prosecution? 

Surprisingly, the answer may be mixed.  If the phony only brags about winning a medal, free speech rights may prevail.  But if the phony sports an undeserved medal, it becomes a different story.

I have an article on the subject that came out today over at the Berkman Center.