We see a lot of mortgage companies with millions to hundreds of millions of dollars in debt to Wall Street and virtually no assets left
Los Angeles, CA (PRWEB) August 13, 2007
While American Home Mortgage Investment Corp. became the latest victim of the sliding mortgage market, many of its competitors are seeking to plan ahead for a possible demise of their companies. According to Jacob Stein, an asset protection attorney and a partner at the Los Angeles law firm of Boldra, Klueger & Stein, LLP, the asset protection industry has seen a dramatic increase in the work being done for the companies in the mortgage industry.
"We see a lot of mortgage companies with millions to hundreds of millions of dollars in debt to Wall Street and virtually no assets left," states Jacob Stein. "The shareholders of these companies frequently seek to either pull out whatever assets are remaining in their businesses before the inevitable bankruptcy filing, or are looking to protect their personal assets." Many of the individual owners of mortgage companies have outstanding personal guarantees.
Bankruptcy may be unavoidable for a lot of the companies in the mortgage industry and some of the individual owners. For these companies, planning options may be limited. But, in some cases, asset protection may be a way to plan for the bankruptcy filing or a way to avoid the necessity of a bankruptcy.
"While everyone is talking about the crunch in the sub-prime industry we are seeing clients holding grade-A paper, and their business is down so significantly; they can no longer keep up on their debt service," continues attorney Stein. "In some cases these are very significant companies that have been in the mortgage industry for many years, and the owners of these companies are just trying to salvage whatever they can. Many of them are anticipating a certain demise of their businesses."
Asset protection is a field of law that deals with sheltering assets from claims of creditors. Demand for asset protection generally increases during an economic downturn. As businesses and individuals become unable to satisfy their obligations, they turn to asset protection to protect their assets from eventual lawsuits by creditors.
The asset protection industry has never experienced such a wide-spread demand for its services as it is experiencing now from the mortgage sector. "We generally see clients from all walks of life and all industry groups. But over the past 6 months we have represented dozens of mortgage companies and individuals who stand behind these companies. It seems that the ships are starting to go down, and those in the know are fleeing before it is too late."
Attorney Jacob Stein and the law firm of Boldra, Klueger & Stein, LLP provide asset protection services to high net-worth clients, nationwide. The firm has set up an educational website about asset protection services and structures. The website maybe found at http://www.maximumassetprotection.com.