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March 9, 2009 50¢
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copyright © 2009 Shenandoah Publishing House, Inc. Weather, B6
Serving Virginia’s Northern Shenandoah Valley
NEW MARKET
Lawyer must
repay line of
credit from
firm in N.Y.
Counsel Financial believes
loan was used for gambling
By Sally Voth
svoth@nvdaily.com
NEW MARKET — A town lawyer with a
penchant for poker was dealt a bad hand in
federal court recently.
Michael Melkersen was ordered in U.S.
District Court in the Western District of
New York late last month to pay Counsel
Financial Services LLC in Buffalo, N.Y.,
$275,464, plus associated fees, according to
online court records.
Melkersen, who has been practicing about
four years, signed a revolving promissory
note with Counsel Financial Services LLC
that gave his law firm a $250,000 line of
credit in October 2005, according to court
documents. He made his monthly interest
payments through September 2007, docu-
ments say.
In October 2007, according to court docu-
AP ments, Melkersen was told Counsel Finan-
cial Services was calling the balance due.
Novella Willis talks about the state of her neighborhood in west Detroit on Thursday. Willis, a longtime resident The suit was triggered when Melkersen fell
of Cruse Street, soon will have her mortgage paid off but she is among those caught in the changing market. behind on his interest payments, Philip
Abramowitz, attorney for Counsel Financial
Buyers flock to take advantage
Going for
Services, said Tuesday.
“The main issue was he borrowed money
and wasn’t making his interest payments,
of Detroit’s foreclosed homes and we’re convinced one of the main reasons
he wasn’t able to pay the money back was
By Jeff Karoub “In the past few months, I’ve because he was gambling with our money,”
and Corey Williams picked up 10 new clients from Abramowitz said.
The Associated Press out of state that are buying Counsel Financial specializes in lending
in bulk,” said Mike Shannon, money to law firms, mainly so they can con-
DETROIT — Welcome to a suburban Detroit real tinue operating while awaiting payouts from
Landlord Nation, where fore- estate agent. His office spe- successful lawsuits, Melkersen said in a
closure notices are plentiful cializes in foreclosures in a telephone interview Wednesday.
pennies
and for-sale signs offer at city that’s among the national Such litigation can take years to pay off, he
least 1,800 homes for under leaders. said.
$10,000 that once were worth “They’re coming to us, say- One of the law firms’ operating expenses is
at least 10 times more. ing ‘Look, I want to buy 50, attorney salaries, Melkersen said.
In extreme cases, homes are 100, 1,000.’ They want to own “I believe there were two times where we
on sale for $1 or less, which every decent and cheap house actually paid the loan off in full,” he said.
has enticed investors to they can find.” The line of credit carried an 18 percent
Detroit from as far away as Despite a stagnant retail interest rate, said Melkersen, who referred
the United Kingdom and Aus- housing market, real estate to the lender as “essentially loan sharks.”
tralia. HOMES, A2 A couple of months before he stopped
LAWYER, A2
To our readers
The Northern Virginia Daily is
introducing a new, smaller format for
Recession hurting even those still with jobs
our pages in today’s issue.
Employers continuing to unemployment rate, which hit 8.1 per-
Each page of the newspaper will be cent in February. They’re not eligible for
111⁄2 inches in width, an inch narrow-
er than the previous format, which
slash hours as workers federal benefits that provide a safety
net for the jobless. Yet their pain is real,
had been in use for several years. put on unpaid leaves and their reduced spending is a drag on
The smaller format, which will the economy.
reduce the amount of paper used for By Christopher Leonard Call them the walking wounded of this
each issue of the Daily, has been The Associated Press deep recession: millions of workers
implemented along with many other whose incomes have fallen even as they
cost-saving measures in response to In cubicles, factories and stores these manage to hold onto their jobs. Their
the weak economy. The savings will days, anxious workers are trying to ease shrunken pay has forced many of them
help the Daily maintain its commit- each other’s economic fears with some- to make hurtful sacrifices.
thing akin to, “Well, at least we still “I won’t be able to buy the groceries I
ment to be the most comprehensive
have a job.” need to buy to make sure my family can
source of news and information in Yet for many, that’s becoming small eat until the end of the month,” said
the Northern Shenandoah Valley. comfort as more employers cut hours or Rhonda Wagner, a 52-year-old Califor-
Some minor changes have been hire only part-timers. People paid on nia state employee who has been deal- AP
made in the presentation of our news commission, meanwhile, are suffering ing with less pay due to state-imposed
to make the best use of space in each as sales dry up. And state workers leave. Rhonda Wagner packs some items at her home in
day’s issue. All of our standing news, around the country have been put on Before her pay cut, Wagner said her Sacramento, Calif., on Wednesday. Wagner, who
sports, business and opinion features unpaid leaves. paycheck from the Department of Motor works for the California DMV, and her family are los-
will continue to be provided. These workers aren’t counted in the JOBS, A2 ing their home to foreclosure.
T T