Plenty of Reasons NOT to Modify Your Mortgage

More news on mortgage modification trends. The WSJ reports that borrowers who receive a permanent mortgage modification still have lots of other debt. The median ratio of total debt payments to pretax income stands at 63.5%.  This means 20% of borrowers  (or more) with permanent modifications are likely to re-default, primarily because of those high debt [...]

“I Want Out of My Mortgage. What Can I Do?”

We hear this question more and more these days, which  is a bit like asking your doctor, “My back hurts.  What can I do?”  Much, much more information is needed in order to put the problem into context. A problem spanning all income brackets We have seen people in all walks of life in our [...]

Reference Materials for Home Affordable Modification Program (HAMP)

Although the Home Affordable Modification Program (HAMP) has been widely reported as under-serving those in need, and hat has been our clients’ experience here,  if you are considering filing for bankruptcy protection or have already done so, and you have also applied for HAMP, this guide explains policies and procedures related to borrower outreach and [...]

A Roof Over Your Head or Your Credit Score?

Q:  I’m unemployed and will soon have to choose between paying the mortgage and paying my other debts. If the unemployment continues I’ll have to choose between feeding my family and paying any bills at all, including the mortgage. What can I do to preserve my credit score while I look for a job and [...]

Doesn’t the IRS Say My Debt Forgiveness Income Can’t Be Taxed?

All this talk about mortgage principal reduction and mortgage modification in the general press is incomplete and often confusing. People searching for answers can even find that information on government websites is too general for their specific needs. Take, for example, debt forgiveness income. This IRS page on The Mortgage Forgiveness Debt Relief Act and [...]

Strategic Default: Part 3 of 3

Here are three common questions asked of my partner, Rick Mitchell, and me by homeowners considering defaulting on their mortgages. I can’t afford to pay my mortgage and my other bills. The house is under water. I’ve asked for a modification. How long do I have to decide whether strategic default is an option? I [...]

Debunking Strategic Default Myths

Myth: strategic default is limited higher-income debtors. In our experience, clients across the income spectrum have considered and engaged in strategic default. Myth: strategic default is limited to investment properties. In our experience, clients have strategically defaulted on primary residences as well as investment/rental properties and commercial properties. Myth: lenders are eager to avoid foreclosure [...]

Cash for Keys, Neither Simple nor Straightforward

As my partner, Rick Mitchell, outlined in “Cash for Keys?” walking away from a mortgage obligation is neither simple nor straightforward. As with short sales, 90%+ of our clients have other debts in addition to the mortgage debt that’s addressed in a deed in lieu/cash for keys offer and those debts remain after a deed [...]

The Dark Side of Bank of America’s Mortgage-Principal Forgiveness Program

Bank of America announced it would offer mortgage-principal forgiveness worth about $3 billion to 45,000 borrowers. The jury is (literally) out on whether it will be an equally good day for homeowners who can’t pay their debts.

Mortgage Modification Mixups

My law partner, Rick Mitchell, and I are disgusted by the false promises and abysmal performance of the nation’s mortgage lenders who claim to be participating in the “Making Homes Affordable” program.  Homeowners were lured into this program with the expectation that they would get an answer within the “modification period” (usually 3-6 months) and [...]

Next Page »