Earlier this year, I asked Kentucky cyclists what their greatest fears were. In a totally unscientific tallying of the responses, here's my impression: The two most commonly cited fears were, unsurprisingly, getting hit by a moving car and getting doored. I can sympathize. I'm looking in the rear window of every single parked car I ride past  to see if there is a driver getting ready to exit the vehicle and throw me into traffic. 

I also asked what Kentucky cyclists fear that I had not considered. Boy, you all are creative bunch. Among the things you fear (and that I now have to consider) are:  

• Handle bars torque while at top speed going downhill.
• Vision impaired in both eyes due to cloud of gnats.
• Having your butt crack peek out of your pants as you bend forward to reduce wind resistance.
• Having a can thrown at you from a passing car window, looking down and then being smashed by a semi only to then have a bee sting you! 
• Being lasso'd in the middle of fricken nowhere and thrown in the back of a truck of a psycho woman and carted off to some hole in the ground.
• When in Kentucky... being bitten by dogs.
• Unexpected rain.
• River Road and people from the East end.
• I can't say that every single thing on this list is actionable in a court of law, but if you or a bicyclist you know are injured by a driver's carelessness, please, get a lawyer. If it's me, great. If not, that's fine, too. But, you need to get a lawyer so that the driver compensates you for all of your injuries. This includes your medical bills, lost time at work, property damage, and your physical pain and emotional suffering. 

The Network Center for Community Change's annual Chill 4 Change fundraiser is this Saturday at 7 p.m.

Friends,

Louisville's most righteous nonprofit, The Network Center for Community Change, is having its annual "Chill 4 Change" fundraiser this Saturday night. Read more about NC3 and Chill 4 Change. 

If I were to follow convention, I would exhort you to attend or donate by referencing the awesome work NC3 does in Louisville around educational equity, workforce development, and family financial stability. I would explain that NC3 is a client of mine. They pay me to continue encouraging our elected officials to adopt policies to remedy the fallout from the ongoing foreclosure crisis.

But, I'm not conventional and neither is NC3. In an era defined by the contradiction—enormous wealth going to very few, unemployed college graduates, electronic connectedness supplanting connection IRL—NC3 combines an old-school commitment to bringing diverse communities of people together with a new-school approach to community organizing. I don't know of another organization doing work as interesting as NC3.

Am I biased? You bet. Am I wrong? Come to Chill 4 Change and find out for yourself. 

At Chill 4 Change, you'll meet the people behind Louisville's most daring nonprofit. They're not bad dancers, either, so wear comfortable shoes.

If you're ready to buy tickets, this is the link for you. 

If you weren't at Bonnie "Prince" Billy's show last night to benefit the Network Center for Community Change, well, lo siento. 

But, if you don't want to miss great live music in Louisville (or anywhere), here is a radio station I made on my buddy Howie Cockrill's smoking-good website, Deli Radio, of all the bands coming to Louisville in the next two weeks.  Happy Monday. 

DeliRadio allows you to create custom playlists based on location and genre(s) to find live music where you live (or—and I use this a lot—where you're traveling to). WELCOME TO THE FUTURE.  

Riding my dad's old Raleigh ten-speed to my law office this morning, I started thinking about all the things that could go wrong for a bicycler, all the things that have  gone wrong for me. Being a bicycler is a lot like being a lawyer: it feels like the right thing to do, but seems fraught with more peril than is necessary. So, bicyclers, what do you fear when you hop in the saddle? (Because some of these events pose the risk of serious injury or death, when gauging your fears, weigh your perceived likelihood of the event occurring multiplied by the consequences of that event's occurrence.)

I'll tally these answers up and report back next week.  

When I proposed this idea to city officials in Louisville last month they literally laughed at me.  

 "Possibility City". 

Today was my first day of cycling to work. New house + new office = new commuting opportunities.

I'm a bicycling lawyer and I sue reckless or negligent drivers. 

I rode my bike every day to law school down Nicholasville Road in Lexington, so I'm accustomed to riding in traffic. But, I have found Louisville to be uniquely unfriendly to cyclists. On-street parking makes the possibility of getting doored everpresent and there are no protected bicycle lanes. If Louisville is going to grow into the Possibility City it aspires to be, we have to do a better job accommodating cyclists. 

The tragedy here is that Louisville would make a GREAT cycling city if it invested in bicycling infrastructure. The river, the views, the neighborhoods, the usually-gentle weather, and the relatively flat terrain all make Louisville perfect for cyclists. 

It took me 20 minutes and 45 seconds door-to-door (my route). I could have ridden faster, but cycling to work is a delicate balance of a number of factors: a) reducing your time in the seat while b) regulating body temperature so your officemates don't vote you and your B.O. off the office island and c) being safe.  

Speaking of being safe, I want to take a moment to rant about cyclists and motorists. Riding into work, I thought, "Maybe I should get a big patch made for my bag that says,

I'm a lawyer and I sue reckless drivers.

bencarterlaw.com

I wondered if that might give me a modicum of added protection against abuse by motorists. At the same time, I have seen some dumb, dumb, dumb cyclists in Louisville recently. Last Saturday, one woman was just riding at her leisure down the center of Frankfort Avenue heading north. In my car, I pulled up beside her and said, "'Share the road' goes both ways, you know." I'm not normally a dick, but that was a real dick move on her part. Obnoxious cyclists alienate drivers and make them more likely in the future to not respect cyclists. In a way, I felt like saying that to her was an act of self-protection. Listen: whether you're a cyclist or a driver, just don't be a dick. 

Having stated that rather obvious truth, if you are a cyclist that has been injured by the negligence or recklessness of a driver in Kentucky, contact me. Unfortunately, Kentucky is not a very bicycle-friendly state and you do not have the same rights and protections here as in other places. You still have the right to file a lawsuit and make the driver pay for his or her negligence or recklessness. Let me help you do just that. 

I've moved Ben Carter Law to a little corner (not literally) of Bahe Cook Cantley & Nefzger. Practicing law is hard and stressful and it helps to have friends to work alongside. 

My new office is one block north of where my old office was. New address: Ben Carter Law PLLC, Marion E. Taylor Building, 6th Floor, 312 South Fourth Street, Louisville, KY 40202. 

Come say hey. 

 

Ben Carter Law PLLC has filed a class action lawsuit Jefferson County Circuit Court against attorney Marilyn Hartley, one of Louisville's largest private tax collectors. Ms. Hartley collects taxes under an assumed name, "DETCO".

In Kentucky, local governments fund their operations in part by selling unpaid property taxes as "Certificates of Delinquency" to individuals and businesses. These Certificates of Delinquency give these individuals and businesses the right to collect delinquent taxes. Today, 115 individuals and businesses have registered to purchase Certificates of Delinquency and function across the Commonwealth as private tax collectors. In the past, delinquent taxpayers didn't know what to expect from these private tax collectors: some were responsible and honest while others crushed delinquent taxpayers by charging them exorbitant, unjustified fees and costs and sometimes forcing the taxpayer's home into foreclosure. 

In 2012, the Kentucky legislature passed new laws and the Department of Revenue issued new regulations in an effort to curb the most abusive practices and ensure that third-party purchasers treated Kentucky's delinquent taxpayers fairly and uniformly. When a third party purchaser like Marilyn Hartley buys a Certificate of Delinquency, these new laws and regulations require third party purchasers to provide important information to delinquent taxpayers. The laws and regulations ensure transparency from the third party purchaser and require the third party purchaser to explain to the delinquent taxpayer the taxpayer's rights, obligations, and alternatives now that a third party purchaser owns the Certificate of Delinquency.

Transparency from the third party purchaser, fair treatment of an individual delinquent taxpayer, and equal treatment of taxpayers across the industry are important goals to the legislature: the new law forbids third party purchasers from charging interest, fees, or costs to a delinquent taxpayer's account unless they have provided the required information to the delinquent taxpayer.  

On January 22, 2013, I filed a class action lawsuit on behalf of my client—James C. Brown—and 459 other delinquent taxpayers who have been harmed by the failure of Marilyn Hartley to provide them with necessary, required information about their rights, obligations, and alternatives after she purchased their Certificates of Delinquency. Ms. Hartley purchased more Certificates of Delinquency in Jefferson County last year than any other third-party purchaser.

Read the Class Action Complaint and view the exhibits to the Complaint. 

Despite her failure to provide delinquent taxpayers with the required information, Ms. Hartley is charging interest, attorney's fees, administrative fees, and—in some cases—payment plan servicing fees. The law does not allow Ms. Hartley to charge interest and fees until after she has sent a proper notice of transfer that contains all of the information required by the new law. I believe that Ms. Hartley has unlawfully charged to the accounts of Mr. Brown and the Class members 1% interest per month, at least $52,900 for administrative fees, and at least $80,500 for attorney's fees. 

The heart of the suit is summed up in paragraph 146 of the Complaint:

In short, Defendant’s entire course of conduct—from her effort to obfuscate the true relationship between Marilyn Hartley and DETCO, to her failure to provide proper notice of transfer, to her failure to itemize both the amount currently due and the amount due under a payment plan, to her unlawfully inflated claims of amounts due under a payment plan, to her presentation of a payment plan as a one-time opportunity with a limited time to accept, to her citation to expired law—is an elaborate artifice designed to disorient hundreds of consumers, confront them with a placeless and faceless creditor, “DETCO”, and intimidate them into paying her hundreds of thousands of dollars in interest, attorney’s fees, administrative fees, and servicing fees to which she is simply not entitled under the law.

This lawsuit seeks to force Ms. Hartley to refund to the accounts of the Class members all of the unlawful interest and fees she has charged to the delinquent taxpayers' accounts. My client is asking for an injunction that would prohibit Ms. Hartley from charging fees and interest to the accounts until she has sent a notice that complies with Kentucky laws and regulations. Further, the lawsuit seeks to recover additional damages because Marilyn Hartley made false and misleading statements to get some delinquent taxpayers to enter into a payment plan agreement with her that requires them to pay interest and fees to Ms. Hartley to which she is not entitled. Finally, the lawsuit seeks punitive damages. Punitive damages in this case will serve three functions. They will:

1. Punish the Defendant for charging delinquent taxpayers interest and fees that the law forbids her from charging,
2. Make an example of the Defendant for other third party purchasers who might be tempted to line their pockets with bogus and unlawful interest and fees, and
3. Level the playing field for the third party purchasers who are abiding by the law and yet have been injured by the competitive advantage Ms. Hartley has enjoyed by charging delinquent taxpayers unlawful interest and fees.   

If you have been contacted by Marilyn Hartley or DETCO or if you are currently paying DETCO under a repayment plan, you can contact me online, email me at ben@bencarterlaw.com, or call (502) 509-3231. 

There are 115 other third party purchasers of Certificate of Delinquency operating in the Commonwealth of Kentucky today. If you suspect you are being charged too much by a third party purchaser or would like me to review a letter you received about your delinquent taxes, please contact me.

I am presenting today in Louisville, Kentucky to a huge room of Kentucky attorneys on our ongoing foreclosure crisis. Many thanks to the Kentucky Bar Association for asking me to speak again this year at the Kentucky Law Update.

Last year, I spoke about the Home Affordable Modification Program (HAMP), the federal program designed to encourage servicers to modify struggling homeowners loans by offering them money for each loan they modify. (Here's the video of that presentation.)

This year, I'm discussing two recent Kentucky Court of Appeals decisions and then pivoting to a novel, but important argument that most advocates ignore: equity. Kentucky courts exist to consider both legal and equitable arguments in each case. My position is that foreclosure cases beg for equitable arguments.

I hope to have a video to post for you at a later date, but for now here is the PowerPoint presentation I will use today. Download the PowerPoint file for the notes section. If you just want the slides (preserved in their original formatting and not screwed up by the fact that you don't have the typeface I used), download the .pdf. 

If you're reading this because you attended the presentation, thanks again for attending. If you are an attorney or a homeowner with questions about foreclosure, contact me online or give me a call: 502-509-3231. 

If you are interested in foreclosure, justice writ large, and/or if you are an attorney who wants to use your law degree to make Kentucky a better place, sign up for email updates about the Commonwealth Justice conference I'm organizing. It's going to be in Louisville from August 8 to August 10, so sign up and mark your calendar. It's gonna be awesome. 

I read an amazing proposal from law professor Chris Peterson recently on regulating the marketing of high-cost loans through local ordinance. The city could require anyone offering high-interest loans to post signs that say, "Warning: Predatory Lender." The approach could be useful in Louisville because it is a local solution requiring buy-in from only the council and the mayor, not Frankfort.

Predatory payday lenders rob the city's most vulnerable people at a time when those folks can least afford the high interest rates payday lenders charge. Frankfort continues to stymie appropriate legislation of these jackels. 

Great article by LEO's Anne Marshall about the erosion of our capacity to help homeowners facing foreclosure in Louisville, Kentucky. 

Thousands of foreclosures a year cannot be the new normal. It cannot. 

Here's a great article by Jonathan Meador in the LEO about vacant properties in Louisville. Jonathan is doing more and better work on foreclosure and vacant properties than any other journalist in Louisville. And I'd say that even if he didn't quote me from time to time. Because he writes for a weekly, he's able to tell the stories of homeowners facing foreclosure and dive deeply into the complicated issues that drive homes into foreclosure and turn foreclosed properties into vacant properties.

Here's a quick breakdown of how the foreclosure crisis exacerbates the River City's growing problem with vacant properties and how banks avoid responsibility for maintaining their vacant property stock.

Homeowners and Tenants Leave Properties Threatened by Foreclosure, Often Months Earlier than Necessary

• Knowing they cannot pay, homeowners seek to avoid the embarrassment and uncertainty of a Sheriff’s “eviction” by moving out. Because the foreclosure process takes months, vacating during the foreclosure process creates a vacant, unmaintained property for at least a few months, if not much longer.

Bank Walkaways Create Long-Term Vacancies and Few Barriers Exist to Discourage this Practice

• Banks can decide to “walk away” from properties at three points: during foreclosure, following a foreclosure auction (but before the deed is transferred), and following the transfer of the deed.

• A bank will decide to “walk away” from a property when the cost of foreclosing and/or owning the property outweighs the benefit to the bank. Louisville’s enforcement mechanisms make the costs of walking away relatively minor.

The Bank’s Avoid Financial Responsibility for their Property in at least Two Ways 

1. Banks Avoid Accountability Through Lax Record-Keeping Requirements

• After the deed is in the bank’s name, the bank can avoid responsibility for maintenance and code violation on a property it owns through the widespread practice of not recording the deed at the County Clerk’s office.

• Many banks will not record their deed until they have found a third-party purchaser for the property.  This creates difficulty for Inspections, Permits, and Licensing to cite the right party for code violations because the bank has not recorded the transfer of ownership.

2. Banks Avoid Accountability Because Building Liens are Virtually Meaningless

• Even if IPL is able to levy fines against the proper party, the bank has no incentive to pay the fines. Should the city attempt to foreclose to collect its money, the bank that owes the money will be paid before the city in from the proceeds of the foreclosure action.

The Mandated Sale of Tax Liens Undermines Louisville’s Ability to Control Housing Stock

• Kentucky passed one of the first land banking statutes in the nation. This statute was intended to give cities the ability to foreclose on tax-delinquent property, scrub the taxes hindering its marketability, and return the property to productive use.

• Since the creation of the Louisville Land Bank Authority, the state has begun mandating the sale of delinquent taxes (“Certificates of Delinquency”) to private, third-party purchasers. The sale of these Certificates is also the sale of the right to foreclose on those properties. Now, out-of-state investors are in control of vacant properties rather than the city.

Louisville's foreclosure crisis has swollen the number of vacant properties in the city to between six- and eight-thousand (no one can say for sure). Three things are for sure, though. Vacant properties drive down the value of surrounding homes, erode neighborhoods, and contribute mightily to the diminution of property tax revenues in the River City. Louisville's response, both in the past and today, has been and promises to be ineffective to prevent banks from unnecessarily wasting our housing stock.

A recent C-J article described howout-of-state banks owe the city more than $200,000 in fines. I have to admit: when I read that article I thought, "Is that all?"

The house's owner owes Louisville Metro Government hundreds of dollars in fines and fees, along with $56,000 for 16 other properties around town to which it holds title. That owner is New York-based Citibank, one of nine financial institutions that owe Louisville Metro Government $242,000 in fines and fees for property maintenance violations at vacant houses –— money that the city likely will never collect.

Citibank owns 17 vacant properties that they continue to fail to maintain. The cost of this should be much greater than $56, 000 in unenforceable fines. Indeed, until the cost is greater, out of state banks will have few incentives not to foreclose and decide not to invest in "unprofitable" properties here in Louisville.

A recent report from the National Housing Institute articulated a multi-pronged approach that hard-hit areas like Cleveland are taking to avoid the blight of vacant properties. The key first step was to "change the economics of owning vacant property." This involved demolishing five times (200 to 1000) as many lots in 2007 as Cleveland did in 2006 along with levying stiff (read: high six figures) fines against irresponsible corporate investors for failure to maintain their property. The report's conclusion lays out the steps Louisville must take to avoid the loss of entire neighborhoods to blight imposed by out-of-state banks.

First, ramp up code enforcement to control the ownership and irresponsible transfer of post-foreclosure vacant property. In other words, change the economics of owning vacant property. Second, while fighting the immediate battle, be forward-thinking and start planning ahead for the sustainable reuse of accumulating vacant property. Third, and critically important, establish an entity, such as a land bank, that can receive and responsibly hold vacant property. It should be noted that any land bank can only be useful if it has the proper financial resources to undertake this task. Linking land banks to excess spin-off property tax revenue, as first developed by the Genesse County Land Bank, may be the single most important innovation in urban redevelopment in recent years.

One thing not recommended by the National Housing Institute report: shaming banks into paying their fines. This is the approach recently proposed by some our Louisville's most well-intentioned lawmakers. The lawmakers assembled a list of the banks who owe the city fines on their vacant and abandoned properties and sought to publish it in the Louisville Courier-Journal.

The idea is quaint. It is based on the old paradigm of mortgage lending: a belief that your banker is someone who lives in your community and cares about what happens here. For the most part, he (or she) does not. Jamie Dimon will not be in the congregation on Sunday.

A house sits vacant in Louisville

Citibank is not Stockyards Bank and Trust. Wells Fargo is not King Southern Bank.

Wall Street firms have securitized over eighty percent of all home loans in America, collecting them into massive trusts in which global investors can then buy shares. The creators of securitized trusts, the investors in securitized trusts, they do not care about a vacant property in Louisville. They care about their bottom line.

As corporations (out-of-state corporations), they cannot be shamed--they have no conscience. The only way they will take responsibility for their properties in Louisville is if Louisville makes it in the banks' financial interest to take responsibility.

For the last two years, I have been working on the front-end of the vacant property problem: defending homeowners from foreclosure and trying to prevent properties from being vacant in the first place. One of the things on which I want to focus next is what to do about the fallout from the foreclosure crisis: the thousands of vacant properties that continue to plague our city. I will write about solutions other cities are trying and ways to make Louisville's land bank more effective. (Hint: the NHI recommended "proper financial resources.")

Louisville's inadequate response to its foreclosure crisis has created a second, more enduring crisis: a growing number of vacant and abandoned properties. The crisis of abandoned properties harms blameless neighbors by devaluing their homes and inviting crime into their communities. Without bold action, this second crisis threatens to undermine the integrity and livability of entire neighborhoods. A quick look at the location of these vacant properties reveals that this issue, like so many, is not just an economic issue, but a civil rights issue, as well.