Chapter 13 bankruptcy is still a real and viable way to save your home. At this time the bankruptcy courts do not have the legal authority to do a loan modification for your primary residence. However that is not the case for second mortgages, third mortgages or equity lines of credit. I am not talking about a loan modification. I am talking about removing those loans altogether.
If the value of your home does not support any of the value of the lien on your property from any mortgages after the first, then the lien can be stripped or removed from the real estate. This option is only available in a chapter 13 bankruptcy setting. The balance of the loan is then treated as a general unsecured debt.
If this is the case for your property, in addition to the chapter 13 case, you need to file a separate adversary proceeding in the bankruptcy court to remove the liens which are no longer collateralized by the value of your real estate. It is a lot more work and adds attorney fees and costs to the chapter 13 case, but is getting rid of one or more mortgages worth that investment? Elimination of a whole loan. I call that loan modification.
The associated press reports that more than one million Americans are likely to lose their homes to foreclosure this year. This number represents the number of home expected to actually be sold at sheriff sale, not new cases filed. In the first six months of this year almost 528,000 homes were lost. The real impact is that this number is more than 100,000 above 2009. Banks expect that to just deal with the current load of properties with delinquent mortgages it will take well into 2013.
To put this information in perspective, in a normal year 100,000 homes are sold at foreclosure. TARP and the other bank bailouts are sure helping homeowners aren’t they? Loan modification? There’s another joke. How many times have you faxed the same information only to be told that they never received it, and to fax it again?
If you qualify, a chapter 13 bankruptcy is the better way to go. The bankruptcy court decides, you make the plan payments, complete the plan, and that’s it.
Care to comment, click below.
Related posts:
The Associate Press reported that America is on track 1n 2010 to surpass one million foreclosures for the first time.
I heard that there were one million foreclosures in just one year.
Mr. Balena
Thank you so very much for the information you have provided. I filed bankruptcy in 2007. I reaffirmed my mortgages [so I thought} we signed the paper work for the reaffirmation and the lawyer submitted one to the courts but forgot to submitt the other. I just found this out as I was cheching my credit report and found the the mortgage company {Wells Fargo} was not reporting my payments to the credit companies. When I inquired about this I was told by wells fargo, that the mortgage was not reaffirmed. Checking the documents I found the documents that were signed for the reaffirmation but only one was submiotted to the court. I have never missed a payment or was late in the past seven yearas of owning my home. This did not matter to wells fargo. Error on the lawyers part among many.
I thank you for the article you wrote on the reaffirming of mortgages because at that moment when reading your article I was faced with that very same situation. I was considering reopening the case to file again as Wells Fargo told me I would have to do in order that it be reported, otherwise this would last throughout the durations of the loan. After reading your article, I realize I can always give an explanation and show proof that I still reside in the home and paying on time with bank records as well as statements. Also, if they were ever called to verify my mortgage, they would have to comply. This is a total inconvenience as well as embarrassement to my credit. Yet, it still can be proven otherwise. I did contact the lawyer with documents to show the error so that it would not happen to anyone else. Thank you again for the information you provide.
ANYONE WHO IS CONSIDERING FILING BANKRUPTCY, PLEASE LOOK FOR A BANKRUPTCY ATTORNEY NOT JUST AN ATTORNEY WHO DOES BANKRUPCY. DO NOT PURSUE THE CASE WITH ANY ATTORNEY THAT YOU DON’T FEEL CONFIDENT HE/SHE IS WORKING FOR YOU.
Again, thank you Mr. Balena for your wisdom and hard work and enlightening the unaware.